On The Timing of Default Losses: When and Why?

At the light of what happened in 2010 and 2011, a lot of European countries founded themselves in a difficult position where all the credit rating agencies were downgrading debt states. Problem of solvency and guarantees on the states' bond were perceived as too risky for a Monetary Union as Europe is. Fear of a contagion from Greece as well was threatening the other countries as Italy, Spain, Portugal and Ireland; while Germany and France asked for a division between risky and riskless bond in order to feel more safe. Our paper gets inspiration by Roch and Uhlig (2011), it refers to the Argentinian case examined by Arellano (2008) and examine possible interventions as monetization or bailout as proposed by Cole and Kehoe (2000). We propose a model in which a state defaults and cannot repay a fraction of the old bond; but contrary to Roch and Uhlig that where considering a one-time cost of default we consider default as an accumulation of losses, perceived as unpaid fractions of the old debts. Our contributions to literature is that default immediately imply that economy faces a bad period and, accumulating losses, government will be worse-off. We studied a function for this accumulation of debt period by period, in order to get an idea of the magnitude of this waste of resources that economy will face when experiences a default. Our thesis is that bailouts just postpone the day of reckoning (Roch, Uhlig); so it's better to default before accumulate a lot of debts. What Europe need now is the introduction of new reforms in a controlled default where the Eurozone will be saved in its whole integrity and a state could fail with the future promise of a resurrection. As experience show us, governments are not interested into reducing debts since there are ECB interventions. That clearly create a distortion between countries in the same monetary union, giving to the states just an illusion about their future debtor position.

Design of an indirectly fired gas turbine integrated with an organic rankine cycle unit for combined heat and power production

In the last years, the European countries have paid increasing attention to renewable sources and greenhouse emissions. The Council of the European Union and the European Parliament have established ambitious targets for the next years. In this scenario, biomass plays a prominent role since its life cycle produces a zero net carbon dioxide emission. Additionally, biomass can ensure plant operation continuity thanks to its availability and storage ability. Several conventional systems running on biomass are available at the moment. Most of them are performant either in the large-scale or in the small power range. The absence of an efficient system on the small-middle scale inspired this thesis project. The object is an innovative plant based on a wet indirectly fired gas turbine (WIFGT) integrated with an organic Rankine cycle (ORC) unit for combined heat and power production. The WIFGT is a performant system in the small-middle power range; the ORC cycle is capable of giving value to low-temperature heat sources. Their integration is investigated in this thesis with the aim of carrying out a preliminary design of the components. The targeted plant output is around 200 kW in order not to need a wide cultivation area and to avoid biomass shipping. Existing in-house simulation tools are used: They are adapted to this purpose. Firstly the WIFGT + ORC model is built; Zero-dimensional models of heat exchangers, compressor, turbines, furnace, dryer and pump are used. Different fluids are selected but toluene and benzene turn out to be the most suitable. In the indirectly fired gas turbine a pressure ratio around 4 leads to the highest efficiency. From the thermodynamic analysis the system shows an electric efficiency of 38%, outdoing other conventional plants in the same power range. The combined plant is designed to recover thermal energy: Water is used as coolant in the condenser. It is heated from 60°C up to 90°C, ensuring the possibility of space heating. Mono-dimensional models are used to design the heat exchange equipment. Different types of heat exchangers are chosen depending on the working temperature. A finned-plate heat exchanger is selected for the WIFGT heat transfer equipment due to the high temperature, oxidizing and corrosive environment. A once-through boiler with finned tubes is chosen to vaporize the organic fluid in the ORC. A plate heat exchanger is chosen for the condenser and recuperator. A quasi-monodimensional model for single-stage axial turbine is implemented to design both the WIFGT and the ORC turbine. The system simulation after the components design shows an electric efficiency around 34% with a decrease by 10% compared to the zero-dimensional analysis. The work exhibits the system potentiality compared to the existing plants from both technical and economic point of view.