Entry Modes for Finnish Firms into the Zambian Renewable Energy Industry

The renewable energy industry in Zambia is poised for growth and offers many possibilities for Finnish firms willing to enter the market. The Zambian government’s deliberate policy measures aim at attracting foreign direct investment (FDI) into this sector. This study rationalises that this could be the pull factor for Finnish firms. The thesis gives an overview of the industry and investigates an appropriate mode of entry, basing its arguments on the comparison analysis of the two economies with the use of the world forum’s stages of economic development as a framework. The theoretical part of the study examines internationalisation theories, entry mode choice and factors influencing the choice. The multiple case study approach is implored, analysing four case companies from Finland with the use of extant literature on internationalisation relevant to the study. The research design involves the use of documentation, secondary data, interviews and observation. The results of the case analyses show that the Finnish firm’s most preferred entry mode initially is exporting because it is considered to be less risky. Additionally, the findings also reveal that the selection of a suitable mode of entry is dependent on the firms’ size, orientation and international experience and could therefore be considered to be subjective. Paramount is the act of gaining market knowledge. The study shows that only hydro-electrical, solar energies and biomass are by far the most used and known forms of renewable energy in Zambia, while other alternative sources still remain un-exploited thus highlighting a growth potential. However, policy formulation and the regulatory framework in the renewable energy sector were found to be wanting.

Analyzing the Effects of the New Renewable Energy Policy in Russia on Investments into Wind, Solar and Small Hydro Power

This thesis presents an analysis of recently enacted Russian renewable energy policy based on capacity mechanism. Considering its novelty and poor coverage by academic literature, the aim of the thesis is to analyze capacity mechanism influence on investors’ decision-making process. The current research introduces a number of approaches to investment analysis. Firstly, classical financial model was built with Microsoft Excel® and crisp efficiency indicators such as net present value were determined. Secondly, sensitivity analysis was performed to understand different factors influence on project profitability. Thirdly, Datar-Mathews method was applied that by means of Monte Carlo simulation realized with Matlab Simulink®, disclosed all possible outcomes of investment project and enabled real option thinking. Fourthly, previous analysis was duplicated by fuzzy pay-off method with Microsoft Excel®. Finally, decision-making process under capacity mechanism was illustrated with decision tree. Capacity remuneration paid within 15 years is calculated individually for each RE project as variable annuity that guarantees a particular return on investment adjusted on changes in national interest rates. Analysis results indicate that capacity mechanism creates a real option to invest in renewable energy project by ensuring project profitability regardless of market conditions if project-internal factors are managed properly. The latter includes keeping capital expenditures within set limits, production performance higher than 75% of target indicators, and fulfilling localization requirement, implying producing equipment and services within the country. Occurrence of real option shapes decision-making process in the following way. Initially, investor should define appropriate location for a planned power plant where high production performance can be achieved, and lock in this location in case of competition. After, investor should wait until capital cost limit and localization requirement can be met, after that decision to invest can be made without any risk to project profitability. With respect to technology kind, investment into solar PV power plant is more attractive than into wind or small hydro power, since it has higher weighted net present value and lower standard deviation. However, it does not change decision-making strategy that remains the same for each technology type. Fuzzy pay-method proved its ability to disclose the same patterns of information as Monte Carlo simulation. Being effective in investment analysis under uncertainty and easy in use, it can be recommended as sufficient analytical tool to investors and researchers. Apart from described results, this thesis contributes to the academic literature by detailed description of capacity price calculation for renewable energy that was not available in English before. With respect to methodology novelty, such advanced approaches as Datar-Mathews method and fuzzy pay-off method are applied on the top of investment profitability model that incorporates capacity remuneration calculation as well. Comparison of effects of two different RE supporting schemes, namely Russian capacity mechanism and feed-in premium, contributes to policy comparative studies and exhibits useful inferences for researchers and policymakers. Limitations of this research are simplification of assumptions to country-average level that restricts our ability to analyze renewable energy investment region wise and existing limitation of the studying policy to the wholesale power market that leaves retail markets and remote areas without our attention, taking away medium and small investment into renewable energy from the research focus. Elimination of these limitations would allow creating the full picture of Russian renewable energy investment profile.

Fundraising and investor relations in social enterprise: Marketing your way out of the pioneer gap in African off-grid renewable energy

Social enterprises apply the best of business for the pursuit of social or environmental mission while also generating revenues. Globally, nearly 1,3 billion people lack access to electricity, as well as another billion having access to only low quality and infrequent electricity. Off-grid renewable energy, like solar, will increasingly have a key role in the solution of the energy access issue. The pioneer gap in off-grid renewable energy consists of financing (or funding) gaps and capacity gaps, to do with both the early stage of the enterprises in question, as well as the early stage of the whole industry. The gaps are emphasised by specific characteristics of off-grid renewable energy business models and the requirements of operating in bottom-of-the-pyramid markets. The marketing perspective to fundraising is chosen to uncover the possible role enterprises themselves have in bridging the pioneer gap. The purpose of this thesis is to study how social enterprises operating in off-grid renewable energy in Africa utilise marketing activities in their investor relations in bridging the pioneer gap. This main research question is divided into the following sub-questions:  How does the pioneer gap affect fundraising for these enterprises?  How are the funding needs for these enterprises characterised?  How do these enterprises build trust in their investor relations? The theoretic framework is built on relationship marketing and investor relations, with an emphasis on creation of trust. The research is conducted as a thematical case study. Primary data is gathered via semi-structured interviews with six solar energy companies and two accelerators. According to the findings, the main components affecting trust-creation are diminished information asymmetry and perceived risk, mission alignment as well as a personal fit or relationship with the investor. Therefore, an enterprise can utilise e.g. the following marketing activities in their investor relations to bridge the pioneer gap: ensuring investor material, the enterprise story and presenting of them is clear, concise and complete to “package” the enterprise as an investment; taking investor needs and motivations into account as well as utilising existing investors as ambassadors.

Support for renewable energy and WTO Law : the actionability of Ontario and Québec renewable energy support mechanisms

Le Traité de Marrakech stipule que le commerce et le développement économique devraient être orientés de manière à permettre l’utilisation optimale des ressources mondiales, conformément à l’objectif de développement durable. Combiné aux dispositions du Protocole de Kyoto et du Traité de Copenhague, les gouvernements poursuivent de politiques nationales favorisant les producteurs nationaux au détriment des étrangers. Cette mémoire propose une analyse des règles de l’OMC, dans le but de déterminer les mesures disciplinaires possibles contre le Canada à l'égard de ses mécanismes de support de l’énergie renouvelable. Une analyse des règles énoncées dans le GATT, l’Accord sur les subventions et les mesures compensatoires et divers accords multilatéraux conclus dans le cadre de l’OMC permet de déterminer si elles pourraient s’appliquer aux mécanismes de support de l’énergie renouvelable. Une analyse des programmes du Québec et de l’Ontario permet une prise de position quant à leur conformité aux règles commerciales de l’OMC.

Advanced Nuclear Energy Systems: Heat Transfer Issues and Trends

Almost 450 nuclear power plants are currently operating throughout the world and supplying about 17% of the world’s electricity. These plants perform safely, reliably, and have no free-release of byproducts to the environment. Given the current rate of growth in electricity demand and the ever growing concerns for the environment, the US consumer will favor energy sources that can satisfy the need for electricity and other energy-intensive products (1) on a sustainable basis with minimal environmental impact, (2) with enhanced reliability and safety and (3) competitive economics. Given that advances are made to fully apply the potential benefits of nuclear energy systems, the next generation of nuclear systems can provide a vital part of a long-term, diversified energy supply. The Department of Energy has begun research on such a new generation of nuclear energy systems that can be made available to the market by 2030 or earlier, and that can offer significant advances toward these challenging goals [1]. These future nuclear power systems will require advances in materials, reactor physics as well as heat transfer to realize their full potential. In this paper, a summary of these advanced nuclear power systems is presented along with a short synopsis of the important heat transfer issues. Given the nature of research and the dynamics of these conceptual designs, key aspects of the physics will be provided, with details left for the presentation.

Urban microclimate and renewable energy use in cities

This paper presents an experimental measurement campaign of urban microclimate for a building complex located in London, the United Kingdom. The experiment was carried out between 19 July and 16 August, 2010 at the Elephant & Castle site. The wind and solar energy distributions within the London urban experimental site were assessed in detail for their potential use in areas of high-rise urban building complexes. The climatic variables were measured at every five minutes for the air temperature, the wind speed and direction, the air humidity and the global solar radiation for a period of four weeks. The surface temperatures were also measured on the asphalt road, pavement and building walls at every hour for the first week of the campaign period. The effect of the building complex on the urban microclimate has been analyzed in terms of the solar radiation, the air temperature and velocity. The information and observation obtained from this campaign will be useful to the analysis of renewable energy implementations in dense urban situations.

Renewable energy in the UK countryside: policy and practice

Of the technologies currently available for producing energy from renewable sources in the British climate all except one depend on a single ingredient, namely land. Therefore other than offshore wind generation, which has been slow and expensive to establish, renewables have had to be derived almost entirely from the land, whether as sites for turbines or areas on which to grow feedstocks for biomass and biofuels. Of these, only wind turbines have been developed in any number while economic conditions have until now been unfavourable for biomass and biofuel. The UK is unlikely to meet its present targets under the Kyoto agreement, due to a mixture of limited funding and problems of policy. Peter Prag examines the present position and the potential outlook.

Saving the planet but losing the landscape: the impact of renewable energy policies on rural Britain

The main instrument of the Government's renewable energy policy is to promote wind power through regulation and subsidy. This gives rise to anomalies in rural planning when turbines are erected in sensitve areas in which other forms of development are strictly controlled. The situation is reviewed in the context of economic viability and considered also against the alternative of growing fuel crops. The latter are currently hampered by lack of Government support but could fulfil a useful secondary role of sustaining the agricultural sector and with it the management of lowland landscapes.

Multiple-project discount rates for cost-benefit analysis in construction projects: A formal risk model for microgeneration renewable energy technologies

The traditional economic approach for appraising the costs and benefits of construction project Net Present Values involves the calculation of net returns for each investment option under different discount rates. An alternative approach consists of multiple-project discount rates based on risk modelling. The example of a portfolio of microgeneration renewable energy technology (MRET) is presented to demonstrate that risks and future available budget for re-investment can be taken into account when setting discount rates for construction project specifications in presence of uncertainty. A formal demonstration is carried out through a reversed intertemporal approach of applied general equilibrium. It is demonstrated that risk and the estimated available budget for future re-investment can be included in the simultaneous assessment of the costs and benefits of multiple projects.