The Economics of Gasification: A Market-Based Approach

This paper deals with the economics of gasification facilities in general and IGCC power plants in particular. Regarding the prospects of these systems, passing the technological test is one thing, passing the economic test can be quite another. In this respect, traditional valuations assume constant input and/or output prices. Since this is hardly realistic, we allow for uncertainty in prices. We naturally look at the markets where many of the products involved are regularly traded. Futures markets on commodities are particularly useful for valuing uncertain future cash flows. Thus, revenues and variable costs can be assessed by means of sound financial concepts and actual market data. On the other hand, these complex systems provide a number of flexibility options (e.g., to choose among several inputs, outputs, modes of operation, etc.). Typically, flexibility contributes significantly to the overall value of real assets. Indeed, maximization of the asset value requires the optimal exercise of any flexibility option available. Yet the economic value of flexibility is elusive, the more so under (price) uncertainty. And the right choice of input fuels and/or output products is a main concern for the facility managers. As a particular application, we deal with the valuation of input flexibility. We follow the Real Options approach. In addition to economic variables, we also address technical and environmental issues such as energy efficiency, utility performance characteristics and emissions (note that carbon constraints are looming). Lastly, a brief introduction to some stochastic processes suitable for valuation purposes is provided.

Vertical and seasonal distribution of phytoplankton in the Shen Reservoir Plateau State, Nigeria

The phytoplankton distribution of the Shen Reservoir, Bukuru in the Jos Plateau, Nigeria was monitored at 6 depths. Higher floral abundance occurred within the upper 00-03 meters with highest values at the first 1 meter. Bacillariophyceae and Dinophyceae recorded higher values in March-April with lower values in July and January respectively. Phytoplankton were most abundant in the rainy season. Secchi disc transparency was lowest in the peak of the rainy season (July) due to higher levels of suspended matter resulting from the increased run-off from surrounding farmlands of allochthonous materials as well as higher levels of phytoplankton population arising from the former factor. The low water temperature of December/January 15 degree C plus or minus 2 degree C might have depressed growth among the major groups of plankters but enhanced rapid multiplication of the Chlorophyta, Trachelomonas which showed a bloom at this season