Development of onshore wind energy utilisation in Germany

Onshore wind energy utilisation in Germany has developed very dynamically in the last decade. This has mainly been driven by the renewable energy laws that systematically support the expansion of renewable energy in the electricity sector. In 2009 a revised law with increased feed-in tariffs for wind energy has come into force. Existing studies already predict a wide range of development patterns under the Renewable Energy Sources Acts 2000 and 2004. This paper investigates the long term impact of different feed-in tariffs implemented by the legislative authorities and it provides corresponding future development patterns of onshore wind energy utilisation in Germany. The underlying System Dynamics model considers technical as well as economic conditions and constraints. The approach and the model’s results are contrasted with other published predictions qualitatively and quantitatively. This comparison shows that the model’s outcome lies in the range of predictions by existing studies, but also shows some interesting differences.

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Zusammenfassung  Die Entwicklung der Windenergienutzung in Deutschland wahrend der letzten Dekade verlief sehr dynamisch. MagBgeblich dafur war die systematische Forde-rung mittels der Erneuerbare Energien Gesetze (EEG) bzw. deren Vorlaufer. Vom Jahr 2009 an gilt ein uberarbeitetes Gesetz, welches u.a. erhohte Einspeisever-gutungen furWindenergie beinhaltet.Vorliegende Studien, die sich mit derzu-kunftigen Entwicklung auseinandersetzten, zeigen bereits deutlich unterschied-liche Szenarien fur die Entwicklung unter dem EEG 2000 und 2004. Diese Arbeit setzt sich mit den langfristigen Auswirkungen der verschiedenen vom Gesetz-geber festgelegten Einspeisetarife auseinander und stellt entsprechend unter-schiedliche Ausbauszenarien fur die deutsche Onshore Windenergienutzung dar. Das zugrunde liegende System Dynamics Modell berucksichtigt dabei sowohl technische als auch okonomische Parameter. Der Ansatz sowie die Ergebnisse werden anderen veroffentlichten Prognosen gegenubergestellt. Die Ergebnisse liegen innerhalb der Spannbreite der anderen berucksichtigten Studien, zei-gen jedoch auch interessante Unterschiede.

     

Geothermische Stromerzeugung in Deutschland — Stiefkind oder schlafender Riese?

This contribution analyses the development of power generation from geothermal energy in Germany. It considers research funding schemes, the support through the german Renewable Energy Sources Act (EEG) and the role of decisive actors as well as technical, economic and societal framework conditions. Compared to other renewable energy sources research funding for geothermal energy had played an inferior role in the past. After the potentials for geothermal power generation had been underlined by a study in 2003, geothermal power gained more political and institutional advocates. Subsequently it was equipped with a higher tariff in the EEG 2004 and led to realization of demonstration projects. Yet, the appliance of technologies for electrical power transformation, ORC and Kalina, are at the very beginning. Presently, the geothermal energy industry consists of a small amount of medium-sized businesses. Regional and nationwide energy providers, acting as operators and investors, do not exert much pressure in view of limited returns. Despite the compatibility with existing power supply systems, constraints to the expansion of geothermal energy use — above all exploration risks and high drilling costs- are likely to lead to a step-by step enhancement rather than a rush.     

Die Bestimmung von individuellen Effizienzvorgaben — Alternativen zum Best-of-Four-Verfahren

The setting of the individual X-factor is a core element of every incentive regulation system. The problem faced by the regulator is the choice among a wide variety of methods for setting the individual efficiency objectives. So far no single method could achieve acceptance as best-practice in both scientific research and regulatory practice. The German incentive regulation, which started in January 2009, uses the so called “Best-of-Four Method” to define individual X-factors. The regulator, the Bundesnetzagentur, announced an in-depth evaluation of this method, because it potentially leads to an unacceptable downward bias in setting the individual efficiency objectives. This article illustrates the problems of the Best-of-Four Method and offers alternatives. The author additionally develops a new approach which is based on a multi-stage process, using economical and engineering methods. Finally all alternatives are compared according to various criteria.It can be shown that the complementary usage of Data Envelopment Analysis and Stochastic Frontier Analysis is a reasonable approach to efficiency analysis. But this raises the question how to transform the resulting efficiency scores into individual X-factors. The Best-of-Four Approach is not appropriate because it distorts the X-factors, offers possibilities for strategic behaviour and cannot guarantee comparability of the efficiency objectives. Comparing alternatives shows that no approach clearly dominates all others taking into account all considered criteria. The multi-stage approach offers a possibility of transforming a “Nordic Walking” into an ambitious fitness program while also setting appropriate and comparable individual X-factors.     

The effects of customer age and recovery strategies in a service failure setting

The aim of this article is to explore the relationship between the type of service failure, age and the customer's negative emotions after a service failure; as well as the relationship between these emotions, the recovery strategies executed and service recovery satisfaction. The proposed model is tested on a sample of financial services customers who suffered some type of failure. The results indicate that the customer's age has a negative impact on the intensity of the negative emotions experienced after a service failure. In addition, the type of service failure (process or outcome) interacts with the age variable on its effect on these negative emotions. Finally, results also show that recovery strategies offset the negative effect of negative emotions on customer satisfaction and that a compensation strategy is more efficient if offered quickly.     

Factors driving aggregate mortality rates in postwar Germany

Using German data over the period 1956–2006, this study provides a comprehensive empirical analysis of factors driving aggregate mortality rates over time. It differs from previous contributions in this field by simultaneously considering an extensive set of macroeconomic, socioeconomic, and ecological factors as explanatory variables. Our regression analysis shows that sex- and age-specific mortality rates vary substantially in their response to external factors. Strongest associations are found with changes in real GDP, flu epidemics, and the two lifestyle variables—alcohol and cigarette consumption—in both univariate and multivariate setups. Further analysis indicates that these effects are primarily contemporary, whereas other indicators, such as weather conditions, exert lagged effects. We derive optimal multivariate models for every age group that provide a good fit to the observed variation in annual mortality rates, and thereby confirm the relevance of the identified factors.     

Naturgefahrenmodellierung in internen Risikomodellen – Unverzichtbares Rüstzeug für Strategieentscheidungen des Managements der Zukunft

Management requires internal models, which will usually span a period of several years (such as five), for analysing the financial situation of the insurance company and supporting strategic value- and risk-based company management. Catastrophe risks play an important role in risk management as a substantial share of the company’s entire risk capital is committed to natural catastrophes. So the article aims to compare two approaches in modelling storm loss in the context of applicability in strategic management. Concretely modelling deductibles in storm insurance is shown using the mathematical statistical approach. A case study will analyse various strategies and their effects on the insurance company’s single and multi-year risk-return position using example data where risk is dominated by catastrophes in order to give a concrete idea for the use of multi-period internal models in the context of management.     

Are good financial advisors really good? The performance of investment banks in the M&;A market

The study examines whether prestigious investment banks deliver quality gains to their clients in a sample of 6,379 US M&A deals. It finds that acquirers advised by tier-one advisors lost more than $42 billion, whereas those advised by tier-two advisors gained $42 billion, whereas those advised by tier-two advisors gained 13.5 billion at the merger announcement. The results were mainly driven by the large loss deals advised by tier-one advisors. The evidence indicates that investment banks might have different incentives when they advise on large deals vs. small deals. The results imply that market share based reputation league tables, could be misleading and therefore, the selection of investment banks should be based on their track record in generating gains to their clients. The findings were consistent with the superior deal hypothesis as tier-one target advisors outperformed tier-two advisors and the existence of a prestigious advisor on at least one side of an M&A transaction resulted in higher wealth gains to the combined entity. Target advisors were able to extract more wealth gains for their clients, which led to higher combined gains at the expense of the acquirer.     

The fundamental theorem of asset pricing for continuous processes under small transaction costs

A version of the fundamental theorem of asset pricing is proved for continuous asset prices with small proportional transaction costs. Equivalence is established between: (a) the absence of arbitrage with general strategies for arbitrarily small transaction costs ${\varepsilon > 0}${\varepsilon > 0}, (b) the absence of free lunches with bounded risk for arbitrarily small transaction costs ${\varepsilon > 0}${\varepsilon > 0}, and (c) the existence of e{\varepsilon}-consistent price systems—the analogue of martingale measures under transaction costs—for arbitrarily small ${\varepsilon > 0}${\varepsilon > 0}. The proof proceeds through an explicit construction, as opposed to the usual separation arguments. The paper concludes comparing numéraire-free and numéraire-based notions of admissibility, and the corresponding martingale and local martingale properties for consistent price systems.     

Return dispersion and expected returns

This paper proposes a two-factor asset-pricing model that incorporates market return and return dispersion. Consistent with this model, we find that stocks with higher sensitivities to return dispersion have higher average returns, and that return dispersion carries a significant positive price of risk. In particular, the return dispersion factor dominates the book-to-market factor in explaining cross-sectional expected returns. The return dispersion model outperforms the CAPM, MVM, IVM, and FF-3M when using a set of 5×5 test portfolios constructed from NYSE and AMEX stock returns from August 1963 to December 2005. Return dispersion continues to play an important role in explaining the cross-sectional variation of expected returns, even when market volatility, idiosyncratic volatility, size, book-to-market factors, and a momentum factor are included. This study sheds some light on the ability of return dispersion to explain expected returns beyond the standard asset-pricing factors. Our finding suggests that return dispersion captures two dimensions of systematic risk: the business cycle and fundamental economic restructuring.     

The two-fund separation theorem revisited

This paper resolves two issues regarding the traditional capital asset pricing model with one risk-free asset which seem to have been overlooked in the literature. First, it provides an elementary and complete proof of the two-fund separation theorem which accounts for the fact that asset demand may become undefined if the limiting slopes of the investor’s indifference curves are finite. Second, it shows that an additional limiting condition on investors’ risk aversions is generally necessary to guarantee existence of an equilibrium. Moreover, a generalized existence result is formulated which includes investors who in equilibrium may not invest in risky assets and a simple condition ensuring positive equilibrium asset prices is given.