Cost Premium Research Articles

Evaluation of Composite Structural Materials for Heliostat Cost Reduction

Abstract Structures manufactured from steel comprise up to 40% of a concentrating solar thermal power (CSP) heliostat's cost. Composite structures represent a potential opportunity to reduce this cost. A reference heliostat structural model has been created with a reflector area of 25 m2. The design, constructed of low-carbon steel, provides baseline deflection and stiffness under a 21 m/s operating wind speed. Established roster of suitable metal alternative materials is considered including glass, basalt, and carbon fiber-reinforced polymer (GFRP, BFRP, and CFRP, respectively). Three heliostat components are investigated: the pylon, torque tube, and the purlin–strut assembly. Composite material properties are substituted for those of steel, and the beams are re-sized to match the original steel components’ deflection under given wind loads. Weight and cost changes resulting from this resizing are evaluated. It is found that GFRP and BFRP represent a 3 ×–6 × cost premium for the same operating deflection characteristics as steel across all three investigated component classes; with weight reduction only achieved for the purlin–strut assembly. While CFRP components can achieve approximately 25–75% weight savings depending on the application, this comes with a 9 ×–14 × cost increase over the steel baseline for tube-type structures and roughly 5 × cost increase when replacing c-channel structures. This work does not rule out the possibility of cost savings when the heliostat design and kinematics take advantage of composites' specific properties.

Virtual Plug-In Hybrid Concept Development and Optimization under Real-World Boundary Conditions

The automotive industry faces development challenges due to emerging technologies, regulatory demands, societal trends, and evolving customer mobility needs. These factors contribute to a wide range of vehicle variants and increasingly complex powertrains. The layout of a vehicle is usually based on standardized driving cycles such as WLTC, gradeability, acceleration test cases, and many more. In real-world driving cycles, however, this can lead to limitations under certain boundary conditions. To ensure that all customer requirements are met, vehicle testing is conducted under extreme environmental conditions, e.g., in Sweden or Spain. One way to reduce the development time while ensuring high product quality and cost-effectiveness is to use model-based methods for the comprehensive design of powertrains. This study presents a layout methodology using a top-down approach. Initially, powertrain-relevant requirements for an exemplary target customer are translated into a specification sheet with specific test cases. An overall vehicle model with detailed thermal sub-models is developed to evaluate the different requirements. A baseline design for a C-segment plug-in hybrid vehicle was developed as part of the FVV research project HyFlex-ICE using standardized test cases, highlighting the influence of customer profiles on the design outcome through varying weighting factors. The target customer’s design is analyzed in four real driving scenarios, considering variations in parameters such as the ambient temperature, traffic, driver type, trailer pulling, and battery state-of-charge, to assess their influence on the target variables. In the next step, the potential of hardware technologies and predictive driving functions is examined in selected driving scenarios based on the identified constraints of the baseline design. As a result, four application-specific technology packages (Cost neutral, Cold country, Hot country, and Premium) for different customer requirements and sales markets are defined, which, finally, demonstrates the applicability of the holistic methodology.

Potential of artificial intelligence in reducing energy and carbon emissions of commercial buildings at scale

Artificial intelligence has emerged as a technology to enhance productivity and improve life quality. However, its role in building energy efficiency and carbon emission reduction has not been systematically studied. This study evaluated artificial intelligence’s potential in the building sector, focusing on medium office buildings in the United States. A methodology was developed to assess and quantify potential emissions reductions. Key areas identified were equipment, occupancy influence, control and operation, and design and construction. Six scenarios were used to estimate energy and emissions savings across representative climate zones. Here we show that artificial intelligence could reduce cost premiums, enhancing high energy efficiency and net zero building penetration. Adopting artificial intelligence could reduce energy consumption and carbon emissions by approximately 8% to 19% in 2050. Combining with energy policy and low-carbon power generation could approximately reduce energy consumption by 40% and carbon emissions by 90% compared to business-as-usual scenarios in 2050.

Broad-Spectrum Technical and Economic Assessment of a Solar PV Park: A Case Study in Portugal

While technical optimization focuses on maximizing the annual energy yield of utility-scale PV parks, the ultimate goal for power plant owners is to maximize investment profit. This paper aims to bridge the gap between technical and economic approaches by using simulation data from a real-case utility-scale PV park. It analyzes how changes in configuration parameters such as the DC–AC ratio and string length and PV technologies like solar tracking systems and bifacial modules impact the economic metrics of the project, i.e., net present value (NPV) and internal rate of return (IRR). PVSyst software was utilized as a simulation tool, while in-house developed software implementing appropriate technical and economic models served as a comparison platform and was used to validate the outputs generated through PVSyst. Results indicate that the commonly used horizontal single-axis tracking configuration may economically underperform compared with fixed-tilt setups. The optimal DC–AC ratio fell within the range of 1.30 to 1.35. Extending the string length from 25 to 28 modules improved economic indexes. Additionally, fixed-tilt bifacial modules can enhance project economics if a 10% cost premium compared with standard monofacial PV modules is considered.

Integration assessment of turquoise hydrogen in the European energy sector

Turquoise hydrogen from natural gas pyrolysis has recently emerged as a promising alternative for low-carbon hydrogen production with a high-value pure carbon by-product. However, the implications of this technology on the broader energy system are not well understood at present. To close this literature gap, this study presents an assessment of the integration of natural gas pyrolysis into a simplified European energy system. The energy system model minimizes the cost by optimizing investment and hourly dispatch of a broad range of electricity and fuel production, transmission, and storage technologies, as well as imports/exports on the global market. Norway is included as a major natural gas producer, and Germany as a major energy importer. Results reveal that pyrolysis is economically attractive at modest market shares where the carbon by-product can be sold into high-value markets for 400 €/ton. However, pyrolysis-dominated scenarios that employ methane as a hydrogen carrier also hold promise as they facilitate deep decarbonization without the need for vast expansions of international electricity, hydrogen, and CO2 transmission networks. The simplicity and security benefits of such pyrolysis-led decarbonization pathways justify the modest 11 % cost premium involved for an energy system where natural gas is the only energy trade vector. In conclusion, there is a strong case for turquoise hydrogen in future energy systems and further efforts for commercialization of natural gas pyrolysis are recommended.

Profitability of supersonic travel

Since the retirement of the Concorde in 2003 no commercial supersonic flights were operated. In 2014 the aircraft manufacturing start-up Boom announced the development of a supersonic aircraft by 2029 and has since gathered 130 orders. This paper analyzes the profitability of this aircraft by calculating the net present value of an investment decision and comparing this to a subsonic aircraft. It is determined that supersonic travel has 50% higher cash operating costs per seat. This implies that, for example, a return flight LHR-JFK merely breaks even at a WACC of 6%. The central question of this paper is whether this cost premium can be covered by a price premium paid for the time saved on a supersonic flight. A schedule analysis shows that this price premium is justified on westbound but not on eastbound flights. Thus, a westward rotation of the supersonic fleet is proposed. To avoid seat imbalances this network can be supplemented by an eastward rotating subsonic narrowbody fleet in an all-business configuration. Whereas a supersonic rotation A - B - A only breaks even with a net present value close to zero, a westward supersonic rotation A - B - C - A complemented by a subsonic rotation A - C - B - A achieves a significant profit reflected in a net present value of over $ 40 mill. per aircraft. It follows that this network structure is the only profitable one.As a by-product it is reconstructed that the Concorde was marginally cash-positive, explaining why operations was kept up for 27 years but no aircraft were ordered after the initial batch.

Self-driving vehicles’ impacts on Americans’ long-distance domestic travel choices

ABSTRACT This research estimated models for long-distance domestic passenger trips before and after the introduction of autonomous vehicles (AVs) and their application to a 10% synthetic US population. The authors synthesized 12.1M households and 28.1M individuals across 73,056 US census tracts. To generate disaggregated passenger trips, travel demand models, including trip frequency, season, purpose, party size, mode choice, and destination choice, and vehicle ownership models were estimated. Different datasets, including a 2021 long-distance AV survey, 2016/17 National Household Travel Survey (NHTS) survey, EPA Smart Location data, and FHWA rJourney dataset were used for model estimation. The model applications indicated AV ownership to be 0.33 per capita after the introduction of AVs within the marketplace with a $3500 AV technology cost premium in the year 2040. Total person-miles traveled per capita in long-distance trips was also estimated to rise 35% (from 280 to 379 miles per month).

Construction Cost Premiums for Risk Category IV SMF Buildings

The International Building Code uses Risk Categories to reduce the probability of damage and collapse for certain buildings. One proposal for improving post-earthquake functional recovery is to design more buildings as Risk Category IV. The purpose of the study was to investigate the construction cost premiums for Risk Category IV buildings with steel special moment frames (SMF). Mathematical derivations were used to bound the stiffness and strength amplifications required for Risk Category IV design, accounting for period effects (as buildings are strengthened/stiffened, design loads increase). To complement this mathematical approach, twelve case study SMF buildings were designed with heights ranging from two to sixteen stories. The primary conclusion of the study is that construction cost premiums for drift-governed SMF buildings are an order-of-magnitude greater than for strength-governed buildings. For many strength-governed buildings, the cost premium for Risk Category IV design is around 1% of the total building cost. For drift-governed SMF buildings, the cost premiums for Risk Category IV design are 6-16% of the total building cost, with the greatest premiums for buildings around eight stories. These cost premiums should be considered when evaluating Risk Category IV design as a strategy for improving post-earthquake functional recovery.

Inovasi Bisnis Keunggulan Baru pada Berkah Coffe Mak'ju (BCM) dengan Pendekatan Bisnis Model Kanvas dan Ten Types of Innovations

Berkah Coffe Mak'ju is one of the coffee entrepreneurs in Sidayu District, Gresik Regency with the highest consumer interest in Sidayu District. This is shown by the turnover income of more than 65 million per year and this figure is higher than other coffee MSMEs in Sidayu District, Gresik Regency. However, the revenue is still not in accordance with the desired target. Therefore, new innovations are needed to be able to achieve the desired income target. This study aims to find out the innovations and tactics that have been implemented by competitors and Berkah Coffe Mak'ju, innovations and tactics recommended to increase turnover in the Berkah Coffe Mak'ju business and the Berkah Coffe Mak'ju canvass business model so that the business can be sustainable. This study uses descriptive qualitative methods on Mak'ju Coffe Blessings in Ngawen Village, Sidayu District, Gresik Regency with data collection techniques in the form of observation, interviews, and documentation studies. The data was taken from one business owner, one supplier and three competitors, namely Cakri and Lajiem from Gresik city and Mahkota Raja from Sidorjo city. The results of the study show that the business innovation that has been used by Berkah Coffe Mak'ju to get high turnover is by using Cost Leadership, Focus, and Inderect Distribution tactics and competitors Cak Ri, Lajiem, and Mahkota Raja have similarities in using tactics namely, Focus tactics , Customization, and Diversification, and each competitor has different tactics. New innovations that are right to use Berkah Coffe Mak'ju use Cost Leadership, Premium, Customization, Guarantee, and Diversification tactics. The results of other studies also found a new business model canvas that is suitable to run on Berkah Coffe Mak'ju.

A Systematic Review of the Clinical Efficacy of Oxidized Zirconium as a Bearing Surface in Hip Arthroplasty

Background Total hip replacement (THA) is an established treatment for end stage hip arthritis providing reliable pain free function. The long-term survival of THA depends on multiple factors, But aseptic loosening and wear induced osteolysis are most common causes of failure and search for alternative bearing surfaces became an important issue. Aim of the Work Our aim in this study is to evaluate efficacy of Oxide zirconium femoral head as a bearing surface in Total hip arthroplasty patients regarding clinical and radiological outcomes. Patients and Methods The types of study was a prospective and retrospective comparative cohort studies. Search results were conducted to systematic review management software and manually screened for eligibility to be included. PRISMA flowchart was produced based on the search results and the inclusion/exclusion criteria. Results OxZr was found to be less sensitive than CoCr to these variations and maintained a lower coefficient of friction when articulated with UHMWPE, even in poor lubricants. Conclusion Most of studies which were included in this review reported no significant differences in the mean polyethylene wear rate, survival rate, mean postoperative clinical subjective scores and complications’ rate of patients treated with OxZi femoral heads compared with the respective mean wear values of those who treated with CoCr femoral heads, While OxZi is offered at a cost premium, it seems that this type of alternate bearing surface is not clinically superior to the traditional metal bearing surface inTHA.

Corporate social responsibility strategies in competition and their implications

Corporate social responsibility (CSR) is very important for society, and the public now monitors firms’ CSR strategies. In this paper, we develop a game-theoretical model with two firms engaged in Cournot competition to investigate their incentives for CSR operations and how such incentives are contingent on exposure probability, demand sensitivity and the cost premium. We find that high violation exposure risk (which is proportional to both exposure probability and demand sensitivity) drives firms to exert more CSR effort, while a high cost premium discourages them from doing so. We also study how competition impacts firms’ CSR strategy. In particular, in a special case where firms can choose either CSR or non-CSR strategies, we find that mandatory requirements on firms’ CSR strategy may lead to win–win or lose–lose situations. Moreover, we extend our model to the case in which the product price is impacted by customer demand and the case in which firms additionally produce to capture shifted demand. Our findings have practical implications for policymakers to promote CSR operations. They can take various actions to encourage firms to exert more CSR effort and should further quantify firms’ effort levels. In addition, policymakers must be careful in promoting CSR operations, as mandatory requirements on firms’ CSR operations serve as a double-edged sword.

Magnesium production by molten salt electrolysis with liquid tin cathode and multiple effect distillation.

Low-cost clean primary production of magnesium metal is important for its use in many applications, from light-weight structural components to energy technologies. This work describes new experiments and cost and emissions analysis for a magnesium metal production process. The process combines molten salt electrolysis of MgO using MgF₂-CaF₂ electrolyte and a reactive liquid tin cathode, with gravity-driven multiple effect thermal system (G-METS) distillation to separate out the magnesium product, and re-use of the tin. Electrolysis experiments with carbon anodes showed current yield above 90%, while a yttria-stabilized zirconia solid oxide membrane (SOM) anode experiment showed 84% current yield. G-METS distillation is an important component of the envisioned process. It can potentially lower costs and energy use considerably compared with conventional magnesium distillation. Techno-economic analysis including detailed mass and energy balances shows that this electrolyte composition could lower costs by utilizing CaO, which is the primary impurity in MgO, as the Hall-Héroult process uses the sodium impurity in alumina. Analysis options include: raw material types (magnesite rock vs. brine or seawater), drying and calcining using electricity vs. natural gas, and carbon vs. SOM anode type. Using SOM inert anodes results in a cost premium around 10%-15%, mostly due to higher electrical energy usage resulting from membrane resistance, and reduces GHG emissions by approximately 1kg CO₂/kg Mg product. Capital and operating cost estimates, and cradle to gate greenhouse gas (GHG) emissions analysis under several raw material and process technology scenarios, show comparable costs and emissions to those of aluminum production.

Construction Costs and Initial Yield Effects of MINERGIE Certification and Sustainable Construction Measures in New Multifamily Houses in Switzerland

In this study, the influence of MINERGIE certifications, sustainable building measures that lead to certification, and further amenities and quality measures not compulsory for certification on the construction costs and net initial (asking) rents of building projects in Switzerland is investigated. The hedonic regression results show construction cost premiums of 1.6–5.1% for MINERGIE-certified apartments. These cost premiums yield higher net initial rents of approximately 2.6–6.6*% (*not significant). In contrast, most specific sustainable building measures, such as district heating, heat pumps, or solar energy, show significant cost premiums, without higher net initial rents in the market. Whereas MINERGIE certification can translate construction costs to higher net initial rents, single sustainable construction measures do not. Such an adverse cost-benefit ratio could impede specific green investments in the short term, whereas a favorable ratio of the MINERGIE standard could promote the spread of green buildings.

Functional Recovery of Steel Special Moment Frames

Steel special moment frames (SMFs) designed per current codes will likely require major repair or be a total loss after design earthquake (DE) shaking. Functional recovery of SMFs can be improved by designing to stricter drift limits, improving postyield stiffness, or improving repairability. In this study, FEMA P-58/ATC-138 (beta) was used to determine the most effective option for improving functional recovery. Eighteen SMFs were designed with different heights (4, 6, and 8 stories), different risk categories (II and IV), and different connections (with varying postyield stiffness and repairability) and were analyzed under response history analysis (RHA). Results from the RHA were used in the FEMA P-58/ATC-138 (beta) analyses to quantify functional recovery for each design. The building designs showed that 6- and 8-story SMFs designed for Risk Category IV were 1.8 to 2.2 times heavier than Risk Category II designs, and that the direct cost premium for Risk Category IV design (versus Risk Category II) was 4%–14% of the total building costs. Response history analysis showed that SMFs with enhanced postyield stiffness had up to 47% lower residual drifts than SMFs with typical postyield stiffness. FEMA P-58/ATC-138 (beta) analyses showed that SMFs with enhanced postyield stiffness and repairability designed to Risk Category II had functional recovery comparable to Risk Category IV SMFs with typical postyield stiffness and repairability. While some proposals to improve functional recovery focus primarily on stiffness and strength, this study demonstrates the relative value of postyield stiffness and repairability.

A metafrontier analysis approach for assessing the efficiency of freight service providers

This paper presents a DEA approach for a company to assess the efficiency of its shipments and of the haulers that handle them. It is based on the concept of metafrontier, which benchmarks a given shipment, first against all the shipments of the same hauler and then against all the shipments of all the haulers. Thus, the efficiency of each shipment as well as that of the corresponding hauler can be determined. The scale efficiency of the shipments, related to the cost premium paid for shipments whose weight, volume or distance is not large enough, is determined. In addition, the model estimates the functional dependence of the shipment cost on the load weight, volume and distance. An experimental design to validate the proposed efficiency assessment approach and test the factors that influence its accuracy has been carried out. The application of the proposed approach to a large Spanish food company is presented and used to illustrate its usefulness. The proposed approach is able to determine the minimum cost of a shipment as a function of its weight, volume and distance. This tool proved to be useful to assess the price quotes received by the company and bargain better prices.

Economic comparison of cool and grey roofs of a small office building in the USA

EnergyPlus V9.0 simulations of a typical small office building prototype in five USA cities (Albuquerque, Atlanta, Buffalo, San Diego, Rochester) indicate that adding a cool roof (albedo 0.6) for an aged grey roof (albedo 0.2) would reduce the annual energy and annual energy cost in all hot dry or humid cities (Albuquerque, Atlanta, San Diego) and in severe cold or mixed humid cities (Buffalo, Rochester). The CO2, SO2, and NOX savings are positive in all selected cities. This work considers the economics of using cool roofs of an office building in the USA by performing a 20-year life-cycle cost analysis that compares each type of roof to a grey roof. The 20-year net present values (NPVs) of annual conditioning (heating + cooling) energy cost savings were calculated. The life cycle cost savings (NPV of annual streams – initial cost premium) of cool roofs have both positive and negative values. The NPV with the cool roofs is from -17.3 USD/m2 in Rochester to 6.5 USD/m2 in San Diego. Among the five cities in the USA, Albuquerque, Atlanta, and San Diego were able to apply the cool roofs since they all have positive NPV, while Buffalo and Rochester were unsuitable to apply the cool roofs methods because of the negative NPV. Owners concerned with urban heat island mitigation and slowing climate change may prefer cool roofs

Hostile takeovers or friendly mergers? Real options analysis

This study analyzes a real options model of mergers and acquisitions between two firms facing different but correlated uncertainties in profits. It is assumed that firms can choose between two alternatives: a hostile takeover or a friendly merger. The bidder firm obtains extra value in a hostile takeover but incurs takeover costs. Although both firms do not bear takeover costs in a friendly merger, they share extra value through Nash bargaining. We formally define an equilibrium in our timing game under competition and then characterize the equilibrium types to discuss the influences of demand uncertainty, and takeover cost on which firm will act as a bidder and which form of amalgamation will emerge. We show that various types of equilibria can emerge because of the introduction of takeover costs. We also show that a smaller firm can be a bidder to a larger firm in a hostile manner, which is occasionally observed in actual markets. Finally, we also show that a preemptive equilibrium is likely to emerge if the takeover cost (premium) increases, which is consistent with the empirical results.

Enabling a low-carbon electricity system for Southern Africa

<h2>Summary</h2> Southern Africa faces the dual challenge of providing affordable energy to meet rapidly growing electricity demand while limiting carbon emissions and socio-environmental impacts. We combined open-source geospatial, hydrological, and electricity grid-investment models to develop cost-optimal low-carbon electricity pathways for Southern Africa. If technology and fuel prices continue to follow current trends, wind and solar technologies can become the dominant sources of electricity in the region by 2040. Importantly, no new coal capacity is built in any scenario except when inter-regional transmission is constrained. Furthermore, despite the abundant hydropower potential in the region, nearly half of the planned hydropower capacity is not cost competitive, thus supporting freshwater conservation efforts. An 80% clean energy target can halve annual greenhouse gas emissions by 2040, as compared with 2020, with only a modest 6% cost premium. Alternatively, retiring coal plants 20 years earlier could result in even greater emission reductions but could incur 12% higher annual costs.

The Price of Inclusion: Evidence from Housing Developer Behavior

Abstract In many cities, incentives and regulations lead developers to integrate low-income housing into market-rate buildings. How cost-effective are these policies? I study take-up of a tax incentive in New York City using a model in which developers trade off between tax savings and pre-tax income. Estimating the model using policy variation and microdata on development from 2003 to 2015, I find a citywide marginal fiscal cost of $1.6 million per low-income unit. Differences in neighborhoods, not developer incidence, explain the cost premium over other housing programs. Weighing costs against estimates of neighborhood effects, I conclude middle-class neighborhoods offer “opportunity bargains.”

Supplier Audit Information Sharing and Responsible Sourcing

We develop a game-theoretic model to study the incentive for competing manufacturers to share supplier audit information. Based on the audit information, each manufacturer decides whether to source from a common supplier who has uncertain responsibility violation risk or to switch to a backup supplier who has no responsibility violation risk but charges a higher price. When supplier responsibility violation occurs, some consumers boycott the manufacturers involved. Audit information allows a manufacturer to reduce the uncertainty about the risk of the common supplier. We show that audit information sharing may make the manufacturers’ sourcing strategies more or less differentiated. As a result, the information-sharing decision is not monotone in the model parameters. We fully characterize the manufacturers’ equilibrium audit information-sharing and sourcing decisions and establish conditions under which audit information sharing induces the manufacturers to adopt more or less responsible sourcing strategies. We also show that a manufacturer could be better off when the cost premium of sourcing from the backup supplier or the risk of the common supplier becomes higher or the audit information becomes less accurate. We consider several extensions of the base model and demonstrate that the main insights remain mostly valid.This paper was accepted by Charles Corbett, operations management.Funding: A. Y. Hawas supported by the Wei Lun Foundation. W. Shang was supported by the Research Grants Council of Hong Kong [GRF Project LU 13501415]. Y. Wang was supported by National Natural Science Foundation of China [Grant 71901209].Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2022.4358 .