Long-term Contracts Research Articles

Designing new energy markets to promote renewables

The drive toward decarbonization has spurred the growth of renewable energy sources, reshaping energy production and consumption patterns. As the energy landscape evolves, so must the market design supporting it to steer the integration of renewable energy. Addressing the challenges of promoting distributed renewable energy is paramount for developing a cleaner energy system and meeting decarbonization targets. This study presents a modern market design that efficiently integrates renewable energy sources, long-term contracts, and flexibility technologies into a single evolved market framework. The approach described herein provides proper price signals for diverse assets and decouples renewable energy from fossil fuels, ensuring economic viability and efficient integration. Taking into consideration key barriers and drivers, the findings provide insights for perfecting energy markets, meeting decarbonization targets, and guiding policymaking to boost cleaner energy systems.

Construction and Application of the Double Game Model for Direct Purchase of Electricity by Large Consumers under Consideration of Risk Factors

With the development of global clean energy and the implementation of carbon emission reduction policies, the direct purchase of electricity by large consumers has been increasingly promoted as a special form of electricity trading. Therefore, on the basis of the completion of low-carbon emission reduction targets in each country, how to rationalize the electricity purchase by large consumers in the electricity market so as to reduce their electricity purchase costs has become the main target of attention in each country. Currently, there are fewer studies in existing research on the direct electricity purchase strategy of large consumers under the consideration of the weight of consumption responsibility and risk. Based on this, this paper constructs a dual-game model for direct electricity purchase by large consumers based on the Stackelberg game and non-cooperative game theory. The concept of value at risk is further introduced, and the optimal strategy of direct electricity purchase by large consumers is proposed. The results of this study show that when market players make decisions on the purchase and sale of electricity, power suppliers will increase their biddings to obtain the highest returns, and large consumers can reduce the transaction costs by combining the medium- and long-term market with the spot market to purchase electricity. In the choice of electricity purchase market, with the increasing risk factor, large consumers shift from the risky spot market to the less risky medium- and long-term market and option market. This paper provides a reference for the issues of power suppliers’ contract bidding and large consumers’ electricity purchase strategy in the medium- and long-term contract transactions.

Policies and incentives for promotion of pulses production and consumption: A Review

The paper delves into the current state of pulses in India, examining technological advancements, production trends, costs and returns, extent of subsidies and other policies related to pulses, competitiveness, and input utilization. It also assesses non-market benefits, such as nitrogen fixation, and suggests incorporating them into incentives for pulses production and consumption. Additionally, the paper explores the nutritional contributions of pulses and their potential distribution through government schemes to aid the impoverished. Policy scenarios, including the role of Minimum Support Price and procurement, are scrutinized for their historical impact on pulse production. The paper evaluates the demand-supply gap and advocates for improved trade policies. Ultimately, it recommends incentive policies based on the ecological contributions of pulses, use of advanced statistical methods for advanced production estimations to guide informed decisions by traders and importers, and long-term government contracts for pulses import/export to stabilize domestic prices. The goal is to ensure affordability for consumers and encourage farmers’ participation in export markets, especially for crops like chickpea.

Research on Optimization of Quantitative Evaluation Model of Value for Money for PPP Projects

With the continuous development of China construction industry, in recent years, government departments are actively cooperating with social capital in the PPP model to solve public infrastructure construction problems. This study explores the interaction between the driving factors that affect value for money in the PPP model and their respective importance proportions. It combines the literature analysis method and the Delphi method to construct an index system, uses the analytic hierarchy process to calculate the weight of the driving factors, and adopts decision-making The laboratory method was used to construct a comprehensive influence matrix and calculate centrality. The results show that the comprehensive impact of reasonable risk sharing, recognition of stakeholders, organizational and operational capabilities, long-term contract, full life cycle costs, and government control of prices is relatively high. Government factors are easily affected by other types of factors, while society and the environment have a higher degree of impact on other factors.

Финансово-экономические предпосылки реорганизации производственной системы машиностроительного комплекса

The production system of the domestic economy, built on the basis of long-term contracts with suppliers of objects of labor and consumers of products, has shown its instability in the conditions of modern instability of the external environment.
 In the study, machine-building enterprises were classified on the basis of specialization into three groups that have specific opportunities for adapting to the external environment. It is determined that the main prerequisites for a largescale reorganization of the domestic production system are threats to the sovereignty of the state, the many times increased need of the national economy for various complex technical objects and spare parts, and financial and logistical instability. The departure of foreign investors from the Russian market created the conditions for expanding the market share of domestic companies and increasing output. In conditions of instability, it is proposed to reorganize the current production model into flexible production systems.

Research on Decision Optimization and the Risk Measurement of the Power Generation Side Based on Quantile Data-Driven IGDT

In an environment marked by dual carbon goals and substantial fluctuations in coal market prices, coal power generation enterprises face an urgent imperative to make scientifically informed decisions regarding production management amidst significant market uncertainties. To tackle this challenge, this paper proposes a methodology for optimizing electricity generation side market decisions and assessing risks using quantile data-driven information-gap decision theory (QDD-IGDT). Initially, a dual-layer decision optimization model for electricity production is formulated, taking into account coal procurement and blending processes. This model optimizes the selection of spot coal and long-term contract coal prices and simplifies the dual-layer structure into an equivalent single-layer model using the McCormick envelope and Karush–Kuhn–Tucker (KKT) conditions. Subsequently, a quantile dataset is generated utilizing a short-term coal price interval prediction model based on the quantile regression neural network (QRNN). Interval constraints on expected costs are introduced to develop an uncertainty decision risk measurement model grounded in QDD-IGDT, quantifying decision risks arising from coal market uncertainties to bolster decision robustness. Lastly, case simulations are executed by using real production data from a power generation enterprise, and the dual-layer decision optimization model is solved by employing the McCormick–KKT–Gurobi approach. Additionally, decision risks associated with coal market uncertainties are assessed through a one-dimensional search under interval constraints on expected cost volatility. The findings demonstrate the effectiveness of the proposed research methodology in cost optimization within the context of coal market uncertainties, underscoring its validity and economic efficiency.

Energy markets restructure beyond 2022 and its implications on Qatar LNG sales strategy: Business forecasting and trend analysis

The emergence of new suppliers and energy resources has reshaped the energy market in terms of contractual structures and pricing systems. The market shifts were accelerated in response to the latest Russian-Ukraine crisis, impacting natural gas supply chains from financing projects to contracting volumes. The increased demand for liquified natural gas volumes intensified the need to switch from long-term oil-indexed contracts to short-term gas-indexed contracts. Those shifts were anticipated to influence the selling strategies for the expected added 49 MTPA of Qatari LNG, wherein increasing the share of spot selling would be reflected in higher economic performance. This study used forecasted prices to investigate potential Qatari LNG selling strategies. Initially, projections of the most dominant pricing systems used for pricing Qatari LNG (i.e., brent, Henry Hub, Title Transfer Facility, and Japan Korea Marker) were estimated between 2023 and 2040. While Qatar has been relying on long-term oil-indexed contracts, the second step estimated annual LNG revenues under different combinations of selling strategies (i.e., long-term and spot sales). Finally, the influence of varying brent slopes on the estimated revenues was measured. Due to data limitations and non-stationarity, the double exponential smoothing model was selected among the different tested models. Considering current market dynamics, forecasts of the double exponential smoothing model showed an upward price trend until 2040. An annual average increase of 1.24% for the studied pricing systems was reported. Reducing the share of long-term brent-indexed contracts to 70% and dedicating the remaining 30% of volumes to spot sales yielded the highest premiums for revenue estimates. An average annual revenue of $62 bn was reported for the 70/30 strategy, around 6% higher than the 100% brent-indexed contracts strategy. The findings revealed that diversifying the selling approach and introducing spot sales can enhance revenues. From the buyers’ perspective, the outcomes support policymakers in understanding the implications of escalated prices driven by a lack of liquidity investments.

Civil and legal regulation of investment activities of life insurance companies

The paper is devoted to some features of the investment activity by life of insurance companies, as well as their civil law regulation. Attention is focused on the fact that life and health insurance is a direction of non-state pension provision in the context of pension reform in Ukraine. A range of questions from potential consumers of insurance services in the field of life and health insurance regarding the investment activity of insurers, methods and means of placing investments, their legal regulation, guarantees of the integrity and safety of accumulation under the life insurance contract has been determined. Scientific approaches to the understanding of investments in general, and the peculiarities of investment activity by life insurance companies have been studied. The norms of national legislation, international financial reporting standards regulating long-term life insurance contracts, including those with an investment component, were analyzed. The civil law procedure for investing funds raised by insurance companies under long-term life insurance contracts and investment life insurance contracts is defined. Examples of investment activities of insurance companies that are leaders in the life insurance market are given. It is indicated that according to statistical data, as of January 1, 2024, 12 life insurance companies are registered and operating in Ukraine. There are life insurance companies provide services exclusively in the field of long-term life insurance, health and pension insurance. Currently, only 8 insurance companies are actively working. It was concluded that financial instruments such as securities in the form of bonds, bank deposits and investment (income) real estate are most popular among life insurance companies for investing.

Long-term service contracts for the mobilization of private financing for the reform of the informal public transport sector in the Philippines

Considered the most ambitious program in the Philippines, the Public Utility Vehicle Modernization Program (PUVMP) requires transport cooperatives to replace their old jeepney with modern units. This however requires massive financing, and the government only provides very limited equity subsidies. This paper examines the impact of service contracts (SC) on the financial capacity of transport cooperatives to replace their fleet of old jeepney units. Using qualitative data drawn from interviews with 12 transport cooperatives, we investigate the effect of service contracting on the ability of transport cooperatives to access financing in terms of loans from banks. We find that long-term service contracts can enhance the level of confidence of transport cooperatives to service debt. Our work presents a novel mechanism to mobilize financing from private banks for the reform of the informal transport sector.

Addressing endogeneity in marginal revenue product estimates of shirking in Major League Baseball

PurposeWhile much of the literature testing for shirking by professional athletes have used performance metrics, some works have quantified shirking in dollar terms by comparing salary to estimated marginal revenue product (MRP). However, Ordinary Least Squares (OLS) approaches to measuring shirking by comparing salary to MRP have an endogeneity problem, as salary and contract length are determined simultaneously. We test for shirking in Major League Baseball (MLB) using an MRP approach, addressing this potential endogeneity.Design/methodology/approachThis paper uses instrumental variables regression to address potential endogeneity using MLB season-level player and team data from 2010 to 2017.FindingsUsing OLS regression, the impact of an additional year of guaranteed contract on shirking is estimated at approximately $1m in 2010 US dollars, and the impact of having a long-term contract is estimated at $5m, estimates comparable to those in the literature. Using instrumental variables regression, these impacts increase to $1.6m and over $9m in 2010 dollars.Practical implicationsGiven large, causal shirking estimates, profit maximizing sports organizations should take caution when negotiating long-term contracts. These findings also have important implications for other labor market settings where workers feel job security.Originality/valueTo our knowledge, this is the first work testing for shirking in sports using an MRP approach which uses instrumental variables regression to address potential endogeneity.

When the goose stops laying golden eggs: supervening loss of trust in long-term contracts under the PICC

PurposeThe purpose of this paper is to examine the supervening loss of inter-organisational trust in long-term commercial contracts. The underlying research question is whether contract law – the legal institution regulating economic exchanges – should intervene and enable a party to a long-term commercial contract to extricate itself from a situation where a relationship of trust has broken down irretrievably.Design/methodology/approachThis paper uses doctrinal methodology and theoretical conceptualisation to answer the underlying research question. The legal instrument chosen for analysis purposes is the UNIDROIT Principles of International Commercial Contracts. This paper also draws on extant literature on inter-organisational trust (including conceptual and empirical studies) to support the arguments and propositions. Furthermore, this study proceeds to assess the substantive justifiability of the proposed remedial measure using four normative values: legal certainty and predictability, protection of the performance interest, economic efficiency and the preservation of the relation.FindingsThe central argument put forward in this paper is the reformulation of draft Article 6.3.1 proposed by the UNIDROIT Working Group on Long-Term Contracts, which confers a novel right to terminate for a compelling reason. This paper presents a multidimensional model of inter-organisational trust that would serve as the conceptual framework for the proposed reformulation of the provision and establishes a coherent juridical basis for the legal solution that would accord with the Principles of International Commercial Contracts’ general remedial scheme. As for the normative assessment, this paper demonstrates that the proposed remedial measure would significantly promote efficient outcomes and positively serve the norms of legal certainty, protection of the performance interest and the preservation of the relation.Originality/valueThis paper addresses the lacuna in current legal scholarship in relation to the adverse socio-economic effects following trust violation and deterioration in inter-organisational relationships. Additionally, the propositions and findings should contribute to the workings of the UNIDROIT in adopting new rules and principles that would serve the special requirements of cross-border trade.

Reorganization of the manufacturing system of engineering enterprises: the emergency period

The manufacturing system of the majority of domestic engineering enterprises is built on the basis of long-term contracts with suppliers of the materials and tools, and currently is in an unstable condition. This determines the acuteness of the problem of reorganization of the manufacturing system. To tackle this problem the authors solved the following tasks. The enterprises were classified into groups which possess specific opportunities to adapt to the external environment. The authors identified the basic prerequisites for reorganization of the national manufacturing system among which of great importance are external financial and logistical restrictions, greatly increased demand of the national economy in various complicated technical facilities and spare parts, and the general instability. Withdrawal of foreign investors from the Russian market has created conditions to expand the market share of the domestic companies and increase their output. The authors suppose that the projects on the reorganization of the domestic enterprises of the engineering complex should be based on flexible manufacturing systems capable of integrating into production lines and responding promptly to external influences.

Accounting of General Production Expenses in Organizations Performing R&D on Long-Term Contracts

The article presents the results of the research, the aim of which was to study the features and problems of regulations and accounting of general production expenses in organizations performing R&D work (hereinafter-referred to as scientific organizations) under long-term contracts. Due to analysis of regulatory legal acts and the specifics of the activities of scientific organizations, the necessity of keeping records of general production expenses is justified, recommendations are made for the arrangements of such accounting, proposals for updating the accounting policy of an economic entity are formulated. The author’s recommendations on the development of a methodology for allocating overhead costs for general production and general business expenses are provided, also recommendations are made for accounting of operating costs made by related departments that are not directly involved in the performance of R&D work, but ensure execution of such work.It has been proven that in the context of the application of new Federal standards, the arrangements for accounting of general production costs in scientific organizations is a necessary condition for compliance with the basic principles and requirements of accounting.To solve the theoretical and practical problems that arise in this case, scientific organizations are proposed to approve the procedure for accounting of general production expenses by departments and cost items, the procedure for allocation of overhead costs attributable to the maintenance of these departments (taking into account the specifics of the organizations’ activities) and the list of cost items itself.While conducting the research, such general scientific methods as analysis, systematization, comparison, synthesis of reference sources, scientific literature on the topic of research, methods of scientific abstraction, deduction, logical and historical unity were used.

Perspectives of successes and challenges in collaborations between non-governmental organization and local government on urban forest management

Governments increasingly collaborate with residents and nongovernment organizations (NGOs) in urban forest management because of the underlying belief that these groups improve the delivery of local forest services. However, in practice, the successes, challenges, and outcomes vary drastically by collaborative arrangement; solely documenting positive outcomes in NGO-government collaborations may hinder the ability to mitigate their associated downsides rather than biasing collaborative behaviours towards success. This study draws on the experiences of urban forest professionals across nine Canadian cities who have participated in or observed NGOs and local governments engage in collaborative urban forest management. We employed semi-structured interviews with 32 participants from three groups: leaders of NGOs, municipal government officials, and urban forest experts who have observed the two parties interact. Our results demonstrate that the addition of NGOs in municipal forest management is associated with positive outcomes and the characteristics of relationships, individual personnel, and community support contribute to their success. We also characterize the barriers that collaborators are tasked with navigating in order to achieve positive outcomes, including high employee turnover, siloed departments, competing priorities, shifting politics, and precarious funding and contracts. Our recommendations for successful NGO-government collaborations include arming stakeholders with a thorough knowledge of civic processes, diversifying political relationships, fostering “champions” among a greater number of involved parties, and participating in longer-term contracts and funding agreements. Further, involved parties should ensure they work towards the equitable distribution of the benefits and outputs of urban forest collaborations. Moving forward, because of the insular nature of NGO-government collaborations and a low capacity among NGOs to share the outputs of these collaborations, we recommend researchers continue to study the successes and shortcomings under varying governance arrangements so that groups may benchmark their collaborative activities against others and determine the most effective means of participating in co-management.

Tenant satisfaction and property reputation of trade centers in Surabaya, Indonesia

Purpose Trade centers are operationally run by a property manager as a delegate of the property owner. The dimensions of service quality (SERVQUAL), which include tangibles, assurance, empathy, reliability and responsiveness, are vital to be implemented as the duties of property managers when providing service to tenants to maintain tenant satisfaction and property reputation. This study aims to understand the effects of the SERVQUAL dimensions, the role of property management and the quality of rental value on tenant satisfaction and property reputation. Design/methodology/approach The sample was gathered using the purposive sampling technique with the criteria of being a tenant and kiosk owner in trade center properties in Surabaya. Data were gathered using questionnaires, from which 100 respondents were acquired. It was then analyzed using the partial least square structural equation model (SEM) in the SmartPLS 3.0 program to test the hypothesis. Findings The results of this study prove that the SERVQUAL dimensions – assurance, empathy and responsiveness – significantly influence tenant satisfaction with the mediating variable of the role of property management. Moreover, the SERVQUAL dimensions – empathy, reliability and responsiveness – significantly influence property reputation with the mediating variable of the role of property management. Practical implications Property managers are expected to proactively map out different service measures related to the dimension of satisfaction by conducting service training programs for their employees. In fact, in the post-pandemic period, property managers require new marketing strategies, such as leaseback, to effectively carry out renovations of the trade center’s public facilities and restructure the tenant mix. Originality/value Trade centers as trading areas experience management limitations because of the prohibition of mass gatherings during the COVID-19 pandemic, resulting in a limited number of onsite trading. Tenants who have entered into a long-term contract experience loss and rely on the aid of property management to survive. The role and quality of service of property management influence tenants’ satisfaction post-COVID-19 pandemic.

Multi-time-scale Resource Allocation Based on Long-term Contracts and Real-time Rental Business Models for Shared Energy Storage Systems

Multi-time-scale Resource Allocation Based on Long-term Contracts and Real-time Rental Business Models for Shared Energy Storage Systems

Long-Term Contracts, Commitment, and Optimal Information Disclosure

Long-Term Contracts, Commitment, and Optimal Information Disclosure

Prioritizing solutions to mitigate the risks due to adoption of intermodal railroad freight transportation for achieving sustainable development goals

Multiple cleaner strategies are being devised by governments worldwide to incorporate approaches aligning with sustainable development goals (SDGs), placing particular emphasis on the modal shift from unimodal road to intermodal railroad (IRR) freight transportation. This shift is gaining traction due to its documented positive impact on environmental, economic, and social sustainability. However, adopting IRR freight transportation in emerging economies faces hurdles, primarily attributable to inherent modal shift risks (MSRs). Addressing these MSRs requires the implementation of modal shift solutions (MSSs). This study aims to prioritize the MSSs to mitigate the impact of MSRs in IRR adoption, focusing on achieving SDGs with a case study conducted in the Indian logistics sector. The study is structured into four phases. The first phase identifies 37 sub-MSRs, categorized into seven main MSRs, accompanied by the 39 MSSs for IRR freight transportation adoption. The second phase employs the spherical fuzzy Bayesian best-worst method (SF-BBWM) to assess the relative weights of main and sub-MSRs. The third phase uses the spherical fuzzy C-means clustering (SF-CMC) algorithm to identify crucial MSSs. Finally, the fourth phase utilizes the spherical fuzzy combinative distance-based assessment (SF-CODAS) to prioritize these crucial MSSs. From the identified MSSs, pivotal solutions include developing an integrated physical IRR network across the freight transport chain and fostering relationships between stakeholders through long-term contracts and strategic partnerships. The available results are discussed to facilitate logistics stakeholders’ understanding of the implementation of MSSs aligning with SDGs to mitigate the impact of MSRs.

Cream-Skimming through PPAs – Interactions between Private and Public Long-term Contracts for Renewable Energy

Cream-Skimming through PPAs – Interactions between Private and Public Long-term Contracts for Renewable Energy

Биржи в структуре энергетического рынка: новый взгляд

The paper offers a systematized and updated view of exchange-traded energy products. The increase in natural gas and electricity trade volumes at commodity exchanges has dramatically changed the wholesale market structure in Europe. Nowadays commodity exchanges have played an essential role in energy trading. The complexity of exchange technologies and the reasons for their demand are often hidden under everyday exchange routine. Academic analysis of exchange activity has traditionally been feebly developed, because, firstly, classical economics assumes that finding of equilibrium between supply and demand is an instantaneous and cost-free process. Markets were mainly described as simple market exchanges where faceless buyers and sellers meet for an instant to exchange standardized goods at equilibrium prices. Secondly, energy exchanges are relatively new phenomenon. The justification of exchange trading became possible as a result of new institutional economics (NIE) and transaction cost theory (TCT) findings. Under conditions of positive transaction costs, incomplete foresight and bounded rationality – the conditions of the New Institutional Economics (NIE) – the institutional framework not only of firms but also of markets matters. Also, within this institutional framework the concept of “governance structure” was introduced. A high-performance system shall align transactions with governance structures in relation to their adaptive needs. Governance structures are properly regarded as part of the optimization problem. A shift from one structure to another may permit a simultaneous reduction in both the expense of writing a complex contract and the expense of executing it effectively in an adaptive, sequential way. The founders of NIE and TCT, having been investigating the stock and commodity exchanges, approached them as a measure of transaction costs for other-the-counter trades. However, they did not include exchange trading into classification of governance structures. As far as is known, it has not been described in this way in terms of NIE and TCT to date. Natural gas and electricity markets is a good examples of network industries, which are an appropriate case of institutional flexibility regarding the alignment between transactions and governance structures. “Liberalised” network industries needed and still need an “intense” design and re-design to be able to host any kind of markets and to interact with. Organized markets, energy exchanges have developed a required bridge between leaving long-term contracts and price promulgation. The hypothesis of energy exchange classification as a special type of governance structure, in the meaning of NIE and TCT, for network industries is discussed in this article.