Utility Sector Research Articles

Predictive Value of Estimated Beta

The Capital Asset Pricing Model (CAPM) is widely used in corporate finance to assess expected returns of securities and return on equity, and beta, a measure of systematic risk, is a component of the CAPM equation. Previous studies appear not to have addressed whether beta as a stand-alone metric allows individual investors to effectively assess returns relative to the market, and this study aims to address this. Exchange-traded funds (ETFs) reflecting a range of expected volatilities relative to the S&P 500 index were selected. Betas of XLK (Technology sector), XLE (Energy sector), XLU (Utilities sector), and XLY (Consumer Staples sector) were estimated by regressing their weekly returns over five years against those of the S&P 500 index. Three five-year periods were used (ending in 2005, 2010, and 2015). The betas largely conformed to anticipated values with the exception of that of XLY which was surprisingly greater than the market beta. Estimated and observed betas were compared using a two-tailed paired T-test and no difference was found, suggesting that estimated beta is statistically a good proxy for actual beta. In practical terms though, there were relatatively large variances in several instances between estimated and observed betas, and this could be a concern for investors. Returns using estimated beta and actual returns were also compared over one, two, three, four, and five years with regard to the three five-year periods. Significant variation was observed for expected minus observed returns both in sign and magnitude. A two-tailed paired T-test suggested there was a difference between returns using estimated beta and actual ones over the three five-year periods for all funds except XLE. The observations suggest betas are volatile and individual investors should incorporate additional metrics to forecast returns relative to the market.

The impact of training on labour productivity in the European utilities sector: An empirical analysis

This paper investigates the effects of firm training on productivity growth among sustainable utility companies in Europe during the Great Recession (2008–2010). The empirical analysis uses an ad-hoc dataset based on the merge between financial and sustainability reporting. Evidence indicates the existence of positive effects of both training flow and training stock on average labour productivity, showing the crucial role of firm-sponsored human capital development in the utilities sector. Results and implications offer useful insights for a faster recovery of the utilities sector after severe recessions and in presence of major techno-organizational changes through countercyclical training investments.

A state‐of‐the‐art review on the impact of fast EV charging on the utility sector

AbstractDeployment of fast‐charging stations for electrified transportation is currently one of the limiting factors in the commercial deployment and paradigm shift of the mobility sector. The rapidly increasing demand for electric vehicles (EVs) brings the demand for accessible and affordable charging infrastructure. The commercial EV fast‐charging load profile depends on the customer's EV charging demand, which poses challenges in determining the overall peak profile. This could lead to unprecedented challenges of harmonic disruption, system losses, supply‐demand balance, and grid reliability. The emergence of bidirectional charging infrastructure and the realization of controlled charging strategies in coordination with the cumulative contribution of renewable energy resources could potentially reduce the challenge of utility grid stability and reliability shortly. Furthermore, the parallel development of smart grid technologies has promising features. This paper aims to provide a comprehensive state‐of‐the‐art review of the major challenges of the utility grid in the swift adoption of fast charging infrastructures available in the open literature, as well as the sustainable implications and potential safety measures. Furthermore, the potential solutions and best practices for the synchronization of electrified transportation with the emerging ecosystem of renewable power systems and various controlled charging strategies are reviewed in detail.

Creation of corporate governance mechanisms as a tool for improving the efficiency of management organizations in the housing and utilities sector

Creation of corporate governance mechanisms as a tool for improving the efficiency of management organizations in the housing and utilities sector

From Profit to Purpose: How Electric Utility Multinationals Visualize Systemic Change and Adaptation of Organizational Ethical Culture through Scenarios for 2040

This article explores how top executives from two electric utility multinationals visualize systemic change and adaptation of their ethical cultures in the future. Allaire and Firsirotu’s framework for organizational culture was incorporated with scenario planning which focused on the influence that the contextual environment exerts on building an organizational ethical culture. The study relied on a holistic and a systems thinking approach to cluster and evaluate six key themes perceived to lead to disruptions in ethical culture. Consequently arriving at the aim to conceive four possible scenarios for 2040 on the future of organizational dynamics and ethical culture in the private electric utility sector. The attributions of relevance for organizational ethical culture and the interrelationships among six key themes demonstrated the greater significance of two themes: From profit to purpose and Environment and Sustainability. As the main driving forces, these two themes guided the development of the scenarios and provided further insights into the flow of power relations, agency, and leverage points for an organizational ethical system.

Dynamic correlation of market connectivity, risk spillover and abnormal volatility in stock price

The connectivity of stock markets reflects the information efficiency of capital markets and contributes to interior risk contagion and spillover effects. We compare Shanghai Stock Exchange A-shares (SSE A-shares) during tranquil periods, with high leverage periods associated with the 2015 subprime mortgage crisis. We use Pearson correlations of returns, the maximum strongly connected subgraph, and 3σ principle to iteratively determine the threshold value for building a dynamic correlation network of SSE A-shares. Analyses are carried out based on the networking structure, intra-sector connectivity, and node status, identifying several contributions. First, compared with tranquil periods, the SSE A-shares network experiences a more significant small-world and connective effect during the subprime mortgage crisis and the high leverage period in 2015. Second, the finance, energy and utilities sectors have a stronger intra-industry connectivity than other sectors. Third, HUB nodes drive the growth of the SSE A-shares market during bull periods, while stocks have a think-tail degree distribution in bear periods and show distinct characteristics in terms of market value and finance. Granger linear and non-linear causality networks are also considered for the comparison purpose. Studies on the evolution of inter-cycle connectivity in the SSE A-share market may help investors improve portfolios and develop more robust risk management policies.

The use of solid household waste as fuel in the housing and utilities sector

The development of civilization is accompanied by a steady increase in the amount of waste and industrial production. Improvement of technology and production technology increases the variety of chemical compounds and their danger to the environment. The problem of processing and disposal of solid household waste (SHW) is becoming more and more urgent not only for megacities, but also for small settlements. The vast majority of solid waste in our country is stored in natural or specially organized landfills. Landfills of solid waste without preliminary processing occupy huge territories, thus removing fertile lands from economic circulation for many decades. Landfills are characterized by a high concentration of carbonaceous materials. For various reasons, fires often occur, as a result of which the products of incomplete combustion pollute the environment. Solid waste landfills are a source of pollution of surface and ground waters due to the drainage of landfills with atmospheric precipitation. In addition, landfills are home to stray animals, rats, mice, birds, insects and parasites. All of them are the cause of the spread of viruses. Because of this, there is a danger of the spread of infectious diseases [1]. In order to reduce the volume of solid waste, harmful emissions into the atmosphere, the number of rodents and birds, and put an effective barrier to the spread of various infections, it is necessary to improve the production and put the project of a mini-plant for processing solid household waste into operation. Thus, the work considers a technological scheme and a set of equipment for processing solid household waste into gas fuel. Calculations of technical and economic indicators are given.

An organizational and economic mechanism for planning the development of systems that are part of the urban utility infrastructure

The systems that comprise the utility infrastructure are a structural element of the housing and utilities sector; they make an essential contribution to the quality of life in municipalities. The development of these systems is particularly relevant now, since the utilities sector is characterized by the high depreciation of fixed assets and the limited profitability of economic activities of organizations in this sector. A combination of the above-mentioned circumstances creates industry-wide problems that hinder the effective operation of public infrastructure systems. The analysis of statistical information has shown that approaches to the development of housing and utility services are insufficient for the renewal and modernization of public infrastructure systems, so there is a practical need to develop innovative approaches to their management. This article focuses on an integrated approach to the development planning of utility systems with regard for the strengths and weaknesses of traditional forecasting tools. Today, the main planning tool is a set of programmes on the integrated development of utility infrastructure systems; however, this tool has a number of disadvantages, including the lack of performance indicators applied to the implemented activities, the predominance of general goal formulations, an unclear relationship between specific projects and programme results, etc. In order to clarify the requirements for the selection of development projects on infrastructure systems, an economic and mathematical model has been designed that allows for the selection of measures based on objective criteria, that will ensure the generation of the most effective programme on the development of utility infrastructure systems in the cities. This economic and mathematical model can be used to develop an organizational and economic planning tool that allows to eliminate the drawbacks of traditional tools.

Экосистема жилого квартала: проблемы, перспективы развития

Introduction. The problem of antagonistic contradiction between human life and the environment has been turning global along with the development of urbanization, breakthrough growth of the energy and technological potency of cities, leading to an increase in the consumption of natural resources and an impact on the biosphere. All over the world and in Russia, scientists are searching for environmentally friendly technologies for urban planning, housing and utilities sectors. However, the problem of analyzing and forecasting the state of ecosystems in residential areas and their influence on man and the environment remains unresolved and needs to be solved in many settlements. Materials and methods. The article analyzes the legal and regulatory documentation on design and construction, urban planning solutions for residential areas, architectural and structural solutions for apartment buildings, statistical and analytical reports on housing construction in Russia, presented on the Internet. Results. The proposed subjects for discussion include two concepts of the term “ecosystem”, results of the analysis of indicators of housing construction in Russia, indices of the quality of the urban environment in settlements, and a factor model used to assess the ecosystem of a residential area. A lifecycle model of a residential area, that represents a complex system, composed of capital construction facilities, linear facilities, landscaping and gardening, and waste management, is used as the basis for the generalization of well-known approaches, developed from the standpoint of the system analysis. Properties of interaction between facilities, on the one hand, facilities and the environment, on the other hand, are taken into account. Conclusions. Now residential housing is constructed faster, and urban areas, occupied by residential buildings, grow accordingly in the settlements of the Russian Federation willing to provide their population with high-quality housing. Mass construction of apartment buildings continues to be the main focus of the country’s urban development. Urban planning activities, aimed at the development and maintenance of residential areas, need all the more attention. It is important to use the biosphere approach, supported by the regulatory and technical framework of construction and operation of facilities and the urban planning environment, to solve the problem of nature conservation and human health maintenance.

The role of labor and capital in sectoral CO2 emissions and linkages: The case of China, India and the USA

The primary resources of labor and capital are required for the industrial production process. It could be argued that industries cannot produce CO2 emissions unless primary resources are available. However, few studies have focused on estimating the role of primary resources in the production of industrial CO2 emissions. Furthermore, primary resource-induced inter and intra-sectoral linkages have received little attention. The purpose of this research is to estimate the role of primary resources in driving direct and net CO2 emissions (net CO2 linkages) in China, India, and the United States, all of which are at different stages of economic development. This study estimated the supply-induced CO2 emissions and linkages of China, India, and the United States using the Ghosh supply input–output model and by proposing some new supply-induced net emission linkage measures. The findings revealed that, when compared to fixed capital, labor produced more total and net carbon emissions in all three countries. The utility sector of “Electricity, gas, and water” (EGW) had the highest amount of labor and capital-induced emissions of all three nations. However, further decomposition of these emissions revealed the impact of different levels of economic development. In the services-based developed economy of the United States, input supplies from the sector of “Financial Intermediation and Business Activities” resulted in the highest emissions of the downstream sectors. The largest amount of downstream emissions was caused by supplies from the raw material supplier of “Mining and quarrying” in the industrial-based Chinese economy. While in India, which has a comparatively more agro-based economy, the “Agriculture” sector caused the greatest amount of downstream emissions. Our findings on supply-induced CO2 emissions of major countries at various levels of economic development can help guide both developed and developing economies to reduce industrial carbon emissions by efficiently managing and reallocating primary resource supplies to sectors.

Kentsel teknik altyapı tesislerine yönelik uluslararası coğrafi veri modellerinin analizi

Utility networks consist of physical constructions which transport utility service products such as power, water, gas and telecommunication. The pressure of urban population growth increases the density of urban underground areas, moreover, privatization of utilities increases decentralization and fragmentation in the utility sector. Geographic information related to utility networks are mainly held in various formats by utility organizations for operation and asset management activities. Integration and information exchange of utility data are required for numerous activities, namely design, construction and repair of utility networks, disaster planning, emergency response. The differences in data models and information systems limit the ability of integration of different utility data, as well as information exchange among relevant parties such as utility companies, local authorities and other public bodies. Several national and international standardization organizations develop data models and/or data exchange methods that focus on the needs for different use cases which require geospatial data exchange. This paper examines international data models for sharing and exchange of utility network data. It is emphasized that there is no international data model addressing the needs of all use cases, while the models’ content, scope, functionality, and geographic representation capabilities depend on the use cases they focus on.

A comparative analysis of social vulnerability and proximity to coal‐fired power plants and windmill farms

AbstractThis research examines if there are differences in the social vulnerability of U.S. residents living within a five‐mile radius of a coal‐fired power plant compared to residents living within a five‐mile radius of a windmill farm (N = 5776) for facilities in operation as of April 2020. Two logistic regression models were created with demographic data for 2020 and 2010 to account for the decline of the coal power industry and rise of the wind power industry. Results suggest that U.S. census tracts with higher percentages of populations aged 25 and over with a Bachelor's degree, living in poverty, minorities, and employed in the utilities sector were significantly more likely to live within a five‐mile radius of a coal power facility than a wind power facility for both the 2020 and 2010 models. The only major discrepancy between the two models involved the percentage of owner‐occupied housing as the variable was only a significant predictor for the 2010 model. Census tracts with higher percentages of owner‐occupied housing were less likely to be located near a coal power facility.

Analyzing the cause of human electrical accidents using Swiss Cheese model

Purpose This study aims to explore the factors influencing electrical accidents. Here, the authors aim to understand and model the causes of electrical accidents at multiple levels. Design/methodology/approach In the study, the authors have tried to put causes of accidents in the electricity distribution segment, in the framework of the Swiss Cheese model. Delphi kind of expert survey was conducted to find the Cheese Slice (level) and the causes (holes) for electrical accidents. Inputs from a hundred experts having more than five years of experience in electrical utility companies have been used to find Cheese Slice and holes, to explain the occurrence of an electrical accident. Findings Effective training for safe work practices, safe knowledge and closer supervision would go a long way to plug the holes in the Cheese Slice in human factors. The difference in perception of managers, supervisors and workers on the importance of various causes of electrical accidents are also presented and discussed. Research limitations/implications This research is based on expert opinion and survey where respondent perception is reported. Actual accident data has not been used here. Practical implications The holes or causes of accidents at different levels (Cheese Slice) have been identified for plugging or removal for better safety. Social implications Electrical energy is widely used, and therefore, electrical safety is a social concern and also improving it is a social need. Originality/value The study contributes to electrical safety issues in the electrical utility sector.

Does the Covid-19 pandemic affect faith-based investments? Evidence from global sectoral indices

In this paper, we aim to investigate the influence of the Covid-19 on the behavior of the S&P 1200 Shariah and non-Shariah sectoral indices over the period from 1st October 2010 to 29th October 2020. We contribute to the global literature by examining the financial impact of the Covid-19 on the Shariah and non-Shariah sectoral indices. We find that the S&P 1200 Shariah Communication, consumer staples, financials, healthcare, industrials, IT, materials, and utility sectors earn higher average returns than their counterpart sectoral indices during the Covid-19 period. The study reports that on average, the volatility of the Shariah indices is less than their counterpart indices. Moreover, we further document that on average the S&P Shariah sectoral indices offer a higher return with low risk even during the Covid-19 global pandemic. We suggest that ethical investments are the best alternatives to retail, institutional, and foreign investors.

Digitalization in public administration in the housing and utility sector and the human factor

Digitalization in public administration in the housing and utility sector and the human factor

The Use of Robotic Process Automation (RPA) as an Element of Smart City Implementation: A Case Study of Electricity Billing Document Management at Bydgoszcz City Hall

Smart cities are an extremely important, multi-faceted subject, both in terms of their practical aspects and in terms of research. This is expressed, among other things, in the multitude of approaches to this concept. These approaches differ based on the emphasis placed on individual aspects: some focus more on technology, and others put more weight on social issues, while still others value sustainable development issues. Currently, an important topic of discussion about the development of the smart city—the importance of which has become even greater in the context of the COVID-19 pandemic—is the digital transformation of the city. The use of robotic process automation (RPA) tools can be a part of such a transformation, as such tools, using advanced software, enable the automation of those tasks carried out thus far by humans. Although such an approach has, to date, been widespread in the case of enterprises (in particular, those operating in the financial and BPO/SSC sectors, but less often in the utilities sector, the first applications of these solutions in the context of process automation for cities are also beginning to emerge in various parts of the world. This article is based on a case study approach. The implementation conditions (including the constraints) of such an approach, the benefits achieved, and the lessons learned (which can be important for other local government units) are outlined using the example of the Bydgoszcz city hall’s (Poland) electricity billing document management. The results of the case study presented here lead to the conclusion that the use of RPA tools enables, very quickly and at relatively low cost, measurable results to be achieved that are related to the processing of electricity billing documentation for the city of Bydgoszcz. This allows the assertion to be made that robotic process automation can be taken into consideration as one of the tools used to build smart cities.

OPPORTUNITIES FOR PRODUCTION AND UTILIZATION OF GREEN HYDROGEN IN THE PHILIPPINES

The Philippines is exploring different alternative sources of energy to become energy-independent while significantly reducing the country's greenhouse gas emissions. Green hydrogen from renewable energy is one of the most sustainable alternatives with its application as an energy carrier and as a source of clean and sustainable energy as well as raw material for various industrial processes. As a preliminary study in the country, this paper aims to explore different production and utilization routes for a green hydrogen economy in the Philippines. Production from electrolysis includes various available renewable sources consisting of geothermal, hydropower, wind, solar, and biomass as well as ocean technology and nuclear energy when they become available in the future. Different utilization routes include the application of green hydrogen in the transportation, power generation, industry, and utility sectors. The results of this study can be incorporated in the development of the pathways for hydrogen economy in the Philippines and can be applied in other emerging economies.Keywords: green hydrogen, electrolysis, renewable energy, energy storage, sustainable energyJEL Classifications: O13, Q01, Q42, Q43, Q48DOI: https://doi.org/10.32479/ijeep.11383

A machine learning model to investigate factors contributing to the energy transition of utility and independent power producer sectors internationally

SummaryThere is evidence of independent power producers dominating the electricity sector's uptake of renewable energy, with utilities lagging behind. Here, we build a machine-learning-based model with multiple dependent variables to simultaneously explore environmental policy and market structure contributions to investment patterns in different technologies by utility and independent producer sectors across 33 countries over 20 years. With the analysis enabling the capture of non-linear relationships, our findings suggest substantial resistance of gas capacity to even strict carbon pricing policies, while coal appears more responsive. There is also an indication of policy pricing in effects. The positive link of renewables subsidies and fossil fuel disincentives to renewables expansion, particularly wind, is more prominent for independent power producers than utilities. Regarding market structures, different characteristics tend to matter for renewables growth compared to fossil fuel reductions. The results also suggest considerable differences in policy and market factor contributions to technology choices of Organisation for Economic Co-operation and Development vis-à-vis emerging economies.

A coronavirus outbreak and sector stock returns: a tale from the first ten weeks of 2020

ABSTRACT This paper examines early impacts of the COVID-19 outbreak on stock returns of 11 sectors using the firm-level stock price data from 10 countries. Results show that investors across sectors and countries respond differently during the outbreak. Communication Services, Consumer Staples, Health Care, Information Technology, and Utilities sectors consistently perform relatively well, compared to other sectors, in all countries except Italy, Japan and U.S. Conversely, Energy sector suffers greatest abnormal negative returns, among all sectors, in countries including Canada, Italy, U.K. and U.S. Furthermore, Japan and U.S. have highest numbers of abnormally and negatively affected sectors.

Incentives and optimal time of investment in New Zealand’s building-blocks regulation of its FTTH open-access network

Understanding the incentive structure and the effects on the timing of investment of any regulatory regime is of outmost importance to all stakeholders. A fundamental question in the literature on broadband investment and regulation, articulated in Cambini and Jiang (2009), asks: “what impacts regulation imposes on firms’ investment behavior in broadband communications, impetus or hindrance, and how regulatory regimes should be designed to foster the incentive to invest?”. New Zealand’s Part 6 of the amended New Zealand Telecommunications Act (2018 New Regulatory Framework) describes a new regulatory framework largely based on the Commerce Act of 1986 that applies to regulation of electricity lines, gas pipelines and airports. This is known as the Building Blocks Model (BBM) approach. Biggar (2004) defines the BBM approach to regulation as “a tool for spreading (or amortising) the expenditure of the regulated firm over time so as to ensure a path of revenue or prices which has the property that the present value of the firm’s allowed revenue is equal to the present value of the firm’s expenditure”. In New Zealand the Framework, and the BBM approach in particular, are aimed to regulate Fibre Fixed-Line Access Services or FFLAS. Regulation is to be achieved by using “price-quality paths” and “information disclosure determinations”, regulatory tools in use in the utility sector. The redetermination of the price-quality path is based on estimation of the price or revenue path that would provide the regulated entity with a normal return taking into account the forthcoming regulatory period and the expected future price-quality path in future periods. This paper will build upon and extend main results in Borrmann and Brunekreeft (2011), to investigate the optimal time of investment under some directive that follows the new regulatory norms. It also focuses on identifying the source of incentives in the determination of building blocks, following (Biggar, 2004). The leading role of New Zealand in the successful deployment of a national Fibre-to-the-home (FTTH) network and the consequential overhaul of the telecommunications market suggest the analysis of the new regulatory approach in terms of time of investment and incentives is not only timely but also quite relevant.