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Economic Analysis: Theory and Practice
 

A matrix model to investigate capital gains and the period of equipment replacement of thermal power plants

Vol. 15, Iss. 1, JANUARY 2016

PDF  Article PDF Version

Received: 14 October 2015

Accepted: 25 November 2015

Available online: 24 January 2016

Subject Heading: MATHEMATICAL METHODS AND MODELS

JEL Classification: C02, C39, C69

Pages: 159-182

Oklei P.I. PAO Inter RAO, Moscow, Russian Federation
okley_pi@interrao.ru

Importance Under economic crisis and investment restrictions, it is crucial to research capital gains, the period of equipment replacement of electricity companies, and to improve the accuracy of mathematical models of asset management systems of thermal power plants.
Objectives The study aims to define the structure of capital gains depending on energy resource production by thermal power plants, and to develop analytical formulas of the period of equipment replacement.
Methods For the matrix analysis, the space of asset management is divided into two sub-spaces, i.e. tangible and financial assets. Financial asset management is determined using the value added structure and the capital gain being its component.
Results I developed an ‘input-output’ matrix model of thermal power stations, created an economic and technological model that links the technology of tangible assets of energy resources of thermal power plants and economic factors of financial assets (value added, income, cost of labor), from which the structure of the cost of asset ownership of thermal power plants is derived.
Conclusions The paper studies a two-tier matrix model of asset management of power suppliers. It presents a model of canonical calculation of capital gains from asset ownership and equipment replacement period of thermal power plants on the basis of a two-tier system of electric and thermal energy generation with and without heating steam extraction.

Keywords: tangible assets, input-output matrix, value-added, capital gain, equipment replacement period

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