Using Purchasing Power

When a design engineer is setting up the specifications for a new plant, a decision must be made on whether to use purchased power or have the plant set up its own power unit. It may be possible to obtain steam for processing and heating as a by-product from the self-generation of electricity, and this factor may influence the final decision. In some cases, it may be justified by means of a HAZOP study to provide power to the plant from two independent sources to permit continued operation of the plant facilities if one of the power sources fails. 

Figure 9.3. Energy intensity of GDP in the EU (TOE/SlOOO 1995 using purchasing power parities).

Equations (9-59), (9-60), (9-61), and (9-62) may be used as they stand to assess expenditure on energy-conservation measures since a constant amount of energy is saved in each year subsequent to the capital outlay. However, the annual cash flows Acf corresponding to the energy savings remain constant only if there is no inflation or if the money values are corrected to their purchasing power at the time of the capital expenditure. 

Table 9-15 shows that the total amount of tax actually paid over the 5-year period was 988,320. This becomes 5.34,272 in uninflated-money terms when the tax for each year is corrected to its purchasing power in Year 0, using / factors for the 20 percent inflation rate employed for the example. Calculations for other rates of inflation can also be made, and the results plotted as in Fig. 9-.30. 

Comparisons between Enropean stndies are also difficult. Tolley and Gyldmark (1993) reviewed costs of treatment, care, and support for HIV-positive and AIDS patients in eleven Enropean conntries, which were based on data from the second half of the eighties. The anthors inflated cost fignres to 1990 prices and converted them from local currency to US by using national healthcare-specific price indices and health-specific purchasing power parities. The standardized cost estimates ranged between US 1,700 (social care per HIV-positive) and US 28,200 (hospital care per AIDS person-year), with the exception of a Greek study, which produced an adjusted cost estimate for the hospital treatment and care of AIDS patients of US 70,400 per person-year. 

Costs converted to US doiiars (1996 vaiue) using the Heaith Purchasing Power Parity price index (OECD, 1999). 

To compute this value requires survivor functions for relevant time periods as well as values for v(f). The survivor functions were computed from male and female life tables available for 1982 and 1997 from Statistics Canada. Economic values for additional life years were computed based on Murphy and Topel (2005) and converted to Canadian dollars using the average per capita ratios of Canadian to U.S. income for 1994-2003. These income-adjusted life year values were then multiplied by 1.267 the purchasing power parity (PPP) rate between Canada and the United States in 2004, expressed in 2004 dollars. 

The numbers are mesmerizing. Since 1980, China s economy has grown by more than nine percent a year and the country now has a GDP of approximately EUR 1.3 trillion. It is the world s seventh largest economy (second if purchasing power parity is used), and annual growth is expected to be around double-digit rates. 

Regional economics of TDF are paramount. Electric Power Research Institute (EFRI) created a computer model of TDF use in a cyclone-fired boiler. The model included an economic analysis of alternative fuel firings to account for the fact that, if boiler efficiency decreases, the company would need to purchase power to replace power lost by the boiler derating.12 These costs are called "busbar power costs".12 Even considering the decrease in the net heat rate caused by TDF use, the model found that TDF provided overall savings in levelized busbar power costs relative to 100 percent coal-firing.12... 

A second group is coal which is seen to have much higher carbon intensity than the liquid or gaseous fuels. Coal is often used by power generation operations associated with petrochemical operations. This power is often purchased from a third party and on a global basis should be counted if power is imported. However, at the present time this type of carbon counting is not demanded by many jurisdictions leaving the... 

PBM companies have used the purchasing power of the unsophisticated plan sponsor to negotiate preferred financial arrangements with drug manufacturers and pharmacy providers, and have now refocused the services intended to provide certain value decisions before paying for the products to actually promohng the products more profitable to the PBM. 

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