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MC ¼ e 13 : 885652232
740621837 Q ð 0 : 740621837 1 Þ
0
:
MC ¼ e 13 : 885652232
0 : 740621837 Q ð 0 : 259378163 Þ
Q ð 0 : 259378163 Þ
MC ¼ 1072660
:
1386
:
For a Seawater desalinating plant the equation is different:
f SEA ¼ 1 g
T C ¼ e a Q ðÞ e c
)
TC ¼ e aþc Q bþd
Q ðÞ
MC ¼ e aþc b þ d
1
)
Using the coef
cient estimates obtained:
MC ¼ e 13 : 885652232 þ 0 : 928025419
ð 0 : 740621837 þ 0 : 143438118 Þ Q ð 0 : 740621837 þ 0 : 143438118 1 Þ
MC ¼ e 14 : 813677651
ð 0 : 884059955 Þ Q ð 0 : 115940045 Þ
MC ¼ 2713304 : 0341 ð 0 : 884059955 Þ: Q ð 0 : 115940045 Þ
MC ¼ 2398723 : 4423 Q 0 : 115940045
Finally, we can compute the Marginal Cost values for Seawater and Brackish
water desalination. The 36
fitted values are computed below, using a standard
econometrics program such as WinRats. Results are organized to increase with
plant size and interpreted in Table 5.3 . Furthermore, Fig. 5.2 illustrates Marginal
Costs in brackish water and seawater desalination plants, respectively.
5.6.2 Derivation of Shadow Ramsey Prices and Breakeven
Prices
In this section, the units of the optimal log-linear regression model are converted
from US gallons to cubic meters. On the basis of the model expressed in cubic
meters, Shadow Ramsey Prices and Breakeven Prices are computed.
In order to express MC, Shadow Ramsey Prices and Breakeven Prices in cubic
meters, the constant coef
cient
α
needs to be recalculated. Other coef
cients in the
model do not change. New coef
cients are reported in Table 5.4 .
The Shadow Ramsey prices (SRP) follow directly from the estimated Marginal
Costs. The Shadow Ramsey Price for each capacity is the price where P = LRMC.
Therefore, a brackish water desalinating plant faces the following Ramsey Price
curve:
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