Developing of a pricing model for Turkish lignite used in thermal plants

Abstract

The objective of this paper is to develop a general pricing model for Turkish Lignite, which is mainly sold to thermal plants. This model will contribute to the development of coal mining within the scope of privatization efforts of the Turkish energy market. The paper consists of two stages. First, data of 10 thermal plants have been evaluated by using hedonic pricing analysis to determine influential price parameters. The results of hedonic regression analysis indicate the effect and importance of calorific value and electricity price on lignite prices. Second, a general coal-pricing model has been developed by taking into account the results of hedonic analysis. Comparison of the coal prices estimated by the developed pricing model and the coal prices obtained from thermal plants indicates an acceptable relation. (c) 2006 Elsevier Ltd. All rights reserved.