Modelling investment and implementation of technological progress in metal industries. Theory and application to the German primary aluminium industry

摘要

Existing approaches to modelling investment and implementation of technological progress in metal industries concentrate, mostly, on the investment process for new plants. Modernisation of existing plants is not modelled with the same degree of care. It is, however, the case that the upgrading of existing plants plays a decisive role in the implementation of technological progress and capacity expansion in metal industries. This paper develops an approach to making investment decisions that considers the upgrading of existing plants, as well as the building of new plants. The capability of the model is illustrated by using the example of the German primary aluminium industry.