Veda2.0 Released!


energy costs
#1

Dear all,

I have just read the discussion related to the topic “Investment costs in VEDA-BE” with interest, and I have a question somewhat related to this.

I would like to be able to say how large a share of a region’s income (GDP) is spent on energy related costs (investments, fuel costs, etc.) in a particular year. Which cost attributes do you think would make most sense to include in such a calculation? And are there costs related to any particular processes/commodities which I should exclude (e.g. because they are not energy- or emissions-related)?

I would like to use undiscounted costs. In VEDA-BE I can select the following attributes which will show up for each year:

·         Cost_Act

·         Cost_Els

·         Cost_Flo

·         Cost_Fom

·         Cost_Inv

·         Cost_ire

·         Cost_Salv

Are these undiscounted? And which should I include?

Or, should I follow Antti’s suggestion, and thus base my calculation on the following (and in case – which)?

·         INVC

·         FIXC

·         ACTC

·         FLOC

·         COMC

·         COME

·         IREC

·         SALV

Many thanks in advance!

Kind regards,

Helene

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#2
Helene: I don't think I have ever suggested to compare cumulative discounted energy system costs (INVC, ACTC etc.) with GDP, at least in the topic you referred to I did not suggest that.  If you think I have done so, could you please give a citation? Smile

If you want to compare costs with GDP, I think you should use annual costs, because GDP is also an annual value. Therefore, I would suggest to use the reported annual costs (Cost_Inv, Cost_Fom etc.), excluding Cost_Salv, which contains the discounted salvage values at the end of model horizon. All the annual cost results (excluding the salvage) are undiscounted values.




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#3

Dear Antti,

 

Thanks for your quick reply. No, I have not seen that you have suggested this at any point - I can, however, see that my post may be interpreted in that way - sorry about that. When I refer to your ‘suggestion’, I meant the suggestion you had regarding how to get values for undiscounted costs.

 

Following your clarification, I am now satisfied with using the annual costs that are reported by default. Just two more questions for clarification.

 

First, do you think I should include all of those cost attributes that are reported (apart from the salvage values); i.e. – is there no double counting here (e.g. between Cost_flo and Cost_ire?)?

 

Second, do you think I should exclude costs related to some particular processes/commodities (e.g. because they are not energy- or emissions-related), when you think of my objective for the calculation?

 

Thanks again, and kind regards,

Helene

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#4
All the annual cost attributes are "independent" of each other, hence no double-counting can occur. For example, Cost_ire includes only the implied trade costs, which are not included in Cost_flo.

I think the most common way of using the cost information is to calculate the difference in the total costs between the Baseline and the policy scenarios.  These cost differences could then be viewed as the policy costs due to the various measures described in each of the policy scenarios.  When calculating these cost differences, all cost should normally be included, because whatever the costs are related to, the difference in the cost is occurring due to the energy/environment policy that is being applied.
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