A quick question of cost_salv and price

[xiao.li8@mcgill.ca]

Hi,

I noticed that the output only provides a total value for cost_salv, but it’s unclear how this amount is distributed across specific investment years. For example, if a technology has capacity expansions in 2045 and 2050, with a lifetime of 30 years and a total salvage cost of 10, how can I determine the portion of cost_salv attributed to the 2045 investment? [is there any better ways than manually further calculations?]

If I want to know the exact cost of that specific year (e.g., 2045), I should sum and discount the cost components (INV, O&M) and then subtract the attributed cost_salv, right?

Besides, which attribute should I use to see the electricity price over timeslices?

Thank you in advance for the clarification.


Best regards,
Xiao

[Antti-L]

> the output only provides a total value for cost_salv, but it’s unclear how this amount is distributed across specific investment years.

I guess this might be a VEDA Online issue, or perhaps you are not using TIMES, but OseMosys?
The TIMES reporting does include Cost_Salv(r,v,p) by vintage (≈investment year), just like Cost_Inv(r,v,t,p) is by vintage, Cost_FOM(r,v,t,p) is by vintage, etc., and also the reported Lumpinv data is by vintage as well. So, I think you would have all the capacity-specific costs by vintage, and could thus easily derive the total capacity-related costs by vintage, with or without salvage credit.

[KristofferEML]

Dear Antti,

Can you please help med clarify if the cst_salv(R,T,P) parameter represents the net-present salvage value of the proces P with vintage T in region R in the model specific G_DYEAR?

Say if the model has 2025 as G_DYEAR and EOH is 2050. Then the cst_salv(R,T,P) for technology P represents the net present value in 2025 of salvage cost for the process in 2051 (assuming that the milestonyear 2050 represents only one year)? If this is the case would I be correct in assuming that the undiscounted salvage cost in 2051 would correspond to "cst_salv(R,T,P) / obj_disc(R,2051,CUR)" or perhaps more to the point "cst_salv(R,T,P) / OBJ_DCEOH(R,CUR)" ?

Best,

Kristoffer

[Antti-L]

Correct. Unlike the other Cost_* reporting parameters, Cost_Salv is thus not undiscounted. The documentation is somewhat ambiguous in this respect, by just saying that it represents the values at EOH+1, but those values are indeed discounted from EOH+1 to the base year, which would be better stated explicitly. At one point, they were reported without that discounting, but then some users got confused about the high salvage values, and preferred to see them discounted to the base year instead.

You can thus sum up all the salvage values as such, and get the objective component for total salvage. However, note that the total OBJ value can be reproduced by summing up all the annual costs (Cost_* excluding Cost_Salv) multiplied by Time_NPV (this is accurate when using levelized annual costs), and so one should bear in mind that the salvage values are thus already taken into account in those annual costs.

[KristofferEML]

Correct. Unlike the other Cost_* reporting parameters, Cost_Salv is thus not undiscounted. The documentation is somewhat ambiguous in this respect, by just saying that it represents the values at EOH+1, but those values are indeed discounted from EOH+1 to the base year, which would be better stated explicitly. At one point, they were reported without that discounting, but then some users got confused about the high salvage values, and preferred to see them discounted to the base year instead.

You can thus sum up all the salvage values as such, and get the objective component for total salvage. However, note that the total OBJ value can be reproduced by summing up all the annual costs (Cost_* excluding Cost_Salv) multiplied by Time_NPV (this is accurate when using levelized annual costs), and so one should bear in mind that the salvage values are thus already taken into account in those annual costs.

Thank you for helping me clarify this issue. For reporting purposes, I have decided to calculate and report salvage cost as undiscounted cost in "year = EOH+1" to better understand the cash flow in the TIMES model solution

Best, 

Kristoffer