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Hi all,
Can anyone explain how does the model form annualized stream of investments in case of a time-stepped approach? For example, if the technical life of a vehicle technology is 15 years, I understand that in the perfect foresight method, it can calculate fuel costs in every year for the next 15 years (with varying fuel prices every year) and make that as annualized stream of costs (please let me know if this wrong).
How does it work in time-stepped approach? Suppose if I run an extremely myopic model with just 1-year of foresight, and if the vehicle lifetime is still 15 years, does it calculate annualized stream of costs using the current year's fuel price?
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As the current maintainer of the TIMES code, I can assure you that there should be no difference in calculating fuel costs between the perfect foresight vs. time-stepped approaches. In both cases, the fuel costs are calculated simply by multiplying the activity levels (VAR_ACT, VAR_FLO) by the activity costs (ACT_COST, FLO_COST, FLO_DELIV) in each year, and then discounting them to the Base Year.
If you see a difference in these calculations, maybe you could you provide some example demonstrating it?
Regarding investment costs, there is basically no difference either; only the model horizon is shorter during the time-stepped iteration. In other words, in the time-stepped mode the investment costs in each time step are accounted in the same way as when running the model in the perfect foresight mode using the same horizon as in that time step.
