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    Time Value Concept and Levelized Cost: Anjana Das June 16-27, 2013, Cairo

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    vlatko313
    The document discusses levelized cost analysis for evaluating coal and gas power plant investments. It provides capital costs, operating costs, fuel costs, generation capacities, and lifespans for 500 MW coal and gas plants. The levelized cost of energy is defined as the constant price per unit of energy needed for the investment to break even over its lifetime when discounting future cash flows. Levelized cost analysis discounts future expenditures and revenues using a discount rate and calculates the breakeven price per unit of energy generated over the plant's lifetime. The technology with the lower levelized cost should be chosen for investment.

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    Time Value Concept and Levelized Cost: Anjana Das June 16-27, 2013, Cairo

    Uploaded by

    vlatko313
    56 views6 pages
    The document discusses levelized cost analysis for evaluating coal and gas power plant investments. It provides capital costs, operating costs, fuel costs, generation capacities, and lifespans for 500 MW coal and gas plants. The levelized cost of energy is defined as the constant price per unit of energy needed for the investment to break even over its lifetime when discounting future cash flows. Levelized cost analysis discounts future expenditures and revenues using a discount rate and calculates the breakeven price per unit of energy generated over the plant's lifetime. The technology with the lower levelized cost should be chosen for investment.

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    levelised costs

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    The document discusses levelized cost analysis for evaluating coal and gas power plant investments. It provides capital costs, operating costs, fuel costs, generation capacities, and lifespans for 500 MW coal and gas plants. The levelized cost of energy is defined as the constant price per unit of energy needed for the investment to break even over its lifetime when discounting future cash flows. Levelized cost analysis discounts future expenditures and revenues using a discount rate and calculates the breakeven price per unit of energy generated over the plant's lifetime. The technology with the lower levelized cost should be chosen for investment.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    56 views6 pages

    Time Value Concept and Levelized Cost: Anjana Das June 16-27, 2013, Cairo

    Uploaded by

    vlatko313
    The document discusses levelized cost analysis for evaluating coal and gas power plant investments. It provides capital costs, operating costs, fuel costs, generation capacities, and lifespans for 500 MW coal and gas plants. The levelized cost of energy is defined as the constant price per unit of energy needed for the investment to break even over its lifetime when discounting future cash flows. Levelized cost analysis discounts future expenditures and revenues using a discount rate and calculates the breakeven price per unit of energy generated over the plant's lifetime. The technology with the lower levelized cost should be chosen for investment.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 6

    Time value concept and Levelized Cost

    Anjana Das
    June 16-27, 2013, Cairo

    IAEA
    International Atomic Energy Agency
    Levellised cost

    • Coal Power Plant • Gas Power Plant


    • Size 500 MW • Size 500 MW
    • Capital cost US$1000/kW • Capital cost US$ 800/kW
    • Construction : 4 years • Construction : 3 years
    • Energy generation: 6570 kWh/kw • Energy generation: 7500 kWh/kW
    • Life : 30 years • Life : 30 years
    • O&M cost US$ 20/MWh • O&M cost US$ 15/MWh
    • Thermal Efficiency 35% • Thermal Efficiency 50%
    • Coal price US$ 100/tonne • Gas price US$ 6/MMBTU (US$
    (US$3.87/GJ) 5.71/GJ)

    Which one should be chosen ?


    IAEA
    Levelised cost definition

    • The levelized cost of energy is defined as the


    constant price per unit of energy that causes
    the investment to just break even:

    Present value of the = Present value of


    lifetime revenue the lifetime costs

    IAEA
    Cash and energy flow of a power plant

    Year Investment O&M cost Fuel cost Other cost Energy


    ($) (Million US$) (Million US$) (Million US$) (GWh)
    1 I1
    2 I2
    3 I3
    4 OM1 F1 OC1 E1
    5 OM2 F2 OC2 E2
    6 OM3 F3 OC3 E3
    7 OM4 F4 OC4 E4
    8 OM5 F5 OC5 E5
    9 I9 OM6 F6 OC6 E6
    So on

    IAEA
    Levelised costs of power generation
    𝑛 −1 𝑛− 1
      𝑃𝐸 (𝐼 𝑡 +𝑂𝑀 𝑡 + 𝐹 𝑡 +𝑂𝐶𝑡)
    ∑ 𝐸𝑡 ∗ ( 𝑡
    =∑
    (1+𝑟 )𝑡
    𝑡=0 1+ 𝑟 ) 𝑡 =0

     
    LCOE = =

    n Project life
    r Discount rate
    Et Electricity generation in year t
    PE Price of electricity
    It Investment cost in year t
    OMt O & M cost in year t
    Ft Fuel cost in year t
    IAEA LCOE Levelized Cost of Electricity
    5
    Levelised cost criteria

    Choose the technology with lower levelised cost

    IAEA

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