Katty Chen 7/17/2013

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Dear COMMEND team,

I used the LEAP model to do economic and environmental analysis for five different scenarios (which have different component of fuel sources for electricity generation).

The LEAP model showed results as "cost for electricity generation","GWP allocated to demand", and "GWP for electricity generation".

However, I do not know the calculation procedure (the formula or equation) within the LEAP model.

Therefore, I do not know how to interpreate the results.

For example, the cost of electricity generation is 26 billion US dollar for my BAU scenario. But I do not know how this "26" comes from.

Where could I find the calculating procedure or equation?
Thanks,
Katty

Taylor Binnington 7/18/2013
 

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Hi Katty,

When LEAP calculates the cost of electricity, for example, this is based on the capital cost of the plant, the number of years over which the cost is annualized (and the annualization method), the plant's availability, and fixed/variable/fuel costs. Nothing should be too mysterious, in fact for basic analyses, it often helps to think of LEAP as a very flexible piece of accounting software.

I think it would help you a great deal to comb through some of the online help pages (to get started, you might have a look here http://www.energycommunity.org/WebHelpPro/Concepts/Transformation_Cost_Calculations.htm and here http://www.energycommunity.org/WebHelpPro/Transformation/Costs.htm ). If you still have questions regarding LEAP's internal equations, I would probably point you to the comprehensive user guide, here:

http://www.energycommunity.org/documents/LEAP2011UserGuideEnglish.pdf

Hope that puts you on the right path!

Taylor

Katty Chen 7/18/2013
 

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Thank you for your reply, Taylor.

I read all these on-line materials but still not very clear about the calculation procedure. All these materials only introduce basic concepts instead of detailed calculation procedure. Therefore, I did not understand how my results come from.

For example, I input capital cost, variable O&M costs into LEAP for five different scenaios and LEAP gave me "cost for electricity generation" for five scenarios. I tried to e0xplain how the numbers(results) some from but failed to do so.

I am reading the UserGuide now but have not found anything helps :(

-Katty

Taylor Binnington 7/19/2013
 

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Hi Katty,

If I'm correctly interpreting the particular chart that you're looking at, what you're seeing is the cost of running, maintaining and owning your power plants each year. This includes some kind of capital cost annualization (the exact method is set in the Basic Paramters:Costing tab, and a common method is the well-known Capital Recovery Factor), which is the amount that must be paid each year, to exactly cover the capital cost of the power plant so that nothing is owing after the lifetime of the plant. Add to this the fixed O&M cost, and multiply by the capacity of the plant. Finally add any variable costs, multiplied by the amount of electricity that the plant actually generated in that year.

There are a few things to note, as well. The cost of your Electricity Generation module does not contain any fuel costs, which are described in the resources branch of the tree. This is to avoid any kind of double counting of costs. Also, you will not see any cost contribution from the capital cost of exogenous capacity: these costs are assumed to be sunk. LEAP annualizes only the capital costs of endogenous capacity that it builds to maintain the planning reserve margin. I know that I included it in my earlier post, but this link:

http://energycommunity.org/WebHelpPro/Concepts/Transformation_Cost_Calculations.htm

...will probably help you to understand which costs enter the analysis at each stage of calculation.

I also think it would be beneficial to begin with a more trivial example than your full LEAP model. Try building a single power plant to meet a simple demand, and then begin adding costs one at a time into your analysis to get a feel for how LEAP determines the yearly cost for your Electricity Generation branches.

Best,

Taylor

Katty Chen 7/19/2013
 

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Thank you for your detailed explain. It really helps! (especially the second paragraph of your latest reply)

I am now reading the User Guide again and trying to make every concept and calculation procedure clearer. :)

Sincerely thank you for your help!

-Katty

Katty Chen 7/22/2013
 

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Hi, Taylor,

Sorry for asking so many questions about costs.

I am reexaming the electricity costs of my research and really felt confused about some calculation.

For example, since the LEAP avoilds double counting of cost, the Electricity Generation module does not contain fuel costs
(ususally in the unit of $/MWh). In other words, I should inset fuel costs information in the Resource module.

However, when I tried to put data into the "Import Cost" column, the unit is different from the unit of fuel cost of electricity generation. For example, the cost of coal is X dollars per metric tonne, instead of dollar per MWh (I understand the difference).

So I am wondering, how could LEAP transform the costs insert in the Resources module to the Transformation module.

I know the basic cost calculation concpt from the User Guide, but not clear about how exactly it works.

Because I try to compare total electricity generation costs of renewable energy and conventional energy, the "fuel costs" should have significant impact for the results. Just cannot understand how the LEAP model integreates fuel costs into total cost of electricity generation.

Thanks a lot!
Hope to hear your reply soon!

-Katty

Taylor Binnington 7/22/2013
 

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Hi there,

You should be able to specify the units of any number that you want to enter under either Import Cost or Indigenous Cost; you don't have to stay with the defaults that LEAP provides. If you're curious how different units of energy are converted among one another, click the Fuels button in the main toolbar. In the window that appears, you'll be able to see the net energy content of all of the fuels in LEAP's database, which are used for conversions.

Bear in mind that these numbers are only concerned with the energy content of each fuel, and have nothing to do with a useful energy analysis (which of course requires parameters specified for each transformation process).

Hope that helps,

Taylor