Topic: Retirements when defining exogenous capacity Subscribe | Previous | Next
Oriol Travesset 10/26/2016
Hi,
I have a problem in my model when I use exogenous capacity in electricity generation. When I introduce new capacity using the Exogenous capacity variable it is not retired after the specified Lifetime. It causes a problem in social costs results as they take into account the Lifetime to annualize capital costs. An example is showed in the attached figure: two technologies are introduces in 2020 with a 30 years lifetime. In the case of "CHP GNL", additional capacity is introduced in 2030 and 2040. As can be observed, when lifetime is expired (30 years from 2020) social costs decay dramatically because capital costs are amortized but both technologies are still generating.
It does not happen using optimization scenarios as LEAP retire capacity when lifetime is expired and add new capacity if it is necessary.
How can I solve this issue?
Thank you very much!
Taylor Binnington 10/26/2016
Hi Oriol,
This is actually how the Exogenous Capacity variable is designed to work. It is meant to offer to the user complete control of a process' capacity regardless of its lifetime, which as a corollary means that the user must exogenously specify retirements as well as capacity additions. You are also correct that if Exogenous Capacity increases by a fixed amount from one year to the next, then the newly-installed exogenous capacity is assigned (amortized) capital costs over the following Lifetime years only.
There is no easy solution, if you essentially wish (as I think you do) to differentiate the financial and physical lifetimes of the power plant. Using the LEAP's optimization capabilities offers one way out, since you may use the Max/Min Built Capacity variables to your advantage - but this may not be appropriate for your model.
We too encounter this occasionally in our own modeling. I'll discuss other some ideas with LEAP's developer. Sorry that we can't offer anything more at this time,
Taylor
Oriol Travesset 10/26/2016
Thanks for your quick answer Taylor.
By the moment, I think that the best solution is considering the same physical and financial lifetimes and introduce a new process (at the end of lifetime) with the same technical characteristics. This solution avoids unexpected social costs behaviour.
Taylor Binnington 10/26/2016
Yes, you're quite right that introducing another process into your Transformation module would be a way around this. I should have mentioned this in my posting - sorry. You could use this new process to add new Exogenous Capacity in the same year in which you retire Exogenous Capacity in the pre-existing process.
Taylor