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Title: Estimating the Impact of Residual Value for Electricity Generation Plants on Capital Recovery, Levelized Cost of Energy, and Cost to Consumers

Abstract

There is often a benefit to continue operating electricity generating assets after their initial contracts expire. This report discusses these benefits and associated risks, using data and illustrative calculations. The key findings are: the realized operational lives of generation technologies before retirement are typically much longer than typical measures of economic lives. The cost impact of a life extension can be comparable to the impact of other factors considered for generation investment decisions, and suggests that R&D and commercial efforts to extend generator life may be valuable. Refurbishment has a useful and economic role, but the option is often neglected during initial investment. Estimating follow-on value at the time of the original investment is complex and often neglected, but may be valuable.

Authors:
 [1];  [1];  [2];  [2]
  1. National Renewable Energy Laboratory (NREL), Golden, CO (United States)
  2. U.S. Department of Energy
Publication Date:
Research Org.:
National Renewable Energy Lab. (NREL), Golden, CO (United States)
Sponsoring Org.:
USDOE Office of Energy Efficiency and Renewable Energy (EERE), Strategic Priorities and Impact Analysis Office (EE-61)
OSTI Identifier:
1493401
Report Number(s):
NREL/TP-6A20-72217
DOE Contract Number:  
AC36-08GO28308
Resource Type:
Technical Report
Country of Publication:
United States
Language:
English
Subject:
24 POWER TRANSMISSION AND DISTRIBUTION; 29 ENERGY PLANNING, POLICY, AND ECONOMY; residual value; economic lives; lifetime; refurbishment; LCOE; levelized cost of energy; NPV; net present value

Citation Formats

Jenkin, Thomas J, Feldman, David J, Kwan, Alan, and Walker, Brian J. Estimating the Impact of Residual Value for Electricity Generation Plants on Capital Recovery, Levelized Cost of Energy, and Cost to Consumers. United States: N. p., 2019. Web. doi:10.2172/1493401.
Jenkin, Thomas J, Feldman, David J, Kwan, Alan, & Walker, Brian J. Estimating the Impact of Residual Value for Electricity Generation Plants on Capital Recovery, Levelized Cost of Energy, and Cost to Consumers. United States. doi:10.2172/1493401.
Jenkin, Thomas J, Feldman, David J, Kwan, Alan, and Walker, Brian J. Tue . "Estimating the Impact of Residual Value for Electricity Generation Plants on Capital Recovery, Levelized Cost of Energy, and Cost to Consumers". United States. doi:10.2172/1493401. https://www.osti.gov/servlets/purl/1493401.
@article{osti_1493401,
title = {Estimating the Impact of Residual Value for Electricity Generation Plants on Capital Recovery, Levelized Cost of Energy, and Cost to Consumers},
author = {Jenkin, Thomas J and Feldman, David J and Kwan, Alan and Walker, Brian J.},
abstractNote = {There is often a benefit to continue operating electricity generating assets after their initial contracts expire. This report discusses these benefits and associated risks, using data and illustrative calculations. The key findings are: the realized operational lives of generation technologies before retirement are typically much longer than typical measures of economic lives. The cost impact of a life extension can be comparable to the impact of other factors considered for generation investment decisions, and suggests that R&D and commercial efforts to extend generator life may be valuable. Refurbishment has a useful and economic role, but the option is often neglected during initial investment. Estimating follow-on value at the time of the original investment is complex and often neglected, but may be valuable.},
doi = {10.2172/1493401},
journal = {},
number = ,
volume = ,
place = {United States},
year = {2019},
month = {1}
}

Technical Report:

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