A manual for the economic evaluation of energy efficiency and renewable energy technologies

Abstract

(703) 487-4650 t* Printed on paper containing at least 50% wastepaper, including 10% postconsumer waste 3 PrefaceA Manual for the Economic Evaluation of Energy Eflciency and Renewable Energy Technologies provides guidance on economic evaluation approaches, metrics, and levels of detail required, while offering a consistent basis on which analysts can perform analyses using standard assumptions and bases. It not only provides information on the primary economic measures used in economic analyses and the fundamentals of finance but also provides guidance focused on the special considerations required in the economic evaluation of energy efficiency and renewable energy systems.The Analytic Studies Division (ASD) of the National Renewable Energy Laboratory (NREL) developed this manual for the Office of Planning and Assessment (OPA) in the U.S. Department of Energy (DOE). It is envisioned that this manual will serve as a standard reference on economic evaluation within DOE'S Office of Energy Efficiency and Renewable Energy.Several NREL staff members contributed to this manual through valuable input and review. Outside of NREL, many people provided information for and reviewed drafts of the manual. Among the latter are Fred Abel of the Office of Planning

2011 Cost of Wind Energy Review

“…(Short et al 1995). 1 Use of LCOE is especially important for technologies, where there is a constant tradeoff between maintaining or reducing capital investment and increasing energy capture, like wind and solar power.…”

“…The LCOE equation applied here is a standard methodology (Short et al 1995, EPRI 2007) that includes four basic inputs: installed capital cost, annual operating expenses (AOE), annual energy production, and the fixed charge rate (a coefficient that captures the cost of financing a wind project and plant operational life). Additional detail on LCOE can be found in the 2010 Cost of Wind Energy Review (Tegen et al 2012).…”

Lignocellulosic Biomass to Ethanol Process Design and Economics Utilizing Co-Current Dilute Acid Prehydrolysis and Enzymatic Hydrolysis for Corn Stover

“…This rate was selected based on the recommendation by Short et al 72 in his description of how to perform economic evaluations of renewable energy technologies for DOE. His view is that "In the absence of statistical data on discount rates used by industrial, transportation and commercial investors for investments with risks similar to those of conservation and renewable energy investments, it is recommended that an after tax discount rate of 10%… be used.…”

“…The IRS indicates that other property not specifically described in the publication should be depreciated using a 7-year recovery period. Short et al 74 indicates that property listed with a recovery period less than 10 years should use the 200% DB depreciation method and that a 20-year recovery period property should use the 150% DB depreciation.…”

De-risking investment into concentrated solar power in North Africa: Impacts on the costs of electricity generation

“…The LCOE approach is regularly used to compare the overall competitiveness of alternative power generation technologies and cost structures (EIA, 2014;Kost et al, 2013;Branker et al, 2011;Short et al, 1995). The basic idea of the LCOE approach is to relate cumulated lifetime costs to cumulated lifetime power generation of a specific power plant 6 .…”