Capital Cost

Note: Cost data is shown only if the Cost check box is checked in the Module Properties screen and if costs are enabled on the Scope tab of the Settings screen. You may enter cost data for any processA Transformation branch that describes an individual technology or group of technologies within a module such as a particular electric plant or oil refinery. However, for a comparative analysis of scenarios, you need only enter costs for processes which differ (in terms of energy consumption, production or installed capacity) among scenarios.

Capital costs should reflect the total (i.e., non-annualized) capital costs per unit of capacity of each process. Capital costs should include all direct construction costs (i.e. overnight costs) and any capitalized finance costs. Use the selection boxes at the top of the screen to select a scale and unit for the data.

The costs you enter here are later annualized during LEAP's calculations, based on the lifetime of each process, and the interest rate charged on the capital cost. LEAP allows you to choose among different methods for annualizing capital costs. You can do this on the Costs tab of the Settings screen. The available methods are:

Capital Recovery Factor (the default method)
No Annualization
Straight Line Depreciation
Sinking Fund Depreciation
Declining Balance Depreciation
Double Declining Balance Depreciation

These approaches are used to spread capital costs over the lifetime of each process, Capacity additions specified endogenously will automatically be replaced after each lifetime (and thus will incur recurring capital costs. Capacity additions specified exogenously do not get automatically replaced.

When constructing scenarios that use LEAP's least-cost optimization methods, you must choose the Capital Recovery Factor method.