Multi-year Investments Using Pre-defined Internal Parameters Tutorial

The basics of how to set up a capacity planning model are covered in Capacity planning Tutorial and multi-year investments in Multi-year investments. With those information, You should be able to do multi-year investments already with your own parameters. However, the correct representation for costs across years can be tricky. To make it more user-friendly, SpineOpt has incorporated some pre-defined economic parameters internally, and the goal of this tutorial is to walk you through the set-up for using these parameters.

Overview

In this tutorial, we will

• simplify the simple system tutorial by only using one power_plant,
• show the necessary parameters to activate and use pre-defined internal parameters,
• show you how to use these economic parameters,
• show you how to use milestone years.

Set-up

To avoid repetition, we only consider one unit instead of the two units from the simple system tutorial. The easiest way to do this is to import the simple system (file > import) and to remove one of the two power plants. To remove a power plant you can go to the graph view. Use ctrl+click on each of the relevant entities connect to powerplantb (except for the nodes as we still need those for powerplanta). Then right click and select 'remove'. There will be a confirmation box with an overview of all the entities that you will be removing.

Since we are working with investments, we are going to make a distinction between investments and operation in the time blocks. We retain the original time block but adjust the resolution to 4 months ('4M'). Additionally we add an investment time block with a resolution of 5 years ('5Y') between 2000 and 2006. We have to adjust the time horizon of the model entity accordingly.

Once we have our setup, we can take a look at the economic representation in SpineOpt. Below is a list of parameters you would need:

• use_economic_represention: if set to true, it means the model will use its internally-calculated parameters for discounting investment and operation costs. The default value is false.
• use_milestone_years: this parameter is used to discount operation costs. If set to false (default), it means we use continous operational temporal blocks, and thus the operation cost will be discounted every year. Otherwise, it will be discounted using the investment temporal block.
• discount_rate: the rate you would like to discount your costs with.
• discount_year: the year you would like to discount your costs to.
• unit_investment_tech_lifetime: using units as an example, this is the technical lifetime of the unit.
• unit_investment_econ_lifetime: using units as an example, this is the economic lifetime of the unit which is used to calculate the economic parameters.
• [optional] unit_discount_rate_technology_specific: using units as an example, this is used if you would like to have a specific discount rate different from discount_rate.
• [optional] unit_lead_time: if not specified, the default lead time is 0.
• unit_investment_cost: using unit as an example, this is the investment cost for the investment year. Suppose you set use_economic_represention to false, then this cost that you put will not be discounted at all. However, if you set it to true, then SpineOpt will discount this cost to the discount_year using discount_rate.

To be able to see the values of the economic parameters after a run, you have to add them to the report.

Not using economic parameters

We start with the case if use_economic_represention is set to false, which means SpineOpt will not create and use its internally-calculated parameters for discounting investment and operation costs. A unit_investment_cost of 100 and a vom_cost of 25 are not discouted at all. See the set-up below.

Using economic parameters but not using milestone years

Now we only change use_economic_represention to true while still keep use_milestone_years as false (default). This set-up indicates that we will use the internally-calculated parameters and continous operational temporal blocks. Now the unit_investment_cost and the vom_cost are discounted to 1990 using a discount_rate of 0.05.

unit_discounted_duration is used to discount operation costs so it has the resolution of the operational temporal block. However, since we only discount per year, this parameter value is constant within a year.

The rest is for discounting investment costs with the resolution of the investment temporal block.

Using economic parameters and using milestone years

Now we also change use_milestone_years to true. This indicates that we want operational temporal block to be discontinous and use the same milestone years as the investment temporal block. In this case, we need to change the definition of temporal blocks, see below picture.

The values for the parameter unit_discounted_duration are shown below. Note now in 2000, the value becomes 2.79. This parameter value acts as a weight taking into account the discount per year and the resolution of the milestone years. In order words, now the operation costs for the in-between years have also been included.