PPICA, Power Plant Investment Cost Analysis

1 - Description of program or function: This software package contains two modules: - CAPITAL1 calculates investment costs from overnight costs, based on the capital structure of the utility (debt/equity ratio), return and interest rates according to the type of securities involved, and a standard-shaped curve of capital outlays during construction of a power plant. - FCRATE1 calculates the year-by-year revenue requirements to cover the capital-related charges incurred by the new investment and their economic equivalent: the levelled fixed-charge rate and capital contribution to the levelled unit power generation cost per kWh. They are proposed as an alternative to the corresponding modules CAPITAL and FCRATE, included in the LPGC (Levelled Power Generation Cost) suite of codes developed by ORNL and US-DOE. They perform the same type of analysis and provide the same results. 2 - Methods: Results output from CAPITAL1, in terms of the initial investment at startup and the fraction thereof that is allowable for tax depreciation, can be transferred automatically as data input to FCRATE1. Other user-defined data are: the project life, the time horizon of the economic analysis (which does not necessarily coincide with the project life), the plant load factor (lifetime average), the tax rate applicable to utility's income, the tax depreciation scheme and the tax charge accounting method (normalised or flow- through). The results of CAPITAL1 and FCRATE1 are expressed both in current money and in constant money of a reference year. Inflation rate and escalation rate of construction expenditures during construction period, and of fixed charges during service life are defined by the user. The discount rate is set automatically by the programme, equal to the weighted average tax-adjusted cost of money. 3 - Restrictions on the complexity of the problem: CAPITAL1 and FCRATE1 are 'alternatives', not 'substitutes', to the corresponding programs CAPITAL and FCRATE of the LPGC package. The file names have been changed on purpose to avoid messing up normal LPGC operation, so that they can be placed in the same directory as LPGC without any disturbance. However, the new versions of these two modules are not designed to run in conjunction with the original LPGC modules. It means that other contributions to power cost, i.e., operating and maintenance costs and fuel costs, must be computed separately, then added to the capital costs in order to evaluate the complete cost of electricity generation