CAP_NEW discounting?

[Antti-L]

Is it correct that CAP_NEW discounts from the middle of a period to it's start year if no NCAP_ILED is defined for a technology? In the global model, where periods have 10 years duration, this discounting factor increases the reported lump sum investment (LUMPINV) costs significantly compared to the calculation based on pure investment costs and new capacity (NCAP_COST x VAR_NCAP), in particular when NCAP_DRATE is high (e.g. as I assume for residential solar PV).

No, there is no discounting from the middle of a period to its start year. To get the lump-sum investment cost, all the annual investment payments are just discounted to the beginning of the commissioning year k associated to each payment stream. When neither NCAP_ILED nor NCAP_DRATE is defined, the LUMPINV value should thus be equal to NCAP_COST × VAR_NCAP.  But if either of them is defined, the lump sum cost will be higher, because with interest during construction or a higher required rate of return, the present value of the investment payments at the commissioning year will be higher than  NCAP_COST × VAR_NCAP.

[lukas]

Hello,
if the NCAP_ILED is larger than lengh of periods, the LUMPINV is shown in the period in that the construction starts (e.g. one period before the period of commissioning year). Is that correct, please?
Even in that case,  LUMPINV= all the annual investment payments are just discounted to the beginning of the commissioning year k associated to each payment stream, right?
Thank you.
Lukas

[Antti-L]

> LUMPINV is shown in the period in that the construction starts (e.g. one period before the period of commissioning year)

No. LUMPINV and INSTCAP are reported for the commissioning period.  The vintage index is also reported, and so you should see the vintage being different from the period in such a case.

> all the annual investment payments are just discounted to the beginning of the commissioning year k associated to each payment stream, right

Yes.  In effect, this means that in the case where no ILED and no NCAP_DISC is specified, LUMPINV divided by the installed capacity will be equal to the average NCAP_COST defined for the years k of each stream (and if NCAP_COST is constant, then you would even get LUMPINV = NCAP_COST × VAR_NCAP).