CAPEX Definition

Capital expenditures (CAPEX) are expenditures required to achieve commercial operation in a given year.

For the ATB - and based on EIA (2016a) and the System Cost Breakdown Structure described by O'Connor et al. (2015b) - the hydropower plant envelope is defined to include:

• Hydropower generation plant
  • Civil works, such as site preparation, dams and reservoirs, water conveyances, and powerhouse structures
  • Equipment, such as the powertrain and ancillary plant electrical and mechanical systems
• Balance of system
  • Installation and O&M infrastructure
  • Electrical infrastructure, such as transformers, switchgear, and electrical system connecting turbines to each other and to the control center
  • Project indirect costs, including costs related to environmental mitigation and regulatory compliance, engineering, distributable labor and materials, construction management start up and commissioning, and contractor overhead costs, fees, and profit
• Financial costs
  • Owner's costs, such as development costs, preliminary feasibility and engineering studies, environmental studies and permitting, legal fees, insurance costs, and property taxes during construction
  • Electrical interconnection and onsite electrical equipment (e.g., switchyard), a nominal-distance spur line (<1 mile), and necessary upgrades at a transmission substation; distance-based spur line cost (GCC) not included in the ATB
  • Interest during construction estimated based on three-year duration accumulated 10%/10%/80% at half-year intervals and an 8% interest rate (ConFinFactor).

CAPEX can be determined for a plant in a specific geographic location as follows:

CAPEX = ConFinFactor*(OCC*CapRegMult+GCC).

(See the Financial Definitions tab in the ATB data spreadsheet.)

Regional cost variations and geographically specific grid connection costs are not included in the ATB (CapRegMult = 1; GCC = 0). In the ATB, the input value is overnight capital cost (OCC) and details to calculate interest during construction (ConFinFactor).

In the ATB, CAPEX is shown for four representative non-powered dam plants and four representative new stream-reach development plants. CAPEX estimates for all identified hydropower potential (~700 NPD and ~8,000 NSD) results in a CAPEX range that is much broader than that shown in the ATB. It is unlikely that all of the resource potential will be developed due to the very high costs for some sites. Regional cost effects and distance-based spur line costs are not estimated.

Standard Scenarios Model Results

ATB CAPEX, O&M, and capacity factor assumptions for the Base Year and future projections through 2050 for High, Mid, and Low projections are used to develop the NREL Standard Scenarios using the ReEDS model. See ATB and Standard Scenarios.

CAPEX in ATB do not represent regional variants (CapRegMult) associated with labor rates, material costs, etc., and neither does ReEDS.

CAPEX in ATB do not include geographically determined spur line (GCC) from plant to transmission grid, and neither does ReEDS.