Equations and Variables in ATB
Calculated Variables Equations
Input Variables
Input Variable Equations
Other Input Variables
Input Variable |
Value |
Definition |
Construction Duration (C) |
Varies by technology |
Number of years in construction period |
Capacity Factor (CF) |
Varies by technology |
Generally defined as the ratio of actual annual output to output at rated capacity for an entire year |
Nominal Discount Rate (d) |
Varies by technology |
The discount rate is a function of the WACC and inflation |
Debt Fraction (DF) |
Varies by technology |
Fraction of capital financed with debt. 1-DF is assumed financed with equity. |
Expected Market Return on Premium (EMRF) |
Varies by technology |
The difference between the expected return on a market portfolio and the risk-free rate |
Capital Fraction (CF) |
Varies by technology |
Fraction of capital spent in each year of construction, 1 to C. |
Depreciation Fraction (FD) |
Varies by technology |
Fraction of capital depreciated in each year, 1 to M |
|
Fixed Operation and Maintenance Expenses (FOM) |
ATB Input ($/MW-year) |
Annual expenditures to operate and maintain equipment that are not incurred on a per-unit-energy basis |
Fuel |
Heat Rate (MMBtu/MWh) *Fuel Costs($/MMBtu) |
Fuel costs, converted to $/MWh, using heat rates. |
Grid Connection Costs (GCC) |
Varies by technology ($/kW) |
Overnight capital cost includes a nominal-distance spur line (<1 mi) for all technologies, and for offshore wind includes export cable and construction-period transit costs for a 30 km distance from shore. Project-specific costs lines based on distance to existing transmission are not included. |
Inflation Rate (i) |
2.5% |
Assumed inflation rate based on historical data |
Depreciation Period (M) |
Varies by technology (years) |
Number of years in MACRS depreciation schedule |
|
Overnight Capital Costs (OCC) |
Varies by technology ($/kW) |
Capital expenditures if plant could be constructed overnight (i.e., excludes construction period financing). Includes onsite electrical equipment (e.g., switchyard), a nominal-distance spur line (<1 mi), and necessary upgrades at a transmission substation. |
|
Capital Regional Multiplier (CapRegMult) |
1 |
Multiplier to account for regional variation in capital costs. Not used in ATB. |
Rate of Return on Equity (RROE) |
Varies by technology |
Assumed rate of return on the share of assets financed with equity |
Economic Lifetime (t) or cost recovery period |
30 years (default); 20 years and Technical Life also available |
Length of time for paying off assets |
Tax Rate (TR) |
40% |
Combined assumed marginal state and federal tax rate before application of available Federal tax credits for renewable generators |
Variable Operations and Maintenance (VOM) |
Varies by technology ($/MWh) |
Operating and maintenance costs incurred on a per-unit-energy basis. |
Year index (y) |
— |
— |
Assumptions common to all technologies include the following:
- Variables are defined in the Financial Definitions worksheet in the ATB data spreadsheet, where two sets of financial assumptions are available in (1) the R&D Only Financial Assumptions Case (R&D Only Case) and (2) the Market + Policies Financial Assumptions Case (Market + Policies Case).
- While the tax rate has been updated to include the changes in corporate taxes in the Market + Policies Case, the federal/state blended tax rate is not assumed to vary by technology in our calculations; in practice, depreciation schedules vary by technology based on the tax code.
Developed with funding from the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy.