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Change Replacements Treatment #210

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@adfarth adfarth commented Mar 30, 2023

  • ElectricStorage and Generator have replacement_year inputs. It is assumed that these two technologies can be replaced within the analysis period.
  • Previously, replacement costs were treated as tax deductible. Neither ITC nor MACRS were applied to these costs.
  • Now, we are treating replacement costs are depreciable and are applying the ITC and MACRS to these costs.
  • The following new inputs have been added to ElectricStorage and Generator:
    -- replace_macrs_option_years
    -- replace_macrs_bonus_fraction
    -- replace_total_itc_fraction
  • For Generators, we assume no ITC or MACRS incentives for the upfront cost or replacements
  • For ElectricStorage replacements, we assume that the MACRS bonus depreciation has phased out, that storage qualifies for 5-year depreciation (2025 and onward), and that the ITC remains at 30%.
  • This is all captured in the effective_cost() calculation

TODO:

  • Update CHANGELOG
  • Add tests
  • Update reporting of results (esp. in financial.jl and proforma.jl)
  • Update existing tests once this branch is fully tested
  • Consider changing input names to "replacement" not just "replace"?
  • Also update docs?
  • Check if generator replacement costs apply to total capacity or just new

Note! I haven't looked into tax treatment assumptions built into replacement costs with battery degradation modeling.

@adfarth adfarth added this to the v1.0.0 release milestone Mar 30, 2023
@@ -344,43 +344,48 @@ function cost_curve(tech::AbstractTech, financial::Financial)
itc_unit_basis = (cap_cost_slope[s] + rebate_federal) / (1 - itc)
end

macrs_schedule = [0.0]
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Added all of this as in-line conditional statements below

@@ -48,7 +48,7 @@
can_export_beyond_nem_limit = false,
can_curtail::Bool = false,
macrs_option_years::Int = 0,
macrs_bonus_fraction::Real = 1.0,
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I'm not sure why we previously defaulted this to 1. It got set to 0 anyway (in cost_curve.jl) since macrs_option_years = 0.

@@ -162,6 +175,63 @@ function effective_cost(;
return round(cap_cost_slope, digits=4)
end

function replacement_effective_cost(;
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I made this a separate function so we can just call this to get replacement costs in the reporting of results.

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Treat replacements as capital costs (apply ITC and MACRS), not as tax deductible costs
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