volumetric cost consists of DER use and non-DER use and is calculated by multiplying the cumulative gas consumption of DER equipment and direct natural gas use
during each period by the fuel tariff rate.
C Gas ¼
X
m
GBase þ
X
m
GDcharge m Á
max
P
u
PGas m,d,h,u þ
P
i
P EGen i,m,d,h,u þ ESal i,m,d,h þ IElec i,m,d,h
Eff i
GHRate
0
B
B
B
@
1
C
C
C
A
þ
X
m
X
d
X
h
X
u
PGas m,d,h,u
GHRate
Á GPriceþ
X
i
P
m
P
d
P
h
P
u
EGen i,m,d,h,u þ ESal i,m,d,h þ IElec i,m,d,h
Eff i Á GHRate
Á GPrice
ð6:3Þ
Investment cost is calculated according to the annualized capital cost and is
composed of fixed and variable parts. Annualizing capital is a means of spreading
the initial cost of an option across the lifetime of that option while accounting for
opportunity costs and inflation. The cost of capital is annualized as if it were being
paid off as a loan at a particular discounted interest rate over the lifetime of the
option. The result is a future value cost or constant annual cost of capital. The
annualized investment cost, which is described in Eq. (6.4), is composed of investment in four components: DER equipment, storage tank, battery, and natural gas
AC.
C Inv ¼
X
i
NInv i Á F max p i Á FVCost i þ NInv i Á FFCost i
ð
Þ Á YF i
þYHSF Á HSVCost Á HSmax þ HS Á HSFCost
ð
Þ
þ YESF Á ESVCost Á ESmax þ ESFCost Á ES
ð
Þ
þYDCF Á DCVCost Á DCCap þ DCFCost Á DC
ð
Þ
ð6:4Þ
YF i ¼
IRate
1 À
1
1þIRate
ð
Þ
FLTime i
8i
ð6:5Þ
YDCF ¼
IRate
1 À
1
1þIRate
ð
Þ
DCLTime
ð6:6Þ
126
H. Ren and W. Zhou