Methodology
Techno-economic inputs
This page discusses the different types of tecno-economic input data used in energy system modelling
Summary
An energy system model includes a set of ‘technologies’ – a broad term that encompasses all forms of energy infrastructure, including power plants, transmission lines, and storage systems. Techno-economic inputs describe the characteristics of these technologies Below is a representative list of technology groups and the specific technologies they include. The full set of technologies available in Scenario Builder is detailed below.Technology set
Technology costs
Capital costs (CAPEX)
CAPEX refers to the upfront investment needed to build new energy infrastructure. These are one-time costs for purchasing and installing technologies. The costs applied here are overnight costs - they do not include the interest during construction. This could lead to an underestimation of capital costs, especially in cases with high upfront costs, construction times, and interest rates.- Includes: equipment, engineering, procurement, construction (EPC), land, grid connection, permitting, environmental impact assessments.
- Units: typically expressed as currency per unit of capacity (e.g. $/kW for power plants and transmission, $/kWh for storage).
Operating expenditures (OPEX)
OPEX refers to the ongoing costs to operate and maintain energy infrastructure over its lifetime, after the initial CAPEX.- Variable O&M costs: proportional to the amount of electricity generated or activity level
- Includes: fuel costs (though sometimes treated separately, Commodity (Fuel) Price section), consumables.
- Units: $/MWh of electricity generated.
- Fixed O&M costs: incurred regardless of energy production level, typically time-based
- Includes: salaries, insurance, routine maintenance, property taxes.
- Units: $/MW/year (or $/kW/year).
Data sourcing standards – technology costs
| Input Variable | Model Type | Gold Standard (‘Best in Class’) | Silver Standard (‘Good’) | Bronze Standard (‘Publishable’) |
|---|---|---|---|---|
| Technology costs - current (CAPEX, Fixed & Variable OPEX) | CE & UD | For deregulated or liberalised markets: Auction results. Analysis based on equipment manufacturers, project developers, country-specific studies. | National-level estimates from data owner or specific national reports. | IEA region-level data, or global averages, applied to the country/region. |
| Technology costs - future projections | CE | Detailed, country-specific cost projection studies incorporating learning curves, R&D impact, and local manufacturing potential. | IEA scenarios (e.g., WEO) or other reputable international projections. | Extrapolation of current costs or application of generic global learning rates. |
Efficiencies
Efficiency represents the ratio of useful energy output to energy input, expressed as a percentage.- Power plant efficiency: Electricity output / fuel energy input (e.g. 40% for a coal plant, 60% for a CCGT gas plant).
- Battery efficiency (round-trip efficiency): Energy discharged / energy used to charge (e.g. 85%). Can be broken down into charging and discharging efficiencies.
- Transmission and distribution (T&D) efficiency/losses: Energy delivered to end-user / energy entering the network. Losses occur over power lines.
Data sourcing standards – efficiencies
| Input Variable | Model Type | Gold Standard (‘Best in Class’) | Silver Standard (‘Good’) | Bronze Standard (‘Publishable’) |
|---|---|---|---|---|
| Efficiency / Losses | CE & UD | Observed data by asset or specific technology from data owner, adjusted by age/retrofits. | Regional/country-level technology studies. | Global technology catalogues. |
Maximum utilisation rates
The highest level at which a power plant can operate, limited by technical, economic, or regulatory factors.- Maintenance: Planned and unplanned maintenance reduces annual output.
- Resource availability: Technologies such as solar and wind are limited by nature.
- Regulatory constraints: Policy limits or permits can reduce operating hours.
Operational life (Lifetime)
The expected number of years a technology can operate before needing replacement. This is a key input for investment decisions. Sourced similarly to technology costs. The following table consolidates the operational lifespan data for various power plant technologies as identified from the referenced sources.Growth or Build Rates (Capacity addition constraints)
The maximum rate at which new capacity of a given technology can be built and brought online in a given year or period. This reflects real-world limitations like supply chain capacity, skilled labor, and planning/permitting timelines. These limits are set to whichever is greater: 2% of the base year capacity (measured in MW) or a 20% increase from the previous year.Emission factors
The rate at which a technology emits pollutants, especially greenhouse gases (CO₂), per unit of energy produced or fuel consumed (e.g. tonnes CO₂/MWh or tonnes CO₂/TJ). Sources include IPCC guidelines, national emissions inventories, and specific studies. These factors are critical for calculating total emissions and assessing alignment with climate targets. The following table summarizes the life-cycle GHG emission factors for various electricity generation technologies based on the IPCC AR6 WGIII.| Technology | Median (gCO2eq/kWh) |
|---|---|
| Coal | 980 |
| Natural Gas (CCGT) | 490 |
| Natural Gas (OCGT) | 680 |
| Oil (Heavy Fuel Oil) | 740 |
Scenario Builder currently evaluates only CO₂ emissions and does not yet account for other regulated air pollutants such as NOₓ and SOₓ.
Data sourcing standards – emission factors
| Input Variable | Model Type | Gold Standard (‘Best in Class’) | Silver Standard (‘Good’) | Bronze Standard (‘Publishable’) |
|---|---|---|---|---|
| Emission factors (CO2) | CE & UD | Plant-specific or country-specific, fuel-specific, technology-specific data from official national reporting (e.g. EUTL). | Default factors from IPCC or reputable regional databases, differentiated by technology and fuel. | Global average IPCC default factors. |