EMS 542 reading set 5 - Renewable Energy Cost...

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Renewable Energy Cost Modeling:-Introduction and Taxonomy of calculation Methodologies Prasad Naik
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Background From an historic and international perspective, the feed-in tariff (FIT) is the most commonly used cost-based incentive tool A FIT is a policy that typically provides eligible renewable generators with guaranteed access to a predictable, long-term revenue stream from a creditworthy buyer. While FITs are generally cost-based in design, they are regularly performance-based in execution. Cost based incentives, such as FITs, have been slow to emerge in the United States. Unlike Europe, the United States historically has used tax incentives to spur renewable energy development; however, there has been a sharp increase in interest in FIT policy development during the past few years. Detailed analysis is required as payment level must ensure revenues will be adequate to cover project costs. If the FIT payments are set too low, then little new RE development will result. And if set too high, the FIT could provide unwarranted profits to developers. During the past several decades in the United States and abroad, a wide range of formal analytical approaches has been employed to estimate the cost of electricity and set incentive levels for both renewable and fossil-fueled generators. EMS 504 Economics of Energy System
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EMS 504 Economics of Energy System
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Renewable Energy Cost Modeling Project Objectives: The purpose of this report is to identify key renewable energy cost modeling methodological options, highlight the policy implications of choosing one approach over the other, and present recommendations on characteristics of a model to be made available for use by a broad target audience Design of CREST models: A cost-of-energy analysis tool intended to assist policy makers considering cost-based renewable energy incentive policy. Models: Solar, Wind, Geothermal, Anaerobic Digestion EMS 504 Economics of Energy System
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CREST - Development Borne from DOE – NARUC Partnership: Saw need for simple yet robust tool Sustainable Energy Advantage (SEA) hired to assess current slate of publicly available tools & design and build new model: Cherry-picked best features of other public models Enable multiple options of input detail
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