STEM help / Calculation framework

10.3.23 Resource costs

Resource Costs represent the largest proportion of the costs within a model, the other costs being Service Administrative Costs. Costs can be entered as time series; alternatively, the unit cost of a Resource in its Calibration Period can be specified and the cost in subsequent years then determined by per-Resource or global Cost Trends – see 10.3.7 Cost Trends and Age Factors. The Use Global Trends input also makes it possible to completely decouple cost assumptions for certain Resources, while retaining global trends as an efficient common hypothesis for the remainder.

If desired, the Capital Cost of a Resource can be broken down into a number of constituent cost trends via separate Cost Index elements – see 10.3.6 Cost Indices and Production Functions. However, this additional complexity is excessive in most cases, where one may be limited by time or data to a single trend at best. Per-Resource and global trends for the Capital Costs of Resources work multiplicatively with the time-series inputs for Costs and the Capital Cost Structure mechanism, thereby rendering Cost Indices optional.

The various costs differ in terms of how often they arise and how they are calculated. Function cost results are simply the sum of costs generated by Resources in a given Function.


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