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Exercise 19: How energy is priced

Watch the video presentation and/or read the full text below

While the static quantity of floor space has a simple price per month, energy is typically priced by the kWh. Two additional concepts are required to model this authentically:

  • A consumable resource element in STEM is very much like a regular resource, except that its capacity is understood to be used-up in time, as opposed to remaining static like the capacities of the persistent equipment – see Capacity Mode below.
  • An optional time factor allows the cumulative energy consumption in a period to be inferred from the instantaneous power requirement of the equipment, regardless of whether the model runs in years, quarters or months.

We will proceed much as we did in the previous section:

  1. Create a new resource, and name it Power (or Energy if you prefer).
  2. Open the Capacity and Lifetime dialog, and enter the inputs Capacity Unit = kWh and Capacity = 1.0. (The Physical Lifetime can be ignored in this context.)
  3. Locate the Capacity Options section in the same dialog, and then enter the inputs Capacity Mode = Consumable, Time Factor = Yes and Capacity Period = Hour. This is the duration of the capacity (i.e., how long it lasts if the demand is 1 kW).
  4. Open the Costs dialog, and enter Operations Cost = 0.15 (under Overheads). This is the cost of consuming a kWh, regardless of when, and so the Cost Period is ignored for a consumable resource. (In this example, the capacity is separately related to time with the Capacity Period, rather than the cost.)

Figure 42: The unit capacity and duration for pricing, and the absolute unit cost, for resource Power

This means that one nominal unit of capacity from the Power resource last an hour.

The consumable resource and built-in time factor allow you to enter the assumptions at face value, and (in due course) to get a read-out of power required by the equipment (kW) vs energy consumed in the period (kWh, the actually billing quantity).

The same financial results could be obtained with a persistent resource for a kW with Cost Period = Hour, but the output would show Installed Units of kW instead of Consumption of kWh. (Beyond the scope of this tutorial.)

Without the time factor, this consumable resource would need to be driven by an aggregate transformation which calculated the energy required directly. This is readily achieved with the aptly named Time Factor transformation type, but does not provide a read-out of power required by the equipment. (Beyond the scope of this tutorial.)

Things that you should have seen and understood

Capacity Options: Capacity Mode, Time Factor, Capacity Period
Operations Cost

 

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