Overnight cost of capital - Revision history

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	When comparing the cost of building different types of [[power plant\|electrical plants]], firms will use various methods. For quick comparisons, firms will look at what <onlyinclude>the [[cost]] of building a plant overnight would be or the '''overnight cost of capital'''.</onlyinclude><ref>J. Koomey and N.E. Hultman. “A Reactor-Level Analysis of Busbar Costs for US Nuclear Plants, 1970–2005.” ''Energy Policy'', 35 (11), pp. 5630–5642, 2007.</ref> This is a hypothetical scenario because a plant cannot be constructed in one night, but it evaluates the cost of a plant if it were built right away, with current prices. This is used as a quick reference for the cost of a plant because it does not take into account the time it would actually take and how prices rise over time. The calculation is made without the interest rate which would account for the rise in cost over time. The overnight cost is a very simple way to compare the cost of different plants.		When comparing the cost of building different types of [[power plant\|electrical plants]], firms will use various methods. For quick comparisons, firms will look at what <onlyinclude>the [[cost]] of building a plant overnight would be or the '''overnight cost of capital'''.</onlyinclude><ref>J. Koomey and N.E. Hultman. “A Reactor-Level Analysis of Busbar Costs for US Nuclear Plants, 1970–2005.” ''Energy Policy'', 35 (11), pp. 5630–5642, 2007.</ref> This is a hypothetical scenario because a plant cannot be constructed in one night, but it evaluates the cost of a plant if it were built right away, with current prices and no interest. This is used as a quick reference for the cost of a plant because it does not take into account the time it would actually take and how prices rise over time. The calculation is made without the interest rate which would account for the rise in cost over time. The overnight cost is a very simple way to compare the cost of different plants.

	Some of the costs that go into the determination of the overnight are:<ref>EIA. "Updated Capital Cost Estimates for Utility Scale Electricity Generating Plants." [Online], Available: http://www.eia.gov/forecasts/capitalcost/, April 12, 2013 [June 29, 2016].</ref>		Some of the costs that go into the determination of the overnight are:<ref>EIA. "Updated Capital Cost Estimates for Utility Scale Electricity Generating Plants." [Online], Available: http://www.eia.gov/forecasts/capitalcost/, April 12, 2013 [June 29, 2016].</ref>
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	==References==		==References==
	{{reflist}}		{{reflist}}
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	When comparing the cost of building different types of [[power plant\|electrical plants]], firms will use various methods. For quick comparisons, firms will look at what <onlyinclude>the [[cost]] of building a plant overnight would be or the '''overnight cost of capital'''.</onlyinclude><ref>J. Koomey and N.E. Hultman. “A Reactor-Level Analysis of Busbar Costs for US Nuclear Plants, 1970–2005.” ''Energy Policy'', 35 (11), pp. 5630–5642, 2007.</ref> This is a hypothetical scenario because a plant cannot be constructed in one night, but it evaluates the cost of a plant if it were built right away, with current prices. This is used as a quick reference for the cost of a plant because it does not take into account the time it would actually take and how prices rise over time. The calculation is made without the interest rate which would account for the rise in cost over time. The overnight cost is a very simple way to compare the cost of different plants.		When comparing the cost of building different types of [[power plant\|electrical plants]], firms will use various methods. For quick comparisons, firms will look at what <onlyinclude>the [[cost]] of building a plant overnight would be or the '''overnight cost of capital'''.</onlyinclude><ref>J. Koomey and N.E. Hultman. “A Reactor-Level Analysis of Busbar Costs for US Nuclear Plants, 1970–2005.” ''Energy Policy'', 35 (11), pp. 5630–5642, 2007.</ref> This is a hypothetical scenario because a plant cannot be constructed in one night, but it evaluates the cost of a plant if it were built right away, with current prices. This is used as a quick reference for the cost of a plant because it does not take into account the time it would actually take and how prices rise over time. The calculation is made without the interest rate which would account for the rise in cost over time. The overnight cost is a very simple way to compare the cost of different plants.

Jmdonev: 1 revision imported: From the summer

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Jmdonev at 01:28, 23 July 2016

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[[Category:Done 2016-04-30]]
[[Category:Cody edit]]
When comparing the cost of building different types of [[power plant|electrical plants]], firms will use various methods. For quick comparisons, firms will look at what <onlyinclude>the [[cost]] of building a plant overnight would be or the '''overnight cost of capital'''.</onlyinclude><ref>J. Koomey and N.E. Hultman. “A Reactor-Level Analysis of Busbar Costs for US Nuclear Plants, 1970–2005.” ''Energy Policy'', 35 (11), pp. 5630–5642, 2007.</ref> This is a hypothetical scenario because a plant cannot be constructed in one night, but it evaluates the cost of a plant if it were built right away, with current prices. This is used as a quick reference for the cost of a plant because it does not take into account the time it would actually take and how prices rise over time. The calculation is made without the interest rate which would account for the rise in cost over time. The overnight cost is a very simple way to compare the cost of different plants.

Some of the costs that go into the determination of the overnight are:<ref>EIA. "Updated Capital Cost Estimates for Utility Scale Electricity Generating Plants." [Online], Available: http://www.eia.gov/forecasts/capitalcost/, April 12, 2013 [June 29, 2016].</ref>
*'''Construction costs''': Installation of utilities for the plant, structural [[steel]] and other materials for the building, site planning etc.
*'''Mechanical equipment supply and installation''': large pieces of machinery such as, [[boiler]]s, [[cooling tower]]s, [[steam]] [[turbine]]s, condensers, [[photovoltaic cell|photovoltaic modules]], [[generator]]s etc.
*'''Electrical controls''': Equipment used to transform and transmit the [[electricity]] that is generated. Electrical [[transformer]]s, switchyards, distributed control systems etc.
*'''Project costs''': Costs that are incurred while the plant is being designed. Engineering costs, labor, scaffolding costs, construction management etc.

A more accurate measure of the total cost is the [[levelized cost of energy]] because it takes into account the time over which the plant will be built and operate. The LCOE is a much smaller number because it is spread across the entire life of the plant whereas the overnight cost of capital is not spread over time at all.

The idea of [[overnight cost]] is more general and can be read about [[overnight cost|here]].
==See Also==
*[[Levelized cost of energy]]
*[[Capital]]

==References==
{{reflist}}