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Wording in the investment calculation and missing offsetting in the investment #10

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MaxHiDLR opened this issue Mar 12, 2025 · 1 comment
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documentation Improvements or additions to documentation help wanted Extra attention is needed

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@MaxHiDLR
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Wording in Investment Calculation
The wording of economics.annuity is in my opinion not correct. From economics.py:

epc = economics.annuity(
        capex=(800 + 800 * 0.02 * lifetime) / 1000,
        n=lifetime,
        wacc=0.03,
    )

    capex : float
        Capital expenditure for first investment. Net Present Value (NPV) or
        Net Present Cost (NPC) of investment

Correct is, since the Investment cost are not equal to the NPV and we use here the investment cost:

    capex : float
        Capital expenditure for first investment.

Annuity of Offset
For general discussion/understanding I want to add, what oemof does in the no multi-period investment mode:

totex_annual = capex_annual + opex_annual

If I'm right, the offset of an investment must also be calculated as an annuity before it is added to the investment component, with:

offset = economics.annuity(
        capex=(2000) / 1000,
        n=lifetime,
        wacc=0.03,
    )

If so, I think it would be useful to have an example here, since I couldn't find one.

@MaxHiDLR MaxHiDLR added documentation Improvements or additions to documentation help wanted Extra attention is needed labels Mar 12, 2025
@p-snft p-snft transferred this issue from oemof/oemof-solph Mar 24, 2025
@p-snft
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p-snft commented Mar 24, 2025

I moved this to oemof.tools, to go through this one by one.

As NPV or NPC are typically quantities not given at the time of installation, referring to them might be more confusing then helping.

(For the second point: Yes, you have to calculate annuities for both, linear term and offset.)

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