It is a good question.

And, in fact, there may be a need to discuss about this among the ETSAP partners.

As it is now, there are some inconsistencies between the documentation and the TIMES code in this matter. In the TIMES code, it is always assumed that if no hurdle rate (NCAP_DRATE) is specified, the present value of the annualized investment payments at the beginning of the commissioning year should be equal to the original lump-sum investment cost (plus any interest during construction, if NCAP_ILED is specified). In other words, the annualized investment costs included in the objective function are equivalent to a single lump-sum payment INV that would occur at the beginning of the commissioning year.

In the same way, if a
hurdle rate (NCAP_DRATE) is specified, the annualized investment costs included in the objective function are equivalent to a lump-sum cost INV_{S} that would occur at the beginning of the commissioning year, where
INV_{S}
= INV * CRF_{S} / CRF, as explained on page 163 of the Documentation, Part II. As stated there, the correction factor
CRF_{S} / CRF
is used to multiply every investment cost (and salvage value), according to the difference between G_DRATE and the hurdle rate, when specified.

See: http://www.iea-etsap.org/docs/TIMESDoc-Details.pdf

However, there is some inconsistency between the cost accounting in the objective function and the annual cost reporting: When the investment costs are reported, they are always annualized by using the standard CRF formula (as given on page 140 in the doc).

I hope the explanation above makes sense!