Salvage value and the objective function ggretton Junior Member Posts: 3 Threads: 1 Joined: Feb 2023 28-02-2023, 03:38 PM Many thanks Antti for your comprehensive reply - this does indeed make sense now. In particular your point: • The reported annualized costs (Cost_*) also implicitly include the salvage value, by excluding the portions of the investment-related costs attributable to the unused portions of their technical lives, because the annualized costs include only costs paid within the model horizon. I think my confusion came from the presentation of the REG_OBJ function: REG\_OBJ(z,r) = \sum_{y \in -\infty, +\infty} DISC(y,z) \times \left( INVCOST(y) + \ldots \right ) - SALVAGE(z) Of course this is a sum from -\infty to +\infty years, whereas when we sum Cost_Inv we are only summing over the model years B_0 to EOH. If salvage is effectively: SALVAGE(z) = \sum_{y \in EOH+1, +\infty} DISC(y,z) \times \left( INVCOST(y) + \ldots \right ) then deducting this we end up with: REG\_OBJ(z,r) = \sum_{y \in -\infty, EOH} DISC(y,z) \times \left( INVCOST(y) + \ldots \right ) Hopefully that makes sense and my interpretation is indeed correct! Many thanks! « Next Oldest | Next Newest »

 Messages In This Thread Salvage value and the objective function - by ggretton - 27-02-2023, 07:22 AM RE: Salvage value and the objective function - by Antti-L - 27-02-2023, 06:54 PM RE: Salvage value and the objective function - by ggretton - 28-02-2023, 03:38 PM RE: Salvage value and the objective function - by Antti-L - 28-02-2023, 07:53 PM RE: Salvage value and the objective function - by ggretton - 02-03-2023, 11:10 AM

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