# Equations and Variables in ATB

## Input Variables

### Other Input Variables

Input Variables and Their Values and Definitions
 Input Variable Value Definition Construction Duration (C) Varies by technology Number of years in construction period Capacity Factor (CF) Varies by technology Generally defined as the ratio of actual annual output to output at rated capacity for an entire year Nominal Discount Rate (d) Varies by technology The discount rate is a function of the WACC and inflation Debt Fraction (DF) Varies by technology Fraction of capital financed with debt. 1-DF is assumed financed with equity. Expected Market Return on Premium (EMRF) Varies by technology The difference between the expected return on a market portfolio and the risk-free rate Capital Fraction (CF) Varies by technology Fraction of capital spent in each year of construction, 1 to C. Depreciation Fraction (FD) Varies by technology Fraction of capital depreciated in each year, 1 to M Fixed Operation and Maintenance Expenses (FOM) ATB Input (\$/MW-year) Annual expenditures to operate and maintain equipment that are not incurred on a per-unit-energy basis Fuel Heat Rate (MMBtu/MWh) *Fuel Costs(\$/MMBtu) Fuel costs, converted to \$/MWh, using heat rates. Grid Connection Costs (GCC) Varies by technology (\$/kW) Overnight capital cost includes a nominal-distance spur line (<1 mi) for all technologies, and for offshore wind includes export cable and construction-period transit costs for a 30 km distance from shore. Project-specific costs lines based on distance to existing transmission are not included. Inflation Rate (i) 2.5% Assumed inflation rate based on historical data Depreciation Period (M) Varies by technology (years) Number of years in MACRS depreciation schedule Overnight Capital Costs (OCC) Varies by technology (\$/kW) Capital expenditures if plant could be constructed overnight (i.e., excludes construction period financing). Includes onsite electrical equipment (e.g., switchyard), a nominal-distance spur line (<1 mi), and necessary upgrades at a transmission substation. Capital Regional Multiplier (CapRegMult) 1 Multiplier to account for regional variation in capital costs. Not used in ATB. Rate of Return on Equity (RROE) Varies by technology Assumed rate of return on the share of assets financed with equity Economic Lifetime (t) or cost recovery period 30 years (default); 20 years and Technical Life also available Length of time for paying off assets Tax Rate (TR) 40% Combined assumed marginal state and federal tax rate before application of available Federal tax credits for renewable generators Variable Operations and Maintenance (VOM) Varies by technology (\$/MWh) Operating and maintenance costs incurred on a per-unit-energy basis. Year index (y) — —

Assumptions common to all technologies include the following:

• Variables are defined in the Financial Definitions worksheet in the ATB data spreadsheet, where two sets of financial assumptions are available in (1) the R&D Only Financial Assumptions Case (R&D Only Case) and (2) the Market + Policies Financial Assumptions Case (Market + Policies Case).
• While the tax rate has been updated to include the changes in corporate taxes in the Market + Policies Case, the federal/state blended tax rate is not assumed to vary by technology in our calculations; in practice, depreciation schedules vary by technology based on the tax code.

Developed with funding from the U.S. Department of Energyâ€™s Office of Energy Efficiency and Renewable Energy.