The purpose of the ATB is to provide CAPEX, O&M, and capacity factor estimates for Base Year and future year projections representing three levels of technical advance (Constant, Mid, and Low technology cost) for use in electric sector models.
The ATB R&D + Market financial assumptions sensitivity case reflects the cost of an electricity generation plant from the perspective of a utility or other investor to include capital investment for the plant (excluding new spur lines to connect the plant to existing transmission infrastructure), annual average operating costs, and annual average energy production. The ATB does not include impacts to the broader electric system based on output characteristics of the plant or distance from transmission infrastructure. The ATB assumptions capture the energy component of electric system planning and operation, but the electric system also requires capacity and flexibility services to operate reliably. These capacity and flexibility services are difficult to value and depend strongly on the system in which a new generation plant is introduced. The Standard Scenarios, which is the ATB's companion product based on the ReEDS model, does reflect these integration impacts and transmission infrastructure expansion requirements.
The ATB R&D Only financial assumptions sensitivity case is intended to reflect fundamental technology changes over time – not short-term market variations in pricing, not changes in interest rates or other project finance elements, and not macroeconomic influences such as commodity price fluctuations.
The ATB illustrates a range of parameters across resource conditions present in the contiguous United States because renewable electricity generation technologies are dependent on the resource available in specific geographic locations. For example, solar PV plant technology does not vary with the solar insolation present in various geographic locations; although different technology variations are available, the ATB represents typical cost of the dominant PV technology without specifying precisely what technology gains market share over time. Solar PV CAPEX is represented with a single value. A wind plant in a low wind speed location will use turbines with larger rotors that results in a CAPEX that is greater than a wind plant with a smaller rotor located in a high wind speed location. The Standard Scenarios, based on the ReEDS model, reflect geographic-regional variations in the cost of labor, materials, etc.
The ATB uses the LCOE metric to illustrate the difference in three technology cost scenarios, representing three different levels of technological advancement. It also offers three financial assumptions sensitivity cases. The R&D Only financial assumptions sensitivity case does not include incentives (e.g., PTC and ITC), and it is not equivalent to electricity market prices (e.g., power purchase price agreement values). The R&D + Market financial assumptions sensitivity case includes effects of tax reform, tax credits, and tariffs for a perspective closer to electricity markets. The full range of cost across the U.S. resource potential is illustrated for each technology. Real world projects are unlikely to reflect the full range of resource potential in any given year. Real world projects will vary from ATB assumptions due to unique project details including, but not limited to, precise resource conditions, regional costs, pricing of components, and project finance terms. Comparison of ATB data with other data sources is best done at the LCOE-component level (e.g., CAPEX, O&M, and capacity factor) to identify sources of differences. ATB assumptions are provided in detail to permit that type of comparison or to support analysis of other metrics such as net present value and financial management rates of return.