Effects of a shortened depreciation schedule on the investment costs for combined heat and power

Kranz, Nicole ; Worrell, Ernst

Lawrence Berkeley National Laboratory

关键词: Economic Impact Taxation Depreciation Chp;    Cogeneration;    Taxes;    29 Energy Planning, Policy And Economy;    Dual-Purpose Power Plants;   

DOI  :  10.2172/793010
RP-ID  :  LBNL--49518
RP-ID  :  AC03-76SF00098
RP-ID  :  793010

美国|英语

来源: UNT Digital Library

【 摘 要 】

We investigate and compare several generic depreciation methods to assess the effectiveness of possible policy measures with respect to the depreciation schedules for investments in combined heat and power plants in the United States. We assess the different depreciation methods for CHP projects of various sizes (ranging from 1 MW to 100 MW). We evaluate the impact of different depreciation schedules on the tax shield, and the resulting tax savings to potential investors. We show that a shorter depreciation cycle could have a substantial impact on the cost of producing power, making cogeneration more attractive. The savings amount to approximately 6-7 percent of capital and fixed operation and maintenance costs, when changing from the current system to a 7 year depreciation scheme with switchover from declining balance to straight line depreciation. Suggestions for further research to improve the analysis are given.