Borin, Seth James ; Thomas, Valerie M. Industrial and Systems Engineering Brown, Marilyn Goldsman, David Realff, Matthew Sokol, Joel ; Thomas, Valerie M.
A formalized methodology for the calculation of the levelized cost of electricity is presented. The levelized cost is widely used as a concise estimate of the cost of electricity generation or comparison between different technologies, incorporating the full lifecycle costs of electricity generation into a unit price over the lifetime of the plant. In the following chapters, a model is presented to evaluate the cost of meeting carbon dioxide emissions targets using an electricity generation planning model incorporating natural gas and transportation fuels with simultaneous selection of efficiency investments in order to satisfy consumer service levels and policy-makers' desired carbon dioxide emissions targets. This model bridges the gap between two sets of existing literature. The framework herein allows a specific target to be met at minimum cost by allowing the user to define the efficiency portfolios and directly incorporate them into the cost structure of the optimization model. This framework is intended to be tractable and easily extended to specific applications. The model is then validated by performing a case study on the United States state of Georgia. Considering electricity, natural gas, and transportation fuel emissions, the case study examines three scenarios. The first involves only business-as-usual considerations; the second incorporates efficiency investments; the third adds a carbon dioxide emissions constraint along with the efficiency investments. By analyzing these three scenarios, the study finds that a 40% reduction in carbon dioxide emissions from 2015 levels is achievable by 2050 at present value costs 13% below that of business-as-usual, with the carbon dioxide emissions target itself accounting for costs being 2% above what would otherwise be achieved with efficiency investments alone.
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