Introduction and Structure - Renewable Energy: Technology, Economics and Environment - page 13

be addressed; these figures will be discussed in the context of the current condi-
tions given in Europe.
The specific energy provision costs of the different investigated energy provi-
sion options are calculated on the basis of the monetary value of the year 2005;
hence, inflation-adjusted costs are presented. For this purpose, an inflation-
adjusted discount rate i of 0.045 (i.e. 4.5 %) is assumed for the economic calcula-
tions throughout this topic. In general, the indicated costs refer to the overall
economy; i.e. plants are depreciated over the technical lifetime L of the respective
plant or respective plant component that may vary according to the applied tech-
nology or system. However, calculations do not consider taxes (e.g. value added
tax), subsidies (e.g. granted within the scope of market launches, credit from pub-
lic bodies which reduce interest rates) and extraordinary depreciation possibilities.
Annual annuities are always based on the initial overall investments. Based on the
total investment I total , the annual share I a (i.e. the annuity) throughout the entire
technical lifetime is calculated according to Equation (1.1) (also refer to /1-5/).

L

i (1 + i

)

=

I I (1.1)

a total

L

(1 + i ) - 1

On the basis of the yearly annuity (i.e. the share of the total investment cost
mature each year throughout the overall technical lifetime), the overall annual
costs can be calculated by considering the additional respective variable costs
(e.g. maintenance costs, operation costs, fuel costs (if applicable)). From these
overall annual costs the specific energy provision costs (i.e. electricity production
costs in €/kWh, heat provision costs in €/GJ) can be calculated considering the
mean annual energy provision at plant exit (e.g. electrical energy of a wind tur-
bine fed into the grid, the caloric energy of a heat pump fed into a heat supply sys-
tem within a dwelling house required to utilise shallow geothermal heat).
The approach of using constant monetary values leads to lower costs (due to in-
flation adaptation) compared to the more common calculation based on nominal
values; nevertheless, order and relation of costs of different alternatives remain
unchanged. However, such calculations based on real costs offer the advantage of
yielding results in a known monetary value - in this case of the year 2005.
The energy production costs indicated in the following may differ tremen-
dously from the results of other studies and analyses due to cost calculation pro-
cedures or different baseline assumptions for the costs calculation or the consid-
eration of possible external effects. The indicated costs should thus be regarded as
an average magnitude affecting the entire overall economy. Considerable devia-
tions from the indicated figures, both elevated and depressed values, may be ob-
served in concrete cases under different site-specific circumstances.
As far as options primarily designed for power generation based on renewable
energies are concerned, specific electricity production costs are determined and