Facility Build Cost

Units:	$
Mode:	Input/Output
Multi-band:	True
Default Value:	0
Validation Rule:	Any Value
Key Property:	No
Description:	Cost of building a unit
Detail:

Input

Facility Build Cost is the 'overnight cost' of building a unit of the Facility for LT Plan.

The Build Cost can be defined in combination with Economic Life and WACC so that LT Plan computes an annuity as described in the article LT Plan. If Build Cost is defined without these parameters then the entire Build Cost is incurred in the period the unit is built. The cost is also treated as a lump sum, if the Economic Life is entirely inside the planning horizon and the value of WACC is not the same as the Discount Rate.

Table 1: Build Cost Example
Facility	Property	Value	Units
Factory	Units	0	-
Factory	Max Operating Level	500	-
Factory	FO&M Charge	25,000,000	$
Factory	Max Units Built	1	-
Factory	Build Cost	750,000,000	$
Factory	Economic Life	25	years
Factory	WACC	10	%

For the example in Table 1, note how the property Max Units Built is used to define the number of units that can be built. The Facility will not be considered for expansion optimization unless this is defined.

Build Cost is a multi-band property. This allows you to model a stream of payments leading up to the time of build.

Table 2: Staged Build Cost Example
Facility	Property	Value	Units	Band
Factory	Build Cost	150,000,000	$	1
Factory	Build Cost	150,000,000	$	2
Factory	Build Cost	450,000,000	$	3

For the example in Table 2 a series of payments in three years leads up to the commission date which It also implies the facility that needs three years to be built.