WEEK 3 · CONCEPTS & CALCULATIONS

Energy Economics Lab.

Understand the inputs. Work through the calculation. Ask what the result can tell you.

Learn, then explore9 lessons · linked calculators

Two steps in every lesson: review the concepts and formulas, then try the exercise with a short reference tailored to that topic.

CHANGE ONE ASSUMPTION

Compare two cases

Save A, change an input in a lesson, then save B. Compare only cases with the same output service and cost boundaries. Storage and hydrogen are separate examples; saving a case does not combine them with the generator.

How to use this in class

Each lesson opens with a review of its concepts, formulas, symbols and units. Select “Try the exercise” to use the calculator; “Full formula review” returns to the reference without clearing inputs. Allow 30–45 minutes for lessons 1–7, or assign the reviews before class. Lessons 8–9 extend the exercise. In pairs, one student predicts the direction of a change and the other calculates, then swap. Use “Check your understanding” before revealing the answer.

Suggested comparison: save the starting generator as A. Raise nominal debt interest from 8% to 12%, save B, and explain why its levelized cost changes. Next change only capacity factor. Finish by naming one system benefit that an LCOE ranking leaves out.

No names are requested and the app sends no answers or calculator inputs to a server. Inputs, checks and saved cases last only until this page is reloaded; download a CSV to keep them. The host receives ordinary website requests. Default numbers are classroom assumptions, not technology quotations or investment advice.

Model boundaries, formulae & sources

Teaching sequence based on the revised GLA2075H Week 3 lecture, September 22, 2026 (slides 7–15, 17, 24, 27–28 and 36–38). Calculator inputs use one consistently chosen currency. Practice questions explicitly marked CAD use Canadian dollars; otherwise choose CAD or USD consistently. Costs are expressed in constant purchasing power. The nominal WACC is converted to a real discount rate before discounting constant-price flows.

Investment occurs at year 0; operating costs, output and benefits occur at year-end. This model excludes construction schedules, financing during construction, subsidies, tax depreciation and detailed tax cash flows. The default 25% corporate tax rate is a rounded classroom assumption. For comparison, the general federal rate is 15% and Ontario’s general rate is 11.5%, giving 26.5% combined (CRA rates checked September 26, 2026). The debt tax shield is a simplified WACC convention and assumes the tax deduction can be used. Debt service is not added again to operating costs. Costs and output may follow the degradation assumptions shown; other real unit costs remain constant.

PV means present value: PV(X) = Σ X_t/(1+r)^t. LCOE = PV(generation costs)/PV(generation). LCOS = PV(storage costs, including charging)/PV(discharge). LACE = PV(avoided energy, capacity and reserve value)/PV(generation). Discounting energy is an accounting normalization, not a physical energy loss. LACE here is a classroom approximation using user-supplied values, not an EIA system simulation.

Lesson 4 uses a hypothetical combined-cycle gas plant operating at 60% capacity factor, then 50%. As context, the U.S. fleet averaged 60.5% in 2024 (EIA); individual plants vary. The lesson 4 questions use constant Canadian dollars (CAD), CAD$21.024 million in annualized capital and fixed maintenance, and CAD$40/MWh in fuel and variable operating costs. These are illustrative assumptions, with no carbon charge included. Each case assumes its annual output and real costs continue over the study period, with no degradation or terminal costs.

Lessons 6–9 use separate practice assumptions. The four-hour battery runs 250 equivalent full cycles per year, below the roughly daily cycling assumed in the Annual Technology Baseline. The solar net-energy question uses an illustrative energy return of 8 with an explicit accounting boundary; actual results depend on location, technology and what is included. The hydrogen question uses 55 kWh/kg, consistent with the U.S. Department of Energy’s published system-status benchmark, and an assumed CAD$100/MWh electricity price. For scale, Ontario’s 2025 average Class B cost of power was 10.96 Canadian cents/kWh before delivery and other bill items; it is not a tariff quote for an electrolyzer. The solar-power question uses a rounded 30% learning-rate scenario, compared with IRENA’s reported 33.8% global historical rate for utility-scale solar. Historical learning does not guarantee future reductions.