THE EQUILIBRIUM PRICE FORMATION IN ENERGY GENERATION ON BASIS OF THE DISCOUNT COST (PREPRINT IBRAE-1998-07)

Preprint IBRAE-98-07

Karkhov A.N. 

Price formation for electricity generation is discussed  on the basis of the production, levelized and discount costs. It is demostrated that discount rate is determining by the electricity cost decline rate as the result of scientific and technical progress and is not connected with percent on capital investment. Starting from famous determination of levelized cost, firm’s theory and also setting line of the applied tasks is came by common equation for the price formation law.  It is shown that rule of equilibrium price formation used in the levelized cost theory from the very beginning. However  enactment into this theory of the investment efficiency normative lead to violation of this bedrock rule. The equilibrium price formation is considered as the basis of the economy matching of the energy development versions into market economy. 

Bibliographical reference

Karkhov A.N.THE EQUILIBRIUM PRICE FORMATION IN ENERGY GENERATION ON BASIS OF THE DISCOUNT COST. Preprint IBRAE-98-07. Moscow. Nuclear Safety Institute. June 1998. 58 p. — Refs.: 28 items.