Implementation of cost subclasses

[HeddaElisabethGardian]

Description of the issue

There are multiple terms to distinguish costs:

• Variable operation & maintenance
• Cost of Equipment
• Cost of grid connection
• Cost of rent of land
• Cost of decommissioning
• Other costs

Ideas of solution

Possible classsification: as subclass of entity/continuant/generically dependent continuant/information content entity/quantity value/economic value/cost

Workflow checklist

• [ ] I discussed the issue with someone else than me before working on a solution
• [x ] I already read the latest version of the workflow for this repository
• [x ] The goal of this ontology is clear to me

I am aware that

• [ x] every entry in the ontology should have a definition
• [ x] classes should arise from concepts rather than from words

[KaiSchnepf]

@HeddaElisabethGardian what do you think about this definition:

• Variable operation and maintenance costs: Variable costs are a company's costs that are associated with the number of goods or services it produces. A company's variable costs increase and decrease with its production volume.

We also need definitions for the following terms:

• Investment costs: Capital investment costs means costs, beyond the research and development phase, associated with capital improvements, including the acquisition and development of land, the design and construction of new facilities, and the making of renovations or additions to existing facilities.

• Fixed operation and maintenance costs: A company's fixed costs are costs for operation and mantainance that do not vary with the volume of production. Fixed costs remain the same regardless of whether goods or services are produced or not. Thus, a company cannot avoid fixed costs.

• Delivery costs (for materials, energy carriers): Delivered costs for a product or service refer to the total unit cost of a product or commodity delivered to a certain market, city or customer. It is normally composed of all associated transport costs and the unit cost of production. for that product.

[Vera-IER]

We could even use subclasses of cost subclasses here for some terms: Cost of Equipment and Cost of grid connection could be subclasses of investment costs. Cost of rent of land could be a subclass of fixed operation & maintenance costs.

[Ludee]

From OEO-DEV #28:

General Discussion

• Idea to separate the variable cost -> Variable production cost / Variable consumption cost
  • difference of costs for consumers (expenditure) and producers
  • Grundgebühr und Arbeitspreis / Steuern und Abgaben
• connected discussions: marginal cost / total cost / fixed cost / levelised cost of electricity
  • LCOE: https://github.com/OpenEnergyPlatform/ontology/issues/906

Variable cost

• Label parent class: Variable cost

• Decision: not yet continue with including variable consumption cost, rather focus on production for the time being and see whether consumption-related information is required at a later stage.

• Definition: Variable costs are costs that depend on an amount of goods or services.

Production

• Subclass label: Variable production cost
• entity/continuant/generically dependent continuant/information content entity/quantity value/economic value/cost/variable cost
• Definition: Variable costs are a producer's costs that depend on the amount of goods or services produced. A producer's variable costs ... increase and decrease with production volume.
• Editorial notes: An example for variable cost are costs incurred for raw materials (of which more are needed if production is increased). Variable costs are sometimes called unit-level costs as they vary with the number of units produced.

Consumption

• Subclass: Variable consumption cost
• Definition: Variable costs are a consumer's costs that depend on the amount of goods or services consumed. A consumer's variable costs ... increase and decrease with production volume.
• Add the perspective to the definition

[stap-m]

Decision: not yet continue with including variable consumption cost, rather focus on production for the time being and see whether consumption-related information is required at a later stage.

I implement variable cost and variable production cost. I won't close the issue und shift it to a later milestone.

[HeddaElisabethGardian]

Does the definition "Variable costs are costs that depend on an amount of goods or services." include the variable costs for a technological device running? Is for example the production of electrical energy by a wind turbine a "service" provided? If yes, then the definition is correct in my option.

[l-emele]

I think, electrical energy should get the axiom 'has role' some 'commodity role', then this would be covered by the definition of variable cost.

[HeddaElisabethGardian]

Concerning the other cost terms, here is a suggestion for a definition:

Investment costs: Investment costs are costs, beyond the research and development phase, associated with capital improvements, including the acquisition and development of land, the design and construction of new facilities.

• The definition above seems very precise. I would only argue that the last part about renovation cost should be omitted, since they can be declared as an additional term.

Fixed operation and maintenance costs: Fixed costs are costs for operation and mantainance that do not vary with the amount of goods or services produced.

• Analogous to the variable costs.

Equipment costs: Equipment costs are costs for the components and machinery including environmental facilities.

• Defintion by the Danish energ agency (https://ens.dk/sites/ens.dk/files/Statistik/technology_data_catalogue_for_el_and_dh_-_0009.pdf)

Grid connection costs: Grid connection costs are costs of grid connection from the energy generating device to point of connection to national grid.

Rent of land costs: Rent of land costs are costs arising from the land rental on which a technological device has been constructed.

Decommissioning costs: Decommissioning costs are costs arising from the decommissioning of a technological device at the end of its lifetime.

• The moment of decommissioning could possibly be omitted, as a plant can possibly be replaced by means of repowering before the end of its lifetime.

[HeddaElisabethGardian]

Decisions from the oeo-dev-meeting:

Investment cost

• parent: cost

• Definition: Investment is a long-term commitment of financial resources in tangible or intangible assets.

• Alternative term: investment cost, capital investment cost, fixed investment cost_

• Background info: FIBO definition of investment relates to property only: https://spec.edmcouncil.org/fibo/ontology?searchBoxQuery=investment

• Gabler on Investition: langfristige Bindung finanzieller Mittel in materiellen oder in immateriellen Vermögensgegenständen (https://wirtschaftslexikon.gabler.de/definition/investition-39454) translation: long-term commitment of financial resources in tangible or intangible assets

Fixed cost:

• parent: cost

• Definition: Fixed costs are costs for operation and mantainance that do not vary with the amount of goods or services produced.

• Examples: rent, regular technical maintenance cost, staff cost, certification cost

• alternative terms: fixed operation & maintanance cost

• Background: Fixe Kosten: Kosten, die von der jeweils betrachteten Einflussgröße bzw. Entscheidung unabhängig sind, d.h. Kosten, die sich nicht mit der jeweils betrachteten Einflussgröße ändern. (https://wirtschaftslexikon.gabler.de/definition/fixe-kosten-33359)

• oemof-Model: https://oemof-solph.readthedocs.io/en/latest/_modules/oemof/solph/options.html?highlight=fix%20costs

Still open for discussion:

Equipment cost:

• parent: investment

• Definition: Equipment costs are investment costs for acquisition of the components and machinery including environmental facilities.

Installation cost:

• parent: investment
• Definition: Installation and development cost are investment costs incurred for setting up the installation.
• Example: costs that occur for becoming operational
• Alternative: site development cost

Grid connection cost:

• parent: investment
• Definition: Grid connection costs are investment costs for establishing the grid connection from the energy generating device to point of connection to national grid.

Property cost:

• parent: investment
• Definition: Property costs are investment costs arising from the acquisition of a property.
• Alternative: land cost

Decommissioning cost:

• parent: investment
• Definition: Decommissioning costs are investment costs arising from the decommissioning of a technological device at the end of its lifetime.

Still open: Finding axioms

[KaiSchnepf]

Does anybody have an idea for some axioms or want to change definitions? I would like to implement.

[Vera-IER]

I would also need the cost subclass delivery cost as a model parameter for our model. There is a definition proposal posted already above: Delivered costs for a product or service refer to the total unit cost of a product or commodity delivered to a certain market, city or customer. It is normally composed of all associated transport costs and the unit cost of production for that product.

A suggestion for an Arestotelian definition would be: Delivery costs are costs for a product or service that refer to the total unit cost of a product or commodity delivered to a certain market, city or customer. It is normally composed of all associated transport costs and the unit cost of production for that product.

[HeddaElisabethGardian]

Would an appropriate axiom be "has unit some currency" and "has unit some unit of measurement"?

[Vera-IER]

I think the axiom has unit some currency would be appropriate, but since unit of measurement is the parent class of currency, the second axiom is not necessary in my view

[HeddaElisabethGardian]

For the term "social cost of carbon" both axioms are listed, but you are right the parent class is redundant.

[stap-m]

All subclasses of unit of measurement inherit has unit some unit of measurement by the parent class, as well as all subclasses of cost inherit the axiom has unit some currency automatically.

[stap-m]

Decisions from the oeo-dev-meeting:

Investment cost

• parent: cost
• Definition: Investment is a long-term commitment of financial resources in tangible or intangible assets.
• Alternative term: investment cost, capital investment cost, fixed investment cost_

We should not mix up "investment" and "investment cost". "Investment" seems to be the process of investing, whereas "investment cost" refers to the cost of this process. In this case you want to implement investment cost, as you made it a subclass of cost, right? This should be reflected in the definition. Hence, I'd label it investment cost and make investment alternative term.

Maybe it's sensible to implement both investment cost and a process investment. @l-emele ? In that case, we should add an axiom like 'investment cost' 'economic value of' some 'investment'

[l-emele]

Maybe, I do not understand this definition proposl. But to me, the concept described with the current definition proposal (Investment is a long-term commitment of financial resources in tangible or intangible assets.) is neither a subclass of a cost nor of a process. A long-term commitment is to me a commitment to either do something in the far future or for a long time. In the definition proposal the reference to the indented parent concept (cost) is missing completely.

[stap-m]

The proposed def can't be used since it's not Aristotelian (as long as we don't have "long-term commitment") and I didn't suggest to do so. I intended to feaze the mixed up concepts, but maybe it's easiest to just focus on the cost part.

EDIT: Easy suggestion: Investment costs are costs of a long-term commitment of financial resources in tangible or intangible assets.