How to deal with interest?

[DorinevanderVlies]

Currently only depreciation costs of investments are taken into account. Especially for large investments interest can play a significant role.

Furthermore I can imagine that large stakeholders, like the system operator or a cooperation, will have lower interest rates than for example customers.

• Is there a particular reason why interest is currently not implemented in ETMoses?
• Do you agree that it is important to implement interest in the model? If so, what would be a good approach?

I'm curious about your thoughts (@dennisschoenmakers @AlexanderWirtz @ChaelKruip (when you're back) ) And the technical possibilities ( @antw, @grdw)

[dennisquintel]

I'm curious about your thoughts (@dennisschoenmakers @AlexanderWirtz @ChaelKruip (when you're back) )

The cost of capital was explicitly left out of etmoses before. We also discussed that it could (and should) be added later.

And the technical possibilities ( @antw, @grdw)

Technologically, of course this is possible. The real question here, is: how much time would it cost to implement this? I am assuming that technically this can be accomplished with not too much time spent.

wait...

There is a caveat. Technically, it might be rather simple, but we would have to know much (=have more information about) about the financial circumstances of the stakeholder and the LES.

Such as:

• timing of investments, income (cash-in) and expenses (cash out), and if not: make assumptions about it
• the assumed ratio of equity and debt and respective costs of capital (or let the user provide an average weighted cost of capital (=wacc).

So, we would have to make a lot of choices, and we would have to design (=think about) and create pages where this information should be added for the user. Also, we would have to think about where we store this information and whether or not etmodel should also have these costs taken into account.