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Key assumptions for capital cost estimation:
Bank interest rate (percent)
Percent internal rate of return
Years of construction
Years of operation
Maintenance, percent initial capital
Working capital, percent revenue
Working capital, percent liquid
Owner's cost, percent initial
capital, first-year operation
Federal income tax rate, percent
General inflation, percent
Raw material price escalation,
percent (same as general inflation)
General inflation of 3 percent per year was applied to all costs and selling prices. As mentioned above, an assumed rate of inflation was included in the investment required by investors.
Throughout this report, all costs, prices, and so forth, are given in constant 1992 dollars unless otherwise specified. A Gross Domestic Product Implicit Price Deflator2 has been used to adjust current dollars to 1992 dollar figures. An exception is DOE budget data, which are quoted in current dollars.
Throughout this report all thermal efficiency figures are based on the higher heating value (HHV) of fuel, which is the convention most widely used in the United States for coal-based systems. HHV credits the fuel with the heat of vaporization of water formed in the combustion reaction; that is, water is assumed to exist in the liquid phase after combustion. This is consistent with the standard thermodynamic conditions of 25 °C (77 °F) and 1 atmospheric pressure used to calculate the heat of formation or reaction of any chemical compound (recall that "heating value" is simply the name commonly used for the heat of reaction of a hydrocarbon used as fuel).
EIA, 1994, Annual Energy Review 1993, Energy Information Administration, U.S. Department of Energy, DOE/EIA-0384(93), DOE, Washington, D.C.