NumPy Financial NPV Finance Model

NumPy Financial NPV Finance Model#

The NumpyFinancialNPV component calculates the Net Present Value (NPV) of a commodity-producing plant or technology over its operational lifetime using the NumPy Financial npv method. It is implemented as an OpenMDAO ExplicitComponent and integrates with system-level technoeconomic optimization workflows.

The component evaluates profitability by discounting future cash flows — including capital expenditures (CAPEX), operating expenses (OPEX), refurbishments, and revenues — based on user-defined financial parameters.

By convention:

  • Investments and costs (CAPEX, OPEX, refurbishments) are negative cash flows.

  • Revenues (commodity sales) are positive cash flows.

Model Inputs#

NumpyFinancialNPVFinanceConfig#

Description Configuration class defining financial parameters for the NPV calculation. Implements validation and default handling using the attrs library.

Attribute

Type

Description

Default

plant_life

int

Operating life of the plant in years. Must be ≥ 0.

—

discount_rate

float

Discount rate (0–1).

—

commodity_sell_price

int or float

Sale price of the commodity (USD/unit).

0.0

save_cost_breakdown

bool

Whether to save annual cost breakdowns to CSV.

False

save_npv_breakdown

bool

Whether to save per-technology NPV breakdowns to CSV.

False

cost_breakdown_file_description

str

Descriptor appended to output filenames.

'default'

An example of what to include in the plant_config to use the NPVFinance model. This is included in ["finance_parameters"]["finance_groups"], where npv is the specific finance_group name.

npv:
  finance_model: "NumpyFinancialNPV"
  model_inputs:
    discount_rate: 0.09 # each period is discounted at a rate of `discount_rate`
    commodity_sell_price: 0.078 # if commodity is electricity $/kwh
    save_cost_breakdown: True
    save_npv_breakdown: True

Note

plant_life is included in the plant section of the plant_config yaml.

Model Outputs#

Name

Units

Description

NPV_<commodity>_<optional_description>

USD

Total discounted Net Present Value for the system.

Output Files (if enabled)#

File

Description

*_cost_breakdown.csv

Annual time series of costs and revenues per technology.

*_NPV_breakdown.csv

Discounted NPV summary by cost/revenue category.

Calculation Methodology#

  1. Assemble Cash Flows

    • CAPEX (negative) at year 0

    • OPEX (negative) and revenue (positive) for years 1–plant_life

  2. Refurbishments

    • Technologies with replacement_cost_percent and a refurbishment period incur periodic capital costs.

  3. Discounting

    • Each series of cash flows is discounted using NumPy Financial’s npf.npv(discount_rate, values).

  4. Summation

    • Total NPV = sum of all discounted cash flows.

  5. Optional Output Files

    • *_cost_breakdown.csv: Annual cash flow time series

    • *_NPV_breakdown.csv: Discounted NPV breakdown per item

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