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Consulting services in the field of process engineering and economics

An economic model (EM) is a tool for the calculation of the economic indicators of WWER-TOI NPP creation project at various project stages, taking into account all the lifecycle stages.

As far as its philosophy is concerned, the economic model is primarily a resource model that enables the transformation into financial indicators of the technical and management solutions through the resources required to implement them.

The economic model of WWER-TOI project aggregates up to 16 objects (4 of them belong to buildings and the remaining 12 objects belong to systems). The lifecycle of these objects is arranged as a standard schedule with a resource/cost estimate bound to each item of the schedule.

Such EM structure allows using it with any status of project. The more detailed and specific data can be obtained from the management schedules and design documentation the lower calculation error is. So, when the project is at the stage of justification of investments and the lifecycle management schedules are not elaborated, the accuracy of modeling is low. When a detailed design and local estimates are released on a full scale and construction schedules for the level 4 are available, the accuracy of modeling is higher. It goes without saying that the accuracy of modeling is affected by the forecasting horizon and by the consistency of the project location data.

The input data for the economic model are:

1) Project technical characteristics (number of units, unit service life, unit thermal capacity etc.).

2) NPP configuration details (structure of PBS – buildings, structures, systems).

3) Resource data i.e. the data concerning the volume of materials, labor costs, machinery and equipment used for NPP construction.

4) Parameters related to the environment i.e. macroeconomic parameters (inflation, growth of labor costs, materials and equipment, etc.), parameters related to electricity and heat market (cost of electricity and capacity for the market, domestic market rates, rate of deductions made to the development fund), parameters of nuclear fuel market, tax system.

5) Financial parameters (share of borrowed funds, loan interest rate etc.).

6) Cost of resources broken down by price types and regions.

The estimation blocks of the model define the cost indices of revenues and expenses for each stage of NPP lifecycle.

Blocks of analytics within the economic model ensure the achievement of objectives which were the basis for the economic model development:

1) Assessment of project efficiency.

2) NPP function-and-cost analysis including component-by-component comparison with competing objects.

3) Selection of optimal design solutions with regard to the greatest contribution to the economic efficiency.

4) Review of the finished product in terms of compliance with economic parameters specified.

The model enables assessing a competitive capacity of the project both throughout the entire lifecycle and at an individual stage. If detailed schedules are available (e.g. schedules for level 3), efficiency/competitive capability of individual operations can be viewed.

The model has a graphical interface with a remote access to the calculation modules. According to the concept there are two levels of model control/use:

  • design engineer / project manager (operational level);
  • economist / top manager (control level).

The control level allows solving direct and inverse problems and setting the boundary conditions/establishing requirements specification (testing parameter values) for products of individual engineering competences.

Here is an example of the direct problem: the acceptable market price of electricity is calculated based on the capital costs, operating costs, capacity utilization factor, unit capacity and required NPV.

Here is an example of the inverse problem: subject to the expected prices on the electricity market, cost limitations (capital costs, costs for operational costs, value of money etc.) and parameters of achieving the required investment efficiency are defined. In particular, the economic model can be used as the Customer's tool during the basic design acceptance and check for compliance with the requirements specification.

Thus, an economic model can become the core of the economic analysis system within the Rosatom engineering area, ensuring the flexibility of customization depending on the tasks to be solved. The main advantage of the model or its "know-how" is the structure and logic of system interconnections among the components.