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Accounting for the Life Cycle Cost of Power Grid Projects by Employing a System Dynamics Technique: A Power Reform Perspective

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  • Yongli Wang

    (State Key Laboratory for Alternate Electrical Power System with Renewable Energy Sources, Beijing 102206, China
    School of Economics and Management, North China Electric Power University, Beijing 102206, China)

  • Shanshan Song

    (State Key Laboratory for Alternate Electrical Power System with Renewable Energy Sources, Beijing 102206, China
    School of Economics and Management, North China Electric Power University, Beijing 102206, China)

  • Mingchen Gao

    (State Key Laboratory for Alternate Electrical Power System with Renewable Energy Sources, Beijing 102206, China
    School of Economics and Management, North China Electric Power University, Beijing 102206, China)

  • Jingyan Wang

    (State Key Laboratory for Alternate Electrical Power System with Renewable Energy Sources, Beijing 102206, China
    School of Economics and Management, North China Electric Power University, Beijing 102206, China)

  • Jinrong Zhu

    (State Key Laboratory for Alternate Electrical Power System with Renewable Energy Sources, Beijing 102206, China
    School of Economics and Management, North China Electric Power University, Beijing 102206, China)

  • Zhongfu Tan

    (State Key Laboratory for Alternate Electrical Power System with Renewable Energy Sources, Beijing 102206, China
    School of Economics and Management, North China Electric Power University, Beijing 102206, China)

Abstract

In the context of China’s electric power reform, issued in May 2019, the “Transmission and Distribution Pricing Supervision Measures” have changed asset accounting in grid enterprises and therefore affected cost accounting in grid projects. This paper proposes a dynamic cost calculation model based on system dynamics and takes a power grid company as an example. On this basis, a sensitivity analysis of power grid engineering was conducted to determine the impacts of key factors of power reform on life cycle cost (LCC). Finally, suggestions for cost accounting and cost management were proposed.

Suggested Citation

  • Yongli Wang & Shanshan Song & Mingchen Gao & Jingyan Wang & Jinrong Zhu & Zhongfu Tan, 2020. "Accounting for the Life Cycle Cost of Power Grid Projects by Employing a System Dynamics Technique: A Power Reform Perspective," Sustainability, MDPI, vol. 12(8), pages 1-28, April.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:8:p:3297-:d:347164
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    References listed on IDEAS

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    Cited by:

    1. Hongliang Tian & Liang Zhao & Sen Guo, 2023. "Comprehensive Benefit Evaluation of Power Grid Investment Considering Renewable Energy Development from the Perspective of Sustainability," Sustainability, MDPI, vol. 15(10), pages 1-17, May.
    2. Biao Li & Tao Wang & Chunxiao Li & Zhen Dong & Hua Yang & Yi Sun & Pengfei Wang, 2022. "A Strategy for Determining the Decommissioning Life of Energy Equipment Based on Economic Factors and Operational Stability," Sustainability, MDPI, vol. 14(24), pages 1-24, December.

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