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Modification of the LCOE model to estimate a cost of heat and power generation for Russia


  • Bratanova, Alexandra
  • Robinson, Jacqueline
  • Wagner, Liam


The Russian heat sector faces crucial problems including underinvestment, below cost pricing, generation capacity and infrastructure depletion. While the Russian electricity sector has gradually progressed through liberalization, the heat sector is still waiting for similar reforms to occur. The modernisation of the sector requires analysis of energy generation costs to suggest feasible technological solutions and secure an increase of investment in the industry. This study presents a modification of a levelised cost of energy (LCOE) model with cost separation coefficients based on Ginter triangles. The modified LCOE model is applied to a regional case study (Moscow, Russia) providing a comparison of generation technology according to cost estimates for electricity and heat under regionally specific economic and technological conditions. We consider five combined heat and power (CHP) generation technology types for two natural gas price scenarios. The modelling outcomes demonstrate cost competitiveness of gas based CHP technology and provide valuable information to assist decision making for the management of the energy sector in Russia.

Suggested Citation

  • Bratanova, Alexandra & Robinson, Jacqueline & Wagner, Liam, 2015. "Modification of the LCOE model to estimate a cost of heat and power generation for Russia," MPRA Paper 65925, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:65925

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    References listed on IDEAS

    1. Orlov, Anton & Grethe, Harald & McDonald, Scott, 2013. "Carbon taxation in Russia: Prospects for a double dividend and improved energy efficiency," Energy Economics, Elsevier, vol. 37(C), pages 128-140.
    2. Paltsev, Sergey, 2014. "Scenarios for Russia's natural gas exports to 2050," Energy Economics, Elsevier, vol. 42(C), pages 262-270.
    3. Alexandra Bratanova & Jacqueline Robinson & Liam Wagner, 2012. "Energy cost modelling of new technology adoption for Russian regional power and heat generation," Energy Economics and Management Group Working Papers 9-2012, School of Economics, University of Queensland, Australia.
    4. Liam Wagner & John Foster, 2011. "Is There an Optimal Entry Time for Carbon Capture and Storage? A Case Study for Australia's National Electricity Market," Energy Economics and Management Group Working Papers 07, School of Economics, University of Queensland, Australia.
    5. Chernenko, Nadia, 2015. "Market power issues in the reformed Russian electricity supply industry," Energy Economics, Elsevier, vol. 50(C), pages 315-323.
    6. Branker, K. & Pathak, M.J.M. & Pearce, J.M., 2011. "A review of solar photovoltaic levelized cost of electricity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4470-4482.
    7. Orlov, Anton, 2015. "An assessment of optimal gas pricing in Russia: A CGE approach," Energy Economics, Elsevier, vol. 49(C), pages 492-506.
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    Cited by:

    1. Foster, John & Wagner, Liam & Liebman, Ariel, 2017. "Economic and investment models for future grids: Final Report Project 3," MPRA Paper 78866, University Library of Munich, Germany.

    More about this item


    cogeneration; levelised cost; heat generation; Ginter triangle; Russia; Moscow;

    JEL classification:

    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting

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