Energy Units and CO2 Equivalent Emissions Estimates

Appendix 1. Energy Units and CO2 Equivalent Emissions Estimates 

Appendix 2. Levelized Price Estimates Derived by Net Present Value Cash Flow Analysis 

The levelized price of a product is the constant revenue stream that recovers all capi tal investments and covers all variable and fixed costs and taxes over the investment period. Therefore, the levelized electricity and H2 prices presented in this study are derived by finding the electricity and H2 price that generates a net cash flow resulting in a zero net present value for the sum of discounted annual net cash flows over the investment period. The net present value formula is 

The definition of net cash flow (NCF) for capital budgeting purposes is after tax cash flows from operations discounted at the present value of the cost of capital.26 In net present value analysis the cost of capital is a pre determined value based on the opportunity cost of capital. The cost of capital is defined as a weighted average cost of capital (WACC) and takes into account the firm s capital structure, the cost of equity and debt capital, and tax rates. The formula for the weighted average cost of capital (WACC) is 

WACC = Discount Rate = [(% equity) (kequity)] x [(% debt) (kdebt) (1 - t)] (3) 

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