Power Module MAC Analysis Sheet

The “MAC Analysis” sheet contains a Marginal Abatement Cost, Carbon Price and an IRR Calculator.


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  • Read the detailed overview of the sheet while you work on it by clicking here.


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    Overview of the sheet

    The “MAC Analysis” sheet is a tool on its own, not directly connected to the development and calculation of scenarios. It contains a Marginal Abatement Cost, Carbon Price and IRR Calculator that enables comparison of any two plant technologies over their lifetimes. It determines the breakeven price of carbon and the marginal abatement cost between the two scenarios. The abbreviation IRR stands for Internal Rate of Return.

    The Marginal Abatement Cost is calculated as the value that would have to be given to each tonne of carbon saved, or mitigated, to give the same net discounted value to each plant technology over the lifetime of the longer-life option.

    Marginal abatement costs are based on pair-wise comparison of alternatives achieving the same primary objective – generally non-climate-change related.

    For example, the pair of activities may be two different power generation modes providing the same kilowatt-hours with similar temporal generation profiles. The comparison requires matching durations and time profiles of outputs, like; kilowatt-hours. If the two alternatives have different life spans, the shorter of the two will need to be replaced to match the alternative with a longer life. The start of outputs begins in year 0 (in P49), and investments that have been made in preceding years are considered to be in year –1, –2, etc. (in K49-O49). Discounting is based on a mid-year assumption; 0.5, 1.5, 2.5 years and so on.

    The procedure is described in the top of the sheet:
    1. Select the two technologies you want to compare via the roll-down menus. The data for the technologies will then be included in the rows 58-273, taken from the "NewPlants" sheet.
    2. Select whether you want to use fixed discount rates for financial analysis and for accruing benefits from carbon and set the fuel prices in the Cotrol panel N6-T21.
    3. Choose the capacity in MW of technology A that you want to make a comparison with.
    4. Press the button "Set option B Capacity". The model will then select a suitable capacity for option B to compare with option A.
    You can now read the break even price of carbon in J34 and the Marginal Abatement Cost in J39.
    5. You calculate the Internal Rate of Return for each of the options A and B by pressing the "Calculate IRR" button in the N23-T34 box.

    Rows 47-273 does all the calculations needed for the top rows. In the bottom the Expenditure/generation is calculated for the two technologies.