What Is Long-Run Marginal Cost?

Long-term marginal cost refers to the change in the size of the factory (which can be easily understood as the manufacturer's increasing number of machines, from one machine to two machines, three machines ...). The total cost is the short-term average cost caused by increasing a unit output in the long run, which can correspond to different production scales (comprehensively, when the manufacturer has only one machine, two machines, three machines ...) The short-term increase in total short-term costs.

Long-term marginal cost formula

The long-term marginal cost formula is expressed as:

LMC = LTC / Q

Long-term marginal cost is

Long-term marginal cost compliance

only at

When people try to combine long-term costs with

With the steady and rapid development of the national economy, electricity price, which is the leverage and core content of the power market, is one of the key factors in the reform and development of the power industry, and is also an important tool that reflects China's power industry management thinking and industry development direction. Using scientific, reasonable and standardized pricing methods to set electricity prices has important theoretical value and practical significance for giving full play to the role of electricity prices in the allocation of electricity resources. There are two main types of electricity price formulation methods: accounting cost pricing method and marginal cost pricing method. Because the marginal cost method is based on the cost of the electricity price calculation period, the shadow price is used to more accurately reflect the value of resources, which reflects the trend of future economic costs and the value of future resources, which can give users a more real economy. signal. Therefore, the marginal cost pricing method is more in line with China's actual situation.

Long- term Marginal Cost Accounting

The long-term marginal cost of the power system is: In order to meet the continued small incremental demand in the future, the incremental cost of the system is caused. The electricity price pricing method based on long-term marginal cost is to determine the long-term marginal capacity cost and marginal electricity cost of the system, and set the target electricity price based on the characteristics of the user load. Finally, the target electricity price is adjusted from the perspective of financial analysis to formulate a reasonable electricity price a way.

The long-term marginal cost of the power system consists of long-term marginal cost of capacity, long-term marginal cost of electricity, and user cost. The marginal cost of long-term capacity is divided into two parts: the marginal cost of long-term generation capacity and the marginal capacity cost of transmission and distribution. Due to the small proportion of user costs, only the marginal cost of long-term capacity and the marginal cost of long-term electricity are studied in depth.

Because the long-term marginal cost pricing method considers the impact of future load increases on the increase in power system costs. Therefore, power system load forecasting, optimal planning and optimal operation of the power system are the basis for calculating the long-term marginal cost of the power system, and long-term marginal cost calculation of the power system is the key to formulating electricity prices.

Calculation method of long-term marginal cost

First, calculate the marginal cost of long-term power generation capacity according to the future power development plan, and calculate the average incremental cost of the transmission grid and distribution network based on the grid development plan and the growth of power loads at each voltage level.

Then, according to the incremental load and load loss of each voltage level, the marginal cost of power generation and transmission and distribution is allocated to each voltage level.

Finally, the marginal cost of long-term power generation is calculated based on the optimal operation results of the future power system and the shadow price of coal for power generation, and the marginal cost of power supply for each voltage level is calculated based on the load loss of each voltage level.

Electricity development planning

Electric power development planning mainly includes three aspects: power demand forecasting, power supply expansion planning and transmission grid expansion planning. Among them, the forecast of power demand includes the forecast of the total power demand for each year in the calculation period, the forecast of the power demand of various users, and the forecast of the power demand of various users at various voltage levels. The expansion plan of the power supply is mainly to predict the new machine assembly capacity and unit type in each year. The transmission grid expansion plan is mainly to calculate the construction projects of each voltage level and the static investment flow of each year. ^[1]