The economic terms could be better named and defined:
- model: discount_rate. This is at present a discount rate on the operational costs (and fixed costs excluding investments). It applies to all operational costs - one could argue that different investments should have different discount rates for their revenues. However, system cost minimizing model does not include revenues (marginal prices), but it is based on costs. For now, the documentation should be clear what the model discount_rate is. Later, one could try to think if there is a way to represent different risk levels for different operational 'revenues'.
- unit / connection / storage: interest_rate. This should be discount_rate (for investments). This could be named WACC, but WACC is not the same as discount rate. Discount rate is used to calculate the present value of future cashflows. (Please note that FlexTool annualizes payments over economic lifetime - these payments are what is discounted). It is a more fitting term - in the case of societal cost minimisation, it should represent the return investors require in order to make the investment - i.e. the financing cost of investments which can differ between technologies/countries due to different risk profiles. Current interest_rate is not an accurate term.
- inflation_rate: This does not currently exist, which means that all monetary inputs should be in real terms. However, it might be easier to use nominal (as data sources may have nominal values) and then inflation_rate would be required. However, it could be that user just bakes in inflation rate both to investment and operations discount_rates (and uses nominal values). But FlexTool should be more explicit about this.
The economic terms could be better named and defined: