*Appendix A.2. CAPEX*

The capital expenditure (CAPEX) of a certain type of power generation capacity at a certain point of time is modelled as follows. The total capital cost of a certain type of power generation capacity during the period of this study is expressed as ∑<sup>I</sup> <sup>i</sup>=<sup>1</sup> <sup>∑</sup><sup>T</sup> <sup>v</sup>=<sup>1</sup> <sup>∑</sup><sup>M</sup> <sup>m</sup>=<sup>1</sup> cmiv ∗ xmiv. xmiv is the capacity of plant type m, vintage v, in country i. Vintage indicates the time a certain type of capacity is built and put into use. cmiv is the corresponding capital cost per unit of capacity of the power plant. For simulation purpose and consistency in presentation with the other cost terms, a time dimension to the equation besides the vintage dimension is added. This allows that the capital cost is amortized using a capital recovery factor.
