HW6 - Break even cost of wind power Final
docx
keyboard_arrow_up
School
North Carolina State University *
*We aren’t endorsed by this school
Course
300
Subject
Industrial Engineering
Date
Dec 6, 2023
Type
docx
Pages
2
Uploaded by MasterPorpoiseMaster138
ES 300 – Homework 6
1.
Break even electricity price for a wind farm
Download the file “HW6.xlsx” from Moodle. It’s a spreadsheet (surprise!)
with levelized cost of electricity (LCOE) calculations for a hypothetical
onshore (land-based) wind farm. The LCOE calculation has two main
components: 1) the financing charge ($/MWh); and 2) operations cost (fuel,
variable O&M, etc.).
a.
From the lectures and this worksheet, explain what the LCOE means in
lay person’s terms.
LCOE is a indicator of whether a plant is a good long term investment,
and if the lifetime costs are worth how much energy is being produced.
b.
What exactly is the “financing charge” in the worksheet? Use the
embedded Excel formulas to define what this is (you may have to look
up what the PMT() function does).
The annualized capital cost (mortgage payment) divided by the expected
annual amount of electricity sold is the financing charge.
c.
What’s the biggest single factor contributing to wind power’s costs?
Land and capital
d.
What type of cost would influence the LCOE of a fossil fuel based power
plant that wind turbines do not experience?
The cost of the fossil fuel
e.
How has the LCOE of onshore wind power has changed over the last 20
years?
It’s decreased by 50%, from 300 to 150.
f.
Why are wind speeds a primary consideration of wind developers when
deciding the physical location of a wind farm?
The wind speeds are what generate the power.
g.
What factor listed in the spreadsheet corresponds to wind speeds?
Total plant capacity
h.
Perform a sensitivity analysis on the LCOE of wind. First multiply the
capacity factor by 0.75
and 1.25 and report the new LCOE in each case.
0.75 -- $37.18
1.25 -- $23.91
i.
Change the capacity factor back to 40%. Now do the same sensitivity
analysis for capital costs. Report the new LCOE in each case.
0.75 -- $22.66
1.25 – $35.10
j.
Change the capital cost back to $1,000,000 per MW. Now perform a
similar sensitivity analysis on the wind farm’s interest rate on debt.
Report the new LCOE in each case.
0.75 – $25.94
1.25 -- $31.99
k.
What do you think would cause the wind farm’s interest rate to increase,
and what underlying challenge associated with wind energy could cause
this?
Changes in the economy, changes in manufacturing costs for plants.
l.
From your analysis, to which factor (part h, part i or part j) is the LCOE
least
sensitive?
It’s lease sensitive to the change interest rate.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help