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7.6 Borduria Power has built a plant with the following characteristics: Investment cost 1000 $/kW 400 MW 30 years 9800 Btu/kWh Capacity Expected plant life
7.6 Borduria Power has built a plant with the following characteristics: Investment cost 1000 $/kW 400 MW 30 years 9800 Btu/kWh Capacity Expected plant life Heat rate at rated output Expected fuel cost Expected utilization factor Expected average selling price 1.10 $/MBtu 0.85 31 $/MWh After five years of operation, market conditions change dramatically. The fuel price increases to 1.50 $/MBtu, the utilization factor drops to 0.45 and the aver- age price at which Borduria Power can sell the energy produced by this plant drops to 25 $/MWh. What should Borduria Power do with this plant? What should Borduria Power have done if it had known about this change in market conditions? Assume that Borduria Power uses a MARR of 12% and ignore the recoverable cost of the plant
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