Additional Notes: Calculate levelized costs by turning the capital outlay into a loan payment using the spreadsheet pmt function. If r represents the interest rate per period and n represents the number of periods (term of the loan), the spreadsheet pmt function divides the present discounted cost by (1-(1+r)^-n)/r.

This is all one question. Thank you!

The regional electric utility, which presently utilizes natural gas for power generation, is examining potential solutions to meet the power demands of its customers. It has the following alternatives: Coal: A S50 megawatt (Mw) coal plant with a capital cost of $50 million and operating costs of 35 million per year plus the cost of coal. The coal plant would operate at 33 percent efficiency for converting heat for burning coal into electricity, and can expect a 50 percent load factor (capacity factor) and will last for 30 years. Under these assumptions, there are enough local resocurces {the cheapest source) to supply the power plant with coal for 30 vears at a cost of $2.00 per million Btu [(MMBtu). Wind: The region has two potential sites for commercial-scale wind farms. One could support 10 Mw of capacity with a 30 percent load factor. The other could support 20 Mw of capacity, but can only expect a 25 percent load factor. Both wind farms have a capital cost of $1,000 per kilowatt (kw) of installed capacity, and an annual operating and maintenance cost of $50 per year for each kw of installed capacity. The wind mills are expected to last for 20 years before needing to be replaced. Matural gas: The utility already has 200 Mw of natural gas capacity that is running on an average of 30 percent efficiency. It could build a new 50 Mw plant for additional capacity using modern combined cycle technology that would vield 50 percent efficiency. The capital cost of the new plant would be $10 million, and the operating and maintenance costs of both new and old gas plants is 550 per kw per year, exclusive of the cost of natural gas. Both new and existing gas plants have an expected life of 30 years. The expected load factor for the natural gas plants is 30 percent. The utility has an existing contract for 30 years to purchase up 1o & trillion Btu of natural gas peryearat a price of 35,00 per MMbtu. If it wants to use more the & trillion Btu in a year, it can purchase as much additional gas as it needs, but has to pay $2.00 per MMbtu. Question: Assuming that the utility has to pay an annual rate of 10 percent for investment funds, what are the levelized costs of power for each of the sources, in cents per kwh? Calculate separate costs for the twio wind sites and for natural gas using the existing facilities and using a new plant. You may assume that the capital costs are all spent in the first year, and that operating and fuel costs are constant for the life of the plant. (Hint: you will need to convert all costs into common units of energy generated per unit of time -- in this case, kwh -- and apply both the load factor and efficiency percentages to scale down electricity actually generated from total capacity and scale up fuel costs. Note that there are 8,766 hours in a year on average (including leap years once every four years). Also, remember to separate gas costs into the existing contract gas vs. new purchases.)