Calculate the internal rate of return on investment (IRR), levelized cost of electricity (LCOE), and net present value (NPV) for the following generic power plant: A power plant generates a design maximum of 5 MW of electricity The power plant takes one year to build (year 0.) The total installed cost of the plant is $2500/kw. The lifetime of the power plant after construction is assumed to be 20 yrs. (1-20) The power plant has a capacity factor of 80% in the first year of operation after construction, 85% in the second year of operation, and 90% in years 3 through 20. The capacity factor tells you what percentage of the year the power plant is operating at its design rated maximum power. Assume that fixed+variable O&M costs are 7%/yr of the $2500/kW upfront installed capital cost, i.e. that O&M fixed+variable costs are $175/kW per year. Assume that, after the 20 years of operation, you must decommission the power plant. The decommissioning takes place over 1 year. The total cost of decommissioning the plant is $500/kW (i.e. $2.5M in year 21.) Assume that the sale price of electricity is $50/MWh (for NPV and IRR) and that the discount rate is 7%/yr (LCOE and NPV) Assume that there is no inflation in O&M costs or sale price of electricity. Use the equations below {or =IRR(cells, guess) in Excel). Answers should be in units of [% / yr], [$/MWh), and [$] . . N NPV = = -i t=0 N (Re C): (1+i)=1 (Re - C) (1+IRR)-- NPV = 0 = X(LCOE - Ec Ca)(1+i)-+ NPV = 0 = t=0 N (.1 t=0 Calculate the internal rate of return on investment (IRR), levelized cost of electricity (LCOE), and net present value (NPV) for the following generic power plant: A power plant generates a design maximum of 5 MW of electricity The power plant takes one year to build (year 0.) The total installed cost of the plant is $2500/kw. The lifetime of the power plant after construction is assumed to be 20 yrs. (1-20) The power plant has a capacity factor of 80% in the first year of operation after construction, 85% in the second year of operation, and 90% in years 3 through 20. The capacity factor tells you what percentage of the year the power plant is operating at its design rated maximum power. Assume that fixed+variable O&M costs are 7%/yr of the $2500/kW upfront installed capital cost, i.e. that O&M fixed+variable costs are $175/kW per year. Assume that, after the 20 years of operation, you must decommission the power plant. The decommissioning takes place over 1 year. The total cost of decommissioning the plant is $500/kW (i.e. $2.5M in year 21.) Assume that the sale price of electricity is $50/MWh (for NPV and IRR) and that the discount rate is 7%/yr (LCOE and NPV) Assume that there is no inflation in O&M costs or sale price of electricity. Use the equations below {or =IRR(cells, guess) in Excel). Answers should be in units of [% / yr], [$/MWh), and [$] . . N NPV = = -i t=0 N (Re C): (1+i)=1 (Re - C) (1+IRR)-- NPV = 0 = X(LCOE - Ec Ca)(1+i)-+ NPV = 0 = t=0 N (.1 t=0
