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Capacity expansion problem A state expects the following annual growth in electricity demand during the next ten years. Year 1 2 3 4 5 6
Capacity expansion problem A state expects the following annual growth in electricity demand during the next ten years.
Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
Growth (MW) | 2 | 3 | 1 | 5 | 2 | 3 | 5 | 3 | 2 | 1 |
To meet the demand, capacity must be constructed. The cost of capacity as a function of size is shown in the table below.
Size (MW) | 1 | 2 | 3 | 4 | 5 |
Cost ($ million) | 20 | 38 | 55 | 70 | 80 |
The discount rate for time value of money calculations is 10%. Find the optimum capacity expansion plan to minimize the present worth of capital expenditures. Complete the DP stage tables for stages n = 10, 9, and 8.
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