Economics of power generation MEP690 Exercise The importance of solar PV power plant is going to increase with the rising of electricity tariffs. A study is being made to evaluate the potential and the cost-effectiveness of a solar photovoltaic power plant for meeting the energy demand. A design of a 2.5 MW solar PV grid connected power plant has been proposed, which requires about 60000 m of land area. Some design data are given in the following table: 2.5 [MW] 205 [10 EGP] 20 [year] 28% Net output Total plant investment including the required inverters Plant life Capacity factor in the first year of operation. A degradation rate is expected to be 0.4% of electricity generation from the plant over its life. Maintenance costs in the first year of operation An escalation rate is expected to be 3.5% over the plant life Levelized annual labor cost over the plant life 40 (EGP/MWh] 35 (EGP/MWh) The interest rate is 6 per cent. The annual insurance cost is 1.5 per cent of total investment. At the end of the tenth year of operation, Inverters should be replaced. The cost of replacing inverters is 22.4 [10 EGP). The salvage value is 2% of the total investment. Depreciation is neglected a. Calculate the levelized capacity factor over the plant life, and find out the annual electricity generated. b. Calculate the levelized annual maintenance costs over the plant life. c. Compute the annualized total costs for the plant. d. Find out the unit electricity cost (EGP/kWh). e. Give your comments on the findings. Table (1) Some useful formulas PPvvv. m (S/year) = {{C. (SV)PWF(i, n) + Y., PWF(i, m)} CRF(i, n) sy where C. is the initial cost, (SV) denotes the salvage value at the end of year n, and Ym represents the cost associated with operations for year m. Single payment present worth factor PWF(r,n) = (1 + r)- = Series present worth factor SPWF(r,n) (1+r)n-1 r(1+r)" Capital recovery factor CRF(r,n) r(1+r)" (1+r)n-1 Where: r= interest rate % The levelized value of the factor f ,i=1...n is 1=1 (f)(PWF), flevelized (SPWF) The levelized value of the factor f which escalates at a constant rate k % is (1 + k) (PWF) -1 1-1 flevelized (SPWF) 1- pn r-k or f levelized (SPWF) Where: r= interest rate %, k= constant escalation rate % and P= (1+k) (1+r) Economics of power generation MEP690 Exercise The importance of solar PV power plant is going to increase with the rising of electricity tariffs. A study is being made to evaluate the potential and the cost-effectiveness of a solar photovoltaic power plant for meeting the energy demand. A design of a 2.5 MW solar PV grid connected power plant has been proposed, which requires about 60000 m of land area. Some design data are given in the following table: 2.5 [MW] 205 [10 EGP] 20 [year] 28% Net output Total plant investment including the required inverters Plant life Capacity factor in the first year of operation. A degradation rate is expected to be 0.4% of electricity generation from the plant over its life. Maintenance costs in the first year of operation An escalation rate is expected to be 3.5% over the plant life Levelized annual labor cost over the plant life 40 (EGP/MWh] 35 (EGP/MWh) The interest rate is 6 per cent. The annual insurance cost is 1.5 per cent of total investment. At the end of the tenth year of operation, Inverters should be replaced. The cost of replacing inverters is 22.4 [10 EGP). The salvage value is 2% of the total investment. Depreciation is neglected a. Calculate the levelized capacity factor over the plant life, and find out the annual electricity generated. b. Calculate the levelized annual maintenance costs over the plant life. c. Compute the annualized total costs for the plant. d. Find out the unit electricity cost (EGP/kWh). e. Give your comments on the findings. Table (1) Some useful formulas PPvvv. m (S/year) = {{C. (SV)PWF(i, n) + Y., PWF(i, m)} CRF(i, n) sy where C. is the initial cost, (SV) denotes the salvage value at the end of year n, and Ym represents the cost associated with operations for year m. Single payment present worth factor PWF(r,n) = (1 + r)- = Series present worth factor SPWF(r,n) (1+r)n-1 r(1+r)" Capital recovery factor CRF(r,n) r(1+r)" (1+r)n-1 Where: r= interest rate % The levelized value of the factor f ,i=1...n is 1=1 (f)(PWF), flevelized (SPWF) The levelized value of the factor f which escalates at a constant rate k % is (1 + k) (PWF) -1 1-1 flevelized (SPWF) 1- pn r-k or f levelized (SPWF) Where: r= interest rate %, k= constant escalation rate % and P= (1+k) (1+r)