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EVEN 2372 - FALL 2017 HOME WORK 7 -Cost benefit analysis of renewable energy sources Due date: 10/12/2016 rev 1 hosokw A local petrochemical industry
EVEN 2372 - FALL 2017 HOME WORK 7 -Cost benefit analysis of renewable energy sources Due date: 10/12/2016 rev 1 hosokw A local petrochemical industry consumes 5 MWh/day which currently is being purchased at 50.13 kWh. The industry has hired you to evaluate building a power plant using renewable energy sources as opposed to purchasing power from the local electric company. The three renewable energy sources in consideration are (1) Solar, (2) Wind, and (3) Geothermal. To build the infrastructure each renewable energy source consists of a one-time initial permitting fee to be filed with Texas Commission on Environmental Quality (TCEQ) which is as follows: (1) Solar-$10,000; (2) Wind- $20,000; (3) Geothermal; $40,000. As shown in Table 1 each of the renewable energy sources has other annual costs including waste disposal costs and other life cycle assessment costs (LCA) which include the violations of environmental laws, supplier failures and other regulatory risks. The estimated life cycles for each renewable energy source as well as discount rates to be applied are also shown in Table 1. Table 1: Costs associated with each renewable energy source along with estimated life cycle and discount rates. Renewable Waste disposalOther LCA Project life cycle Discount rate $24,000 $20,000 energy source cost tS/yr) costs (Slyr)(years) Solar Wind Geothermal 10,000 30,000 S40,000 20,000 15 15 Note: Waste disposal for solar panels is the solvent waste accumulated during cleaning process While in case of wind turbines and geothermal plants it is the cleaning solvent waste and blowdown water The capital, operating and maintenance cost for each energy source to be used are shown on the next page
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