• Renewable Energy Sources for Electricity Generation in page 36 of the textbook.
• Answer questions:
  • 1. If you wanted to know more about the new arrangement with the wind farm in south Texas for the additional 60 MW per year, what types of questions would you ask of a staff member In your first meeting with him or her?
  • 2. Much of the current generation capacity of PEC facilities utilizes coal and natural gas as the primary fuel source. What about the ethical aspects of the government's allow ance for these plants to continue polluting the atmosphere with emissions that may cause health problems for citizens and further the effects of global warming? What types of regulations, If any, should be developed for PEC (and other generators) to follow In the future?

Here are some data that you have obtained. The information is sketchy, as this point, and the numbers are very approxi- Case Study Exercises mate. Electricity generation cost estimates are national in scope, not PEC-specific, and are provided in cents per 1. If you wanted to know more about the new arrange- ment with the wind farm in south Texas for the addi- kilowatt-hour ($/kWh). tional 60 MW per year, what types of questions would Generation Cost, c/kWh you ask of a staff member in your first meeting with him or her? Fuel Source Likely Range Reasonable Average 2. Much of the current generation capacity of PEC facilities Coal 4 to 9 7.4 utilizes coal and natural gas as the primary fuel source. Natural gas 4 to 10.5 8.6 What about the ethical aspects of the government's allow- Wind 4.8 to 9.1 8.2 ance for these plants to continue polluting the atmosphere Solar 4.5 to 15.5 8.8 with the emissions that may cause health problems for citizens and further the effects of global warming? What National average cost of electricity to residential custom- types of regulations, if any, should be developed for PEC ers: 11$/kWh (and other generators) to follow in the future?CASE STUDY RENEWABLE ENERGY SOURCES FOR ELECTRICITY GENERATION Background PEC average cost to residential customers: 10.27 $/kWh (from primary sources) and 10.92 (renewable sources) Pedernales Electric Cooperative (PEC) is the largest member-owned electric co-op in the United States with over Expected life of a generation facility: 20 to 40 years (it is 232,000 meters in 12 Central Texas counties. PEC has a ca- likely closer to 20 than 40) pacity of approximately 1300 MW (megawatts) of power, of Time to construct a facility: 2 to 5 years which 277 MW, or about 21%, is from renewable sources. Capital cost to build a generation facility: $900 to $1500 The latest addition is 60 MW of power from a wind farm in per kW south Texas close to the city of Corpus Christi. A constant question is how much of PEC's generation capacity should be You have also learned that the PEC staff uses the well- from renewable sources, especially given the environmental recognized levelized energy cost (LEC) method to determine issues with coal-generated electricity and the rising costs of the price of electricity that must be charged to customers to hydrocarbon fuels. break even. The formula takes into account the capital cost of Wind and nuclear sources are the current consideration for the generation facilities, the cost of capital of borrowed the PEC leadership as Texas is increasing its generation by money, annual maintenance and operation (M&O) costs, and nuclear power and the state is the national leader in wind the expected life of the facility. The LEC formula, expressed farm-produced electricity. in dollars per kWh for (t = 1, 2, ... , n), is Consider yourself a member of the board of directors of J'P. + AtC PEC. You are an engineer who has been newly elected by the LEC = 1-1 (1+1) PEC membership to serve a 3-year term as a director-at-large. As such, you do not represent a specific district within the entire service area; all other directors do represent a specific district. You have many questions about the operations of where P, = capital investments made in year t PEC, plus you are interested in the economic and societal A = annual maintenance and operating (M&O) costs for year t benefits of pursuing more renewable source generation C, = fuel costs for year t capacity. E, = amount of electricity generated in year t Information n = expected life of facility 1 = discount rate (cost of capital)