RENEWABLE ENERGY SOURCES FOR RL.FCTRICITY CENERATION Backeround Pedernales Pecirte Cooperalive (PBC) is the Iarged mernber-owned electric co-op in the Uniled Slates with over 232000 meters in 12 Central Texas counties. PI.C has a ca. pacily of approsimately 1300MW (meggawatis) of power, of which 277MW, or about 21%, is from renewable sources. The tatest addition is 60MW of powve from a Wind farm in wouth Texas close to the cily of Corpus Cleisil. A cursiand quation ts how nuch of PEC's gencration capacily should be from renewable sourres, especially glven the environmental lssaes with coal generated electricity and the rising costs of hydrocarbon fueb. Wind and nuclear sources are the current consideration for the PEC lealership as Texas is increaling its generation by nuclear power and the sate ts the national leader in wind farm-produced electricity. Consider yourself a member of the boand of directors of PEC. You are an engincer who has been newly elected by the PEC membershlp to serve a 3-year term as a ditector-at-lange As such, you do not represent a specific district within the entire service arex; all cther directors do represent a specific district. You leve many questions about the operations of PEC, plas you are interested in the economic and societal benclits of pursulng more renewable source gencration capacliy. Information Here are some dats that you have obtained. The information is skeichy, as this polnt, and the numbers are very approxi. nate. Electricity gerneralion cost stimates are rallonal in scope, not PEC-specific, and are provided in eents per kllowatt-hour ( t/kWh). National average cost of electricity to residential custom: c5 IIt /kWh PLC average cost to resideritid cuscomers: 10.27 d/kWh (Viom primary sources) and 1092eNWh (renewable sources) Expected life of a gerienalion facility: 20 to 40 years (it is likely closer to 20 than 40) Capltal cost fo bulld a geieration factlity: $900 te $1500 per kW You have also learned that the PEC staff uses the well recognized levelted enevgy cast (I. ..C) method to determine the price of electricity that nust be charged to customers to break even. The formula takis into account ilie capilai cost of the generalion facilities, the cost of caplial of borrowed moncy, anmual maintenance and eperation (M\&O) costs, and the expectiod life of the facility. The L.EC formula, expressed in dollars per kWh for (t1.2,,A), is where Pt capital investments made in year t A, - annual mainteriance and operating (M&O) costs roryear t C3= fud costs for year t E2 - amount of electricily generalid in year t a= expecied life of facility I- discount rale (cost of capital) Case Study Exercises 1. If you wanted to know more about the new arrangement with the wind farma in scouth Texas for the addr. tlonal 60 MW per year, what types of questions would you ask of a starf mernber in your first meoting with him or her? 2. Moch of the current generntion capacity of PLC racilities utilias cml and ratural ges as the princry fuel saifce. What about the ethical aspects of the government's allowance for these planis fo continue polluting the atmosphere with the entsions tor may cawn health problens for citters and further the effects of global warmirg? What types of regulations, if any, should be developed for PEC (and ether generaton) to follow in the futire