Question
The PowerGen company is building a 100 Megawatt (1 MW =106 watt) natural gas-fueled electric power plant. PowerGen obtains a loan at 6% interest to
The "PowerGen" company is building a 100 Megawatt (1 MW =106 watt) natural gas-fueled electric power plant. PowerGen obtains a loan at 6% interest to finance building the plant over three years. PowerGen spends the following total amounts each year (for equipment, engineering, construction).
Year 1: $50 million
Year 2: $25 million
Year 3: $100 million
The plant starts producing electricity in year 4.
e) What is the capital recovery factor CRF, assuming a plant lifetime of 20 years? Fixed operation and maintenance costs for the plant (labor) are 3% of the total capital investment cost of the plant.
Find the present value (at the time the plant begins operation) of:
f) the total capital investment in building the plant
g) the natural gas input to the plant
h) the fixed operation and maintenance costs i) Find the lifecycle cost of the plant ($
j) What is the annualized lifecycle cost of the plant ($/yr)?
k) Estimate the levelized cost of electric power from this plant ($/kWh).
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