Using the following assumptions calculate the marginal cost of both a simple cycle and combined cycle gas generator:

Simple Cycle hear rate (GJ/MWh)	10
Simple Cycle Variable O&M ($/MWh)	$3.50
Combined Cycle heat rate (GJ/MWh)	7
Combined Cycle Variable O&M ($/MWh)	$5.00
Gas Price ($/GJ)	$3.00
Tonnes of CO2 per GJ	0.051
Carbon Price ($/Tonne of CO2)	$20.00

1. What is the variable cost of a simple cycle and combined cycle plant? [5points]
2. What do the differences in variable cost suggest about each technology'scapacity factor? [2points]
3. What would happen if carbon prices when to $170/tonne? [1point]
4. How do you think a $170/tonne carbon price would impact electricity prices?[1 point]