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In: Mechanical Engineering

QUESTIONS: Net present value (NPV) of the wind farm project In order to make this calculation,...

QUESTIONS:

Net present value (NPV) of the wind farm project
In order to make this calculation, we need to convert some of the information we have
into annual figures:
1. What are the O&M costs in euro for each year (€/year)?
2. What is annual revenue from selling the electricity (€/year)?
3. What is the annual net income (€/year)?
4. What is the net present value of this wind farm project(€)? Hint: when calculating
with NPV function don't forget to extract the decommissioning cost from the last
years net income.

DATA:
The basic information about the wind farm:
Wind farm capacity (MW) 50
Capital investment (€) 65 000 000
Period of operation (years) 20
Decommissioning costs (€) 3 000 000
O&M costs (€/kWh) 0.0091
Annual energy production (kWh) 110 000 000
Electricity selling price, tariff (€/kWh) 0,075
Annual discount rate (%) 8

Can you please help me solve this engineering economics question, I am really confused.

Please be very specific when explaining your solution & show all formulas used.

Thank you,

J.

Solutions

Expert Solution

samet mamat answered 1 week ago
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