Question

CASE STUDY:

               RENEWABLE ENERGY SOURCES FOR ELECTRICITY GENERATION

3. You developed an interest in the LEC relation and the publicized cost of electricity of 10.27¢/kWh for this year. You wonder if the addition of 60 MW of wind-sourced electricity will make any difference in the LEC value for this next year. You did learn the following:

This is year t = 11 for LEC computation purposes

n = 25 years

i = 5% per year

E11 = 5.052 billion kWh

LEC last year was 10.22 ¢/kWh (last year’s breakeven cost to customers)

From these sketchy data, can you determine the value of unknowns in the LEC relation for this year? Is it possible to determine if the wind farm addition of 60 MW makes any difference in the electricity rate charged to customers? If not, what additional information is necessary to determine the LEC with the wind source included?     

Answer 1