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Category > Calculus Posted 10 Jul 2017 My Price 4.00

A power plant

1. A power plant has a total installed cost of $200 million, a marginal operating cost
of SEW and has a life of 20 years. Its owner faces an annual discount rate of 10%. Write out the equations for the LCOE and ARR for this plant, and calculate
the derivative of each with respect to Q (total annual output of the plant). Explain
why the derivative of LCOE with respect to Q has a negative sign but the derivative
of AR with respect to Q has a positive sign. TICuer
—-,-_ _ LCOE = LFC + me = % + LVC , , —TICW_T (—200 mike-:0) 234919243538
LCOE (w1th respect to Q) = _ 1-(1+r} = _ 1-(1+0-1) = — —2 2 2 Q
Q Q The reason behind the negative sign is that when deriving the equation with respect to Q,
we treat 111+), as a constant. For example, we assume it is equal to 1, when derivingQ i it is like deriving; and we knew that the derivative for: — is — — 2.,Therefore we have the
apparent negativex sing in LCOE'. Note: In deriving LVC its derivative 1s 0. TIC*T TIC‘T _ 1—(1+r)—T = 1—(1+r)—T Q
ARR— —K + Cf ac MC * 8760 —K + 10:37:50 * MC * 876d

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SuperTutor
(15)
Status NEW Posted 10 Jul 2017 02:07 AM My Price 4.00

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