Question

# A power company is planning to replace a 23 years old thermal power generator with a...

A power company is planning to replace a 23 years old thermal power generator with a capacity of 200 MW, with a new generator with a capacity of 600 MW. 23 years ago the cost index was 171 and it is 286 now. If the cost of 200 MW generator was \$350 million 23 years ago and the cost of 600 MW generator is \$1912 million today, what is the cost capacity factor?

IN EXCEL PLZ!!

#### Homework Answers

Answer #1

By hand (to demonstrate the solution)

Let Cost capacity factor be x, then

Price of 600MW capacity today = (Index today/ Index in past) * (capicity today / past capacity )^ cost capacity factor * Price of past capacity

Putting values in above equation

1912m = (286 / 171) * (600 / 200)^x * 350m

1912 = (1.6725146) * (3)^x * 350

3^x = 1912 / (350 *1.6725146) = 3.266253785

taking log both sides

x = log 3.266253785 / log 3 = 1.077 ~ 1.08

By Excel

 Past Capacity (MW) 200 Capacity today (MW) 600 Price in past (m) 350 Price today (m) 1912 index today 286 index in past 171 Cost capacity factor 1.08

Showing formula in excel

 Past Capacity (MW) 200 Capacity today (MW) 600 Price in past (m) 350 Price today (m) 1912 index today 286 index in past 171 Cost capacity factor =LOG(C28/(C27*(C29/C30)))/LOG(C26/C25)
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