Economic Analysis of Economic Analysis of Alternative Energy - - PowerPoint PPT Presentation

Economic Analysis of Economic Analysis of Alternative Energy Sources Alternative Energy Sources Dec07 Dec07-

• 03

03

Team Members: Team Members: Kyle Drees (Team Leader) (EE) Kyle Drees (Team Leader) (EE) Mitchell Frazier (Communication Officer) (EE) Mitchell Frazier (Communication Officer) (EE) Peter Howard (EE) Peter Howard (EE) Abraham Tarbey (EE) Abraham Tarbey (EE) Advisors: Advisors: Professor John Lamont Professor John Lamont Professor Ralph Patterson III Professor Ralph Patterson III Professor Tom Baird Professor Tom Baird Client: Client: Senior Design Senior Design Presented: April 19 Presented: April 19th

th, 2007

, 2007

Definitions Definitions

AES AES – – Alternative Energy Source Alternative Energy Source EAE EAE – – Economic Analysis Engine Economic Analysis Engine

Overview of May07 Overview of May07-

• 03 Project

03 Project

The May07 The May07-

• 03 project is designed for a user that

03 project is designed for a user that is interested in alternative energy. This user will is interested in alternative energy. This user will input information about their needs and desires input information about their needs and desires for an alternative energy source into an for an alternative energy source into an economic analysis program that will be featured economic analysis program that will be featured

• n a website.
• n a website.

The output displayed by the program will contain The output displayed by the program will contain the most cost effective alternative energy the most cost effective alternative energy solution as calculated by an EAE used in the solution as calculated by an EAE used in the

• program. The output will be dependent on the
• program. The output will be dependent on the

specifications of the user. specifications of the user.

Overview of Dec07 Overview of Dec07-

• 03 Project

03 Project

The Dec07 The Dec07-

• 03 project will create a more accurate and

03 project will create a more accurate and robust EAE than the one currently in place in the May07 robust EAE than the one currently in place in the May07-

• 03 project in order to determine the costs associated

03 project in order to determine the costs associated with each possible solution. with each possible solution. Using different spreadsheets, Excel will be used to Using different spreadsheets, Excel will be used to accurately process incoming data into an output accurately process incoming data into an output containing the most economical system available to the containing the most economical system available to the user and the costs associated with that system. user and the costs associated with that system. The Excel program will act as a mathematical tool to The Excel program will act as a mathematical tool to facilitate overall functionality of the project. facilitate overall functionality of the project.

Assumptions Assumptions

The EAE will have no user interface. All necessary user inputs The EAE will have no user interface. All necessary user inputs will come will come from May07 from May07-

• 03

03’ ’s Source Feasibility Calculator. The interface of the Excel s Source Feasibility Calculator. The interface of the Excel program will not be user friendly. program will not be user friendly. The May07 The May07-

• 03

03’ ’s Source Feasibility Calculator will provide the EAE with the s Source Feasibility Calculator will provide the EAE with the forms of alternative energy solutions to evaluate and the method forms of alternative energy solutions to evaluate and the method in which in which they will be installed. The EAE will make no determinations as they will be installed. The EAE will make no determinations as to which to which solutions are feasible; only calculate and output the costs asso solutions are feasible; only calculate and output the costs associated with ciated with the specified system. the specified system. The current state of the May07 The current state of the May07-

• 03 project may not be suitable to supply the

03 project may not be suitable to supply the EAE with the data it needs. Improvements to their program may h EAE with the data it needs. Improvements to their program may have to be ave to be performed at a later date in order to facilitate use of the EAE. performed at a later date in order to facilitate use of the EAE. Storage solutions will be limited to batteries due to problems e Storage solutions will be limited to batteries due to problems evaluating the valuating the feasibility of other possible solutions. feasibility of other possible solutions. It will be assumed that the alternative energy solution will pro It will be assumed that the alternative energy solution will provide energy to vide energy to

• ne lumped load.
• ne lumped load.

Data built into the EAE will be based off of information availab Data built into the EAE will be based off of information available at the time. le at the time. Updated information will have to be inputted manually at a later Updated information will have to be inputted manually at a later date. date.

Considerations Considerations

The following considerations will not apply to this The following considerations will not apply to this project: project: Economic Economic Environmental Environmental Social Social Political Political Ethical Ethical Health and safety Health and safety Manufacturability Manufacturability

Alternative Energy Sources Alternative Energy Sources

Wind Wind Solar Solar Petroleum Petroleum-

• Generator

Generator Micro Micro-

• Turbines

Turbines Micro Micro-

• Hydro

Hydro Fuel Cells Fuel Cells Storage Storage

System Types System Types

AES with Grid Storage AES with Grid Storage AES with Utility Buyer AES with Utility Buyer AES with Utility Seller AES with Utility Seller AES Standalone without Backup AES Standalone without Backup AES with Storage and Grid Connection AES with Storage and Grid Connection AES with Storage AES with Storage Grid with Storage Grid with Storage Grid Only Grid Only

Inputs Inputs

Customer Data Customer Data Utility Supplier Data Utility Supplier Data Geographical Data Geographical Data Equipment Alternative Selected Equipment Alternative Selected

Database Database

Manufactures Equipment Details Manufactures Equipment Details Installation Locations Installation Locations Basic Loads Basic Loads Costs Costs Pollution Pollution Inflation/Expected Load Increase Inflation/Expected Load Increase System Lifespan System Lifespan Incentives/Rebates Incentives/Rebates

Incentives/Rebates Incentives/Rebates

Iowa Code Iowa Code § § 422.45 422.45

– – No State tax on total cost of wind energy system No State tax on total cost of wind energy system

Iowa Code Iowa Code § § 17A.4 and Iowa Code Chapter 476B and 17A.4 and Iowa Code Chapter 476B and 476C 476C

– – 1.5 c per KWH and can not exceed 2.5MW 1.5 c per KWH and can not exceed 2.5MW

Iowa Energy Center Iowa Energy Center

– – Alternate Energy Revolving Loan Program Alternate Energy Revolving Loan Program – – Iowa Building Energy management Iowa Building Energy management – – Local Option Special Assessment of Wind Energy Devices Local Option Special Assessment of Wind Energy Devices – – Wind Energy Equipment Exemption Wind Energy Equipment Exemption – – Property Tax Exemption for Solar Systems Property Tax Exemption for Solar Systems – – Investment Tax Credit for Solar Property Investment Tax Credit for Solar Property – – Federal 5 Federal 5-

• Year Depreciation Schedule for Solar Energy Property

Year Depreciation Schedule for Solar Energy Property

http://www.energy.iastate.edu/ http://www.legis.state.ia.us/Rules/2006/Bulletin/IAB060927.pdf

Calculations Calculations

Wind Turbine Power: Wind Turbine Power: – – P = 0.5 x P = 0.5 x x A x Cp x V^3 x Ng x Nb x A x Cp x V^3 x Ng x Nb Solar Solar

– – P = Efficiency x Area x Luminescence P = Efficiency x Area x Luminescence

Micro Micro-

• Hydro

Hydro – – P = 5.9 x flow rate x ft of head P = 5.9 x flow rate x ft of head Others Others

– – Dependent on the Efficiency of the System Dependent on the Efficiency of the System

Inflation/Increase Inflation/Increase

Present Worth and Feature Worth (1 ) and (1 )

N N

PW F i F P i

−

= + = +

2 1 1

Linear Gradient 1 1 1 Where 1 1 1 Geometric Gradient 1 1 (1 ) if 1

N N N N N N

( i) iN i ( i) iN PW G A G i ( i) i( i) ( g) i A i g PW N A i g i

−

• +

− − + − − = =

• +

+ −

• −

+ +

• −
• =
• =
• +

Output of Costs Output of Costs

Overall Cost Overall Cost Installation Cost Installation Cost Operating Cost Operating Cost Maintenance Cost Maintenance Cost Equipment Cost Equipment Cost

Output of Equipment Output of Equipment

System Capacity System Capacity Manufacturer/Model Information Manufacturer/Model Information Estimated Lifespan Estimated Lifespan

Other Outputs Other Outputs

Incentives Incentives Pay Pay-

• back

back Assumptions Assumptions Disclaimer Disclaimer

Conclusion Conclusion

The increasing cost of energy coupled with The increasing cost of energy coupled with environmental factors have people thinking environmental factors have people thinking about alternative sources of energy. about alternative sources of energy. Dec07 Dec07-

• 03 will create an Excel based

03 will create an Excel based mathematical evaluator to be interfaced with the mathematical evaluator to be interfaced with the

• verall May07
• verall May07-
• 03 project.

03 project. The absence of an easy, simple, means to The absence of an easy, simple, means to evaluate possibilities of using alternative energy evaluate possibilities of using alternative energy sources in Iowa sources in Iowa Project on track; the team have a good chance Project on track; the team have a good chance

• f achieving their goal.
• f achieving their goal.

Questions? Questions?

Courtesy of May07-03 Courtesy of May07-03

Part of May07-03 Part of May07-03

AES w/o storage AES w/ storage Storage only Utility Buyer Utility Supplier AES with Grid Storage x x x AES with Utility Buyer x x AES with Utility Seller x x AES Standalone without Backup x AES with Storage and Grid Connection x x x AES with Storage and Grid Connection x x AES with Storage and Grid Connection x x AES with Storage x Grid as Primary with Storage Backup x x Grid Only (no change) x

Modes of Operation

Daily Monthly Annual Initial CUSTOMER DATA Average Power x x x Max Power x x x Min Power x x x Estimated Usage Increase/Decrease x x x x Current Rate Per KWH x Estimated Inflation Rate x Zip Codes x Current Utility Provider x Avaiable Land Size x Distances Of From Power Lines x Allowable Tower Height x Supportable Weight (Housing Style) x Mounting Locations x Current Fuel Type x UTILITY SUPPLIER DATA Utility Companies x Current Summer Rate x x x Current Winter Rate x x x x Incentives x x x Connection Fee (x) x GEOGRAPHICAL DATA Wind Speed x x x Sunlight Availibility x x x Water Flow Rate x x x Air Density x EQUIPMENT ALTERNATIVE SELECTED Wind x Solar x Petroleum x Fuel Cells x Micro-Turbines x Micro-Hydros x

Input

Wind Solar Petroleum Fuel Cells Micro-Turbines Micro-Hydro Storage Manufacturer x x x x x x x Model # x x x x x x x Weight x x x x x x x Size x x x x x x x Instalation Locations x x x x x x x Equipment Cost x x x x x x x Installation Cost x x x x x x x Maintenance Cost x x x x x x x Life Expectancy x x x x x x x Rated Power Output x x x x x x Voltage Output x x x x x x Noise x x x x Survival Rate x x x x x Rotor Diameter x x Efficiency x x x x x x x Gearbox Efficiency x Coefficient of performance x Height x # of Arrays x # of Cells x Open Circuit Voltage x Short Circuit Current x Fuel Type x x Current Fuel Rate x x Emissions x x Cost Per KWH x x x x x x Air Polution x x Current Fuel Cost x x x Estimated Fuel Cost Increase x x x Default Inflation Rate x x x x x x x Ft of Water Head x Water Flow Rate x Current Rated Loads x x x x x x x House Hold Items x x x x x x x Farming Items x x x x x x x Shop Loads x x x x x x x Incentives/Rebates State x x x x x x Federal x x x x x x Company x x x x x x Alternate Energy Revolving Loan Program x x x Iowa Building Energy management x x x x x Local Option Special Assessment of Wind Energy Devices x Wind Energy Equipment Exemption x Property Tax Exemption for Solar Systems x Investment Tax Credit for Solar Property x Federal 5-Year Depreciation Schedule for Solar Energy Property x

DATA BASE

Expected Output specifications

Specs

Fuel Cell Hydro Micro Turbine Solar Wind Petro Generator Storage Battery

Model

x x x x x x x

Retail Price:

x x x x x x x

Manufacturer

x x x x x x x

Rotor Diameter

x

Tower height:

x

Weight

x x x x x x x

Alternator

x x x x

Start up wind speed

x

Voltage Output

x x x x x x x

Capacity

x x x x x x x

Estmated Energy Production

x x x x x x x

Head

x

Water Flow in GPM

x

Leght

x x x x x x

Width

x x x x

Height

x x x

Engine Type

x

Fuel Type

x x

Noise Output

x x x x

Warranty

x x x x x x x

Design Review Follow-Up for Dec07-03

Following the design review, several suggestions were made on how the project could be improved. The following outlines what improvements were suggested:

• There needs to be a more in depth and complete overview of how the spreadsheet

will take the inputs and achieve the necessary outputs. What was given in the presentation was not nearly enough to demonstrate what needs to occur in that

• area. More equations and descriptions are needed.
• Firm decisions need to already have been made on all aspects of the project.

There should be no areas with uncertainty about what will be accomplished.

• When describing the project, it must be clearly stated that the scope of the project

will be limited to residential buildings in the state of Iowa.

• Research on incentives needs to be drastically scaled down. Rather than give

specific examples, a statement stating that incentives are available will be provided.

• The description of the economic considerations needs to be changed. Currently,

the description provides an inaccurate view of what is meant in the statement.

• The bullets in the presentation need to be shorter, and the grammar needs to be

improved.

• The gradients used in determining the outputs need to be clearly defined as linear
• r geometric.
• Explain what exactly is meant by a “lumped load”, and explain why it is needed.
• Add to the assumptions that additional wiring will not be included in the total

cost.

• For equations with coefficients, explain what they are and where they are coming

from.

• There needs to be more assurance that the project will be completed on time.
• Not enough information is given on fuel cells, more is needed.
• More emphasis is needed on identifying the primary and secondary systems in the

modes of operations.

• Knowledge of the rate structure is needed in addition to the current rate.
• The difference between petroleum generators and microturbines needs to be better

defined.

• More information about the building’s structural integrity is needed in order to

determine if a roof mounted solar system is feasible.

• The total cost of the system needs to be added as an output.
• A test case needs to be incorporated in order to test the system.