A wind energy conversation system of capacity 2.1 MW is installed at a 6 cost of...

   

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A wind energy conversation system of capacity 2.1 MW is installed at a 6 cost of Rs 11.5 crores for supplying power to an electricity grid. It works at an annual capacity factor of 20 percent. Assume; 1) The electricity board purchases the electrical energy at the rate of Rs 4.0 per kWh and this price increases by 5 percent every year. 2) 80 percent of the initial cost of the system is financed through a loan borrowed at the rate of 12 percent to be repaid in equal instalments in 5 years. 3) The rate of depreciation is 80 percent in the first year and the remaining 20 percent in the second year. The corporate tax rate is 33 percent. 4) Tax saving is allowed on the interest component of the loan repayment 5) The annual operation and maintenance costs in the first year are 2 percent of the total cost of the system. This cost increases at the rate of 5 percent every year. Calculate (i) the cumulative cost over a period of 8 years and 15 years assuming a discount rate of 11 percent and (ii)the payback period, with and without discounting. A wind energy conversation system of capacity 2.1 MW is installed at a 6 cost of Rs 11.5 crores for supplying power to an electricity grid. It works at an annual capacity factor of 20 percent. Assume; 1) The electricity board purchases the electrical energy at the rate of Rs 4.0 per kWh and this price increases by 5 percent every year. 2) 80 percent of the initial cost of the system is financed through a loan borrowed at the rate of 12 percent to be repaid in equal instalments in 5 years. 3) The rate of depreciation is 80 percent in the first year and the remaining 20 percent in the second year. The corporate tax rate is 33 percent. 4) Tax saving is allowed on the interest component of the loan repayment 5) The annual operation and maintenance costs in the first year are 2 percent of the total cost of the system. This cost increases at the rate of 5 percent every year. Calculate (i) the cumulative cost over a period of 8 years and 15 years assuming a discount rate of 11 percent and (ii)the payback period, with and without discounting.

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i The cumulative cost over a period of 8 years and 15 years assuming a disc... View the full answer