ECEN-489: Smart Grid
Homework: 3
Name:
UIN:
Question
Research to find the updated capital costs of energy resources:
1. Coal
2. Natural gas
3. Uranium
4. Biomass
5. Solar
6. Wind
Cost of Capital
Cost of capital is the one time cost that is spent on project or business. Capital cost are fixed
costs or expenses that are one time incurred. Weighted average cost of capital is used by
companies by using combination of debt and equity to finance their businesses.
For Example
A coal power plant capital cost include the cost of construction of site, the cost of equipment’s,
the cost of purchasing land, the cost of permits. If the power plant capital structure consist of
60% equity and 40% debt than its cost of equity is 20% and the after-tax cost of debt is 10% so
weighted average cost of capital is given by the below expression.
WACC= ( Equit∗%cost of equity )+(Debt∗%cost of debt after tax)
WACC= ( 0.6∗20 % ) + ( 0.4∗10 % )=16 %
(Source: SLOVAK UNIVERSITY OF TECHNOLOGY)
1. Coal ($3607 per KW)
2. Natural gas ($1019 per KW)
3. Uranium ($6144 per KW)
4. Biomass ($9089 per KW)
5. Solar ($19365 per KW)
6. Wind ($17800 per KW)
1. Coal
Coal power in the United States generates about 20% of the country's electricity. It
accounted for 39% of production at utility-scale facilities in 2014, 33% in 2015, 30.4% in
2016, 30.0% in 2017, 27.4% in 2018, and 23.5% in 2019. Coal supplied 12.6 quadrillion
Btu (3,700 TWh) of primary energy to electric power plants in 2017, which made up 91%
of coal's contribution to US energy supply
2. Natural Gas
According to EIA the cost of the natural gas generators in 2015 that are installed was
$696 per KW and more decline of 28% is seen from 2013 for natural gas generators
installation. In 2015 almost 75% of installation of natural gas capacity were combined-
cycle units, which had an average installed cost of $614 per kW. U.S. natural gas
production grew again in 2019, increasing by 10% U.S. natural gas production grew by
9.8 billion cubic feet per day (Bcf/d) in 2019, a 10% increase from 2018. The increase
was slightly less than the 2018 annual increase of 10.5 Bcf/d.
3. Uranium
Nuclear reactors generated a total 2657 TWh of electricity in 2019, up from 2563 TWh in
2018, and second only to the 2661 TWh generated in 2006, according to a new World
Nuclear Association report.
4. Biomass
Biomass energy production in the United States amounted to 4.82 quadrillion British thermal
units (Btu) in 2019. Production is expected to steadily increase in the coming decades,
reaching an estimated 5.54 quadrillion Btu by 2050.
5. Solar
Solar Power Statistics in the USA 2019 0. In 2018, the US solar industry achieved the
feat of installing 10.6 giga-watts (GW) of solar PV for the third consecutive year,
according to a report by Wood Mackenzie and the Solar Energy Industries Association
(SEIA)
6. Wind
In 2019, around 300 terawatt hours of wind electricity were generated in the United
States. That year, wind power was by far the largest non-hydroelectric renewable energy
source used in the United States, followed by solar and thermal. U.S. total annual
Electricity generation from wind electricity generation in the United States increased
from about 6 billion kilo-watt-hours (kWh) in 2000 to about 300 billion kWh in 2019. In
2019, wind turbines in the United States were the source of about 7.3% of total U.S.
utility-scale electricity generation.
Reference
https://www.investopedia.com/terms/c/costofcapital.asp
https://www.researchgate.net/publication/305076753_Comparison_of_the_Total_Costs_of_Rene
wable_and_Conventional_Energy_Sources
https://usea.org/sites/default/files/Operating%20ratio%20and%20cost%20of%20coal%20power
%20generation%20-%20ccc272-1.pdf
https://www.eia.gov/todayinenergy/detail.php?id=31912
https://solarfeeds.com/usa-solar-power-statistics/
https://www.statista.com/statistics/264029/us-biomass-energy-production/
https://www.iea.org/reports/world-energy-investment-2019/power-sector
