Economics and capital cost for reactors

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Financial/economic data: nominal interest rate is 5%; cost of new build is $4900/kW installed capacity; 6 year construction time; wholesale pricing of electricity 4.5¢/kW

Economics and capital cost for reactors: a) Calculate the overnight cost of the plant (cost irrespective of construction time and financing). b) Calculate the cost of the plant at the time it goes online assuming interest costs are accrued (not paid) during construction. Assume the spending (fraction of overnight cost) during the construction period is as follows: Year 1: 0.1, Year 2: 0.2, Year 3: 0.2, Year 4: 0.2, Year 5: 0.2, Year 6: 0.1 c) Amortize the cost of the plant (from b.) over 40 years. What is the total cost paid over 40 years? d) What is the cost of the electricity ($/kWh) associated with the capital cost? e) Repeat parts b through d now assuming you pay the interest cost during the construction period. Provide the answers to each part and what is the savings by paying the interest during construction? What is the interest cost paid during construction?

Reference no: EM131526485

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