How much would penn state save in one year

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Reference no: EM132173390

Assignment -

Assume the following values:

The capital cost installing of the battery system is $2,000,000.

The capacity of the battery is 2 MW.

The lowest price when you can charge (usually 4am) is $20/MWh.

The highest price when you will use the stored energy (usually 5pm) is $38/MWh.

You can use the battery 365 days/year, for 10 years.

Assume a one-hour battery: this means you can charge from 0% to 100% (2 MWh) in one hour, and you can discharge from 100% to 0% (2 MWh) in one hour.

For this assignment, assume that you can charge to 100% and that you can discharge to 0%.

(a) How much would Penn State save in one year if it used the battery in this way? Show your work.

(b) Create a MATLAB script to save all your work. In the script, create a vector to contain the savings in nominal dollars in each year for 10 years.

(d) If the capital cost is paid at the start (year 0), what is the NPV? Is this project profitable?

(e) Do the discounting yourself: create a vector with 10 rows (one for each year) that contains the discount factor g calculated as.

(f) Where r is the discount rate of 8% and t is the year (1-10).

(g) Create another vector that contains the present value of savings in each year, by multiplying the nominal savings by the discount factor in each year. Calculate the sum of this vector, and compare with the present value of savings from part c). Are these values the same? Why or why not?

(h) Calculate the NPV of Project A with a discount rate of zero. Is this project profitable? What does this tell you?

Reference no: EM132173390

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