Using the following assumptions calculate the marginal cost of both a simple cycle and combined cycle gas generator: Simple Cycle hear rate (GJ/MWh) 10 Simple Cycle Variable O&M ($/MWh) $3.50 Combined Cycle heat rate (GJ/MWh) 7 Combined Cycle Variable 0&M ($/MWh) $5.00 Gas Price ($/GJ) $3.00 Tonnes of CO2 per GJ 0.051 Carbon Price ($/Tonne of CO2) $20.00 a) What is the variable cost of a simple cycle and combined cycle plant? b) What do the differences in variable cost suggest about each technology's capacity factor? c) What would happen if carbon prices when to $170/tonne? d) How do you think a $170/tonne carbon price would impact electricity prices?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
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Chapter8: Cost Analysis
Section: Chapter Questions
Problem 5E
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Using the following assumptions calculate
the marginal cost of both a simple cycle
and
combined cycle gas generator:
Simple Cycle hear rate (GJ/MWh) 10
Simple Cycle Variable O&M ($/MWh) $3.50
Combined Cycle heat rate (GJ/MWh) 7
Combined Cycle Variable O&M ($/MWh)
$5.00
Gas Price ($/GJ) $3.00
Tonnes of CO2 per GJ 0.051
Carbon Price ($/Tonne of CO2) $20.00
a) What is the variable cost of a simple cycle
and combined cycle plant?
b) What do the differences in variable cost
suggest about each technology's capacity
factor?
c) What would happen if carbon prices
when to $170/tonne?
d) How do you think a $170/tonne carbon
price would impact electricity prices?
Transcribed Image Text:Using the following assumptions calculate the marginal cost of both a simple cycle and combined cycle gas generator: Simple Cycle hear rate (GJ/MWh) 10 Simple Cycle Variable O&M ($/MWh) $3.50 Combined Cycle heat rate (GJ/MWh) 7 Combined Cycle Variable O&M ($/MWh) $5.00 Gas Price ($/GJ) $3.00 Tonnes of CO2 per GJ 0.051 Carbon Price ($/Tonne of CO2) $20.00 a) What is the variable cost of a simple cycle and combined cycle plant? b) What do the differences in variable cost suggest about each technology's capacity factor? c) What would happen if carbon prices when to $170/tonne? d) How do you think a $170/tonne carbon price would impact electricity prices?
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