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This section reflects Policy questions. 1. Li 3 primary public policy arguments for pingwa 2. From the list in question, choose ten of the policy arms and critically discuss the pros and cons for promoting such an energy 10 k 53 8.2 an 605 Is fig1, a private considers two optims for electricity petion Suppose the leveled private (or direct) cost (is) for one KWh of electricity to solar PV is $0.35, in cycle-ge-feed electricity plant is 50.0 The Leveld Cost of Electricity Generation Consideration is also given to the wing LODE (RES) LODE veled cost of electricity 34 From the prima facie senare, which option appears to be more codly and hence les efficient active? 12 maks Consider that the rate of discount used in figure Is What happen to the private co of solar PV if the rate of discount is lower to 1% and 3% respectively. Base on your findings how cracial is the discount rate in LCOE 12 maks
0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 Solar PV Figure 1 The Levelized Cost of Electricity Generation Combined-cycle gas-fired External cost Private cost The social cost the private cost the external cost !! In figure 1, a private considers two options for electricity generation. Suppose the levelized private (or direct) cost (in S) for one KWh of electricity from solar PV is $0.35, in comparison to the levelized private cost (in S) for one KWh of electricity from a combined- cycle-gas-fired electricity plant is $0.08.
Consideration is also given to the following: (a) the gas-fired electricity generation produces Carbon dioxide emissions which contributes to global warming. II. (b) The levelized cost estimates are based on discounting. The levelized cost of electricity LCOE are defined as: LCOE- 1-4√xa+Σ97×(1-a) - S 1-1 21 **** The factor y represents the time-value of money [y 1/(1+r)], r is the discount rate, a is the corporate tax rate, n is the energy production, and T is the life-cycle of the project. Based on the following scenario, answer the following questions: I. From the prima facie scenario, which option appears to be more costly and hence less efficient attractive? 12 marks Consider that the rate of discount used in figure 1 is 3%. What happen to the private cost of solar PV if the rate of discount is lower to 1% and 3% respectively. Base on your findings how crucial is the discount rate in LCOE? 12 marks
Question 3 (36 marks) This section reflects Policy questions. 1. List six primary public policy arguments for promoting renewable energy sources (RES). 2 marks 2. From the list in question 1, choose two of the policy arguments and critically discuss the pros and cons for promoting such an energy source. 10 marks 3. Consider the following figure. 0.4 0.35 0.3 0.35 0.2 0.15 0.1 0.05 Solar PV Figure 1 The Levelized Cost of Electricity Generati Combined cycle gas-fired External cost Private cost The social cost the private cost the external cost