Student ID: 37-165035 Name: Ade Hidayat

Resilience Engineering: No.2 (2017.4.19) due May 3rd

Energy System Analysis (Ryoichi Komiyama)

Plan A Plan B Plan C

(Emergency Generator) (Solar PV) (Thermal Power Gen.)
Discount rate 15% / year
Construction cost $ 1,000,000 $ 500,000 X
Life time 40 years 20 years (solar panel) 15 years (steam generator)
40 years (aux. facility) 40 years (building)
Replacing cost of solar panel - $ 400,000 -
at the end of 20 years
Replacing cost of steam - - $ 100,000
generator at the end of 15 year
Operating & maintenance cost $ 900 / year $ 72,500 / year $ 25,000 / year

1. Present worth (PW) value of Plan A and Plan B, and description of which plan is cheaper.

Plan A 𝑃𝑊𝐴 = 𝑃𝑊𝑐𝑜𝑛𝑠𝑡𝑟𝑢𝑐𝑡𝑖𝑜𝑛 + 𝑃𝑊𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛𝑎𝑙

$ 900
𝑃𝑊𝐴 = $ 1,000,000 + ∑40
𝑡=1 (1+0.15)𝑡
𝑃𝑊𝐴 = $ 1,000,000 + $ 5978 = $ 𝟏, 𝟎𝟎𝟓, 𝟗𝟕𝟖

Plan B 𝑃𝑊𝐵 = 𝑃𝑊𝑐𝑜𝑛𝑠𝑡𝑟𝑢𝑐𝑡𝑖𝑜𝑛 + 𝑃𝑊𝑟𝑒𝑝𝑙𝑎𝑐𝑒𝑚𝑒𝑛𝑡 + 𝑃𝑊𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛𝑎𝑙

$ 400,000 $ 72,500
𝑃𝑊𝐵 = $ 500,000 + (1+0.15)20 + ∑40
𝑡=1 (1+0.15)𝑡
𝑃𝑊𝐵 = $ 500,000 + $ 24,440 + $ 481,529 = $ 𝟏, 𝟎𝟎𝟓, 𝟗𝟔𝟗

From the calculation, we can see that Plan B is slightly cheaper than Plan A. Although the Plan
B has replacement cost and higher operational cost, it’s present value is cheap because of the
discount rate.

2. Annual cost (AC) value of Plan A and Plan B.

Plan A 𝐴𝐶𝐴 = 𝐶𝑅𝐹𝐴 . 𝑃𝑊𝐴

0.15(1+0.15)40
𝐴𝐶𝐴 = (1+0.15)40 −1
× $ 1005,978
𝐴𝐶𝐴 = 0.1506 × $ 1005,978 = $ 𝟏𝟓𝟏, 𝟒𝟔𝟐

Plan B 𝐴𝐶𝐵 = 𝐶𝑅𝐹𝐵 . 𝑃𝑊𝐵

0.15(1+0.15)40
𝐴𝐶𝐵 = (1+0.15)40 −1
× $ 1005,969
𝐴𝐶𝐵 = 0.1506 × $ 1005,969 = $ 𝟏𝟓𝟏, 𝟒𝟔𝟏

So, the annual cost value of Plan A and Plan B is almost the same.
3. Description of condition of Plan C’s construction cost (X) where it’s PW value becomes
the cheapest.

Since the building has 40 years of life time, replacement of steam generator is conducted twice.
40 years is chosen as a life span for uniform annual worth.

Plan C 𝑃𝑊𝐶 = 𝑃𝑊𝑐𝑜𝑛𝑠𝑡𝑟𝑢𝑐𝑡𝑖𝑜𝑛 + 𝑃𝑊𝑟𝑒𝑝𝑙𝑎𝑐𝑒−1 + 𝑃𝑊𝑟𝑒𝑝𝑙𝑎𝑐𝑒−2 +𝑃𝑊𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛𝑎𝑙

$ 100,000 $ 100,000 $ 25,000
𝑃𝑊𝐶 = 𝑋 + ((1+0.15)15) + ((1+0.15)30 ) + ∑40
𝑡=1 (1+0.15)𝑡
𝑃𝑊𝐶 = 𝑋 + ($ 12,289 + $ 1,510) + $ 166,044 = $ (𝟏𝟕𝟗, 𝟖𝟒𝟑 + 𝑿)

Assuming that construction cost of Plan C is 5 times of the replacement cost.

We obtain:

𝑃𝑊𝐶 = $ (179,843 + 5. (100,000)) = $ 𝟔𝟕𝟗, 𝟖𝟒𝟑 (cheapest)

0.15(1+0.15)40
𝐴𝐶𝐶 = 𝐶𝑅𝐹𝐶 . 𝑃𝑊𝐶 = (1+0.15)40 −1
× $ 690,622
𝐴𝐶𝐶 = 0.1506 × $ 679,843 = $ 𝟏𝟎𝟐, 𝟑𝟖𝟒