2004exam - Rev. 3/11/05...

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Rev. 3/11/05 1.818J/2.65J//3.564J10.391J/11.371J/22.811J/ESD166J SUSTAINABLE ENERGY Spring 2004 MID-TERM EXAM PROBLEM #1 (30%) We desire to have a decommissioning fund of $500 million accumulated at the end of the 60-year lifetime of a photovoltaic power plant. The real estate interest is 5% per year. QUESTIONS A. What annualized rate of payments is needed in order to provide this fund? i) In the absence of inflation. ii) If the rate of inflaction were equal to 5% annually. B. How much of this money should be reserved for treatment of potential future environmental liabilities (e.g., due to toxic chemical residues) in order to provide compensation of $100 million for a fatality that occurs 100 years after shutdown? PROBLEM #2 (35%) A. Consider a pumped hydro system that is used for energy storage. During off-peak hours, excess electricity is used to pump water up to a storage reservoir. During peak demand periods the flow is reversed and electric power is generated by flowing the water through a hydraulic turbine. The storage reservoir is 100 m above the hydro
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2004exam - Rev. 3/11/05...

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