Economic Analysis of Economic Analysis of Alternative Energy SourcesAlternative Energy Sources

Dec07Dec07--0303Team Members:Team Members:

Kyle Drees (Team Leader) (EE)Kyle Drees (Team Leader) (EE)Mitchell Frazier (Communication Officer) (EE)Mitchell Frazier (Communication Officer) (EE)

Peter Howard (EE)Peter Howard (EE)Abraham Tarbey (EE)Abraham Tarbey (EE)

Advisors:Advisors:Professor John LamontProfessor John Lamont

Professor Ralph Patterson IIIProfessor Ralph Patterson IIIProfessor Tom BairdProfessor Tom Baird

Client:Client:Senior DesignSenior Design

Presented: April 19Presented: April 19thth, 2007, 2007

DefinitionsDefinitions

AES AES –– Alternative Energy SourceAlternative Energy SourceEAE EAE –– Economic Analysis EngineEconomic Analysis Engine

Overview of May07Overview of May07--03 Project03 Project

The May07The May07--03 project is designed for a user that 03 project is designed for a user that is interested in alternative energy. This user will is interested in alternative energy. This user will input information about their needs and desires input information about their needs and desires for an alternative energy source into an for an alternative energy source into an economic analysis program that will be featured economic analysis program that will be featured on a website. on a website.

The output displayed by the program will contain The output displayed by the program will contain the most cost effective alternative energy the most cost effective alternative energy solution as calculated by an EAE used in the solution as calculated by an EAE used in the program. The output will be dependent on the program. The output will be dependent on the specifications of the user.specifications of the user.

Overview of Dec07Overview of Dec07--03 Project03 Project

The Dec07The Dec07--03 project will create a more accurate and 03 project will create a more accurate and robust EAE than the one currently in place in the May07robust EAE than the one currently in place in the May07--03 project in order to determine the costs associated 03 project in order to determine the costs associated with each possible solution. with each possible solution.

Using different spreadsheets, Excel will be used to Using different spreadsheets, Excel will be used to accurately process incoming data into an output accurately process incoming data into an output containing the most economical system available to the containing the most economical system available to the user and the costs associated with that system. user and the costs associated with that system.

The Excel program will act as a mathematical tool to The Excel program will act as a mathematical tool to facilitate overall functionality of the project.facilitate overall functionality of the project.

AssumptionsAssumptionsThe EAE will have no user interface. All necessary user inputs The EAE will have no user interface. All necessary user inputs will come will come from May07from May07--0303’’s Source Feasibility Calculator. The interface of the Excel s Source Feasibility Calculator. The interface of the Excel program will not be user friendly.program will not be user friendly.

The May07The May07--0303’’s Source Feasibility Calculator will provide the EAE with the s Source Feasibility Calculator will provide the EAE with the forms of alternative energy solutions to evaluate and the methodforms of alternative energy solutions to evaluate and the method in which in which they will be installed. The EAE will make no determinations as they will be installed. The EAE will make no determinations as to which to which solutions are feasible; only calculate and output the costs assosolutions are feasible; only calculate and output the costs associated with ciated with the specified system.the specified system.

The current state of the May07The current state of the May07--03 project may not be suitable to supply the 03 project may not be suitable to supply the EAE with the data it needs. Improvements to their program may hEAE with the data it needs. Improvements to their program may have to be ave to be performed at a later date in order to facilitate use of the EAE.performed at a later date in order to facilitate use of the EAE.

Storage solutions will be limited to batteries due to problems eStorage solutions will be limited to batteries due to problems evaluating the valuating the feasibility of other possible solutions.feasibility of other possible solutions.

It will be assumed that the alternative energy solution will proIt will be assumed that the alternative energy solution will provide energy to vide energy to one lumped load.one lumped load.

Data built into the EAE will be based off of information availabData built into the EAE will be based off of information available at the time. le at the time. Updated information will have to be inputted manually at a laterUpdated information will have to be inputted manually at a later date.date.

ConsiderationsConsiderations

The following considerations will not apply to this The following considerations will not apply to this project:project:

EconomicEconomicEnvironmentalEnvironmentalSocialSocialPoliticalPoliticalEthicalEthicalHealth and safetyHealth and safetyManufacturabilityManufacturability

Alternative Energy SourcesAlternative Energy Sources

WindWindSolarSolarPetroleumPetroleum--GeneratorGeneratorMicroMicro--TurbinesTurbinesMicroMicro--HydroHydroFuel CellsFuel CellsStorageStorage

System TypesSystem Types

AES with Grid StorageAES with Grid StorageAES with Utility BuyerAES with Utility BuyerAES with Utility SellerAES with Utility SellerAES Standalone without BackupAES Standalone without BackupAES with Storage and Grid ConnectionAES with Storage and Grid ConnectionAES with StorageAES with StorageGrid with StorageGrid with StorageGrid OnlyGrid Only

InputsInputs

Customer DataCustomer DataUtility Supplier DataUtility Supplier DataGeographical DataGeographical DataEquipment Alternative SelectedEquipment Alternative Selected

DatabaseDatabase

Manufactures Equipment DetailsManufactures Equipment DetailsInstallation LocationsInstallation LocationsBasic LoadsBasic LoadsCostsCostsPollutionPollutionInflation/Expected Load IncreaseInflation/Expected Load IncreaseSystem LifespanSystem LifespanIncentives/RebatesIncentives/Rebates

Incentives/RebatesIncentives/RebatesIowa Code Iowa Code §§ 422.45422.45–– No State tax on total cost of wind energy systemNo State tax on total cost of wind energy system

Iowa Code Iowa Code §§ 17A.4 and Iowa Code Chapter 476B and 17A.4 and Iowa Code Chapter 476B and 476C476C–– 1.5 c per KWH and can not exceed 2.5MW1.5 c per KWH and can not exceed 2.5MW

Iowa Energy CenterIowa Energy Center–– Alternate Energy Revolving Loan ProgramAlternate Energy Revolving Loan Program–– Iowa Building Energy managementIowa Building Energy management–– Local Option Special Assessment of Wind Energy DevicesLocal Option Special Assessment of Wind Energy Devices–– Wind Energy Equipment ExemptionWind Energy Equipment Exemption–– Property Tax Exemption for Solar SystemsProperty Tax Exemption for Solar Systems–– Investment Tax Credit for Solar PropertyInvestment Tax Credit for Solar Property–– Federal 5Federal 5--Year Depreciation Schedule for Solar Energy PropertyYear Depreciation Schedule for Solar Energy Property

http://www.energy.iastate.edu/

http://www.legis.state.ia.us/Rules/2006/Bulletin/IAB060927.pdf

CalculationsCalculationsWind Turbine Power:Wind Turbine Power:–– P = 0.5 x P = 0.5 x �� x A x Cp x V^3 x Ng x Nbx A x Cp x V^3 x Ng x Nb

SolarSolar–– P = Efficiency x Area x Luminescence P = Efficiency x Area x Luminescence

MicroMicro--HydroHydro–– P = 5.9 x flow rate x ft of headP = 5.9 x flow rate x ft of head

OthersOthers–– Dependent on the Efficiency of the SystemDependent on the Efficiency of the System

Inflation/IncreaseInflation/Increase

Present Worth and Feature Worth

(1 ) and (1 )N NPW F i F P i−= + = +

2

1

1

Linear Gradient

1 1 1 Where

1 1 1

Geometric Gradient

1 1 (1 )

if 1

N N

N N

N N

( i) iN i ( i) iNPW G A G

i ( i) i( i)

( g) iA

i gPW

NA i g

i

−

� � � �+ − − + − −= =� � � �+ + −� � � �

� � �− + +� � �−� ��=� � � =� +� � ��

Output of Costs Output of Costs Overall CostOverall CostInstallation CostInstallation CostOperating CostOperating CostMaintenance CostMaintenance CostEquipment CostEquipment Cost

Output of EquipmentOutput of EquipmentSystem CapacitySystem CapacityManufacturer/Model Information Manufacturer/Model Information Estimated Lifespan Estimated Lifespan

Other OutputsOther OutputsIncentivesIncentivesPayPay--backbackAssumptionsAssumptionsDisclaimerDisclaimer

ConclusionConclusionThe increasing cost of energy coupled with The increasing cost of energy coupled with environmental factors have people thinking environmental factors have people thinking about alternative sources of energy.about alternative sources of energy.Dec07Dec07--03 will create an Excel based 03 will create an Excel based mathematical evaluator to be interfaced with the mathematical evaluator to be interfaced with the overall May07overall May07--03 project.03 project.The absence of an easy, simple, means to The absence of an easy, simple, means to evaluate possibilities of using alternative energy evaluate possibilities of using alternative energy sources in Iowasources in IowaProject on track; the team have a good chance Project on track; the team have a good chance of achieving their goal.of achieving their goal.

Questions?Questions?

Courtesy of May07-03Courtesy of May07-03

Part of May07-03Part of May07-03

AES w/o storage AES w/ storage Storage only Utility Buyer Utility SupplierAES with Grid Storage x x xAES with Utility Buyer x xAES with Utility Seller x xAES Standalone without Backup xAES with Storage and Grid Connection x x xAES with Storage and Grid Connection x xAES with Storage and Grid Connection x xAES with Storage xGrid as Primary with Storage Backup x xGrid Only (no change) x

Modes of Operation

Daily Monthly Annual InitialCUSTOMER DATAAverage Power x x xMax Power x x xMin Power x x xEstimated Usage Increase/Decrease x x x xCurrent Rate Per KWH xEstimated Inflation Rate xZip Codes xCurrent Utility Provider xAvaiable Land Size xDistances Of From Power Lines xAllowable Tower Height xSupportable Weight (Housing Style) xMounting Locations xCurrent Fuel Type x

UTILITY SUPPLIER DATAUtility Companies xCurrent Summer Rate x x xCurrent Winter Rate x x x xIncentives x x xConnection Fee (x) x

GEOGRAPHICAL DATAWind Speed x x xSunlight Availibility x x xWater Flow Rate x x xAir Density x

EQUIPMENT ALTERNATIVE SELECTEDWind xSolar xPetroleum xFuel Cells xMicro-Turbines xMicro-Hydros x

Input

Wind Solar Petroleum Fuel Cells Micro-Turbines Micro-Hydro StorageManufacturer x x x x x x xModel # x x x x x x xWeight x x x x x x xSize x x x x x x xInstalation Locations x x x x x x xEquipment Cost x x x x x x xInstallation Cost x x x x x x xMaintenance Cost x x x x x x xLife Expectancy x x x x x x xRated Power Output x x x x x xVoltage Output x x x x x xNoise x x x xSurvival Rate x x x x xRotor Diameter x xEfficiency x x x x x x xGearbox Efficiency xCoefficient of performance xHeight x# of Arrays x# of Cells xOpen Circuit Voltage xShort Circuit Current xFuel Type x xCurrent Fuel Rate x xEmissions x xCost Per KWH x x x x x xAir Polution x xCurrent Fuel Cost x x xEstimated Fuel Cost Increase x x xDefault Inflation Rate x x x x x x xFt of Water Head xWater Flow Rate xCurrent Rated Loads x x x x x x x

House Hold Items x x x x x x xFarming Items x x x x x x x

Shop Loads x x x x x x xIncentives/Rebates

State x x x x x xFederal x x x x x x

Company x x x x x xAlternate Energy Revolving Loan Program x x xIowa Building Energy management x x x x xLocal Option Special Assessment of Wind Energy Devices xWind Energy Equipment Exemption xProperty Tax Exemption for Solar Systems xInvestment Tax Credit for Solar Property xFederal 5-Year Depreciation Schedule for Solar Energy Property x

DATA BASE

Expected Output specifications

Specs Fuel Cell Hydro Micro Turbine Solar Wind Petro Generator Storage BatteryModel x x x x x x xRetail Price: x x x x x x xManufacturer x x x x x x xRotor Diameter xTower height: xWeight x x x x x x xAlternator x x x xStart up wind speed xVoltage Output x x x x x x xCapacity x x x x x x xEstmated Energy Production x x x x x x xHead xWater Flow in GPM xLeght x x x x x xWidth x x x xHeight x x xEngine Type xFuel Type x xNoise Output x x x xWarranty x x x x x x x

Design Review Follow-Up for Dec07-03 Following the design review, several suggestions were made on how the project could be improved. The following outlines what improvements were suggested:

• There needs to be a more in depth and complete overview of how the spreadsheet will take the inputs and achieve the necessary outputs. What was given in the presentation was not nearly enough to demonstrate what needs to occur in that area. More equations and descriptions are needed.

• Firm decisions need to already have been made on all aspects of the project. There should be no areas with uncertainty about what will be accomplished.

• When describing the project, it must be clearly stated that the scope of the project will be limited to residential buildings in the state of Iowa.

• Research on incentives needs to be drastically scaled down. Rather than give specific examples, a statement stating that incentives are available will be provided.

• The description of the economic considerations needs to be changed. Currently, the description provides an inaccurate view of what is meant in the statement.

• The bullets in the presentation need to be shorter, and the grammar needs to be improved.

• The gradients used in determining the outputs need to be clearly defined as linear or geometric.

• Explain what exactly is meant by a “lumped load”, and explain why it is needed. • Add to the assumptions that additional wiring will not be included in the total

cost. • For equations with coefficients, explain what they are and where they are coming

from. • There needs to be more assurance that the project will be completed on time. • Not enough information is given on fuel cells, more is needed. • More emphasis is needed on identifying the primary and secondary systems in the

modes of operations. • Knowledge of the rate structure is needed in addition to the current rate. • The difference between petroleum generators and microturbines needs to be better

defined. • More information about the building’s structural integrity is needed in order to

determine if a roof mounted solar system is feasible. • The total cost of the system needs to be added as an output. • A test case needs to be incorporated in order to test the system.