Page 312 - Handbook of Energy Engineering Calculations

Related Calculations. Luz International Ltd. has installed more capacity at
the Mojave Desert plant mentioned here, proving the acceptance and success
of its approach to this important technical challenge. That data in this
procedure can be useful to engineers studying the feasibility of solar electric
generation for other sites around the world. Luz received an Energy

Conservation Award from Power magazine, from which the data and
illustrations in this procedure were obtained. There are estimates showing
that the sunshine impinging the southwestern United States is more than

enough to generate the entire electrical needs of the country—when efficient
conversion apparatus is developed. It may be that the equipment described
here will provide the efficiency needed for large-scale pollution-free power
generation. Results to date have been outstanding and promise greater
efficiency in the future.

INDUSTRIAL SOLAR-ENERGY SYSTEM INVESTMENT

ECONOMICS

Determine the rate of return and after-tax present value of a new industrial
solar energy system. The solar installation replaces all fuel utilized by an
existing fossil-fueled boiler when optimum weather conditions exist. The

existing boiler will be retained as an auxiliary unit. Assume a system energy
9
9
output (E ) of 3 × 10 Btu/yr (3.17 kJ × 10 /yr) an initial cost for the total
s
2
2
system of $503,000 based on a collector area (A ) of 10,060 ft (934.6 m ), a
c
depreciation life (DP) of 12 years, a tax rate (τ) of 0.4840, a tax credit (TC)
factor of 0.25, a system life of 20 years, an operating cost fraction (OMPI) of
0.0250, an initial fuel cost (P ) of $3.11/MBtu ($3.11/947.9 MJ), and a fuel
f0
price escalation rate (e) of 0.1450.

Calculation Procedure:

1. Compute unit capacity cost (K ) in $/million Btu per year
s