The Economic Optimization of Renewable Energy

clean-blog-postGlobal warming is a very popular topic at the present time. With the upwards trend of clean technology and the realization that strict climate policy should be implemented, demand of renewable energy has sky-rocketed while conservative plant popularity continues to fall. Additionally, the number of coal power plants have significantly dropped since its peak era, as they are now known as the largest pollutant contribution, producing nitrogen, sulfur oxide and carbon dioxides.

Renewable energy comes from many sources: hydropower, wind power, geothermal energy, bioenergy and many more. The ability to replenish and have no limit on usage and application makes renewable energy implementation attractive. To make this even better, it also produces low emission. Theoretically, with the usage of renewable energy, human-kind should be able to meet their energy needs with minimal environmental damage. With growth rates ranging from 10% to 60% annually, renewable energy is getting cheaper through the technological improvements as well as market competition. In the end, the main goal is to maximize profit while minimizing our carbon footprint.  Since the technology is relatively new, capital costs are still considerably higher compared to more traditional (–and naturally harmful) implementations. This begs the question of exactly how we maximize the economic potential of a renewable energy power generation plant.

Living up to the full potential of any power generation plant starts with the design process. Solar power plants are one environmentally friendly option.  During the design process, designers should take into consideration the type and quality of the solar panels as it is important to see the economic-efficiency tradeoff before jumping into an investment. Looking into the power conversion is also one of the most important steps one should take into consideration since it would be worthless to produce more energy than what is able to be transferred and put to use and low energy generation would mean less gross income.

Geothermal power plants are another option. Many studies have shown that boundary conditions on each component play a big role in determining the plant’s capacity and efficiency. High efficiency is definitely desired to optimize the potential of a power plant and minimized the energy loss. That being said, it is important to take into account the economic sacrifice. Regardless of how good the technology is, if it doesn’t make any profit, it would not make sense for one to invest in such technology. Low capital cost but high operating expenses would hurt the economic feasibility in the long run, whereas high capital cost and low operating expense could still be risky since that would mean a higher lump sum of investment upfront which may or may not breakeven or be profitable depending on the fluctuation of energy market.

Modern technology allows investors and the engineering team to make this prediction based on models developed by the experts. SoftInWay just recently launched our economic module, so check out AxCYCLE to optimize your power plant!

Reference:
[1] http://scholarscompass.vcu.edu/cgi/viewcontent.cgi?article=4483&context=etd
[2] http://www.sciencedirect.com/science/article/pii/S0038092X12002022

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