The Economic Optimization of Renewable Energy

Global warming has been a very popular topic these days. With up-trend of clean technology and realization that strict climate policy should be implemented, demand of renewable energy sky-rocketed as conservative plants popularity falls. Number of coal power plants have significantly dropped since its peak era, being known as the largest pollutant contributor as it produces nitrogen oxide and carbon dioxide, the technology is valued less due to its impact on nature. Renewable energy comes from many sources: hydropower, wind power, geothermal energy, bio energy and many more. The ability to replenish and having no limit in usage and applications make renewable energy implementations seems attractive. Aside from that, they also produce low emission, sounds like a win-win solution for everyone. Theoretically, with the usage of renewable energy, human-kind should be able to meet their energy need with minimal environmental damage. With growth rate ranging from 10% to 60% annually, renewable energy are getting cheaper through the technology improvements as well as market competition. In the end, the main goal is still to generate profit, though these days taking impact on nature into the equation is just as important. Since the technology is relatively new, capital cost still considerable higher compared to some cases with more traditional (–and naturally harmful) implementations. So the question is: how to maximize the economic potential of a renewable energy power generation plant?

The Economic Optimization of Renewable Energy

Living up to the maximum potential of any power generation plant starts in the design process. Few examples for solar power plant: designers should take into consideration type and quality of panels, it’s important to see the economic-efficiency tradeoff before jumping into investment; looking into the power conversion is also one of the most important steps, one should take into consideration that it would be worthless to produce more energy than the capacity that are able to be transferred and put to use, though too low energy generation would mean less gross income.

Another example, for a geothermal power plant, many studies have shown that boundary conditions on each components 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. Though, should also be compared to the economic sacrifice; regardless of how good the technology is, if it doesn’t make any economic 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 might or may not breakeven nor 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, check out AxCYCLE to optimize your power plant!

Reference:

[1] Optimal design of geothermal power plants 

[2] Strategies in tower solar power plant optimization

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