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Comparative Life Cycle Cost Analysis of Hardening Options for Critical Loads

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  • Sungmin Park

    (Department of Electronic & Electrical Engineering, Hongik University, 2639 Sejong-ro, Jochiwon-eup, Sejong 30016, Korea)

  • Sung-Yeul Park

    (Department of Electrical & Computer Engineering, University of Connecticut, Storrs, CT 06269, USA)

  • Peng Zhang

    (Department of Electrical & Computer Engineering, University of Connecticut, Storrs, CT 06269, USA)

  • Peter Luh

    (Department of Electrical & Computer Engineering, University of Connecticut, Storrs, CT 06269, USA)

  • Michel T. J. Rakotomavo

    (School of Business, University of Connecticut, Storrs, CT 06269, USA)

  • Camilo Serna

    (Eversource, Berlin, CT 06037, USA)

Abstract

In order to determine the most cost effective alternative among hardening options of power systems, the direct monetary benefits should be evaluated above all other things. Therefore, this paper presents a life-cycle cost model which describes total monetary costs experienced in annual time increments during the project with consideration for the time value of money. In addition, to minimize the risks associated with estimated cost errors due to uncertainties of input data, the stochastic input data are considered. Using the Monte Carlo method, the probabilities and cost ranges in the case studies can be predicted, in turn resulting in better decisions in the selection of hardening options which are cost effective.

Suggested Citation

  • Sungmin Park & Sung-Yeul Park & Peng Zhang & Peter Luh & Michel T. J. Rakotomavo & Camilo Serna, 2016. "Comparative Life Cycle Cost Analysis of Hardening Options for Critical Loads," Energies, MDPI, vol. 9(7), pages 1-15, July.
    • Handle: RePEc:gam:jeners:v:9:y:2016:i:7:p:553-:d:74158
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    References listed on IDEAS

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    1. Bernal-Agustín, José L. & Dufo-López, Rodolfo, 2009. "Simulation and optimization of stand-alone hybrid renewable energy systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(8), pages 2111-2118, October.
    2. Holt, Lynne & Kury, Theodore K., 2011. "Florida's Storm Hardening Effort: A New Paradigm for State Utility Regulators," The Electricity Journal, Elsevier, vol. 24(4), pages 62-71, May.
    3. Roth, Ian F. & Ambs, Lawrence L., 2004. "Incorporating externalities into a full cost approach to electric power generation life-cycle costing," Energy, Elsevier, vol. 29(12), pages 2125-2144.
    4. Black, Fischer & Scholes, Myron S, 1973. "The Pricing of Options and Corporate Liabilities," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 637-654, May-June.
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    Cited by:

    1. Deok-Kyeom Jung & Sung-Min Park, 2023. "Economic Value Estimation of Biogas Utilization in Public Wastewater Treatment Plants of the Republic of Korea," Energies, MDPI, vol. 16(5), pages 1-13, February.

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