1.Discuss the pros and cons of the two “advanced” forms of estimating energy dem
ID: 1169553 • Letter: 1
Question
1.Discuss the pros and cons of the two “advanced” forms of estimating energy demand. What do they excel at and where are they lacking? How might policy changes be built into the models?
2.Assume the following two equations for the extraction of a natural resource:
A)P = 18 – 0.5 Q for Marginal Willingness to Pay
B)P = 4 for a constant Marginal Cost of Extraction
Solve for the following in a two time period setting:
1)Find and label the equilibrium when there is no limit on Q.
2)Assume that there are only 20 units of the natural resource to be extracted, and I tell you the optimal extraction rates at time period 1 and time period two are 10.1 and 9.9 respectively. Solve for the discount rate.
3)Show graphically or in terms of total benefits that the optimized extraction rates maximize total benefits.
3.Discuss the cost features of renewable energies in the supply electricity. What are some of the harder costs that are more difficult to capture. What aspects of renewable electricity supply are more expensive than traditional fossil fuels? Where are they cheaper?
Explanation / Answer
1.
Advanced forms of estimating energy demand are given below:
Lighting energy: In this case, total consumption is equal to the aggregate of power and time. Energy consumption = Power × Time.
Pros: The estimation gives energy utilization during a particular period. It gives the amount of utility cost.
Con: The correct figure depends on proper estimation of power and time in advance. Proper estimation would be a lacking.
Change in policy: Inclusion of further job during a process increases the estimation. The required policy should be changed accordingly.
Water energy: This is the estimation of water filling time. Suppose an old technique is used to fill the required water in 4 minutes time. The new technique might take 1 minute for filling. Here the consumption is fixed, but the demand depends on cost of using technique.
Pros: It gives ideas about requirement of energy in per-unit time. This is helpful for decision making.
Con: Demand may vary if there is sudden change in work category.
Change in policy: Inclusion of advance technology is always desirable. The old one could be scraped, which leads to change in policy.
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