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2
Economics of Energy Generation
and Conservation Systems*
Anyone who believes exponential growth can go on forever in a nite world is either a
madman or an economist.
—Kenneth Boulding (ca. 1980)
This chapter presents useful analysis tools that engineers should be familiar with. These
include a basic process for economic assessment, energy ow analysis, and resource account-
ing methods for complex energy systems. The objective of economic assessment is to provide
useful nancial insight and enable a comparison between various energy options. No famil-
iarity with microeconomics is presumed, and given the uncertainty in predicting a future
economic ...