Chapter 12 Multiple choice questions

. Energy prices in different countries are described in Section 12.2. Why are petrol prices higher in most European countries than in the USA?

The oil comes from more expensive sources.

The refining standards are higher.

It is more highly taxed.

. Section 12.3 describes inflation, 'real' prices, and affordability. What is inflation? Is it:

The taxation on a notional basket of goods

The rate of change of the retail price index

The 10-year average of the retail price index

. In 2019, what proportion of an average UK household's expenditure went on domestic energy?

8%

6%

4%

. Section 12.4 describes investing in energy including different types of electricity generation. Which of these types of generation plant has the lowest operation and maintenance (O & M) costs per kilowatt hour of electricity generated?

Onshore wind turbine

Nuclear pressurized water reactor

Combined cycle gas turbine

. Box 12.5 and its surrounding text discusses the annuitization of capital costs and the repayment of loans. How much annually would have to be repaid on a loan of £10 million at a discount rate of 8% over a period of 20 years?

£102,000 per year

£117,000 per year

£1.02 million per year

£1.17 million per year

. Box 12.7 describes investment in a possible future nuclear power station. The chosen discount rate has a significant effect on its calculated electricity cost. The quoted figure at a discount rate of 8.9% is 9.5 pence per kilowatt hour. What would it be if the discount rate was reduced to 5%?

5 pence per kilowatt hour

6 pence per kilowatt hour

7 pence per kilowatt hour

. Section 12.4 also describes perceived risk in investments. The estimated minimum discount rate to obtain a pre-tax profit on a particular project is described as what?

A hurdle rate

The investment barrier

A financial standard

. Many energy investments, such as those in nuclear and hydro power, may have consequences lasting for many decades. How is the notion that today's investments should not create disbenefits to people in the future called?

Longitudinal fairness

Intergenerational equity

Temporal evenness

. Section 12.5 describes real-world complications with energy costing. Least-cost planning is one method of analysing energy costs. To whom, and for what, does it provide the least cost?

An oil company for the end refined petrol

The consumer for a particular energy service

A fuel-exporting country for maintaining its energy exports

. Various countries have used a range of financial methods to support renewable energy. One method is to provide clearly stated prices for the electricity. What is this mechanism called?

Renewables Obligation

Contract for difference

Feed-in tariff

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