Oakville Hydro Optimum Engine Selection
(3 pages of text)
The president of Oakville Hydro Energy services needed to make a decision on the installation of an electricity-generating engine at the regional municipal Wastewater Treatment Plant in Burlington, Ontario. This engine installation was in support of the production of green power, and the Ontario Power Authority (OPA) had introduced a feed-in tariff that paid a premium for the generation of this type of green power. One of three specific engines would be purchased and installed to generate electricity from the combustible gases produced during wastewater treatment. The president had to decide which engine generator would produce the most favourable output and the best return for Oakville Hydro and the municipality. The president also needed to decide whether or not to integrate the existing on-site gas storage tank into the controls of the generator system.
This case deals with decision making under uncertainty, risk analysis, simulation, probability distributions, net present value, and variance reduction techniques. Students must determine which engine should be installed and the probability that this is a profitable choice, as well as whether the storage tank should be purchased.
Canada, Medium, 2010
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