Economic and environmental considerations – MCQs – EE

1. The main goal of economic analysis in energy systems is to:
(A) Maximize energy losses
(B) Minimize cost while ensuring performance
(C) Increase energy prices
(D) Reduce system efficiency

2. The life cycle cost (LCC) of an energy system includes:
(A) Only installation cost
(B) Capital, operation, maintenance, and disposal costs
(C) Labor cost only
(D) Energy losses only

3. The payback period is defined as:
(A) The time required to recover the investment cost through savings
(B) The time to install equipment
(C) The time before maintenance
(D) The lifespan of the system

4. A shorter payback period indicates:
(A) Faster recovery of investment
(B) Poor financial performance
(C) High project risk
(D) Inefficient system

5. Net Present Value (NPV) represents:
(A) The present value of cash inflows minus outflows
(B) The total cost of equipment
(C) The gross revenue
(D) The future cost of energy

6. A project is considered economically viable if:
7. The Internal Rate of Return (IRR) is the rate at which:
(A) NPV equals zero
(B) Energy losses are minimum
(C) Operating cost is maximum
(D) Efficiency becomes zero

8. The levelized cost of energy (LCOE) is used to:
(A) Compare energy generation technologies
(B) Measure system voltage
(C) Determine peak load
(D) Estimate grid losses

9. The LCOE represents:
(A) Average cost per unit of generated electricity
(B) Capital cost only
(C) Maintenance cost only
(D) Subsidy per unit

10. Renewable energy projects often have:
(A) High initial cost but low operating cost
(B) Low installation cost
(C) High fuel cost
(D) High maintenance cost

11. Carbon credits are awarded for:
(A) Reducing greenhouse gas emissions
(B) Increasing fuel use
(C) Consuming more electricity
(D) Using non-renewable sources

12. The Clean Development Mechanism (CDM) is part of:
(A) Kyoto Protocol
(B) Paris Agreement only
(C) Montreal Protocol
(D) Rio Summit

13. Greenhouse gases (GHGs) primarily include:
(A) CO₂, CH₄, and N₂O
(B) O₂ and N₂
(C) H₂ and He
(D) CO and SO₂ only

14. The carbon footprint measures:
(A) Total greenhouse gas emissions associated with an activity
(B) Total land area
(C) System efficiency
(D) Total cost of installation

15. The main environmental benefit of renewable energy systems is:
(A) Reduction of greenhouse gas emissions
(B) Increase in fossil fuel consumption
(C) Decrease in biodiversity
(D) High air pollution

16. Life Cycle Assessment (LCA) evaluates:
(A) Environmental impact from production to disposal
(B) Only financial aspects
(C) Installation time
(D) Market trends

17. The economic feasibility of renewable systems depends on:
(A) Resource availability, technology cost, and policy support
(B) Random market changes
(C) Manual operation only
(D) Weather forecast

18. Feed-in tariffs (FiTs) are designed to:
(A) Encourage investment in renewable energy
(B) Increase fossil fuel prices
(C) Discourage energy savings
(D) Penalize consumers

19. Subsidies and tax incentives help renewable projects by:
(A) Lowering financial barriers and payback time
(B) Increasing project cost
(C) Limiting technology adoption
(D) Reducing output

20. The Environmental Impact Assessment (EIA) aims to:
(A) Evaluate potential environmental consequences of a project
(B) Measure power factor
(C) Assess grid voltage
(D) Determine energy losses

21. Economic dispatch in power systems ensures:
(A) Minimum cost of generation while meeting demand
(B) Maximum fuel consumption
(C) Constant generation regardless of demand
(D) Reduced transmission voltage

22. External costs in energy economics refer to:
(A) Environmental and social impacts not included in market prices
(B) Direct capital investment
(C) Maintenance cost
(D) Transportation losses

23. The social cost of carbon estimates:
(A) Economic damage from emitting one ton of CO₂
(B) Price of fossil fuels
(C) Cost of renewable equipment
(D) Annual energy bill

24. Energy efficiency improvements lead to:
(A) Reduced operating cost and emissions
(B) Higher electricity demand
(C) Increased system losses
(D) More pollution

25. Carbon capture and storage (CCS) is a technology used to:
(A) Reduce CO₂ emissions from power plants
(B) Increase combustion rate
(C) Produce more fossil fuels
(D) Replace renewables

26. Renewable energy certificates (RECs) represent:
(A) Proof of electricity generated from renewable sources
(B) Fuel price
(C) Tax documents
(D) Grid failure reports

27. Sustainable development in energy means:
(A) Meeting present needs without compromising future generations
(B) Maximizing short-term profits
(C) Using only fossil fuels
(D) Ignoring environmental impact

28. The main economic drawback of renewable energy systems is:
(A) High initial capital cost
(B) Zero operational cost
(C) High carbon emissions
(D) Unlimited energy availability

29. Grid parity occurs when:
(A) Renewable energy costs equal or fall below conventional energy costs
(B) Fossil fuels are cheaper
(C) Grid electricity is unavailable
(D) Renewable energy becomes more expensive

30. Integrating economic and environmental considerations ensures:
(A) Cost-effective and sustainable energy development
(B) Increased emissions
(C) Dependence on fossil fuels
(D) Unplanned growth