Evaluate Energy One's Transition to Renewable Energy Sources
Company: Capital One
Role: Data Scientist
Category: Analytics & Experimentation
Difficulty: medium
Interview Round: Onsite
##### Scenario
Energy One is evaluating a move from fossil fuels to renewable power and must analyze financial feasibility, capacity limits and technology options.
##### Question
What factors would you consider when evaluating Energy One's transition from fossil fuels to renewable power? 2. Given a fossil-fuel plant (8.8 M MWh/year capacity, $5 M monthly lease, $25 M yearly fixed cost, $20/MWh variable cost, $40/MWh revenue, $400 M initial investment), how many MWh are needed annually to recover 10 % of the initial investment? 2b. Does your calculated production volume make sense relative to the plant’s maximum capacity? Explain. 3. If government policy caps fossil-fuel generation at 5 M MWh/year, which alternative power sources should Energy One pursue and why? 3b. If no new power sources are added, what levers could keep profitability stable? 4a. Solar test plant: $12.5 M capex, 75 % sunny (150 k MWh), 25 % cloudy (50 k MWh), $0 variable cost, $40/MWh price. How many years to break even? 4b. Ethanol test plant: $2.5 M capex, 100 k MWh/year, $30/MWh variable cost, $40/MWh price. How many years to break even? 5. With no budget limit, which test plant would you recommend and why?
##### Hints
State assumptions, apply break-even formulas, check capacity constraints, and articulate strategic trade-offs between cost, risk, and long-term profitability.
Quick Answer: This question evaluates financial modeling, capacity planning, unit economics, and scenario/sensitivity analysis skills applied to an energy transition case, testing a data scientist’s ability to interpret costs, revenues, and policy constraints within an energy-sector context and is categorized under Analytics & Experimentation.
