Economics of Power Generation

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INTRODUCTION

Electricity is produced in power plants can be of the following


types :

• Thermal

• Nuclear

• Hydraulic

• Gas turbine

• Geothermal

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LOAD–DURATION CURVES

• A curve showing the load demand variations of consumers with


respect to time is known as load curve.

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1. Load factor,

2. Capacity factor (or plant factor),

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3. Reserve factor,

4. Demand factor,

5. Diversity factor,

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LOCATION OF POWER PLANTS


For conventional base load thermal power plants, the following factors
are to be considered:
• Availability of cooling water
• Availability of fuel
• Distance from the centre of gravity of load demand
• Cost of land
• Character of soil
• Main wind direction and water currents in cooling water source (sea,
lake or river)
• With coal-fired stations, disposal of ash
• If the plant is erected far from a town, accommodation for staff
• Rail and road connections
• Security considerations

For nuclear power plants two additional factors are to be considered:


• Density of population in the vicinity.
• Danger of earthquakes. 7
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POWER PLANT ECONOMICS

The cost per kWhnet is determined by:


• Fixed costs (FC), mainly interest, depreciation, insurance, taxes,
depending on the capital invested, i.e. on the construction costs of
the plant including the cost of the land.
• Operation and maintenance (O & M) costs covering salaries and
wages, overhauling of equipment, repairs including spare parts,
water, lubricating oil, chemicals and miscellaneous expenses.
• Fuel costs, dependent on the amount of electricity generated.
• kWhnet of electricity sent out per year.

Total annual costs (Ct) in a power plant

The reliability of a power plant

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Construction Costs

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Fixed Costs and Depreciation


Two methods of accumulating the money for the depreciation fund:

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• S
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Present-Worth Concept

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Incremental Heat Rate


Performance of a generating plant

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Economic Scheduling Principle


According to the economic scheduling principle, the load is so
distributed that at any moment all generating units will have the same
incremental heat rates.

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Effect of Load Factor on Cost per kWh

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INDIAN ENERGY SCENARIO

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COAL-FUELLED ELECTRICITY GENERATING UNIT

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THE END

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