Economics of Power Generation 9

9.1. Introduction. 9.2. Terms and definitions. 9.3. Principles of power plant design. 9.4. Location of power plant. 9.5. Layout
of power plant building. 9.6. Cost analysis. 9.7. Selection of type of generation. 9.8. Selection of power plant equipment—
Selection of boilers—Selection of prime movers—Selection of size and number of generating units. 9.9. Economics in plant selection.
9.10. Factors affecting economics of generation and distribution of power. 9.11. How to reduce power generation cost ?
9.12. Power plant—useful life. 9.13. Economics of hydro-electric power plants. 9.14. Economics of combined hydro and
steam power plants. 9.15. Performance and operating characteristics of power plants. 9.16. Economic load sharing. 9.17.
Tariff for electrical energy—Introduction—Objectives and requirements of tariff—General tariff form—Worked Examples—Highlights—
Theoretical Questions— Unsolved Examples—Competitive Examinations Questions.

9.1. INTRODUCTION given period. It is determined by measurement, according

to specifications, over a prescribed interval of time.
In all fields of industry economics plays an important role. 4. Demand factor. The demand factor of any
In power plant engineering economics of power system use system, or part of a system, is the ratio of maximum demand
certain well established techniques for choosing the most of the system, a part of the system, to the total connected
suitable system. The power plant design must be made on load of the system, or of the part of the system, under
the basis of most economical condition and not on the most consideration. Expressing the definition mathematically,
efficient condition as the profit is the main basis in the
Maximum demand
design of the plant and its effectiveness is measured Demand factor = . ...(9.1)
financially. The main purpose of design and operation of Connected load
the plant is to bring the cost of energy produced to minimum. 5. Load factor. The load factor is the ratio of the
Among many factors, the efficiency of the plant is one of average power to the maximum demand. In each case, the
the factors that determines the energy cost. In majority of interval of maximum load and the period over which the
cases, unfortunately, the most thermally efficient plant is average is taken should be definitely specified, such as a
not economic one. “half-hour monthly” load factor. The proper interval and
period are usually dependent upon local conditions and
9.2. TERMS AND DEFINITIONS upon the purpose for which the load factor is to be used.
Expressing the definition mathematically,
1. Connected load. The connected load on any
Average load
system, or part of a system, is the combined continuous Load factor = . ...(9.2)
rating of all the receiving apparatus on consumers’ premises, Maximum demand
which is connected to the system, or part of the system, under 6. Diversity factor. The diversity factor of any
consideration. system, or part of a system, is the ratio of the maximum
2. Demand. The demand of an installation or power demands of the subdivisions of the system, or part of
system is the load that is drawn from the source of supply a system, to the maximum demand of the whole system, or
at the receiving terminals averaged over a suitable and part of the system, under consideration, measured at the
specified interval of time. Demand is expressed in kilowatts point of supply. Expressing the definition mathematically,
(kW), kilovolt-amperes (kVA), amperes (A), or other Sum of individual
suitable units. maximum demands
3. Maximum demand or Peak load. The Diversity factor = . ...(9.3)
Maximum demand
maximum demand of an installation or system is the
greatest of all the demands that have occurred during a of entire group

442
 ECONOMICS OF POWER GENERATION 443

7. Utilization factor. The utilization factor is

defined as the ratio of the maximum generator demand to
the generator capacity.

Power demand (kW)

8. Plant capacity factor. It is defined as the ratio
of actual energy produced in kilowatt hours (kWh) to the
maximum possible energy that could have been produced Peak
during the same period. Expressing the definition load
mathematically, Average
load
E
Plant capacity factor = ...(9.4)
Ct Base load
where, E = Energy produced (kWh) in a given period,
C = Capacity of the plant in kW, and Time (hours)
t = Total number of hours in the given period.
Fig. 9.1. Load curve.
9. Plant use factor. It is defined as the ratio of
energy produced in a given time to the maximum possible (ii) The area under the curve divided by the total
energy that could have been produced during the actual number of hours gives the average load on the power station.
number of hours the plant was in operation. Expressing (iii) The peak load indicated by the load curve/graph
the definition mathematically, represents the maximum demand of the power station.
E Significance of load curves :
Plant use factor = ...(9.5)
C  t l Load curves give full information about the
where t = Actual number of hours the plant has been in incoming load and help to decide the installed
operation. capacity of the power station and to decide the
10. Types of loads. economical sizes of various generating units.
(i) Residential load. This type of load includes l These curves also help to estimate the
domestic lights, power needed for domestic appliances such generating cost and to decide the operating
as radios, television, water heaters, refrigerators, electric schedule of the power station i.e., the sequence
cookers and small motors for pumping water. in which different units should be run.
(ii) Commercial load. It includes lighting for 12. Load duration curve. A load duration curve
shops, advertisements and electrical appliances used in represents re-arrangements of all the load elements of
shops and restaurants etc. chronological load curve in order of descending magnitude.
(iii) Industrial load. It consists of load demand of This curve is derived from the chronological load curve.
various industries. Fig. 9.2 shows a typical daily load curve for a power
(iv) Municipal load. It consists of street lighting, station. It may be observed that the maximum load on
power required for water supply and drainage purposes. power station is 35 kW from 8 A.M to 2 P.M. This is plotted
in Fig. 9.3. Similarly other loads of the load curve are
(v) Irrigation load. This type of load includes
plotted in descending order in the same figure. This is called
electrical power needed for pumps driven by electric motors
load duration curve (Fig. 9.3).
to supply water to fields.
(vi) Traction load. It includes trams, cars, trolley, The following points are worth noting :
buses and railways. (i) The area under the load duration curve and the
11. Load curve. A load curve (or load graph) is a corresponding chronological load curve is equal and
graphic record showing the power demands for every instant represents total energy delivered by the generating station.
during a certain time interval. Such a record may cover (ii) Load duration curve gives a clear analysis of
1 hour, in which case it would be an hourly load graph ; generating power economically. Proper selection of base load
24 hours, in which case it would be a daily load graph ; a power plants and peak load power plants becomes easier.
month in which case it would be a monthly load graph ; or 13. Dump power. This term is used in hydroplants
a year (8760 hours), in which case it would be a yearly load and it shows the power in excess of the load requirements
graph. The following points are worth noting : and it is made available by surplus water.
Refer to Fig. 9.1. 14. Firm power. It is the power which should
(i) The area under the load curve represents the always be available even under emergency conditions.
energy generated in the period considered.
 444 POWER PLANT ENGINEERING

15. Prime power. It is the power which may be 1. Simplicity of design.

mechanical, hydraulic or thermal that is always available 2. Low capital cost.
for conversion into electric power. 3. Low cost of energy generated.
4. High efficiency.
5. Low maintenance cost.
35 kW
6. Low operating cost.
30 kW 7. Reliability of supplying power.
24
kW 8. Reserve capacity to meet future power demand.
Load (kW)

18 kW 9.4. LOCATION OF POWER PLANT

Some of the considerations on which the location of a power
plant depends are :
3 kW 1. Centre of electrical load. The plant should be
located where there are industries and other important
consumption places of electricity. There will be considerable
6 A.M. 8 A.M. 2 P.M. 3 P.M. 6 P.M. 6 A.M. advantage in placing the power station nearer to the centre
Time (hours) of the load.
— There will be saving in the cost of copper used
Fig. 9.2. Typical daily load curve. for transmitting electricity as the distance of
transmission line is reduced.
— The cross-section of the transmission line
35 kW directly depends upon the maximum current to
be carried. In case of alternating current the
30 kW voltage to be transmitted can be increased thus
reducing the current and hence the cross-section
24 kW of the transmission line can be reduced. This will
Load (kW)

save the amount of copper.

18 kW
— It is desirable now to have a national grid
connecting all power stations. This provides for
selecting a site which has other advantages such
as nearer to fuel supply, condensing water
3 kW available.
2. Nearness to the fuel source. The cost of
0 6 9 10 12 24 transportation of fuel may be quite high if the distance of
Time (hours) location of the power plant is considerable. It may be
advisable to locate big thermal power plants at the mouth
Fig. 9.3. Load duration curve. of the coal mines. Lignite coal mines should have
centralised thermal power station located in the mines itself
16. Cold reserve. It is that reserve generating
as this type of coal cannot be transported. Such type of
capacity which is not in operation but can be made available
power stations could be located near oil fields if oil is to be
for service.
used as a fuel and near gas wells where natural gas is
17. Hot reserve. It is that reserve generating available in abundance. In any case it has been seen that
capacity which is in operation but not in service. it is cheaper to transmit electricity than to transport fuel.
18. Spinning reserve. It is that reserve generating Hence the power plant should be located nearer the fuel
capacity which is connected to the bus and is ready to take supply source.
the load. 3. Availability of water. The availability of water
is of greater importance than all other factors governing
9.3. PRINCIPLES OF POWER PLANT station location. Water is required for a thermal power
DESIGN station using turbines for the following two purposes :
(i) To supply the make-up water which should be
The following factors should be considered while designing
reasonably pure water.
a power plant :
 ECONOMICS OF POWER GENERATION 445

(ii) To cool the exhaust steam. This cooling process 9. Each wall should receive a symmetrical treatment
is done in case of diesel engines too. For bigger power in window openings etc.
stations the quantity of this cooling water is tremendous 10. The principal materials used for building the
and requires some natural source of water such as lake, power plant building are brick, stone, hollow tiles, concrete
river or even sea. Cooling towers could be used economically and steel.
as the same cooling water could be used again and again. 11. In case of a steam power plant, there are distinct
Only a part of make up water for cooling will then be parts of the building viz., boiler room, turbine room and
required. For small plants spray pounds could sometimes electrical bays. Head room required in the boiler room
be used. It is economical to limit the rise in cooling-water should be greater than in the others. Ventilation in boiler
temperature to a small value (between 6ºC and 12°C), and room presents greater difficulty because of heat liberated
to gain in cycle efficiency at the expense of increased cooling from the boiler surfaces. The turbine room is actually the
water pumping requirement. show room of the plant. Mezzanine flooring should be used
4. Type of soil available and land cost. While in the power plant. The chimney height should be sufficient
selecting a site for a power plant it is important to know so as to release the flue gases sufficiently high so that the
about the character of the soil. If the soil is loose having atmosphere is not polluted and the nearby buildings are
low bearing power the pile foundations have to be used. not affected.
Boring should be made at most of the projected site to have 12. The foundation of a power plant is one of the
an idea of the character of the various strata as well as of most important considerations. For this the bearing
the bearing power of the soil. The best location is that for capacity of the sub-soil, selection of a working factor of
which costly and special foundation is not required. safety and proportioning the wall footings to economical
In case of power plants being situated near construction should be well thought of and tested. The pile
metropolitan load centres, the land there will be very costly foundations may have to be used where the soils have low
as compared to the land at a distance from the city. bearing values.
13. In any power plant machine foundation plays
9.5. LAYOUT OF POWER PLANT an important part. The machine foundation should be able
BUILDING to distribute the weight of the machine, bed plate and its
own weight over a safe subsoil area. It must also provide
The following points should be taken care of while deciding sufficient mass to absorb machine vibrations.
about power plant building and its layout :
14. Sufficient room for storage of fuel should be
1. The power plant structure should be simple and provided indoor as well as outdoor so as to ensure against
rugged with pleasing appearance. any prolonged breakdown.
2. Costly materials and ornamental work should be
avoided. 9.6. COST ANALYSIS
3. The power plant interior should be clean, airy
and attractive. The cost of a power system depends upon whether :
4. The exterior of the building should be impressive (i) an entirely new power system has to be set up,
and attractive. or
5. Generally the building should be single storeyed. (ii) an existing system has to be replaced, or
6. The layout of the power plant should first be made (iii) an extension has to be provided to the existing
on paper, the necessary equipment well arranged and then system. The cost interalia includes :
design the covering structure. In all layout, allowances 1. Capital Cost or Fixed Cost. It includes the
must be made for sufficient clearances and for walkways. following :
Good clearance should be allowed around generators, (i) Initial cost (ii) Interest
boilers, heaters, condensers etc. Walkway clearances (iii) Depreciation cost (iv) Taxes
around hot objects and rapidly moving machinery should
(v) Insurance.
be wider than those just necessary to allow passage. Also
the galleries in the neighbourhood of high tension bus bars 2. Operational Cost. It includes the following :
should be sufficient as the space will permit. (i) Fuel cost (ii) Operating labour cost
7. Provision for future extension of the building (iii) Maintenance cost (iv) Supplies
should be made. (v) Supervision (vi) Operating taxes.
8. The height of the building should be sufficient so The above mentioned costs are discussed as follows :
that overhead cranes could operate well and the
(a) Initial cost
overhauling of the turbines etc. is no problem. Sufficient
room should be provided to lift the massive parts of the Some of the several factors on which cost of a
machines. generating station or a power plant depends are :
 446 POWER PLANT ENGINEERING

(i) Location of the plant. useful life is spent. The actual life span of the plant has,
(ii) Time of construction. therefore, to be taken as shorter than what would be
(iii) Size of units. normally expected out of it.
(iv) Number of main generating units. The following methods are used to calculate the
depreciation cost :
(v) The type of structure to be used.
(i) Straight line method
The initial cost of a power station includes the
following : (ii) Percentage method
1. Land cost (iii) Sinking fund method
2. Building cost (iv) Unit method.
3. Equipment cost (i) Straight line method. It is the simplest and
commonly used method. The life of the equipment or the
4. Installation cost
enterprise is first assessed as also the residual or salvage
5. Overhead charges which will include the value of the same after the estimated life span. This salvage
transportation cost, stores and storekeeping charges, value is deducted from the initial capital cost and the
interest during construction etc. balance is divided by the life as assessed in years. Thus,
— To reduce the cost of building, it is desirable to the annual value of decrease in cost of equipment is found
eliminate the superstructure over the boiler and is set aside as depreciation annually from the income.
house and as far as possible on turbine house Thus, the rate of depreciation is uniform throughout the
also. life of the equipment. By the time the equipment has lived
— The cost on equipment can be reduced by out its useful life, an amount equivalent to its net cost is
adopting unit system where one boiler is used accumulated which can be utilised for replacement of the
for one turbogenerator. Also by simplifying the plant.
piping system and elimination of duplicate (ii) Percentage method. In this method the
system such as steam headers and boiler feed deterioration in value of equipment from year to year is
headers. The cost can be further reduced by taken into account and the amount of depreciation
eliminating duplicate or stand-by auxiliaries. calculated upon actual residual value for each year. It thus,
— When the power plant is not situated in the reduces for successive years.
proximity to the load served, the cost of a (iii) Sinking fund method. This method is based
primary distribution system will be a part of on the conception that the annual uniform deduction from
the initial investment. income for depreciation will accumulate to the capital value
(b) Interest of the plant at the end of life of the plant or equipment. In
this method, the amount set aside per year consists of
All enterprises need investment of money and this
annual instalments and the interest earned on all the
money may be obtained as loan, through bonds and shares
instalments.
or from owners of personal funds. Interest is the difference
between money borrowed and money returned. It may be Let, A = Amount set aside at the end of each
charged at a simple rate expressed as percentage per year for n years,
annum or may be compounded, in which case the interest n = Life of plant in years,
is reinvested and adds to the principal, thereby earning S = Salvage value at the end of plant life,
more interest in subsequent years. Even if the owner i = Annual rate of compound interest on
invests his own capital the charge of interest is necessary the invested capital, and
to cover the income that he would have derived from it P = Initial investment to install the plant.
through an alternative investment or fixed deposit with a
Then, amount set aside at the end of first year = A
bank. Amortization in the periodic repayment of the
principal as a uniform annual expense. Amount at the end of second year
= A + interest on A = A + Ai = A(1 + i)
(c) Depreciation
Amount at the end of third year
Depreciation accounts for the deterioration of the
= A(1 + i) + interest on A(1 + i)
equipment and decrease in its value due to corrosion,
weathering and wear and tear with use. It also covers the = A(1 + i) + A(1 + i)i
decrease in value of equipment due to obsolescence. With = A(1 + i)2
rapid improvements in design and construction of plants,  Amount at the end of nth year = A(1 + i)n–1
obsolescence factor is of enormous importance. Availability Total amount accumulated in n years (say x)
of better models with lesser overall cost of generation makes = Sum of the amounts accumulated in n
it imperative to replace the old equipment earlier than its years
 ECONOMICS OF POWER GENERATION 447

i.e., x = A + A(1 + i) + A(1 + i)2 + ...... + A(1 + i)n–1 (iii) Efficiency of the plant.
= A [1 + (1 + i) + (1 + i)2 + ...... + (1 + i)n–1] Labour cost. For plant operation labour cost is
...(i) another item of operating cost. Maximum labour is needed
Multiplying the above equation by (1 + i), we get in a thermal power plant using coal as a fuel. A hydraulic
x(1 + i) = A [(1 + i) + (1 + i)2 + (1 + i)3 + ...... power plant or a diesel power plant of equal capacity require
+ (1 + i)n] ...(ii) a lesser number of persons. In case of automatic power
Subtracting equation (i) from (ii), we get station the cost of labour is reduced to a great extent.
x.i = [(1 + i)n – 1] A However labour cost cannot be completely eliminated even

 x=
LM (1  i) n
1 OP A with fully automatic station as they will still require some
manpower for periodic inspection etc.
MN i PQ Cost of maintenance and repairs. In order to
where x = (P – S) avoid plant breakdowns maintenance is necessary.
LM (1  i) n
1 OP A Maintenance includes periodic cleaning, greasing,
 P–S=
MN i PQ ...(9.6) adjustments and overhauling of equipment. The material
used for maintenance is also charged under this head.

or A= M
L i OP (P – S) ...(9.7)
Sometimes an arbitrary percentage is assumed as
maintenance cost. A good plan of maintenance would keep
N (1  i) n
 1Q the sets in dependable condition and avoid the necessity of
(iv) Unit method. In this method some factor is too many stand-by plants.
taken as a standard one and depreciation is measured by Repairs are necessitated when the plant breaks
that standard. In place of years an equipment will last, down or stops due to faults developing in the mechanism.
the number of hours that an equipment will last is The repairs may be minor, major or periodic overhauls and
calculated. This total number of hours is then divided by
are charged to the depreciation fund of the equipment. This
the capital value of the equipment. This constant is then
item of cost is higher for thermal plants than for hydro-
multiplied by the number of actual working hours each
year to get the value of depreciation for that year. In place plants due to complex nature of principal equipment and
of number of hours, the number of units of production is auxiliaries in the former.
taken as the measuring standard. Cost of stores (other than fuel). The items of
consumable stores other than fuel include such articles as
(d) Operational cost lubricating oil and greases, cotton waste, small tools,
The elements that make up the operating chemicals, paints and such other things. The incidence of
expenditure of a power plant include the following costs : this cost is also higher in thermal stations than in hydro-
(i) Cost of fuels. electric power stations.
(ii) Labour cost. Supervision. In this head the salary of supervising
(iii) Cost of maintenance and repairs. staff is included. A good supervision is reflected in lesser
breakdowns and extended plant life. The supervising staff
(iv) Cost of stores (other than fuel).
includes the station superintendent, chief engineer,
(v) Supervision. chemist, engineers, supervisors, stores incharges, purchase
(vi) Taxes. officer and other establishment. Again, thermal stations,
Cost of fuels. In a thermal station fuel is the particularly coal fed, have a greater incidence of this cost
heaviest item of operating cost. The selection of the fuel than the hydro-electric power stations.
and the maximum economy in its use are, therefore, very Taxes. The taxes under operating head includes the
important considerations in thermal plant design. It is following :
desirable to achieve the highest thermal efficiency for the (i) Income tax
plant so that fuel charges are reduced. The cost of fuel (ii) Sales tax
includes not only its price at the site of purchase but its (iii) Social security and employee’s security etc.
transportation and handling costs also. In the hydroplants
the absence of fuel factor in cost is responsible for lowering
9.7. SELECTION OF TYPE OF
the operating cost. Plant heat rate can be improved by the
use of better quality of fuel or by employing better GENERATION
thermodynamic conditions in the plant design. While choosing the type of generation the following points
The cost of fuel varies with the following : should be taken into consideration :
(i) Unit price of the fuel. 1. The type of fuel available or availability of suitable
(ii) Amount of energy produced. sites for water power generation.
 448 POWER PLANT ENGINEERING

2. Fuel transportation cost. (v) Efficiency desired.

3. Land required. — ‘Heat-reclaiming equipment’ such as economisers
4. Foundation cost. and air preheaters should be provided with
5. The availability of cooling water. boilers. With the addition of economisers and
air preheaters the efficiency of the boiler
6. The type of load to be taken by the power plant.
increases from 75% to 90% and above.
7. Reliability in operation.
— The ‘increased pressure’ affects the cost of boiler
8. Plant life. drum, boiler tubes, headers, economisers and
9. Cost of transmitting the energy. other accessories. Similarly high temperatures
increase the cost of superheaters as higher
9.8. SELECTION OF POWER PLANT pressure and higher temperatures require
EQUIPMENT special alloy steels. High pressures require forced
circulation also. This also increases the cost but
Selection of some important power plant equipment is this forced circulation also increases the
discussed below : efficiency of the boiler.
9.8.1. Selection of Boilers — The method of firing has also an influence on
the percentage of total time for which the boiler
It is now well known fact that only water tube boilers (fire will be available and should be considered when
tube boilers not suitable) should be used for all central planning boiler capacity. Stoker firing is in
power stations. While selecting a boiler the following points general slightly less costly than pulverised fuel
should be taken care of : firing. The pulverised fuel firing increases the
1. Type of fuel to be burnt. efficiency.
2. Type of load. — Economisers improve the boiler efficiency by 4
3. Cost of fuel. to 10%. The air preheater further improves the
4. Desirability of heat-reclaiming equipment. boiler efficiency from 6 to 8%.
5. Availability of space for boiler installation. — The exhaust gases should not be cooled below
— The design and efficiency of the boiler is 150°C. Below this temperature the condensation
considerably influenced by the type of fuel used of moisture may take place and when mixed
in a boiler. A high efficiency can be obtained with with SO2 this moisture produces a dilute
coal firing as compared to oil or gas firing. This solution of H2SO4 which is finitely detrimental
is due to increased hydrogen loss in gaseous to the equipment.
fuels. — While selecting the proper economiser size as
— The location of the plant will also decide the type well as the size of the air preheaters fixed as
of fuel to be used. If the plant is nearer the coal well as operating charges should be considered.
fields, coal will be cheaper. Power plants near The fixed charges include the cost of heat
to the oil fields and gas wells will naturally use recovery equipment, flue work, ducts and also
these fuels. increased fan cost and building cost.
— Coal firing will also influence furnace design and 9.8.2. Selection of Prime Movers
hence the cost of boiler. In case of low ranking
For proper selection of prime mover it is of paramount
fuel such as lignites etc., pulverised firing is
importance to construct the following curves :
used. Very low fusing temperatures of coal
require water cooled walls and in some cases (i) A typical daily load curve.
the slag tap furnaces. The yearly minimum (ii) A peak-load curve.
operating cost has to be considered which may (iii) A probable future-load curve.
include production cost and fixed charges. In The prime movers to be used for generating
case of anthracite coal or metallurgical coke etc. electricity could be diesel engines, steam engines, steam
the wear on pulverising machinery is relatively turbines, gas turbines, water turbines etc.
much higher than that of bituminous coal. — While selecting a prime mover the initial cost
The cost of boilers vary with the following : of a unit erected has to be taken into
(i) Type of boiler used. consideration. The efficiency of this unit at
(ii) Operating pressure. various loads is also to be taken into
(iii) Operating temperature. consideration. As the capacity of the unit
increases there is a corresponding reduction in
(iv) Type of firing.
floor space per kW.
 ECONOMICS OF POWER GENERATION 449

— The selection of the prime mover depends also Total cost

on the type of use whether it is used for Unit cost =
Capacity

Component cost, total cost and unit cost

industrial purpose or for central power stations.
ost
Prime movers used for industrial purpose should al c
Tot
be non-condensing so that steam after exhausting could be
used for processing.
In case of central power stations condensing steam
turbines should be used. Diesel engines have an advantage
of higher efficiency and low cost. It also requires less labour al cost
teri
and the initial investment is also less. But the cost of coal Ma
is less as compared to diesel oil. Also the capacity of diesel
ur cost
engines is limited and hence for bigger power stations they e ring a nd labo
are unsuitable. The diesel engines are used as standby plant Engine
in all the central power stations whether thermal or hydro.
— In places where water is in abundance and a
certain head is available hydro power plants/
Capacity
stations are installed. In rivers where there is
a natural fall, the same could be used for driving Fig. 9.4. Variation of costs of power plant versus its capacity.
a water turbine in a hydro power plant. The
maintenance of hydro power plant is the The equipment prices are usually compared on the
cheapest. basis of price per unit of capacity, usually termed ‘unit
price’. The unit price decreases as the capacity of the machine
9.8.3. Selection of Size and Number of Generating Units increases. This is the main reason for adopting a large size
There can be no hard and fast rules, but however looking generating unit in power plants. Fig. 9.4 shows the general
at the load curve of the station one can guess for the total trend and trend of the major cost components in building a
generating capacity, size and number of the units. Minimum given type of machine. The following points are worth
generating capacity of a plant must be more than the noting :
predicted maximum demand. Obviously, the minimum — The labour and engineering cost curve increases
number of generators can be one but this will not be a wise slightly with the capacity of the unit.
suggestion. As the load on a power station is never constant,
— The material cost curve decreases in slope with
owing to variable demands at the different times of the
day, the generator will have to run continuously at variable an increase in capacity of plant.
loads, which will be much less than the rated capacity of — The total cost curve follows the pattern of
the generator for most of the times, without any provision material cost curve. The total cost curve shows
for the maintenance. So a power station which is expected the positive intercept at zero capacity which
to be reliable in service, must have at least two generators, represents the cost of just maintaining an
irrespective of the total capacity of the plant. organisation of men and plant ready to produce.
The following points are worth noting : — The dotted curve shows the reduction in unit
(i) The most appropriate way of deciding the size, price with an increase in capacity and this is
and number of generating sets in a station is to select the the major argument for installing large units.
number of sets in such a way so as to fit in the load curve as The large units are always preferred for the loads
closely as possible, so that the plant capacity may be used with higher load factor (0.8 to 1).
efficiently.
9.9. ECONOMICS IN PLANT SELECTION
(ii) Extra spare capacity is not desired as it increases
the capital expenditure. After selection of type of drive (such as steam, gas diesel or
(iii) The main aim should be to have units of different water power) which depends on availability of cheap fuels
capacities which will suitably fit in the load curve so that or water resources, further selection of the design and size
most of the generators when in use can be operated at of the equipment is primarily based upon economic
nearly full load. consideration and a plant that gives the lowest unit cost of
 450 POWER PLANT ENGINEERING

production is usually chosen. In case of all types of Gas turbine power plant. The cost of the gas
equipment the working efficiency is generally higher with turbine power plant increases as the simple plant is
larger sizes of plants and with high load factor operation. modified by inclusion of other equipment such as
Also, the capital cost per unit installation reduces as the intercooler, regenerator, reheater, etc. but the gain in
plant is increased in size. However, a bigger size of plant thermal efficiency and thereby a reduction in operating
would require greater investment, and possibilities of lower cost may justify this additional expense in first cost.
than optimum load factor usually increase with larger size Hydro-electric power plant. As compared with
of the plant. thermal stations an hydro-electric power plant has little
Steam power plants. In case of steam power plants operating cost and if sufficient water is available to cater
the choice of steam conditions such as throttle pressure to peak loads and special conditions for application of these
and temperature, is an important factor affecting operating plants justify, power can be produced at a small cost.
costs and is, therefore, very carefully made. As throttle The capital cost per unit installed is higher if the
pressure and temperature are raised the capital cost quantity of water is small. Also, the unit cost of conveying
increases but the cycle efficiency is increased. The advantage water to the power house is greater if the quantity of water
of higher pressures and temperatures is generally not is small. The cost of storage per unit is also lower if the
apparent below capacity of 10,000 kW unless fuel cost is quantity of water stored is large.
very high. An existing plant capacity may be increased by
Heat rates may be improved further through storing additional water through increasing the height of
reheating and regeneration, but again the capital cost of dam or by diverting water from other streams into the head
additional equipment has to be balanced against gain in reservoir. However, again it would be an economic study
operating cost. whether this additional cost of civil works would guarantee
The use of heat reclaiming devices, such as air sufficient returns.
preheaters and economisers, has to be considered from the Some hydro-power plants may be made automatic
point of economy in the consumption of fuel. or remote controlled to reduce the operating cost further,
Internal combustion engine plants. In this case but the cost of automation has to be balanced against the
also the selection of I.C. engines also depends on saving effected in the unit cost of generation.
thermodynamic considerations. The efficiency of the engine Interconnected hydro-steam system. In such a
improves with compression ratio but high pressures system where peak loads are taken up by steam units, the
necessitate heavier construction of equipment which capacity of water turbine may be kept somewhat higher
increases cost. than the water flow capacity at peak loads, and lesser than
The choice may also have to be made between four- or equal to maximum flow of river. This would make it
stroke and two-stroke engines, the former having higher possible for the water turbine to generate adequate energy
thermal efficiency and the latter lower weight and cost. at low cost during sufficient water flow.
The cost of the supercharger may be justified if there Some of the principal characteristics of hydro-
is a substantial gain in engine power which may balance electric, steam and diesel power plants are listed below :
the additional supercharge cost.
S.No. Characteristics Hydro-plant Steam plant Diesel plant

1. Planning and construction Difficult and takes Easier than Easiest

long time hydro-plant
2. Civil works cost Highest Lower than Lowest
hydro-plant

1 1 1
3. Running and maintenance cost (as
10 7 6
a fraction of total generation cost)

4. Overall generation cost Lowest Lower than for Highest

diesel plants
5. Reliability Good Good Excellent
 ECONOMICS OF POWER GENERATION 451

Advantages of interconnection : — The older or less efficient stations are used as

Major advantages of interconnecting various power peak or standby stations only, and are operated
stations are : rarely or for short periods of time.
1. Increased reliability of supply. Presently there is a tendency to use units of large
2. Reduction in total installed capacity. capacities to reduce space costs and to handle larger loads.
However, the maximum economical benefit of large sets
3. Economic operation.
occurs only when these are run continuously at near full
4. Operating savings. load. Running of large sets for long periods at lower than
5. Low capital and maintenance costs. maximum continuous rating increases cost of unit
6. Peak loads of combined system can be carried at generated.
a much lower cost than what is possible with small
individual system. 9.11. HOW TO REDUCE POWER
GENERATION COST ?
9.10. FACTORS AFFECTING ECONOMICS
The cost of power generation can be reduced by :
OF GENERATION AND
1. Using a plant of simple design that does not need
DISTRIBUTION OF POWER highly skilled personnel.
The economics of power plant operation is greatly 2. Selecting equipment of longer life and proper
influenced by : capacities.
(i) Load factor (ii) Demand factor 3. Carrying out proper maintenance of power plant
(iii) Utilisation factor. equipment to avoid plant breakdowns.
Load factor. In a hydro-electric power station with 4. Running the power stations at high load factors.
water available and a fixed staff for maximum output, the 5. Increasing the efficiency of the power plant.
cost per unit generated at 100% load factor would be half 6. Keeping proper supervision, which ensures less
the cost per unit at 50% load factor. In a steam power station breakdowns and extended plant life.
the difference would not be so pronounced since fuel cost
constitutes the major item in operating costs and does not 9.12. POWER PLANT—USEFUL LIFE
vary in the same proportion as load factor. The cost at 100%
load factor in case of this station may, therefore, be about The useful life of a power plant is that after which repairs
2/3rd of the cost 50% load factor. For a diesel station become so frequent and extensive that it is found economical
the cost per unit generated at 100% load factor may be to replace the power plant by a new one. Useful life of some
about 3/4th of the same cost at 50% load factor. From the of the power plants is given below :
above discussion it follows that : Plant Useful life
(i) Hydro-electric power station should be run at its 1. Conventional thermal power plant 20–25 years
maximum load continuously on all units. 2. Nuclear power plant 15–20 years
(ii) Steam power station should be run in such a way 3. Diesel power plant About 15 years.
that all its running units are economically loaded.
The useful life of some of the equipment of a steam
(iii) Diesel power station should be worked for power plant is given below :
fluctuating loads or as a stand by.
Equipment Useful life (years)
Demand factor and utilisation factor. A highly
1. Boilers
efficient station, if worked at low utilisation factor, may
produce power at high unit cost. (i) Fire tube 10–20
The time of maximum demand occurring in a system (ii) Water tube 20
is also important. In an interconnected system, a study of 2. Steam turbine 5–20
the curves of all stations is necessary to plan most economical 3. Steam turbo-generators 10–20
operations. 4. Condensers 20
The endeavour should be to load the most efficient 5. Pumps 15–20
and cheapest power producing stations to the greatest extent 6. Coal and ash machinery 10–20
possible. Such stations, called “base load stations” carry
7. Feed water heaters 20–30
full load over 24 hours i.e., for three shifts of 8 hours.
8. Stacks 10–30
— The stations in the medium range of efficiency
are operated only during the two shifts of 9. Stokers 10–20
8 hours during 16 hours of average load. 10. Transformers 15–20
 452 POWER PLANT ENGINEERING

11. Motors 20 (xi) Cost in respect of new roads, railway lines,

12. Electric meters and instruments 10–15 residential houses and even new towns which may have to
13. Transmission lines 10–20 be constructed.
A typical cost analysis of a hydro-plant is as follows :
9.13. ECONOMICS OF HYDRO-ELECTRIC
S.No. Components Cost
POWER PLANTS
1. Reservoir, dam and water ways 55%
The cost analysis of an hydro-electric power plant is
2. Land 15%
different from those of the other plants in the respect that
3. Structures 10%
the fixed coal is the major item of the total cost and the
operating cost is relatively much smaller whereas in the 4. Power plant and equipment 20%
steam and other plants, the operating cost is a large part
Besides this there is an another important item
of the total cost.
called transmission liability which refers to the
In a hydro-plant the total annual cost can be divided transmission charges for conveying the electricity from the
into two following categories : plant site to the load centre.
1. Fixed costs : — The total cost of construction of hydro-plant is
(i) Interest on capital invariably higher than that of a thermal plant
(ii) Amortization of the capital of equal capacity. Therefore, the annual charges
for interest and depreciation are comparatively
2. Running costs : higher.
(i) Maintenance and repairs. — In case of a hydro-plant, the smaller the quantity
(ii) Operating costs including salaries and wages. of water stored higher is the cost per kW.
(iii) Rates and taxes.
(iv) Stores, oil and other supplies.
9.14. ECONOMICS OF COMBINED HYDRO
(v) Management expenses including insurance.
AND STEAM POWER PLANTS
— The fixed charges of a hydro-plant are about 60 It has been established that if a region/country is neither
to 70% of the total cost of power and these do rich in fuel reserves nor in hydro resources then a combined
not depend upon the station output. operation of hydro and steam power plants give the best
— The running charges depend upon the station results in regard to generation of electricity at the
output, but not so much as in the thermal power economical cost. The following advantages accrue from
plants. combined plants :
1. Flexibility of operation.
The following items go to form the total capital
2. Security of supply.
outlay or the investment on a hydro-plant :
3. Improved utilisation of hydro-power.
(i) Preliminary surveys and investigations of the
4. Spare plant.
topography and geology of the proposed site of the plant.
Practically all large power systems in the world have
(ii) Purchase of land (needed for adequate storage hydro-steam interconnected. Hydro-plant may function as
or pondage) and water rights. a capacity plant i.e., to supply system peak with minimum
(iii) Compensation to oustees. flow conditions, or it may work as an energy plant to replace
(iv) Cost of preparation of detailed designs and the costly steam generated electricity by low cost hydro
specifications. power.
In such a system (interconnected) there should be a
(v) Cost of testing the materials of construction.
daily or seasonal load allocation plan set prehand so that
(vi) Cost of carrying out experimental work and the use of the two power systems is made to the best
model tests or designs for hydraulic structures. advantage. A certain amount of forecasting of load and
(vii) The actual cost of construction. capacity of the system as well as flexibility are necessary for
optimum results and experience is a big factor in good co-
(viii) Cost relating the purchase and installation of ordinated action.
the equipment. A knowledge of system plant loading schedules for
(ix) Interest on capital during construction. minimum production cost is as important as that of
(x) Working capital during the period of load reservoir levels, pond storage and stages of low flow and
development. heavy loads.
 ECONOMICS OF POWER GENERATION 453

9.15. PERFORMANCE AND OPERATING

CHARAC TERISTICS OF POWER
PLANTS
The performance of generating power plants is compared
by their average efficiency over a period of time. The average

Efficiency
efficiency of a power plant is the ratio of useful energy output
to the total energy input during the period considered. This
measure of performance varies with uncontrolled conditions
viz. (i) cooling water temperature, (ii) quality of fuel, and
(iii) shape of load curve. Thus, unless all plant performances
are corrected to the same controlled conditions it is not a
satisfactory standard of comparison.
Output (or load)
The performance of a plant can be precisely
(b) Efficiency curve.
represented by the input-output curve from the tests
conducted on individual power plant. The input-output
curve is graphical representation between the net energy
output (L) and input (I). The input is generally expressed in

Heat and incremental rates

millions of kcal/h or kJ/h and load output is expressed as
megawatts (MW). The input to hydro-plant is measured in

He
cusecs or m3/s of water.

at
te

ra
In general input-output may be represented as
follows :
I = a + bL + cL2 + dL3 e
l rat
where I = Input, en
ta
L = Output, and cr em
In
a, b, c and d = Constants
Input-output curve. Fig. 9.5 (a) shows an input- Output (or load)
output curve. In order to keep the apparatus functioning (c) Heat rate and incremental
rate curves.
at zero load, a certain input (I0) is required to meet frictional
and heat losses. Fig. 9.5
Efficiency curve. The efficiency of the power plant
I
is defined as the ratio of output to input.
L L
 Efficiency,  =
I a  bL  cL2  dL3
By using the above formula the efficiency for any
given load can be calculated.
An efficiency curve is shown in Fig. 9.5 (b).
Input

Heat rate and incremental rate curves. These

curves can be derived from basic input-output curve.
Heat rate (HR) is defined as the ratio of input to
output.
Iq
I a  bL  cL2  dL3
i.e., Heat rate (HR) = =
L L
Load (or output) a
= + b + cL + dL2
(a) Input - output curve. L
 454 POWER PLANT ENGINEERING

Heat rate curve is obtained by plotting values of heat

rate against corresponding values of output. Fig. 9.5 (c)
1200
shows a heat rate curve. L

5
+L

Combined input (I = I1 + I2) kcal / h × 10

1
Incremental rate (IR) is defined as the ratio of 2 =1
6
additional input (dI) required to increase additional output
(dL). L
1 +L
dI 800 2 =1
2
i.e., Incremental rate (IR) = .
dL
Incremental rate curve is obtained by plotting values L
1 +L
of IR against corresponding values of output. Such a curve 2 =8 Optimum
is shown in Fig. 9.5 (c). This curve expresses additional load locus
400
energy required to produce an added unit of output at the L for Unit-1
given load. 1 +L
2 =4

9.16. ECONOMIC LOAD SHARING

0
The primary objective of the design of all generating 2 4 6 8 10
stations is the economy. For a power system to return a Load on unit 1 MW
profit on the capital invested, proper operation of the plant
(b)
is essential. As far as the efficiency of boilers, turbines,
alternators etc. is concerned, engineers have been Fig. 9.6
successful in increasing the efficiency continuously so that
each unit added results in comparatively more efficient In the Fig. 9.6 (b) is shown the plot of combined
operation. Methods have also been devised for economic input of generators 1 and 2 versus load on generator 1, for
operation of plants at part loads and under variable load a constant total load.
conditions. Attempts have been made to minimise the Although generator 1 requires less input for a given
transmission losses too. Now the only aspect that remains output it is not essential that unit 1 should be loaded first
is the economic distribution of the output of a plant between and then generator 2. For economical loading the combined
the generators, or units within the plant. input of units 1 and 2 should be plotted against load on
Let us consider two generators 1 and 2 which supply unit 1 for a constant total load. Let a total load of 4 MW be
in parallel a common load. Generator 1 is more efficient supplied by generators 1 and 2.
than generator 2 as for the same input, output of generator L = L1 + L2
1 is more than that of generator 2. where, L = combined output
Fig. 9.6 shows the input-output curves of the two L1 = output of generator 1
generators/units. L2 = output of generator 2
Let the generator 2 supply total load of 4 MW and
generator 1 supply zero load. Now corresponding to zero
600 load on generator 1 and 4 MW on generator 2 the values of
input to generator 1 (I1) and input to generator 2 (I2) can
be determined respectively from Fig. 9.6 (a) and thus
5
Unit input (I1 or I2) kcal / h × 10

value of (I1 + I2) can be plotted against zero load on

generator 1. Again let 2 MW be supplied by generator 1
2
400 and 2 MW be supplied by generator 2 (so that total load
remains 4 MW) then values of I1 and I2 can be determined
1 corresponding to 2 MW load on each generator and value
of (I1 + I2) can be plotted against 2 MW load on generator 1
as shown in Fig. 9.6 (b). In this way curve for a total load of
200
4 MW can be plotted corresponding to different output of
generator 1.
Similarly curve for total load of 8 MW etc. can be
plotted. In these curves there is at least one point where
0 combined input is minimum for a given total load.
2 4 6 8 10 Corresponding to this point of minimum, the load generator
Unit load (L1 or L2) MW 1 can be found. Then the load on generator 2 will be
(a)
 ECONOMICS OF POWER GENERATION 455

difference of total load and load on generator 1. This load

saving will be the most economical.
This method is difficult to apply in practice as such 1
because generally stations have got more than two
generators/units and in that case the application of above
principles becomes a cumbersome process.
Considering any combined constant input in 2
Fig. 9.6 (b), at the point of minimum input

Input (I)
dI
=0 ...(i)
dI1
where, I= I1 + I2 = input of generator 1 + input of
generator 2
= combined input to generators 1 and 2
L= L1 + L2 = output of generator 1 + output of L1 L2
generator 2
Output (L)
= combined output of generators 1 and 2
F∵ dI I Fig. 9.7
Then
dI dI dI
 1  2 =0
dI1 dL1 dL1
GH dI1
0 JK L
Efficiency =
As I is constant. I
dI1 dI I
   2 ...(ii) Heat rate (HR) =
dL1 dL1 L
dI2 dI dL2  For minimum value of heat rate
 2 
But
dL1 dL2 dL1
...(iii)
d FG IJ
d I
Also, L2 = L – L1 dL
(HR) = 0 or
H K
dL L
dL2 dL dL1 LdI  IdL
    = 0 or LdI = IdL
dL1 dL1 dL1 L2
Since L is constant. I dI
dL or 
 =0 L dL
dL1 This shows that efficiency will be maximum at a load
dL2 dL1 where heat rate is equal to incremental heat rate.
Hence,  =–1 ..(iv)
dL1 dL1
Substituting in (iii), we get 9.17. TARIFF FOR ELEC TRICAL ENERGY
dI2 dI
 2 ...(v) 9.17.1. Introduction
dL1 dL2
 From (ii) and (v), The cost of generation of electrical energy consists of fixed
cost and running cost. Since the electricity generated is to
dI1 dI be supplied to the consumers, the total cost of generation
 2 ...(vi)
dL1 dL2 has to be recovered from the consumers. Tariffs or energy
Thus, for minimum combined input to carry a given rates are the different methods of charging the consumers
combined output, the slopes of the input-output curve for for the consumption of electricity. It is desirable to charge
each unit must be equal. the consumer according to the maximum demand (kW) and
If there are n units, supplying a constant load, then the energy consumed (kWh). The tariff chosen should
the required condition for the minimum input or maximum recover the fixed cost, operating cost and profit etc. incurred
system efficiency is in generating the electrical energy.
dI1 dI dI dI 9.17.2. Objectives and Requirements of Tariff
 2  3  ......  n ...(vii)
dL1 dL2 dL3 dLn Objectives of tariff :
Condition for maximum efficiency :
1. Recovery of cost of capital investment in
Refer to Fig. 9.7. The load at which efficiency will generating equipment, transmission and
be maximum, the heat rate will be minimum at that load distribution system.
as efficiency is inverse of heat.
 456 POWER PLANT ENGINEERING

2. Recovery of the cost of operation, supplies and 5. Doherty rate (Three-part tariff).
maintenance of the equipment. 6. Wright demand rate.
3. Recovery of the cost of material, equipment, 1. Flat demand rate :
billing and collection cost as well as for The flat demand rate is expressed as follows :
miscellaneous services.
z = ax ...(9.8)
4. A net return on the total capital investment must
i.e., the bill depends only on the maximum demand
be ensured.
irrespective of the amount of energy consumed. It is based
Requirements of tariff : on the customer’s installation of energy consuming devices
1. It should be easier to understand. which is generally denoted by so many kW per month or
2. It should provide low rates for high consumption. per year. It is probably one of the early systems of charging
3. It should be uniform over large population. energy rates. It was based upon the total number of lamps
4. It should encourage the consumers having high installed and a fixed number of hours of use per year. Hence
load factors. the rate could be expressed as a price per lamp or unit of
installed capacity.
5. It should take into account maximum demand
charges and energy charges. Now-a-days the use of this tariff is restricted to signal
system, street lighting etc., where the number of hours are
6. It should provide incentive for using power
fixed and energy consumption can be easily predicted. Its
during off-peak hours.
use is very common to supplies to irrigation tubewells, since
7. It should provide less charges for power the number of hours for which the tubewell feeders are
connection than lighting. switched on are fixed. The charge is made according to horse
8. It should have a provision of penalty for low power of the motor installed.
power factors.
9. It should have a provision for higher demand
charges for high loads demanded at system x=4
peaks.
10. It should apportion equitably the cost of service
to the different categories of consumers. x=3

9.17.3. General Tariff Form

A large number of tariffs have been proposed from time to x=2
z
time and are in use. They are all derived from the following
general equation :
x=1
z = a.x + b.y + c
where, z = Total amount of bill for the period considered,
x = Maximum demand in kW,
y = Energy consumed in kWh during the period
considered, y
a = Rate per kW of maximum demand, and
Fig. 9.8. Flat demand rate.
b = Energy rate per kWh,
c = Constant amount charged to the consumer In this form of tariff the unit energy cost decreases
during each billing period. This charge is progressively with an increased energy usage since the total
independent of demand or total energy cost remains constant. The variation in total cost and unit
because a consumer that remains connected cost are given in Fig. 9.8.
to the line incurs expenses even if he does not By the use of this form of tariff the cost of metering
use energy.
equipment and meter reading is eliminated.
Various types of tariffs :
2. Straight meter rate :
The various types of tariffs are :
The straight meter rate can be expressed in the
1. Flat demand rate.
form :
2. Straight meter rate.
z=b.y ...(9.9)
3. Block meter rate.
4. Hopkinson demand rate (Two-part tariff). This is the simplest form of tariff. Here the charge
per unit is constant. The charges depend on the energy
 ECONOMICS OF POWER GENERATION 457

used. This tariff is sometimes used for residential and The variation of bill according to this method is
commercial consumer. The variation of bill according to shown in Fig. 9.10.
the variation of energy consumed is shown in Fig. 9.9. The block meter rate accomplishes the same purpose
of decreasing unit energy charges with increasing
consumption as the step meter rate without its defect. Its
main defect is that it lacks a measure of the customer’s
demand.
This tariff is very commonly used for residential and
commercial customers. In many states of India, a reverse
form of this tariff is being used to restrict the energy
consumption. In this reverse form the unit energy charge
z increases with increase in energy consumption.
4. Hopkinson demand rate (Two-part tariff) :
This method charges the consumer according to his
maximum demand and energy consumption. This can be
expressed as
z = a + by ...(9.10)
This method requires two meters to record the
y maximum demand and energy consumption of the
consumer. The variation of z with respect to y taking x as
Fig. 9.9. Straight meter rate. parameter is shown in Fig. 9.11.
Advantage. Simplicity.
Disadvantages 1. The consumer using no energy
will not pay any amount although he has incurred some
expenses to the power station.
x=3
2. This method does not encourage the use of x=2
electricity unless the tariff is very low. x=1
3. Block meter rate :
In order to remove the inconsistency of straight
meter rate, the block meter rate charges the consumers on z
a sliding scale. The term ‘block’ indicates that a certain
specified price per unit is charged for all or any part of
such units. The reduced prices per unit are charged for all
or any part of succeeding block of units, each such reduced
price per unit applying only to a particular block or portion
thereof.
y

Fig. 9.11. Hopkinson demand rate (Two-part tariff).

This form of tariff is generally used for industrial
customers.
5. Doherty rate (Three-part tariff) :
Refer to Fig. 9.12. When the Hopkinson demand rate
z is modified by the addition of a customer charge, it becomes
a three charge rate or Doherty rate. It was first introduced
by Henry L. Doherty at the beginning of twentieth century.
It consists of a customer or meter charge, plus a demand
charge plus any energy charge. This is expressed as follows :
y = ax + by + c
Many people consider that theoretically this is an
y ideal type of rate. As it requires two meters, it is better
suited for industrial than for residential customers.
Fig. 9.10. Block meter rate.
 458 POWER PLANT ENGINEERING

6. Wright demand rate :

This tariff was introduced by Arthur Wright (of
England) in 1896. This rate intensifies the inducement by
x=3 lowering both the demand and energy charge for a
x=2
reduction in maximum demand or in other words an
x=1
improvement in load factor. This rate is usually specified
for industrial consumers who have some measure of control
over their maximum demands.
z
The rate is modified by stating a minimum charge
which must be paid if the energy for the billing period falls
below the amount by such charge. For allowing fair returns
some adjustment in the rate forms are provided. Some of
them are :
(i) Higher demand charges in summer.
(ii) Fuel price adjustment to provide a rate change
y
when fuel prices deviate from the standard.
Fig. 9.12. Doherty rate (Three-part tariff). (iii) Wage adjustment.
The Doherty rate is sometimes modified by (iv) Tax adjustment.
specifying the minimum demand and the minimum energy (v) Power factor adjustment.
consumption that must be paid for, if they are less than (vi) Discount to be given to the customers for prompt
the minimum values specified. In this manner the customer payment of bills.
charge is incorporated with the demand and energy
component.

WORKED EXAMPLES

Example 9.1. The maximum demand of a power station is 96000 kW and daily load curve is described as follows :

Time hours 0–6 6–8 8–12 12–14 14–18 18–22 22–24

Load (MW) 48 60 72 60 84 96 48

(i) Determine the load factor of power station. (ii) Load factor of standby equipment :
(ii) What is the load factor of standby equipment The standby equipment supplies
rated at 30 MW that takes up all load in excess of 72 MW ? 84 – 72 = 12 MW for 4 hours (14 – 18)
Also calculate its use factor.
96 – 72 = 24 MW for 4 hours (18 – 22)
Solution. Load curve is shown in Fig. 9.13.
 Energy generated by standby equipment
Energy generated = area under the load curve
= 48 × 6 + 60 × 2 + 72 × 4 + 60 × = (12 × 4 + 24 × 4) × 103
2 + 84 × 4 + 96 × 4 + 48 × 2 = 144 × 103 kWh
= 1632 MWh = 1632 × 103 kWh. Time for which standby equipment remains in
(i) Load factor : operation (from the load curve)
1632  103 = 4 + 4 = 8 hours
Average load = = 68000 kW
24 144  103
Maximum demand = 96000 kW (given) Average = = 18 × 103 kW
8
Average load 68000 18  103
 Load factor =  Load factor = = 0.75. (Ans.)
Maximum demand 96000
24  103
= 0.71. (Ans.)
 ECONOMICS OF POWER GENERATION 459

100 96
90 84 Load
80
72 curve
70
Load (MW)

60 60 60
50 48 48
40
30
20
10

0 2 4 6 8 10 12 14 16 18 20 22 24
Time (hours)

Fig. 9.13

E
Use factor =
C  t
where, E = Energy generated,
C = Capacity of the standby equipment, and
t = Actual number of hours the plant has been
in operation.
144  103
 Use factor =
30  103  8
= 0.6. (Ans.)
+Example 9.2. An electrical system experiences linear
changes in load such that its daily load curve is defined as
follows :

Time Load (MW)

12 PM 24
2 AM 12
6 AM 12
8 AM 60 Fig. 9.14
12 AM 60
12.30 PM 48 Chronological load and load duration curves are
1 PM 60 drawn as shown in Fig. 9.14 (a), (b). The procedure for
5 PM 60 constructing the load duration curve from chronological
6 PM 84 load curve is as follows :
12 PM 24 — The abscissa of the load duration curve is laid
off equal to the number of hours in the
(i) Plot the chronological and load duration curve
chronological curve, in this case 24 hours.
for the system.
— The criterion of plotting the load duration curve
(ii) Find the load factor.
makes the abscissa at any load ordinate equal
(iii) What is the utilisation factor of the plant serving to the length of the abscissa intercepted by that
this load if its capacity is 120 MW. load ordinate on the chronological curve. Thus :
Solution. (i) Chronological load and load duration
curves :
 460 POWER PLANT ENGINEERING

(i) At the maximum demand or peak load, the (i) Draw the load curve.
intercept is one point which will be plotted at 0 hour. (ii) Draw load duration curve.
(ii) At 70 MW load the intercept is x1 hours and is (iii) Choose suitable generating units to supply the
plotted as x1 hour on the load duration curve. load.
(iii) At 55 MW load the intercept is a total of (x2 + x3) (iv) Calculate the load factor.
and is plotted accordingly. (v) Calculate the plant capacity factor.
(iv) At minimum load of 12 MW the intercept covers Solution. (i) Load curve :
the entire period of 24 hours.
The load curve is shown in Fig. 9.15 (a).
Following points may be noted :
(ii) Load duration curve :
1. Any point on the load duration curve is a measure
The load duration curve is shown in Fig. 9.15 (b).
of number of hours in a given period during
which the given load and higher loads have (iii) Selection of generating units :
prevailed. Load duration curve will indicate the operation
2. If the chronological curve indicated a constant schedule of different generating units.
demand during the entire day, it would be of 1. One generating unit (unit 1) of 45 MW
rectangular shape and load duration curve would will run for 24 hours
be an exact duplicate. 2. Second generating unit (unit 2) of 45 MW
(ii) Load factor : will run for 18 hours
From the load duration curve, the average load can 3. Third generating unit (unit 3) of 45 MW
be estimated. will run for 10 hours
Average load for the period 4. Fourth generating unit (unit 4) of 15 MW
Total energy in load curve for period will run for 4 hours
=
Total number of hours in period One additional unit (unit 5) should be kept as
FG 24 + 12 IJ  2  12  4  FG 12  60 IJ standby. Its capacity should be equal to the capacity of
H 2 K H 2 K biggest set, i.e., 45 MW.

 2  60  4  G
F 60  48 IJ  1 Energy generated
H 2 K 2 = 45 × 6 + 135 × 6 + 90 × 2 + 150 × 4 + 75 × 6

G
F 48  60 IJ  1  60  4  FG 60  84 IJ = 270 + 810 + 180 + 600 + 450 = 2310 MWh
H 2 K 2 H 2 K Average load
2310  103
 1 G
F 84  24 IJ  6 = kW = 96250 kW

=
H 2 K 24
Maximum demand
24
= 150 × 103 = 150000 kW
36  48  72  240  27  27  240  72  324
=
24
1086
= = 45.2 MW
24
 Load factor
45.2
= = 0.45 or 54%. (Ans.)
84
(iii) Utilisation factor :
Utilisation factor
Maximum load
=
Rated capacity of the plant
84
= = 0.70 or 70%. (Ans.)
120
+Example 9.3. A power station has to supply load as
follows :
(a) Load curve
Time (hours) : 0–6 6–12 12–14 14–18 18–24
Load (MW) : 45 135 90 150 75
 ECONOMICS OF POWER GENERATION 461

96250
= = 0.64. (Ans.)
150000
(v) Plant capacity factor :
Plant capacity factor

E
=
Ct
where, E = Energy generated (kWh),
C = Capacity of the plant (kW),
= 45 × 4 + 1 × 15 = 195 MW = 195 × 103 kW, and
t = Number of hours in the given period
= 24 hours.
 Plant capacity factor
(b) Load duration curve
2310  103
Fig. 9.15 = = 0.49. (Ans.)
195  103  24
(iv) Load factor :
Example 9.4. A generating station has a maximum demand
Average load
 Load factor = of 5000 kW, and the daily load on the station is as follows :
Maximum demand

Load (MW) 1000 1750 4000 1500

Time 11 PM to 8 AM 6 AM to 8 AM 8 AM to 12.00 Noon 12 PM to 1 PM

Load (MW) 3750 4250 5000 2250

Time (hours) 1 PM to 5 PM 5 PM to 7 PM 7 PM to 9 PM 9 PM to 11 PM

(i) Draw the load curve. 66000

or Average load = = 2750 kW
(ii) Draw the load duration curve. 24
(iii) Select the size and number of generator units. Average load 2750
 Load factor = 
(iv) What reserve plant would be necessary ? Maximum demand 5000
(v) Load factor. = 0.5. (Ans.)
(vi) Plant capacity factor.
Solution. (i) Load curve is shown in Fig. 9.16 (a).
(ii) Load duration curve is shown in Fig. 9.16 (b).
(iii) Size and number of generator units :
From the load duration curve it is evident that
generating sets of capacity 1000 kW, 1500 kW and 2500 kW
will fulfil the requirement.
(iv) Reserve capacity :
Also, reserve capacity = largest size of the unit in
the station = 2500 kW. (Ans.)
(v) Load factor :
Area under the load curve gives the energy
generated during 24 hours
= 1000 × 7 + 1750 × 2 + 4000 × 4 + 1500 × 1
+ 3750 × 4 + 4250 × 2 + 5000 × 2 + 2250 × 2
= 7000 + 3500 + 16000 + 1500 + 15000 + 8500 (a) Load curve
+ 10000 + 4500
= 66000 kWh
 462 POWER PLANT ENGINEERING

Maximum demand
Demand factor =
Connected load
50 50
=  = 0.89
20 + 17 + 10 + 9 56
Hence, demand factor = 0.89. (Ans.)
Example 9.6. The yearly duration curve of a certain plant
can be considered as a straight line from 300 MW to
80 MW. Power is supplied with one generating unit of
200 MW capacity and two units of 100 MW capacity each.
Determine :
(i) Installed capacity (ii) Load factor
(iii) Plant factor (iv) Maximum demand
(b) Load duration curve
(v) Utilization factor.
Fig. 9.16 Solution. The load duration curve is shown in Fig. 9.17.
(vi) Plant capacity factor :
Plant capacity factor 300
E 66000
=  Load duration
C  t (2500  1500  1000  2500)  24 curve
= 0.367. (Ans.)
200
Example 9.5. A 60 MW power station has an annual peak
Load (MW)

load of 50 MW. The power station supplies loads having

maximum demands of 20 MW, 17 MW, 10 MW and 9 MW.
The annual load factor is 0.45. Find : 100
(i) Average load. 80
(ii) Energy supplied per year.
(iii) Diversity factor.
0
(iv) Demand factor. 0 4380 8760
Solution. Capacity of power station = 60 MW Time (hours)
Maximum demand on power station = 50 MW
Fig. 9.17. Load duration curve.
(i) Average load :
(i) Installed capacity :
Average load
Load factor = Installed capacity
Maximum demand
Average load = 200 + 2 × 100 = 400 MW. (Ans.)
i.e., 0.45 =
50 (ii) Load factor :
 Average load = 50 × 0.45 = 22.5 MW. (Ans.) Load factor
(ii) Energy supplied per year :
Average load
Energy supplied per year =
Maximum demand
= Average load × number of hours in one year
Average load
= (22.5 × 103) × 365 × 24
= 197.1 × 106 kWh. (Ans.) Total energy in load curve for the period
=
(iii) Diversity factor : Total number of hours in the period
Diversity factor 80  8760 + 1  (300  80)  8760
2
Sum of individuals maximum demands =
8760
=
Simultaneous maximum demand 8760 LM 1 OP
=
20 + 17 + 10 + 9 56
 = 1.12
=
8760 N
80  (300  80) = 190 MW
2 Q
50 50
190
Hence diversity factor = 1.12. (Ans.)  Load factor = = 0.633. (Ans.)
300
(iv) Demand factor :
 ECONOMICS OF POWER GENERATION 463

(iii) Plant factor : = 4.32 × 105 kWh. (Ans.)

Average load 190 (iv) Maximum energy that could be produced
Plant factor =  daily :
Capacity of the plant 400
= 0.475. (Ans.) Maximum energy that could be produced, operating
as per operating schedule
(iv) Maximum demand = 300 MW. (Ans.)
(v) Utilization factor : Actual energy produced
=
Utilization factor Plant use factor
Maximum load 4.32  105
= = = 5.268 × 105 kWh. (Ans.)
Rated capacity of the plant 0.82
300 Example 9.8. A power station has the following loads :
= = 0.75. (Ans.) 1. Residential lighting load :
400
Maximum demand = 1200 kW
+Example 9.7. A generating station has a maximum
demand of 30 MW, a load factor of 0.6, a plant capacity of Load factor = 0.21
0.48, and a plant use factor of 0.82. Find : Diversity between consumers = 1.32
(i) The daily energy produced. 2. Commercial load :
(ii) The reserve capacity of the plant. Maximum demand = 2400 kW
(iii) The maximum energy that could be produced if Load factor = 0.32
the plant were running all the time. Diversity between consumers = 1.2
(iv) The maximum energy that could be produced 3. Industrial load :
daily, if the plant when running according to operating Maximum demand = 6000 kW
schedule were fully loaded. Load factor = 0.82
Solution. Maximum demand of the power station Diversity between consumers = 1.22
= 30 MW Overall diversity factor may be taken as 1.42.
Load factor = 0.6 Determine the following :
Plant capacity = 0.48 (i) Maximum demand on system.
Plant use factor = 0.82 (ii) Daily energy consumption (total).
(i) The daily energy produced : (iii) Overall load factor.
Average demand (iv) Connected load (total) assuming that demand
Load factor =
Maximum demand factor for each load is unity.
Average demand Solution. (i) Maximum demand on system :
0.6 = Group diversity factor
30
 Average demand Sum of individual maximum demands
=
= 30 × 0.6 = 18 MW or 18000 kW Actual maximum demand of the group
Daily energy product = Average demand × number 1200 + 2400 + 6000
of hours  1.42 =
Maximum demand on system
= 18000 × 24 = 4.32 × 105 kWh. (Ans.) i.e., Maximum demand on system
(ii) Reserve capacity of the plant : 1200 + 2400 + 6000
Average demand =
Plant capacity factor = 1.42
Installed capacity = 6760.5 kW. (Ans.)
18000 (ii) Daily energy consumption :
0.48 =
Installed capacity Average demand
Load factor =
18000 Maximum demand
 Installed capacity = = 37500 kW or Average demand = Maximum demand × load factor
0.48
 Reserve capacity of the plant = 1200 × 0.21 + 2400 × 0.32
= Installed capacity – maximum demand + 6000 × 0.82
= 37500 – 30000 = 7500 kW. (Ans.) = 5940 kW
(iii) Maximum daily energy produced when  Daily energy consumption
running all the time = 5940 × 24 = 142560 kWh. (Ans.)
 464 POWER PLANT ENGINEERING

(iii) Overall load factor : Solution. (i) Maximum demand :

Average demand Maximum demand on power station
Overall load factor =
Maximum demand Sum of individual maximum demands
=
5940 Diversity factor
= = 0.878. (Ans.) 10 + 5 + 8 + 7
6760.5
=
(iv) Connected load : 1.5
Maximum demand = 20 MW or 20000 kW. (Ans.)
= 1200 × 1.32 + 2400 × 1.2 + 6000 × 1.22 (ii) Annual energy supplied :
= 11784 kW Average load = Maximum demand × load factor
Connected load = 20000 × 0.6 = 12000 kW
Maximum demand 11784 Annual energy supplied from the station
= 
Demand factor 1 = Average load × (365 × 24)
= 11784 kW. (Ans.) = 12000 × (365 × 24)
Example 9.9. The following data relates to a steam power = 105.12 × 106 kWh. (Ans.)
plant : Installed capacity and number of units :
Maximum demand = 30000 kW Considering 50% increase in maximum demand on
Load factor = 0.42 the power station in next five years, the installed capacity
Coal consumption = 1.1 kg/kWh should be 30000 kW or 30 MW. (Ans.)
Boiler efficiency = 84% Select, four similar units each of 7.5 MW capacity
because minimum number of spare parts will be required
Turbine efficiency = 88%
to be stored, at the same time three units can supply present
Price of coal = ` 70 per tonne. maximum demand and fourth unit can be taken out for
Determine the following : routine maintenance or during breakdown without any
(i) Thermal efficiency of the plant. disruption in supply.
(ii) Coal bill of the plant for one year. Example 9.11. The peak load on a 50 MW power station is
Solution. (i) Thermal efficiency of the plant : 39 MW. It supplies power through four transformers whose
Thermal efficiency of the plant connected loads are 17, 12, 9 and 10 MW. The maximum
demands on these transformers are 15, 10, 8 and 9 MW
= Boiler efficiency × turbine efficiency
respectively. If the annual load factor is 50% and the plant
= 0.84 × 0.88 = 0.7392 or 73.92%. (Ans.) is operating for 65% of the period in a year, find out the
(ii) Coal bill : following :
Average demand on station = Maximum demand × (i) Average load on the station
load factor (ii) Energy supplied per year
= 30000 × 0.42 = 12600 kW (iii) Demand factor
 Energy generated per year (iv) Diversity factor
= 12600 × (365 × 24) kWh (v) Power station use factor.
 Coal consumption Solution. Power station rated capacity
= 12600 × (365 × 24) × 1.1 kg per year = 50 MW or 50000 kW
 Coal bill Maximum demand on the power station
12600  (365  24)  1.1  70 = 39 MW or 39000 kW
=
1000 Sum of connected load
= ` 8498952. (Ans.)
= 17 + 12 + 9 + 10 = 48 MW or 48000 kW
+Example 9.10. A power station is to supply for regions Sum of maximum demands on the transformers
of load whose peak loads are 10 MW, 5 MW, 8 MW and = 15 + 10 + 8 + 9 = 42 MW or 42000 kW
7 MW. The diversity factor of the load at the station is 1.5 Annual load factor = 50% or 0.5
and the average annual load factor is 0.6. Calculate :
Plant operating period
(i) Maximum demand on the station.
= 0.65 × (365 × 24) = 5964 hours.
(ii) Annual energy supplied from the station.
(i) Average load on the station :
Suggest the installed capacity and the number of
Average load on the station = Maximum demand ×
units taking all aspects into account.
load factor
 ECONOMICS OF POWER GENERATION 465

= 39000 × 0.5 = 19500 kW. (Ans.) Standby power station :

(ii) Energy supplied per year : 17  106
Energy supplied per year Annual average load = = 1940.6 kW
365  24
= Average load × (365 × 24) (i) Load factor
= 19500 × 8760 Average load 1940.6
= 170.82 × 106 kWh. (Ans.) = 
Maximum demand 18  1000
(iii) Demand factor : = 0.1078. (Ans.)
Maximum demand Energy generated
Demand factor = (ii) Capacity factor =
Sum of connected load Capacity  (24  365)
39000
= = 0.8125. (Ans.) 17  106
48000 =
(iv) Diversity factor : 22  1000  24  365
Sum of maximum demands = 0.088. (Ans.)
Diversity factor =
Maximum demand +Example 9.13. A base load station having a capacity of
42000 18 MW a standby station having a capacity of 20 MW share
= = 1.077. (Ans.)
39000 a common load. Find (i) annual load factor, (ii) use factor,
(v) Power station use factor : and (iii) capacity factor of the two power stations from the
Use factor following data :
Energy generated per year Annual standby station output
=
Rated capacity  number of operating hours = 7.35 × 106 kWh
170.82  106 Annual base load station output
= = 0.6 or 60%. (Ans.)
50000  5694 = 101.35 × 106 kWh
Example 9.12. A base load power station and standby Peak load on the standby station
power station share a common load as follows :
= 12 MW
Base load station annual output = 180 × 106 kWh
Hours of use of standby station during the year
Base load station capacity = 42 MW
= 2190 hours.
Maximum demand on base load station
Solution. Standby station :
= 36 MW
Capacity of standby station
Standby station capacity = 22 MW
= 20 MW or 20000 kW
Standby station annual output = 17 × 106 kWh
Maximum demand on standby station
Maximum demand (peak load) on stand by station
= 12 MW or 12000 kW
= 18 MW
Annual standby station output
Determine the following for both power stations :
= 7.35 × 106 kWh
(i) Load factor.
Hours of use of standby station during the year
(ii) Capacity (or plant) factor.
= 2190 hours
Solution. Base load station :
Annual average load of standby station
180  106 Output in kWh 7.35  106
Average load = = 20548 kW = 
365  24 365  24 365  24
Average load 20548 = 839 kW
(i) Load factor = 
Maximum demand 36  103 (i) Annual load factor :
= 0.57. (Ans.) Annual load factor
(ii) Capacity factor Annual average load 839
= =
Energy generated Maximum demand 12000
=
Capacity of plant  (24  365) = 0.07 or 7%. (Ans.)
(ii) Use factor :
180  106
= Use factor
42  1000  24  365
= 0.489. (Ans.) Total kWh generated
=
Rated capacity of station
 Number of operating hours
 466 POWER PLANT ENGINEERING

Solution. Capital cost, P = ` 96000.

7.35  106
= 5
20000  2190 Salvage value, S= × 96000 = ` 4800
100
= 0.1678 or 16.78%. (Ans.)
Rate of interest on sinking fund, i = 5% or 0.05
(iii) Capacity factor :
Life, n = 10 years
Average load 839  Annual sinking fund payment
Capacity factor = 
Rated capacity 20000
= (P – S)
LM i OP
= 0.0419 or 4.19%. (Ans.) N (1  i) n
 1Q
Base load station :
Capacity of base load station = (9600 – 4800)
LM 0.05 OP
= 18 MW or 18000 kW N (1  0.05)
10
 1Q
= ` 7250.8
Assume maximum demand on base load station
Total cost per year :
equal to its rated capacity i.e., 18 MW.
Annual base load station output Annual sinking fund
= 101.35 × 106 kWh = ` 7250.8
Annual average load of base load station Annual repair and maintenance cost
Output in kWh = ` 3000
=
365  24 Annual cost of chemicals
101.35  106 = ` 6000
= = 11570 kW Annual labour cost
365  24
(i) Annual load factor : = (360 × 12) = ` 4320
Annual load factor  Total cost per year
Annual average load = 7250.8 + 3000 + 6000 + 4320
=
Maximum demand = ` 20570.8. (Ans.)
11570 Example 9.15. The output of a generating station is 500 ×
= = 0.643 or 64.3%. (Ans.)
18000 106 kWh per year and average load factor is 0.7. If the
(ii) Use factor : annual fixed charges are ` 50 per kW of installed plant and
Use factor annual running charges are 5 per kWh, what is the cost per
Total kWh generated kWh of energy at the bus bar.
=
Rated capacity  Number of operating hours Solution. Output energy per annum = 500 × 106 kWh
6
101.35  10 Average load
=
18000  (365  24) Annual average load 500  106
= 
= 0.643 or 64.3%. (Ans.) 365  24 365  24
(iii) Capacity factor : = 57077 kW
Average load 11570 Maximum demand
Capacity factor = 
Rated capacity 18000 Average load 57077
= 
= 0.643 or 64.3%. (Ans.) Load factor 0.7
= 81538 kW
COST ANALYSIS Assuming installed capacity equal to maximum
Example 9.14. Determine the annual cost of a feed water demand,
softner from the following data : Fixed charges = 50 × 81538 = ` 4076900
Cost = ` 96000 Running charges
Salvage value = 5% 5
=` × 500 × 106 = ` 25000000
Life = 10 years 100
Annual repair and maintenance cost = ` 3000 Total annual charges
Annual cost of chemicals = ` 6000 = ` 25000000 + ` 4076900
Labour cost per month = ` 360 = ` 29076900
Interest on sinking fund = 5%.
 ECONOMICS OF POWER GENERATION 467

Cost of energy at bus-bar Cost of coal including transportation

Total annual charges = ` 4.4 per kN
=
Output energy per annum Operating cost
= ` 500000
29076900
= Plant maintenance cost :
500  106
(i) Fixed = ` 20000 per annum
= ` 0.058 or 5.8 p/kWh. (Ans.)
(ii) Variable = ` 30000 per annum
Example 9.16. From the following data calculate the cost
of generation per unit delivered from the power plant : Installed plant capacity
Installed capacity of the power plant = 200 MW = 10000 kW
Annual load factor = 0.4 Maximum demand
= 9000 kW
Capital cost of power plant = ` 280 lacs
Annual load factor
Annual cost of fuel, oil, salaries, taxation
= 0.6
= ` 60 lacs.
Consumption of coal
Interest and depreciation = 13%. = 255000 kN
Solution. Installed capacity of the power plant Determine the following :
= 200 MW or 200 × 103 kW (i) Cost of power generation per kW per year.
Assuming maximum demand equal to installed (ii) Cost per kWh generated.
capacity,
(iii) Total cost of generation per kWh.
Maximum demand = 200 × 103 kW
Transmission or primary distribution chargeable to
Annual load factor = 0.4 generation.
Total units generated per annum Solution. Installed capacity of plant
= Maximum demand × load factor × (365 × 24) = 10 MW or 10000 kW
= 200 × 103 × 0.4 × (365 × 24) = 700.8 × 106 kWh Total cost of plant
Capital cost of the power plant = ` 280 × 105 = ` 10000 × 1200 = ` 12 × 106
Annual interest and depreciation Annual interest, insurances and taxes
13 = ` 0.05 × 12 × 106 = ` 0.06 × 106
= ` 280 × 106 × = ` 3.64 × 106
100 = ` 600000
Annual cost of fuel, oil, salaries, taxation etc. Annual depreciation
= ` 60 × 105 or 6 × 106 = ` 0.05 × 12 × 106 = ` 0.6 × 106
Total annual cost = ` 600000
= ` 3.64 × 106 + ` 6 × 106 = ` 9.64 × 106 Annual interest, insurance, taxes and depreciation
Generating cost on primary distribution
Total annual cost = ` 0.05 × 500000 = ` 25000
=
Total units generated per annum Annual plant maintenance cost (fixed)
= ` 20000
9.64  106
= Total fixed cost
700.8  106
= ` (600000 + 600000 + 25000 + 20000)
= ` 0.0137 or 1.37 p/kWh. (Ans.)
= ` 1245000
+Example 9.17. The following data relate to a 10 MW Annual operating cost
power station : = ` 500000
Cost of plant = ` 1200 per kW Annual plant maintenance cost (variable)
Interest, insurances and taxes = ` 30000
= 5% per annum Annual cost of coal
Depreciation = 5% = ` 4.4 × 255000 = ` 1122000
Cost of primary distribution Total annual running cost
= ` 500000 = ` (500000 + 300000 + 1122000)
Interest, insurances, taxes and depreciation = ` 1652000
= 5% Maximum demand
= 9000 kW
 468 POWER PLANT ENGINEERING

Annual load factor Annual cost of fuel and lubricants

= 0.6 = ` 70 lacs = ` 7 × 106
Average load Annual cost of transport and storage
= 9000 × 0.6 = 5400 kW = ` 10 lacs = ` 1 × 106
Annual energy generated Annual cost of salaries and wages
= 5400 × 365 × 24 = 47.3 × 106 kWh = ` 12 lacs = ` 1.2 × 106
(i) Cost of power generation per kW per year : Annual miscellaneous cost
Annual cost per kW of maximum demand
= ` 2 lacs = ` 0.2 × 106
Fixed cost per annum Annual interest and depreciation
=
Maximum demand 15
= ` 350 × 106 × = ` 52.5 × 106
1245000 100
= = ` 138.33. (Ans.)
9000 Total annual cost
(ii) Cost per kWh generated : = ` (0.5 + 7 + 1 + 1.2 + 0.2 + 52.5) × 106
Annual cost/kWh = ` 62.4 × 106
Annual running cost Total energy generated per annum
=
Annual energy generated = Maximum demand × average load factor
1652000 × (365 × 24)
= = ` 0.035 or 3.5 p. (Ans.)
47.3  106 = 200000 × 0.6 × (365 × 24)
(iii) Total cost per kWh : = 1051.2 × 106 kWh
Total cost per kWh Cost of generation
Total annual cost Total annual cost
= =
Annual energy generated Total units generated
1245000 + 1652000 62.4  106
= = = ` 0.0594 per kWh
47.3  106
1051.2  106
= ` 0.06 or 6 p. (Ans.) or 5.94 paise per kWh. (Ans.)
Example 9.18. Annual 200 MW steam power station is If the load factor is improved to 75% :
estimated to cost ` 350 millions. Other costs are as follows :
Total energy generated per annum
Insurance and taxes
= 200000 × 0.75 × (365 × 24)
= ` 5 lacs per annum
= 1314 × 106 kWh
Fuel and lubricants
= ` 70 lacs per annum Annual operating cost
Transport and storage = ` (0.5 + 7 × 1.1 × 106 + 1 + 1.2
= ` 10 lacs per annum + 0.2 + 52.5) × 106
= ` 63.1 × 10 6
Salaries and wages
= ` 12 lacs per annum Cost of generation
Miscellaneous Total annual cost
=
= ` 2 lacs per annum Total units generated
Reckoning interest and depreciation at 15% per
63.1  106
annum of capital cost, determine : = = ` 0.048 per kWh
1314  106
The cost of energy generated per unit if the power
or 4.8 paise per kWh. (Ans.)
station works at an average load factor of 0.6. What would
it be, if the load factor be increased to 75% with a consequent Example 9.19. A steam station has two 110 MW units.
increase in fuel costs by 10%, other costs remaining the Following cost data are given :
same ?
Particulars Units A Units B
Solution. Capacity of steam power station
= 200 MW or 200000 kW Capital cost ` 2400 per kW ` 3000 per kW
Cost of power station Fixed charge rate 10% 10%
= ` 350 millions = ` 350 × 106 Capital factor 0.55 0.60
Annual cost of insurance and taxes Fuel consumption 1 kg/kWh 0.9 kg/kWh
= ` 5 lacs = ` 0.5 × 106 Fuel cost ` 96 per 1000 kg ` 96 per 1000 kg
 ECONOMICS OF POWER GENERATION 469

Annual cost of 20% of annual 15% of annual 10

=` × 3000 × 110 × 1000 = ` 33 × 106
operation, labour fuel cost fuel cost 100
maintenance and Expected annual energy output
supplies = (110 × 1000) × (365 × 24) × 0.6
Utilisation factor 1 1 = 57.816 × 107 kWh
Calculate the following : Annual fuel consumption
(i) Annual plant cost and generation cost of unit A. = 0.9 × 57.816 × 107 = 52.0344 × 107 kg
(ii) Annual plant cost and generation cost of unit B. 96
Fuel cost = × 52.0344 × 107 = ` 49.95 × 106
(iii) Overall generation cost of the station. 100
Annual cost of maintenance, repair etc.
Solution. (i) Annual plant cost and generation cost
of unit A : 15
=` × 49.95 × 106 = ` 7.4925 × 106
Annual fixed cost of unit A 100
Annual operating cost
10
= × 2400 × (100 × 1000) = Fuel cost + maintenance cost
100
= ` (49.95 × 106 + 7.4925 × 106)
= ` 26.4 × 106
= ` 57.4425 × 106
Annual energy output
Annual plant cost of unit B
= Maximum demand × capacity factor
= Fixed cost + operating cost
× no. of hours
= ` 33 × 106 + 57.4425 × 106
= (100 × 1000) × 0.55 × (356 × 24)
= ` 90.4425 × 106 (Ans.)
= 52.998 × 107 kWh
Generation cost of unit B
Annual fuel consumption
= 1 × 52.998 × 107 Annual plant cost
=
= 52.998 × 107 kg Annual energy output
96 90.4425  106
Fuel cost = × 52.998 × 107 = ` 50.87 × 107 =
1000 57.816  107
Annual cost of operating labour, maintenance and = ` 0.1564 or 15.64 p/kWh. (Ans.)
supplies (iii) Overall generation cost of the station
= 20% of annual cost Sum of annual plant cost of both units
=
20 Sum of energy supplied
= × 50.87 × 106 = ` 10.174 × 106
100 87.444  106  90.4425  106
The annual operating cost of unit A =
52.998  107  57.816  107
= Annual fuel cost + annual cost of = ` 0.16 or 16 p/kWh. (Ans.)
operation, labour and maintenance
= ` (50.87 × 106 + 10.174 × 106)
+Example 9.20. The annual costs of operating a
15000 kW thermal power station are as follows :
= ` 61.044 × 106
Cost of plant = ` 1080 per kW
Annual plant cost of unit A Interest, insurance, taxes on plant
= Annual fixed cost + annual operating cost = 5 per cent
= ` (26.4 × 106 + 61.044 × 106) Depreciation = 5 per cent
= ` 87.444 × 106. (Ans.) Cost of primary distribution system
Generation cost of unit A = ` 600000
Annual plant cost Interest, insurance, taxes and depreciation
= on primary distribution system
Annual energy output
= 5 per cent
87.444  106 Cost of secondary distribution system
= = ` 0.165
52.998  107 = ` 1080000
or 165.5 p/kWh. (Ans.) Interest, taxes, insurance and depreciation on
(ii) Annual plant cost and generation cost of secondary distribution system
unit B : = 5 per cent
Annual fixed cost of unit B Maintenance of secondary distribution system
= ` 216000
 470 POWER PLANT ENGINEERING

Plant maintenance cost Plant depreciation

(i) Fixed cost = ` 36000 = ` 810000
(ii) Variable cost = ` 48000 Interest, taxes, insurance and depreciation on :
Operating costs = ` 720000 Primary distribution system
Cost of coal = ` 7.2 per kN = ` 30000
Consumption of coal = 300000 kN Secondary distribution system
= ` 54000
Dividend to stock holders = ` 1200000
Fixed part of plant maintenance
Energy loss in transmission = 10 per cent
= ` 36000
Maximum demand = 14000 kW
Dividend of stock-holder
Diversity factor = 1.5
= ` 1200000
Load factor = 0.7
 Total fixed cost
Determine : (i) Charge per kW per year = ` 2940000
(ii) Rate per kWh. Sum of maximum demand of consumers
Solution. Maximum demand = 14000 kW = Maximum demand × diversity factor
Average load = 14000 × 1.5 = 21000 kW
Load factor = 0.7 =
Maximum demand 2940000
 Average load = 0.7 × 14000 = 9800 kW Charge per kW per year =
21000
 Energy generated per year = ` 140 per kW. (Ans.)
= 9800 × (365 × 24) (ii) Rate per kWh :
= 85.8 × 106 kWh Variable costs
Cost of plant = Capacity of plant × cost per kW Cost of coal = ` 2160000
= 15000 × 1080 = ` 16.2 × 106 Plant maintenance = ` 48000
Interest, insurances, taxes on plant Operating costs = ` 720000
5 Maintenance of secondary distribution system
= × 16.2 × 106 = ` 810000
100 = ` 216000
5 Total variable cost = ` 3144000
Plant depreciation = × 16.2 × 106 = ` 810000
100 Energy loss in transmission
Cost of primary distribution system = ` 600000 = 10 per cent
Interest, insurance, taxes, depreciation on primary  Net energy transmitted
distribution system = 0.9 × 85.8 × 106
5 = 77.22 × 106 kWh
= × 600000 = ` 30000
100 3144000
Cost of secondary distribution system = ` 1080000  Rate per kWh =
77.22  106
5 = ` 0.0407
= × 1080000 = ` 54000
100 or 4.07 p/kWh. (Ans.)
Cost of coal = 7.2 × 300000 = ` 2160000. Example 9.21. It is proposed to supply a load with a
(i) Charge per kW per year : maximum demand of 100 MW and a load factor of 0.4.
Fixed costs Choice is to be made from nuclear, hydro and steam power
Interest, taxes and insurance on plant plants. Calculate the overall cost per kWh in each scheme.
= ` 810000
Cost Nuclear power plant Hydro-power plant Steam power plant

Capital per kW installed ` 6000 ` 4320 ` 2160

Interest 10% 10% 12%
Depreciation 10% 8% 12%
Operating cost per kWh 12 paise 6 paise 18 paise
Transmission and distri-
bution cost/kWh 0.24 paise 0.96 paise 0.24 paise
 ECONOMICS OF POWER GENERATION 471

Solution. (i) Nuclear power plant : 12

Depreciation =` × 21.6 × 107
Capital cost = 6000 × (100 × 103) = ` 60 × 107 100
10 = ` 25.92 × 106
Interest = × 60 × 107 = ` 6 × 107 Annual fixed cost = Interest + depreciation
100
Depreciation = ` 6 × 107 = ` 2 × 25.92 × 106 = ` 51.84 × 106
Annual fixed cost (interest + depreciation) Running cost/kWh = 18 + 0.24 = 18.24 p
= ` 12 × 107 Overall cost/kWh = Running cost/kWh
Energy generated per year + fixed cost/kWh
= Average load × (365 × 24) 51.84  106
= 18.24 + × 100
= Load factor 350.4  106
× maximum demand × (365 × 24) = 18.24 + 14.79 = 33.03 p. (Ans.)
= 0.4 × (100 × 103) × (365 × 24) From the above calculations it is concluded that
= 350.4 × 106 kWh overall cost/kWh is minimum in case of hydropower plant.
Running cost per kWh +Example 9.22. A power plant of 180 MW installed
= Operating cost per kWh capacity has the following data :
+ transmission and distribution Capital cost = ` 2160/kW installed
cost per kWh Interest and depreciation = 12 per cent
= 12 + 0.24 = 12.24 p Annual load factor = 0.6
 Overall cost per kWh Annual capacity factor = 0.5
= Running cost/kWh + fixed cost/kWh Annual running charges = ` 36 × 106
12  107 Energy consumed by power auxiliaries
= 12.24 + × 100
350.4  106 = 6 per cent
= 46.48 p. (Ans.) Calculate : (i) Reserve capacity
(ii) Hydro-electric power plant : (ii) Generation capacity.
Capital cost = 4320 × 100 × 103 = ` 43.2 × 107
Average load
10 Solution. Load factor =
Interest = × 43.2 × 107 = ` 43.2 × 106 Maximum demand
100
Average load
8 and Capacity factor =
Depreciation = × 43.2 × 107 = 34.56 × 106 Rated capacity
100
Annual fixed cost  Load factor Rated capacity

= Interest + depreciation Capacity factor Maximum demand
= ` (43.2 + 34.56) × 106 0.6 180

= ` 77.76 × 106 0.5 Maximum demand
Running cost per kWh  Maximum demand
= (Operation cost + transmission cost) 0.5  180
= = 150 MW.
= (6 + 0.96) p = 6.96 p 0.6
(i) Reserved capacity :
Overall cost per kWh
Reserved capacity
= Running cost/kWh
= Installed/rated capacity – maximum demand
+ annual fixed cost/kWh
= 180 – 150 = 30 MW. (Ans.)
77.76  106
= 6.96 + × 100 (ii) Generation cost :
350.4  106 Average load = Load factor × maximum demand
= 6.96 + 22.2 = 29.16 p. (Ans.)
= 0.6 × 150 = 90 MW
(iii) Steam power plant :
Energy generated per annum
Capital cost = ` 2160 × 100 × 103
= 90 × 103 × (365 × 24)
= ` 21.6 × 107
= 788.4 × 106 kWh
12 Energy consumed by auxiliaries
Interest =` × 21.6 × 107
100
6
= ` 25.92 × 106 = × 788.4 × 106 = 47.3 × 106 kWh
100
 472 POWER PLANT ENGINEERING

Net energy available When the load factor is raised to 0.5 :

= 788.4 × 106 – 47.3 × 106 Average load = Load factor × maximum demand
= 741.1 × 106 kWh = 0.5 × 180 = 90 MW
Fixed cost of generation Energy produced per annum
= Interest + depreciation = 90 × 103 × 365 × 24
12 = 788.4 × 106 kWh
=` × 2160 × 180 × 103 = ` 46.65 × 106
100 Total annual cost will not change.
Total annual cost 90  106
= Running cost + fixed cost  Cost per kWh = × 100
788.4  106
= 36 × 106 + 46.65 × 106 = ` 82.65 × 106 = 11.41 p. per kWh
 Generation cost
 Saving in cost per kWh
82.65  106 = 14.27 – 11.41
= × 100 = 11.1 p. (Ans.)
741.1  106 = 2.86 p. (Ans.)
Example 9.23. A power station has the installed capacity Example 9.24. A 60 MW generating station has the
of 180 MW. Calculate the cost of generation, other data following data :
pertaining to power station are given below : Capital cost = ` 18 × 106
Capital cost = ` 300 × 106 Annual taxation = ` 0.48 × 106
Rate of interest and depreciation Annual salaries and wages = ` 1.44 × 106
= 18 per cent Cost of coal = ` 72 per tonne
Annual cost of fuel oil, salaries and taxation
Calorific value (C.V.) of coal = 23000 kJ/kg
= ` 36 × 106 Rate of interest and depreciation
Load factor = 0.4 = 12 per cent
Also calculate the saving in cost per kWh if the Plant heat rate = 138000 kJ/kWh at 100% capacity
annual load factor is raised to 0.5.
Calculate the generating cost/kWh at 100% capacity
Solution. Assuming maximum demand equal to the factor.
capacity of the power plant,
Solution. Maximum demand
Average load
Load factor = = 60 MW (= peak load)
Maximum demand
Fixed cost = Interest and depreciation on
Average load capital cost
0.4 =
180
12
 Average load = 0.4 × 180 = 72 MW =` × 18 × 106 = ` 2.16 × 106
100
Energy generated per annum
Running cost = Annual salaries, wages and
= 72 × 103 × (365 × 24)
taxation
= 630.72 × 106 kWh 6
= ` (1.44 + 0.48) 10
Fixed cost = Interest and depreciation on capital cost
= ` 1.92 × 106
18 At 100% capacity factor :
= × 300 × 106 = ` 54 × 106
100 Rated/installed capacity
Running (operating cost)
= 60 MW
= Cost of fuel oil, salaries and taxation
Average load
= ` 36 × 106 Capacity factor = =1
Rated capacity
Total annual cost
or Average load = Rated capacity = 60 MW
= Fixed cost + operating cost
Average energy produced per annum
= ` (54 + 36) × 106
= 60 × 103 × (365 × 24) kWh
= ` 90 × 106
 Cost per kWh = 525.6 × 106 kWh
Total plant heat rate
90  106
= × 100 = 138000 × 525.6 × 106 kJ
630.72  106
= 14.27 p. per kWh. (Ans.)
 ECONOMICS OF POWER GENERATION 473

Weight of coal required per annum When load, L = 5 MW

138000  525.6  106 Input, I5 = 4 × 106 (10 + 8 × 5 + 0.4 × 52)
= tonnes
23000  1000 = 240 × 106 kJ/h
= 3.15 × 106 tonnes Increase in input required
Cost of fuel = ` 72 × 3.15 × 106 = I5 – I3
= ` 226.8 × 106 = (240 – 150.4) × 106
Total annual cost = ` (2.16 + 1.92 + 226.8) × 106 = 89.6 × 106 kJ/h. (Ans.)
= ` 230.88 × 106 (b) By incremental rate curve :
230.88  106 When load varies from 3 to 5 MW, the incremental
Generation cost = × 100 rate may be considered to be straight line and the average
525.6  106
height of area under the curve between 3 MW and 5 MW
= 43.93 p. (Ans.) would be
ECONOMIC LOAD SHARING 35
= = 4 MW
2
Example 9.25. An input-output curve of a 10 MW station I = 4 × 106 (10 + 8L + 0.4L2)
is expressed as follows : Increment rate,
I = 4 × 106 (10 + 8L + 0.4L2) dI
where I is in kJ/hour and L is in megawatts. IR = = 4 × 106 (8 + 0.8L)
dL
(i) Without plotting any curve find the load at which  IR = 4 × 106 (8 + 0.8 × 4) when load
the maximum efficiency occurs. = 4 MW
(ii) Find the increase in input required to increase = 4 × 106 (8 + 3.2) = 4 × 106 × 11.2
station output from 3 to 5 MW by means of the input-output
Hence total increase in input
curve and also by incremental rate curve.
= 4 × 106 × 11.2 (5 – 3)
Solution. (i) Load at which maximum efficiency
occurs : = 89.6 × 106 kJ/h. (Ans.)
I = 4 × 106 (10 + 8L + 0.4L2) This shows that increase in input required to
I 10 FG IJ increase the required output in both cases (a) and (b) is
or
L
= 4 × 106
L H
 8  0.4 L
K same. This indicates that the incremental rate curve can be
taken as straight line for small increase in output.
Output L Example 9.26. The input-output curve of a 50 MW power
Efficiency = 
Input I station is given by :
1 I = 4 × 106 (8 + 8L + 0.4L2) kJ/hour
 Efficiency,  =
10 FG ...(i)
IJ where I is the input in kJ/hour and L is load in MW.
4  106
L H
 8  0.4 L
K (i) Determine the heat input per day to the power
Now the efficiency will be maximum when station if it works for 20 hours at full load and remaining
FG 10  8  0.4 LIJ is minimum period at no load.
HL K (ii) Also find the saving per kWh of energy produced
d F 10 I if the plant works at full load for all 24 hours generating
i.e., G
H
dL L
 8  0.4 LJ = 0
K the same amount of energy.
Solution. (i) Heat input per day :
10 Total energy generated by the plant during 24 hours
 – + 0.4 = 0
L2 = 20 × 50 + 4 × 0 = 1000 MWh
10 Input to the plant when the plant is running at full
or L2 = = 25 or L = 5 MW
0.4 load
Hence the load at which the maximum efficiency I50 = 4 × 106 (8 + 8 × 50 + 0.4 × 502) × 20
occurs = 5 MW. (Ans.)
= 4 × 1408 × 20 kJ during 20 hours
(ii) Increase in input :
when the plant was running at full load.
(a) By input output curve :
Input at no load,
When load, L = 3 MW
I0 = 4 × 106 × 8 × 4
Input, I3 = 4 × 106 (10 + 8 × 3 + 0.4 × 32)
= 128 × 106 kJ during 4 hours when the
= 150.4 × 106 kJ/h plant was running at no load.
 474 POWER PLANT ENGINEERING

Total input to the plant during 24 hours 11.5

or, P1 = = 79.3 MW. (Ans.)
= I50 + I0 = 4 × 106 × 1408 × 20 + 128 × 106 0.145
= 106 (5632 × 20 + 128) and, P2 = 180 – 79.3 = 100.7 MW. (Ans.)
= 112768 × 106 kJ/day. (Ans.) (ii) Loss in fuel cost :
(ii) Saving per kWh : If the load is equally shared by both the units
Average heat supplied per kWh generated FG supplying 180  90 MW eachIJ , then the increase in cost
112768  106 H 2 K
= = 112768 kJ/kWh of fuel for unit 1
1000  103
If the same energy is generated within 24 hours,
the average load is given by :
=
z 90

79.3
(0.07 P1 + 24) dP1

Average load
1000
= = 41.67 MW L 0.07 P
=M 1
2
 24 P1
OP 90

24
Heat supplied during 24 hours in this case MN 2 PQ 79.3

I50 = 4 × 106 (8 + 8 × 50 + 0.4 × 41.672) × 24 = 0.035 (902 – 79.32) + 24 (90 – 79.3)

= 4 × 106 (8 + 400 + 694.5) × 24 = 63.4 + 256.8 = ` 320.2/hour
Increase in cost of fuel for unit 2

z
= 4 × 106 × 1102.5 × 24 kJ/day
90
= 105840 × 106 kJ/day = (0.075 P2 + 22) dP2
Net saving per day 100.7

= 112768 × 106 – 105840 × 106

=
LM 0.075 P 2
2
 22 P2
OP 90

= 6928 × 106 kJ/day

 Saving per kWh
MN 2 PQ 100.7
0.075
6928  106 = (902 – 100.72) + 22 (90 – 100.7)
= = 6928 kJ/kWh. (Ans.) 2
1000  103 = – 76.5 – 235.4 = ` – 311.9/hour
Example 9.27. The incremental fuel costs for two generat- This indicates that the cost of fuel for unit 2
ing units 1 and 2 of a power plant are given by the follow- decreases.
ing equations :
Net increase in cost (or loss in fuel cost) due to
dF1 departure from economic distribution of load
= 0.07 P1 + 24
dP1 = 320.2 – 311.9 = ` 8.3/hour. (Ans.)
dF2 Example 9.28. Two steam turbines each of 30 MW capacity
= 0.075 P2 + 22
dP2 take a load 45 MW. The steam consumption rates in kg per
where F is fuel cost in rupees per hour and P is power output hour for both turbines are given by the following equations :
in MW. Determine : S1 = 2400 + 12L1 – 0.00012 L12
(i) The economic loading of the two units when the S2 = 1200 + 8.4L2 – 0.00006 L22
total load supplied by the power plants is 180 MW. L represents the load in kW and S represents the steam
(ii) The loss in fuel cost per hour if the load is equally consumption per hour. Find the most economical loading
shared by both units. when the load taken by both units is 45 MW.
Solution. (i) Economic loading of two units : Solution. L1 + L2 = 45 MW = 45000 kW ...(i)
P1 + P2 = 180 ...(Given) ...(i) For the most economical loading, the required
The condition required for economic loading is given condition is
by : dS1 dS2

dF1 dF2 dL1 dL2

dP1 dP2  12 – 2 × 0.00012 L1 = 8.4 – 2 × 0.00006 L2
 0.07 P1 + 24 = 0.075 P2 + 22 ...(ii) 12 – 0.00024 L1 = 8.4 – 0.00012 L2 ...(ii)
Substituting the value of P2 (= 180 – P1) from (i) in Substituting the value of L2 (= 45000 – L1) from (i)
(ii), we get in (ii), we get
0.07 P1 + 24 = 0.075 (180 – P1) + 22 12 – 0.00024 L1 = 8.4 – 0.00012 (45000 – L1)
or 0.07 P1 + 24 = 13.5 – 0.075 P1 + 22 12 – 0.00024 L1 = 8.4 – 5.4 + 0.00012 L1
or 0.145 P1 = 11.5 0.00036 L1 = 9
 ECONOMICS OF POWER GENERATION 475

9 Refrigerator load : 2 kWh daily

 L1 = = 25000 kW
0.00036 Miscellaneous load : 2 kW for 2 hours daily
or 25 MW. (Ans.) Find the monthly bill at the following tariff :
and L2 = 45000 – 25000 = 20000 kW First 20 units ` 0.50/kWh
or 20 MW. (Ans.) Next 30 units ` 0.40/kWh
Remaining units ` 0.30/kWh
TARIFF
Constant charge ` 2.50 per month
Example 9.29. Two electrical units used for same purpose Discount for prompt payment = 5 per cent.
are compared for their economical working : Solution. Total energy consumption in 30 days
(i) Cost of Unit-1 is ` 6000 and it takes 120 kW. = (6 × 40 × 4 × 30 + 6 × 100 × 6 × 30)
(ii) Cost of Unit-2 is ` 16800 and it takes 72 kW. 1
Each of them has a useful life of 40000 hours. × + 2 × 30 + 2 × 2 × 30
1000
Which unit will prove economical if the energy is 1
charged at ` 96 per kW of maximum demand per year and = (28800 + 108000) × + 60 + 120
1000
6 p. per kWh ? = 316.8 kWh per month
Assume both units run at full load. The monthly bill
Solution. (i) Unit-1 : = ` [(20 × 0.5 + 30 × 0.4 + 266.8 × 0.3) + 2.5]
6000 = ` [(10 + 12 + 80.04) + 2.5] = ` 104.54
Capital cost per hour = = ` 0.15
40000
LM∵ Remaining units per month OP
Maximum demand = 120 kW
Charge for maximum demand per hour
N = 316.8  20  30  266.8 Q
Net monthly bill if the payment is made promptly
120  96
= = ` 1.315 = 104.54 × 0.9 = ` 94.08. (Ans.)
(365  24)
Example 9.31. An industrial undertaking has a connected
Energy charge per hour = Maximum demand × one
load of 220 kW. The maximum demand is 180 kW. On an
hour × charge per kWh
average each machine works for 60% time. Find the yearly
6 expenditure on electricity if the tariff is :
= 120 × 1 × = ` 7.2
100 ` 1200 + ` 120 per kW of maximum demand per
 Total charges per hour for operation of Unit-1 year + ` 0.15 per kWh.
= 0.15 + 1.135 + 7.2 = ` 8.485 Solution. Energy consumption in one year
(ii) Unit-2 : = 180 × 0.6 × (365 × 24) = 946080 kWh
Capital cost per hour Total electricity bill
16800 = ` (1200 + 120 × 180 + 0.15 × 946080)
= = ` 0.42.
40000 = ` 164712. (Ans.)
Charge for maximum demand per hour
72  96
+Example 9.32. A Hopkinson demand rate is quoted as
= = ` 0.789 follows :
365  24
Demand rates :
Energy charge per hour
First 1 kW of maximum demand
6
= 72 × 1 × = ` 4.32 = ` 6/kW/month
100
Total charges per hour for the operation of Unit-2 Next 4 kW of maximum demand
= 0.42 + 0.789 + 4.32 = ` 5.529 = ` 5/kW/month
The charges of operation for the Unit-2 per hour Excess 5 kW of maximum demand
are less than the charges of operation for the Unit-1, = ` 4/kW/month
therefore Unit-2 is more economical in this case. (Ans.) Energy rates :
Example 9.30. The monthly electricity consumption of a First 50 kWh = 7 paise/kWh
residence can be approximated as under : Next 50 kWh = 5 paise/kWh
Light load : 6 tube lights 40 watts each working Next 200 kWh = 4 paise/kWh
for 4 hours daily Next 400 kWh = 3 paise/kWh
Fan load : 6 fans 100 watts each working for Excess over 700 kWh = 2 paise/kWh.
6 hours daily
 476 POWER PLANT ENGINEERING

Determine : (i) The monthly bill for a total Average load

consumption of 2000 kWh and a maximum demand of Solution. Load factor =
Maximum demand
15 kW. Also find out the unit energy cost.
 Average load
(ii) Lowest possible bill for a month and a
= Load factor × maximum demand
corresponding unit energy cost.
= 0.25 × 700 = 175 kW
Solution. (i) Monthly bill and energy cost :
Energy consumed per year
Demand charges per month
= ` (1 × 6 + 4 × 5 + 10 × 4) = ` 66 = 175 × (365 × 24) = 1.533 × 106 kWh.
Energy charge = ` [50 × 7 + 50 × 5 + 200 × 4 (i) Public supply :
1 Maximum demand charges per year
+ 400 × 3 + 1300 × 2] ×
100 = 48 × 700 = ` 33600
= ` (350 + 250 + 800 + 1200
Energy charge per year
1
+ 2600) × = ` 52 2.4
100 = × 1.533 × 106 = ` 36792
 Monthly bill = 66 + 52 = ` 118. (Ans.) 100
Average unit energy cost Interest and depreciation
118 10
= × 100 = × 84000 = ` 8400
2000 100
= 5.9 paise/kWh. (Ans.) Total cost = ` (33600 + 36792 + 8400) = ` 78792
(ii) Lowest possible bill :  Energy cost per kWh
The lowest possible bill will occur when average load 78792
= × 100 = 5.14 p.
= Maximum load or at 100% load factor 1.533  106
 Maximum load (ii) Private oil engine generating station :
2000 Fuel consumption
= Average load = = 2.77 kW
30  24 3  1.533  106
 Demand charges = = 4599 kN
1000
= ` (6 + 1.77 × 5) = ` 14.85 Cost of fuel = 4599 × 8.4 = ` 38631
Energy charges will be same Cost of wages and maintenance
= ` 52
FG 0.48  0.36 IJ × 1.533 × 10
 Minimum monthly bill
= 14.85 + 52 = ` 66.85. (Ans.)
=
H 100 K 6 = ` 12877
Interest and depreciation
Unity energy cost for this condition
15
66.85 = × 300000 = ` 45000
= × 100 = 3.34 paise/kWh. (Ans.) 100
2000 Total cost
TARIFF AND COST ANALYSIS = ` (38631 + 12877 + 45000) = ` 96508
Energy cost per kWh
+Example 9.33. A new factory requires a maximum 96508
demand of 700 kW and load factor of 25%. The following = × 100 = 6.29 p.
.
1533  106
two suppliers are available : As the energy cost per kWh for oil engine is less than
(i) Public supply tariff is ` 48 per kW of maximum the public supply, the oil engine generation is more
demand plus 2.4 p. per kWh. preferable. (Ans.)
Capital cost = ` 84000
+Example 9.34. A load having a maximum demand of
Interest and depreciation = 10 per cent
100 MW and a load factor of 0.4 may be supplied by one of
(ii) Private oil engine generating station : the following schemes :
Capital cost = ` 300000 (i) A steam station capable of supplying the whole
Fuel consumption = 3 N/kWh load.
Cost of fuel = ` 8.4 per kN (ii) A steam station in conjunction with pump storage
Wages = 0.48 p/kWh plant which is capable of supplying 130 × 106 kWh energy
Maintenance cost = 0.36 p/kWh per year with a maximum output of 40 MW.
Interest and depreciation = 15 per cent. Find out the cost of energy per unit in each of the
Find which supply will be more economical ? two cases mentioned above.
 ECONOMICS OF POWER GENERATION 477

Use the following data : = 350.4 × 106 – 130 × 106

Capital cost of steam station = 220.4 × 106 kWh
= ` 2000/kW of installed capacity Operating cost of the steam station
Capital cost of pump storage plant 6
= × 220.4 × 106 = ` 13.22 × 106
= ` 1300/kW of installed capacity 100
Operating cost of steam plant Total cost per year
= 6 p./kWh = ` (20.64 × 106 + 0.65 × 106 + 13.22 × 106)
Operating cost of pump storage plant = ` 34.51 × 106
= 0.5 p./kWh Total cost per unit
Interest and depreciation together on the capital 34.51  106
invested should be taken as 12 per cent. Assume that no = × 100
350.4  106
space capacity is required. = 9.85 p/kWh. (Ans.)
Solution. (i) Steam station :
Capital cost = 100 × 103 × 2000 = ` 200 × 106 Note. If the above example is repeated with a load factor
Interest and depreciation of 0.7 it will be observed from the results that the cost of
generation becomes less with higher load factor irrespective
12
= × 200 × 106 = ` 24 × 106 of the type of the plant.
100
Average load Example 9.35. The following data relate to a 2000 kW diesel
= Load factor × maximum demand power station :
= 0.4 × 100 × 103 = 40000 kW The peak load on the plant
Energy supplied per year = 1500 kW
= Average load × (365 × 24) Load factor = 0.4
= 40000 × 365 × 24 = 350.4 × 106 kWh Capital cost per kW installed
 Interest and depreciation charges per unit of = ` 1200
energy Annual costs = 15 per cent of capital
6
24  10 Annual operating costs = ` 50000
= × 100 = 6.85 p/kWh
350.4  106 Annual maintenance costs :
 Total cost per unit (i) Fixed = ` 9000
= 6 + 6.85 = 12.85 p/kWh. (Ans.) (ii) Variable = ` 18000
(ii) Steam station in conjunction with pump- Cost of fuel = ` 0.45 per kg
storage plant : Cost of lubricating oil = ` 1.3 per kg
The load supplied by the steam plant C.V. of fuel = 41800 kJ/kg
= 100 – 40 = 60 MW
Consumption of fuel = 0.45 kg/kWh
 Capital cost of steam plant
Consumption of lubricating oil
= 60 × 1000 × 2000 = ` 120 × 106
= 0.002 kg/kWh
Capital cost of pump storage plant
= 40 × 1000 × 1300 = ` 52 × 106 Determine the following :
 Total capital cost of combined station (i) The annual energy generated.
= 120 × 106 + 52 × 106 = ` 172 × 106 (ii) The cost of generation per kWh.
Interest and depreciation charges on capital Solution. Capital cost of the plant
investment = 2000 × 1200 = ` 2.4 × 106 per year
12 Interest on capital
= × 172 × 106 = ` 20.64 × 106
100 15
 Operating cost of pump storage plant = × 2.4 × 106
100
0.5 = ` 0.36 × 106 per year.
= × 130 × 106 = ` 0.65 × 106
100 (i) Annual energy generated
The energy units supplied by steam station
= Load factor × maximum demand × (365 × 24)
= Total units required – energy units
= 0.4 × 1500 × 365 × 24 = 5.256 × 106 kWh. (Ans.)
supplied by pump storage plant
 478 POWER PLANT ENGINEERING

(ii) Cost of generation : Energy loss in transmission

Fuel consumption = 0.45 × 5.256 × 106 = 10 per cent
= 2.365 × 106 kg per year Diversity factor = 1.5
Cost of fuel = ` 0.45 × 2.365 × 106 Load factor = 0.75
= ` 1.064 × 106 per year Maximum demand
Lubricant consumption = 0.002 × 5.256 × 106 = 12 MW
= 10512 kg per year (i) Devise a two-part tariff.
Cost of lubricating oil = 1.3 × 10512 (ii) Find the average cost per kWh.
= ` 13665 per year Solution. (i) Two-part tariff :
Total fixed cost = Interest + maintenance Average load
Load factor =
(fixed) Maximum demand
= 0.36 × 106 + 9000
 Average load
= ` 369000 per year
= Load factor × maximum demand
Total running or variable costs
= 0.75 × 12 × 103 = 9000 kW
= Fuel cost + lubricant cost
Energy generated per year
+ maintenance (running)
= 9000 × (365 × 24) = 78.84 × 106 kWh
+ annual operating costs
Cost of the plant
= 1.064 × 106 + 13665 + 18000 + 50000
= 15 × 103 × 1500 = ` 22.5 × 106
= ` 1145665 per year
Interest, insurance and depreciation charges of the
Total cost = Fixed cost + running cost plant
= 369000 + 1145665 = ` 1514665
10
Cost of generation = × 22.5 × 106 = ` 2.25 × 106
100
1514665
= × 100 Interest, insurance and depreciation charges of
5.256  106 primary and secondary equipments
= 28.8 paise/kWh. (Ans.)
5
+Example 9.36. The annual costs of operating a 15 MW = × 20 × 106 = ` 1.0 × 106
100
thermal plant are given below :
Total fixed cost = Insurance, interest and
Capital cost of plant
depreciation costs + dividend to stock-holders
= ` 1500/kW
= ` (2.25 × 106 + 1.5 × 106) = ` 3.75 × 106
Interest, insurance and depreciation
= 10 per cent of plant cost Sum of individual maximum demand
Capital cost of primary and secondary distribution = Maximum demand × diversity factor
= ` 20 × 106 = 12 × 103 × 1.5 = 18000 kW
Interest, insurance and depreciation on the capital  Fixed charges per kW
cost of primary and secondary distribution 3.75  106
= = ` 208.3.
= 5% the capital cost 18000
Plant maintenance cost Total variable charges
= ` 100 × 103 per year = All maintenance costs
Maintenance cost of primary and secondary + salaries and wages + fuel cost
equipment = (100 × 103 + 2.2 × 105) + 6.5 × 105+ 40
= ` 2.2 × 105 per year × 104 × 9
Salaries and wages = (1 × 10 + 2.2 × 10 ) + 6.5 × 105
5 5
= ` 6.5 × 105 per year + 36 × 105
Consumption of coal = ` 45.7 × 105 or ` 4.57 × 106
= 40 × 104 kN per year Energy transmitted
Cost of coal = ` 9 per kN = Energy generated × transmission efficiency
Dividend to stockholders = 78.84 × 106
= ` 1.5 × 106 per year
FG 100  energy loss in transmission IJ
×
H 100 K
 ECONOMICS OF POWER GENERATION 479

90 Plant annual load factor

= 78.84 × 106 × = 70.956 × 106 kWh = 0.72
100
 Charges for energy consumption Cost of the plant = ` 800/kW installed capacity
Interest, insurance and depreciation
4.57  106
= × 100 = 6.44 paise/kWh. = 10 per cent of the capital cost
70.956  106 Cost of transmission and distribution system
 Two-part tariff = ` 350 × 103
= ` 208.3/kW + 6.44 paise/kWh. (Ans.) Interest, depreciation on distribution system
(ii) Average cost per kWh : = 5 per cent
Total charges = Fixed charges + variable charges Operating cost = ` 350 × 103 per year
= 3.75 × 106 + 4.57 × 106 Cost of coal = ` 6 per kN
= ` 8.32 × 106 Plant maintenance cost
Average cost of supply = ` 30000/year (fixed)
= ` 40000/year (running)
8.32  106
= × 100 Coal used = 250000 kN/year
70.956  106
= 11.72 paise/kWh. (Ans.) Assume transmission and distribution costs are to
be charged to generation
Example 9.37. A 10 MW thermal power plant has the
following data : (i) Devise a two-part tariff.
Peak load = 8 MW (ii) Average cost of generation in paise/kWh.

Solution. (i) Two-part tariff :

S. No. Items Fixed cost per year Running cost per year
(in `) (in `)

10
1. Interest, depreciation etc. of the plant × 10000 × 800
100
= ` 800 × 103 –
5
2. Interest, depreciation etc. of the × 350 × 103
100
transmission and distribution = 17.5 × 103 –
3. Annual cost of coal – 250000 × 6
= 1500 × 103
4. Operating cost – = 350 × 103
5. Plant maintenance cost = 30 × 103 = 40 × 103

Total cost 847.5 × 103 1890 × 103

 Grand total cost = ` 105.9/kW + paise 3.74/kWh. (Ans.)

= Fixed cost + running cost (ii) Average cost generation in paise/kWh :
= 847.5 × 103 + 1890 × 103 Average generation cost
= ` 2737.5 × 103 Grand total cost
=
Energy generated/year Energy generated
= Average load × (365 × 24) 2737.5  103
= (Peak load × load factor) × (365 × 24) = × 100
50.46  106
= (8 × 103 × 0.72) × (365 × 24) = 5.42 paise/kWh. (Ans.)
= 50.46 × 106 kWh Example 9.38. Determine the load factor at which the cost
 Two-part tariff of supplying a unit of electricity is same in Diesel station as
Fixed cost Running cost in a steam station if the respective annual fixed and running
=  charges are given below :
Maximum load Energy generated
Diesel : ` (40/kW + 0.06/kWh)
847.5  103 1890  103
=  × 100 Steam : ` (160/kW + 0.015/kWh).
8  103 50.46  106
 480 POWER PLANT ENGINEERING

Solution. Let P = Maximum load in kW, and  Energy cost

x = Load factor (same for both the stations). LMFG 25  0.7355  (365  24)  30  1 IJ
NH 100 0.9 K
=
Then, Average load
=P×x
F 1 I O 12
 G (25  0.7355)   (365  24)  JP 
Cost of diesel station, 1 70
Cdiesel = 40 P + 0.06 × P × x × (365 × 24) H 2 100 0.85 K Q 100


Cost of steam station, 12

= (53691.5 + 66324.8) ×
Csteam = 160 P + 0.015 × P × x × (365 × 24) 100
= ` 14402/year
As given in the problem,
 Total cost of motor A
Unit energy cost (diesel station) = Unit energy
= 220 + 250 + 400 + 14402 = ` 15272/year.
cost (steam station)
Motor B :
40 P  0.06 Px  (365  24)
 12
Px  (365  24) Salvage value = × 3500 = ` 420
100
160 P  0.015 Px  (365  24) 3500  420
= Depreciation = = ` 154
Px  (365  24) 20
 40 P + 0.06 Px × 8760 = 160 P + 0.015 Px × 8760 5
Interest = × 3500 = ` 175
or 40 P + 525.6 Px = 160 P + 131.4 Px 100
or 120 P = 394.2 Px Maintenance = ` 200
120 Energy cost
or x=
394.2
= 0.3
LMFG 25  0.7355  (365  24)  30  1 IJ
NH 100 0.86 K
i.e., Load factor = 0.3. (Ans.) =

F 1 I O 12
Example 9.39. A motor of 25 H.P. connected to a condensate
 G 25  0.7355   (365  24)  JP 
1 70
pump has been burnt beyond economical repairs. Two
alternatives have been proposed to replace it by : H 2 100 0.8 K Q 100


12
Cost  at full load  at half load = (56188.8 + 70470) × = ` 15199
100
Motor A : ` 5000 90% 85% Total cost of motor B
= 154 + 175 + 200 + 15199 = ` 15728/year.
Motor B : ` 3500 86% 80%
Hence motor A is economical since its annual cost is
The life of each motor is 20 years and its salvage less than motor B.
value is 12 per cent of the initial cost. The rate of interest is +Example 9.40. The following proposals are under
5 per cent annually. The motor operates at full load for 30% consideration for an industry which has a maximum
of time and at half load for the remaining period. The demand of 45 MW and a load factor of 0.45 :
annual maintenance cost of motor A is ` 400 and that of
(i) A steam plant having an initial cost of ` 1200/kW
motor B is ` 200. The energy rate is 12 paise/kWh.
and maintenance cost of 2.4 paise/kWh. The coal of C.V. of
Which motor will be economical ? 2550 kJ/N is used. The overall efficiency of the plant is
Solution. Motor A : 24 per cent.
12 (ii) An hydro-plant having a capital cost of
Salvage value = × 5000 = ` 600
100 ` 3600/kW and a running cost of 0.6 paise/kWh.
5000  600 Assuming interest and depreciation rate of 10 per
Depreciation = = ` 220/year
20 cent for steam plant and 8 per cent for hydro-plant,
5 determine the price of coal above which steam station is
Interest = × 5000 = ` 250/year uneconomical.
100
Maintenance = ` 400 Solution. Energy required per year
Energy given to motor = Peak load × load factor × (365 × 24)
Load on motor  time in hours = 45 × 103 × 0.45 × (365 × 24)
=
Efficiency of the motor = 177.39 × 106 kWh/year
 ECONOMICS OF POWER GENERATION 481

(i) Steam plant : High voltage : ` 50/kW per year + paise 4/kWh
Interest and depreciation Low voltage : ` 55/kW per year + paise 5/kWh
10 In order to have high voltage supply, consumer has
= × (45 × 103) × 1200 = ` 5.4 × 106
100 to install his own transformer which costs ` 110/kW. The
Maintenance cost losses in the transformer are 4 per cent of full load.
Determine the number of working hours per week above
2.4
= × 177.39 × 106 = ` 4.257 × 106 which the high voltage supply will be economical.
100
Assume : interest and depreciation 12 per cent of
Let Wcoal = Weight of coal in kN used/year, and
capital, working weeks per year 50 and load of consumer
x = Cost of coal in rupees per kN as 1.5 MW.
 Wcoal × 103 × C.V. × overall Solution. Consumer load
= 177.39 × 106 × 3.6 × 103 = 1.5 MW = 1500 kW
(∵ 1 kWh = 3.6 × 103 kJ) Required rating of transformer
6
177.39  10  (3.6  10 ) 3 1500
or Wcoal = = = 1562 kW
103  2550  0.24 (1  0.4)
= 1.043 × 106 kN/year Cost of the transformer to the consumer
Now, total cost of steam plant = 1562 × 110 = ` 171820
= Interest + maintenance cost + fuel cost Annual interest and depreciation
= 5.4 × 106 + 4.257 × 106 + 1.043 × 106 × x 12
= × 171820 = ` 20618
...(1) 100
Let the number of hours for which power is required
(ii) Hydel plant :
by the consumer = x hours/week
Interest and depreciation
 Number of hours for which power is used during
8 the year = 50x hours
= 45 × 103 × 3600 × = ` 12.96 × 106
100 (i) Number of units consumed from low voltage side
Running cost if the load is connected to low voltage
0.6 = 1500 × 50x = 75000x kWh/year
= × 177.39 × 106 = ` 1.064 × 106
100 (ii) Number of units consumed from high voltage
Total cost of hydel plant side if the load is connected to high voltage
= 12.96 × 106 + 1.064 × 106 = 1562 × 50x = 78100x kWh/year
= ` 14.024 × 106 ...(2) Total cost from low voltage supply in rupees
The steam and hydel station will be equally 5
economical if the total cost/year remains same. = 1500 × 55 + 75000x ×
100
 Equating the values of (1) and (2), we get = 82500 + 3750x ...(1)
5.4 × 106 + 4.257 × 106 + 1.043 × 106 × x Total cost from high voltage supply in rupees

= 14.024 × 106 4
= 1562 × 50 + 78100x × + 20618
100
or 5.4 + 4.257 + 1.043 x
= 98718 + 3124x ...(2)
= 14.024 (Dividing both sides by 106)
It both the systems cost the same to the consumer,
14.024  5.4  4.257 then equating (1) and (2), we get
 x= = ` 4.19 per kN
1.043 82500 + 3750x = 98718 + 3124x
Hence price coal above which steam station is 98718  82500 16218
uneconomical = ` 4.19 per kN. (Ans.) i.e., x=  = 25.9 hours.
(3750  3124) 626
Example 9.41. An industrial consumer has a choice Hence the number of working hours above which the
between low and high voltage supply available at the high voltage supply will be economical
following rates :
= 25.9 hours. (Ans.)
 482 POWER PLANT ENGINEERING

ADDITIONAL /TYPICAL EXAMPLES

Example 9.42. A diesel electric station has 4-generating Cost of lubricating oil
sets, each of 500 kW and 1 of 400 kW capacity. = (6.57 × 106 × 0.0024) × 45
The other data is given below : = ` 0.71 × 106
Maximum demand 1500 kW
Total variable cost per year
Load factor 0.5
Capital cost ` 10000/kW = (23.65 + 0.71) × 106 = ` 24.36 × 106
Annual cost (interest + depreciation Total cost = Fixed cost + variable cost
+ insurances and taxes) 16% of capital cost = 3.085 × 106 + 24.36 × 106
Annual maintenance cost ` 45000 = ` 27.44 × 106
Operation cost ` 8000  Cost per kWh generated
Fuel used 0.45 kg/kWh
Total cost
Cost of fuel ` 8/kg =
Energy generated per year
Lubricating oil used 0.0024 kg/kWh
Cost of lubricating oil ` 45/kg 27.44  106
=  ` 4.18. (Ans.)
~
Calorific value of fuel used 41000 kJ/kg 6.57  106
Generator efficiency 90% (iv) Overall efficiency of the plant, overall :
Determine the following :
Output 6.57  106  3600 (kJ)
(i) The rating of diesel engine, overall = 
(ii) Energy produced per year, Input 6.57  106  0.45  41000 (kJ)
(iii) Cost of generation, `/kWh, and = 0.195 or 19.5%. (Ans.)
(iv) Overall efficiency of the plant. (N.U.) Example 9.43. A load curve of a factory follows a parabola
and it works for 8 hours a day from 10 A.M. to 6 P.M. The
Solution. (i) The rating of diesel engine :
Rating of first 3-sets maximum and minimum loads of the factory are 3 MW
and 1 MW. The capacity of the diesel power plant supplying
500
= = 555 kW. (Ans.) the power to the factory is 2 MW. Determine the following :
0.9
Rating of last set (i) Load factor and capacity factor of the plant
supplying power to the factory.
400
= = 445 kW. (Ans.) (ii) Energy consumption of the factory per month
0.9 assuming it works for 26 days per month and 8 hours per
(ii) Energy produced per year : day.
Average demand
(iii) Electrical charges to be paid by the factory if the
= Maximum demand × load factor charges are ` 60/kW for maximum load during a day and
= 1500 × 0.5 = 750 kW ` 2.75/kWh.
 Energy produced per year
The time at 6 A.M. may be taken as zero. (M.U.)
= 750 × 8760 = 6.57 × 106 kWh. (Ans.)
Solution. Given : Working hours per day = 8 (10 A.M. to
(iii) Cost of generation, `/kWh :
Fixed cost per year : 6 P.M.) ; Maximum load = 3 MW ; Minimum load =
Capital cost = (3 × 500 + 1 × 400) × 10000 1 MW ; Capacity of diesel power plant = 2 MW ; Tariff :
= ` 1.9 × 107 ` 60/kW (maximum load) ; ` 2.75/kWh.
16 The load curve is shown in Fig. 9.18.
Annual fixed cost = × 1.9 × 107 = ` 0.304 × 107 The load curve is given by :
100
Maintenance cost= ` 45000 = ` 0.0045 × 107 y2 = ax,
Total fixed cost = ` (0.304 + 0.0045) × 107 where x and y represent hours and MW respectively.
= ` 0.3085 × 107 The boundary conditions are :
Variable cost per year : At x = 0, y = 0 ; At x = 4, y = 1
Fuel cost = (6.57 × 106 × 0.45) × 8 1
= ` 23.65 × 106  1 = a × 4 or a =
4
 ECONOMICS OF POWER GENERATION 483

y (MW) Example 9.44. The daily load curve for a power plant is
given by the following equation :
L = 350 + 10t – t2
2
y = ax where t is time in hours from 0 to 24 hours and L is in MW
3 calculate :
(i) Value of maximum load and when it occurs, and
1
(ii) Load factor of the plant.
x
0 6 A.M. 10 A.M. 6 P.M. (hours) Draw load curve and load duration curve. (P.U.)
Solution. Equation of the load curve,
L = 350 + 10t – t2 ...(Given)
4 hours 8 hours
(i) Value of maximum load and when it
Fig. 9.18 occurs :
The condition for finding the value of maximum load
x x dL
 y2 = (load curve)
or y = is =0
4 2 dt
The above load curve also fulfills the another
d
condition which is :  (350 + 10t – t2) = 0 or 10 – 2t = 0
dt
At x = 12, y = 3  t = 5 hours.
 e j
3 
12
2

4
 3=3 Thus, the maximum load occurs at 5th hour during
the day. (Ans.)
The average load of the factory on the diesel power  Lmax = 350 + 10 × 5 – 52 = 375 MW. (Ans.)
plant is given by :

z z
(ii) Load factor of the plant :
1 12 1 12 x
Lav = y . dx  dx The average load on the plant is given by

z z
8 4 8 4 2
LM OP 1 24 1 24
12
1 2 1 Lav = L . dt  (350  10t  t 2 ) dt
( x)1.5 [(12)1.5 – (4)1.5]

16 3 N Q 4

24
24 0 24 0

= 1.4 MW

1 LM
350t  10 
t2 t3

OP 24

(i) Load factor and capacity factor : 24 MN 2 3 PQ 0

Lav 1.4
1 L OP
Load factor =  = 0.808. (Ans.) 2
(24)3
Lmax 3

24 MN
M350  24  10  (24)2 
3 PQ
Lmax 3
Capacity factor = 
Plant capacity 2 = 278 MW
= 0.866. (Ans.) Lav 278
 Load factor =  = 0.7413. (Ans.)
(ii) Energy consumption per month : Lmax 375
Energy consumption per month, Load curve and load duration curve :
E = (Lav × 8) × 26 l The ‘load curve is’ the representation of load with
= (1.4 × 8 × 1000) × 26 respect to time.
= 291200 kWh l The ‘load duration curve’ is the representation of
load with respect to time in descending order.
(iii) Electrical charges to be paid by the factory :
In order to draw these curves, we need to calculate
Electrical charges to be paid by the factory
the values of L when t = 0, 1, 2, 3, .... . 24 hours and these
= Lmax × 60 + E × 2.75 values are tabulated below :
= 3 × 60 + 291200 × 2.75 (Eqn. of the load curve L = 350 + 10t – t2), At
t~
 0, L = 350 MW
= ` 800904. (Ans.)
484 POWER PLANT ENGINEERING

t (h) L (MW) t (h) L (MW) From the above data the load curve and load
duration curve are drawn as shown in Fig. 9.19 (a) and
1 359 13 311 (b) respectively.
2 366 14 294
3 371 15 275 375
375
4 374 16 254
5 375 17 231
6 374 18 206

L
7 371 19 179 14 14
8 366 20 150
0 456 12 18 24 0 6 12 18 24
9 359 21 119 t t
10 350 22 86 (a) Load curve. (b) Load duration curve.
11 339 23 51 Fig. 9.19
12 326 24 14

HIGHLIGHTS

1. Types of loads : (i) Residential load, (ii) Commercial a, b, c, d = constants.

load, (iii) Industrial load, (iv) Municipal load, (v) Irrigation 7. For minimum combined input to carry a given combined
load, and (vi) Traction load. output, the slopes of the input-output curves for each unit
2. A load curve is a graphic record showing the power must be equal. If there are n units supplying a constant
demands for every instant during a certain time interval. load, then the required condition for the minimum input
The area under the load curve represents the energy or maximum system efficiency is
generated in the period considered. dI1 dI dI dI
3. The cost of a power system includes the following :  2  3  ...... n .
dL1 dL2 dL3 dLn
A. Capital cost or fixed cost :
(i) Initial cost (ii) Interest 8. The general tariff form is given by :
(iii) Depreciation cost (iv) Taxes z = a.x + b.y + c
(v) Insurance where, z = Total amount of bill for the period considered.
B. Operational cost : x = Maximum demand in kW.
(i) Fuel cost (ii) Operating labour cost y = Energy consumed in kWh during the period
(iii) Maintenance cost (iv) Supplies considered.
(v) Supervision (vi) Operating taxes. a = Rate per kW of maximum demand.
4. The following methods are used to calculate the
b = Energy rate per kWh.
depreciation cost :
(i) Straight line method. (ii) Percentage method. c = Constant amount charged to the consumer
(iii) Sinking fund method.(iv) Unit method. during each billing period. This charge is
independent of demand or total energy
5. The economics of power plant is greatly influenced by :
because a consumer that remains connected
(i) Load factor (ii) Demand factor
to the line incurs expenses even if he does
(iii) Utilisation factor. not use energy.
6. The performance of a plant can be precisely represented
9. Various types of tariff are :
by the input-output curve from the tests conducted on
individual power plant. In general input-output may be (i) Flat demand rate
represented as follows : (ii) Straight meter rate
I = a + bL + cL2 + dL3 (iii) Block meter rate
where I = input (in millions of kcal/h or kJ/h in case of (iv) Hopkinson demand rate (Two-part tariff)
thermal plants and m3/s of water in case
of hydro-plants) (v) Doherty rate (Three-part tariff)
L = output (in MW or kW) (vi) Wright demand rate.
ECONOMICS OF POWER GENERATION 485

THEORETICAL QUESTIONS

1. Define the following terms : 10. What do you mean by depreciation ?

(i) Connected load (ii) Demand 11. Enumerate and explain briefly various methods used to
(iii) Demand factor (iv) Load factor calculate the depreciation cost.
(v) Diversity factor (vi) Utilisation factor. 12. Name the elements that make up the operating
2. Explain briefly the following : expenditure of a power plant.
(i) Load curve (ii) Load duration curve. 13. What points should be considered while choosing the type
3. What is the significance of load curves ? of generation ?
4. Enumerate various types of loads. 14. Discuss the economic loading of combined steam and
5. List the factors which should be considered while hydro-plants.
designing a power plant. 15. How can the power generation cost be reduced ?
6. What are the considerations on which the location of a 16. What do you understand by the term tariff ?
power plant depends ?
17. What are the objectives and requirements of tariff ?
7. List the points which should be taken care of while
18. Enumerate various types of tariff and explain any two of
deciding about power plant building and its layout.
them.
8. List the various costs which go to form the total cost of a
power system. 19. Explain briefly the following tariff :
9. Explain briefly the following : (i) Straight meter rate (ii) Block meter rate
(i) Capital or fixed cost (ii) Operational cost. (iii) Doherty rate (three-part tariff).

UNSOLVED EXAMPLES
1. The maximum demand of a power station is 80000 kW 4. A generating station has a maximum demand of 20 MW,
and the load curve is defined as follows : a load factor of 0.6, a plant capacity of 0.48 and a plant
Time (hours) : 0–6 6–8 8–12 12–14 14–18 18–22 22–24 use factor of 0.80. Find :
(i) The daily energy produced.
Load (MW) : 40 50 60 50 70 80 40
(ii) The reserve capacity of the plant.
(i) Determine the load factor of power station. (iii) The maximum energy that could be produced if the
(ii) What is the load factor of standby equipment plant were running all the time.
rated at 25 MW that takes up all load in excess of (iv) The maximum energy that could be produced daily, if
60 MW ? Also calculate its use factor. the plant when running, according to operating
[Ans. (i) 0.71, (ii) 0.75, 0.6] schedule, were fully loaded.
2. The following load is to be supplied by a power station : [Ans. (i) 2.88 × 105 kWh, (ii) 5000 kW,
Load (MW) : 30 90 60 100 50 (iii) 2.88 × 105 kWh, (iv) 3.60 × 105 kWh]
Time (hours) : 0–6 6–12 12–14 14–18 18–24 5. A proposed power station has to supply load as follows :
(i) Draw the load curve. Time (hours) : 01–08 08–12 12–17 17–20 20–23 23–01
(ii) Draw the load duration curve. Load (MW) : 10 20 25 18 35 20
(iii) Choose suitable generating units to supply the load. After drawing the load curve, find out the load factor. Also
(iv) Calculate the load factor. choose suitable generating units to supply this load,
(v) Calculate plant capacity factor. maintaining reliability of supply. Prepare operation
[Ans. (iii) 30 MW (4 units including standby unit), schedule for the machine and calculate plant use factor.
10 MW (one unit), (iv) 0.64, (v) 0.49] [Ans. 0.56, 0.92]
3. The yearly duration curve of a certain plant can be con- 6. A generating station supplies the following loads :
sidered as a straight line from 150 MW to 40 MW. Power 15 MW ; 12 MW ; 8 MW and 0.5 MW. The station has a
is supplied with one generating unit of 100 MW capacity maximum demand of 20 MW and the annual load factor
and two units of 50 MW capacity each. Determine : is 0.5. Find :
(i) Installed capacity (ii) Load factor (i) Number of units supplied annually.
(iii) Plant factor (iv) Maximum demand (ii) Diversity factor.
(v) Utilization factor. [Ans. (i) 876 × 105 kWh, (ii) 1.775]
[Ans. (i) 200 MW, (ii) 0.633, (iii) 0.475, 7. A base load power station and standby power station share
(iv) 150 MW, (v) 0.75] a common load as follows :