Download - Chapter 1 - Economics of Power Generation
Engr. Chandraknt Shitole
Economics of Power Generation
MET401 Power Plant Engineering
Ref: Power Plant Engineering 4th edition, P.K. Nag, TATA McGRAW-Hill, June 2007
2
Introduction
Why do we need Economic analysis?
The main purpose of design and operation of a power
plant is to bring the cost of energy produced to
minimum.
Thermal efficiency of a plant is one of the important
factors in determining energy cost.
The most thermally efficient plant is not the most
economics.
3
Types of power plants
Thermal fossil fuels, coal, fuel oil & natural gas.
80% of world electricity.
Nuclear
Geothermal
Hydraulic
Multipurpose plants (generating power, flood control, etc..)
Gas turbine plants
They run for a short time to meet the peak load demand
They are used in the combined steam power plant.
• Similar in cycle • Similar in structure • Use steam as a working
fluid
4
Electricity generation in KSA
5
Production rate
Electricity production, E
Annual fractional increase
rate, i (%)
Eo=electricity production
at year t0
To find time required for
electricity production to be
doubled, we define tD as
doubling time
it
it
E
E
ttt
eEE
ttiE
E
Eidt
dE
D
D
D
ttio
oo
o
693.0
2ln
2
)(ln
1
2
12
)(
6
Planning a new power plant
When planning a new power plant, there are two factors to be considered. Total power output to be installed (kWinst)
First demand (kWmax).
Growth of demand.
Reserve capacity required.
Size of generating units
Load variation during 24hr
Total capacity of units connected to grid
Minimum start up and shut down periods
Maintenance program
Plant efficiency
Price and space per kW vs. unit
500MW plant
Unit 1 Unit 2 Unit 3
7
Power plants location
For thermal power plant Availability of cooling water Availability of fuel Distance from center of load demand Land cost and characteristics Wind direction & water stream Disposal of fuel waste and ashes Staff accommodations Rail and road connections Security
For hydraulic power plant Availability of water and water head
8
Load-duration curves k
W e
lect
rici
ty
Summer Average
Winter Average
Peak loads
9
Electricity supply industry factors used Load factor (m):
Capacity factor / plant factor (n):
Reserve factor (r):
Demand factor (dem):
Diversity factor (div)
8760" 365 * 24year one"
8760x kW
year ain kWh
interval same theduring loadpeak
interval timeaover load average
max
ave
m
8760 x kW
kWhr
365 x 24 x kW
kWhr
plant ofcapacity rated
load average
inst
gen
inst
gen n
factorcapacity
factor load
kW
kW
max
inst n
mr
connectedkW
kWdem max
demand connected total
loadpeak or demand maximum actual
d
cbadiv
system of loadpeak actual
groupsconsumer invidual of sum
10
Plant Use Factor (u)
hours operating x kW
kWh
inst
genu
11
A steam power plant have a peak load of 65 MW. Connected to it are five loads having maximum demands of 20 MW, 15 MW, 10 MW, 10 MW and 5 MW each. Plant capacity is 90MW and annual load factor is 0.60. Determine,
a) the average load on the power plant b) the energy supplied annually c) the demand factor d) the diversity factor e) the use factor if plant only operate 8000 hrs per year f) What do you think about this plant economically?
Example 1
12
Power plant economics
The cost per kWhnet is determined by
Fixed cost (FC) Interest (I)
Depreciation (D)
Taxes and insurance (T)
Operation and Maintenance (O&M) covering Salaries and wages
Overhauling of equipment
Repairs including spare parts, water, lubricants, miscellaneous, etc..
Fuel cost
Depends on amount of electricity generated.
kWhrnet of electricity sent out per year
Depend on capital invest (construction cost)
13
Power plant economics
Total annual cost
Cc – construction cost
W – wages
R – repairs and maintenance
M – miscellaneous.
Cf – fuel cost
Annual amount of electricity sent out
Laux = power consumption by auxiliaries in %
n = plant capacity factor
Reliability of a power plant
fct CMRWCTDI
C
)(100
n x 100
1 x 8760 x kWkWh instnet
auxL
hour outage forcedhour Service
hour outage ForcedyReliabilit
14
Cost reduction
The costs have a continuous upward mainly due to monetary inflation,
rising fuel prices. It can be reduced by applying the following:
Select equipment with longer life and proper capacity
Run at high load factor
Increase power plant efficiency
Proper maintenance to reduce breakdown
Keep a proper supervision
Simple design (less dependent on highly skilled worker)
• Construction cost • Fixed cost and depreciation • Fuel cost • Present worth concept • Incremental heat rate • Economic scheduling principle • Effect of load factor on cost per kWhr
15
Problem 2.
A generating unit of 10MW capacity supplies the following loads:
a. Domestic consumer with maximum demand of 6MW at a load factor of 20%
b. Small industrial load with a maximum demand of 3.6MW at a load factor of 50%
c. Street light with a maximum demand of 400kW at a load factor of 30%.
Find overall cost of energy per kWh for each type of consumer using the following data:
Capital cost of the plant = SR 1000 per kW
Total running cost = SR 360000 per year
Annual rate of interest and depreciation on capital cost = 10%
Problem 3.
A thermal power plant of 210MW capacity has the maximum load of 160MW. Its annual
load factor is 0.6. The fuel consumption is 1.2 kg per kWh of energy generated and the cost
of fuel is SR 30.0 per tonne.
Calculate
(a) the annual capital earned if energy is sold at SR 0.06 per kWh and
(b) the capacity factor of the plant.
16
Problem 4.
Problem 5.
A new housing development is to be added to the lines of a public electrical network There are 2500 apartments each having a connected load of 6 kW, with the commercial load shown. The demand factor of the apartments is 55%. The group diversity factor of the residential load is 2.5, and the peak diversity factor is 1.5, and the commercial – load group diversity factor is 1.6 and the peak diversity factor is 1.1. Find the maximum demand of each group and the system peak demand.
Store or service Connected
load (kW)
Demand
factor (d) %
1- laundry
3-mosques
1-resturant
1-bookstore
2-drugsstores
2-grocery stores
1-shoe store
1-cloting store
1-theater
25
12 each
60
8
10 each
5 each
2
6
95
0.66
0.58
0.50
0.68
0.77
0.75
0.69
0.56
0.45
17
60
14102030
Demand Max.
Demand max. individual of SumFactor Diversity .d
MWLoadAvg
LoadAvg
PeakLoad
LoadAvgLoadfactora
30. 60
.5.0
. .
8760*30*.yearper suppliedEnergy . noofhrsLoadAvgb
14102030
60
Load Connected
demand Max.factor Demand .c
18