Power Generation Economics : Concepts

1. Peak Load Plants :

Such plants arc operated only during peak load periods. These plants must be capable of quickly starting from cold conditions. Diesel engine plants, gas turbine plants, pumped storage plants and sometimes steam power plants and hydroelectric plants are used as peak load plants. Efficiency of such plants is of secondary importance as these plants operate for limited period only.

2. Use of accumulators :

Although electrical energy cannot be stored, however steam can be stored in steam accumulators, which can be used to generate additional power during peak load period.

3. Purchasing power :

When a power plant cannot generate sufficient power to meet with the demand, it may purchase power from neighboring plants if facilities exist.

4. Load Shedding :

When there is no alternative available the supply to some consumers is cut off temporarily. Which is known as load shedding. Sometimes load shedding is done by switching off feeders by rotation or by reducing system voltage or by reducing frequency.

SELECTION OF TYPE OF POWER GENERATION

It is done on the basis of

1. Capacity of power plant
2. Probable load factor
3. Space
4. Cost of fuel and transpiration facilities
5. Availability of water
6. Interest and depreciation
7. Reliability

Cost of Electrical Energy :

Capital cost of a power plant is due to

1. Cost of land and buildings
2. Cost of generating equipment and accessories
3. Cost of transmission and distribution network
4. Cost of designing and planning the power station

In general following plants are preferred for base load operations :

1. Nuclear power plant
2. Hydro electric plant
3. Steam power plant

Following points are preferred for peak load operations :

1. Diesel engine power plant.
2. Gas turbine power plant
3. Pumped storage plant.

Cost of generation :

The cost of generating electricity in a power plant can be conveniently split into two parts: fixed costs and variable costs.

(A) Fixed Cost :

Fixed costs are to be borne by the plants irrespective of the load. These costs consist

(i) Interest on capital :

Capital cost of a plant includes the cost of land, buildings, of equipment including installation, designing, engineering etc. Since the capital cost of a plant is fixed therefore interest on the amount is considered as fixed cost.

(ii) Taxes :

A power generating and distributing company has to pay taxes to the Government This amount is more or less fixed.

(iii) Cost of Transmission and Distribution :

Power transmission and. distribution network involves huge capital expenditure. This involves cost of transmission lines, transformers, substations and associated equipment. Interest on the capital involved is considered as a fixed cost.

(iv) Depreciation:

It is decrease in value caused by the wear due to constant use of an equipment Under the income tax laws there is provision for setting aside a fixed proportion of the capital employed, towards the depreciation fund.

(v) Insurance :

The plant and also life of some of workers working in dangerous areas, has to be insured against various risks involved. For this purpose a fixed sum is payable as premium for the insurance cover.

(vi) Salary for Managerial Staff :

Irrespective of whether the plant works or not certain managerial staff has to be retained by the organization. The salary liability of such staff is a part of the fixed cost.

(B) Variable Cost :

These costs vary in some proportion of the power generated in a plant. These costs consist of

(i) Cost of fuel :

Cost of fuel is directly related with the amount of power generated. For generating more power, more fuel is required. Cost of fuel may be 10% to 25% of the total cost of production. In case of hydroelectric plants the cost of fuel is zero.

(ii) Maintenance and Repair Charges:

In order to keep the plant in running condition, certain repairs are always needed. Stock of some consumable and non- consumable items has got to be maintained. All chargers for such staff are considered as operating costs.

(iii) Wages:

Salaries including allowances bonus, benefits etc. for the workers are considered as operating costs.

Total cost of production is thus sum of the fixed charges and the operating charges. As the plant load factor improves, the cost per kWh decreases. The sum of the charges for various factors will give an optimum load factor where such charges will be least.

Tariff :

A tariff is the rate of charge per kilowatt hour of energy supplied to a consumer. The cost of generation of electrical energy may be conveniently split into two parts e.g. fixed charges plus the operating charges. So a tariff should be adjusted in such a way that the total receipts balance the total expenditure involved in generating the energy. There are several solutions to this problem, some of which are given below :

1. Uniform Rate Tariff :

In this case there is a fixed rate per unit amount of energy consumed. The consumption of energy is measured by the energy meter installed at the premises of the consumer. This type of tariff accounts for all the costs involved in the generation of power. This is the simplest tariff easily understood by consumers. However, this type of tariff does not distinguish between small power domestic consumer and bulk power industrial consumers.

2. Two Part Tariff:

In this the total charges are split into two parts - fixed charges based on maximum demand (in kW) plus the charges based on energy consumption (in kWh). This method suffers from the drawback that an additional provision is to be incorporated for the measurement of maximum demand. Under such tariff, the consumers having 'peaked' demand for short duration are discouraged.

3.Block Rate Tariff:

In this the fixed charges are merged into the unit charges for one or two blocks of consumption, all units in excess being charged at low or high unit rate. Lower rates for higher blocks are fixed in order to encourage the consumers for more and more consumptions. This is done in case the plant has got larger spare capacity. Wherever the plant capacity is inadequate, higher blocks are charged at higher rate in order to discourage the consumers for higher than minimum consumption.

4. Three Part Tariff :

It is an extension of the two part tariff in that it adds to the consumer some fixed charges irrespective of the energy consumption or maximum demand. In this ever if the consumer has got zero power consumption, he has to pay some charges merely because a connection has been provided to him.

5. Power Factor Tariff :

In ac power supply size of the plant is determined by the kVA rating. In case the power factor of a consumer installation is low, the energy consumption in terms of kW will be low. In order to discharge such consumers, power factor tariff is introduced, which may be of the following types.

(a) Maximum kVA demand Tariff :

In this instead of kW. the kVA consumption is measured and the charge are Based partly or fully on this demand.

(b) Sliding Scale tariff :

In this case the average power factor is fixed say at 0.8 lagging. Now if the power factor of a consumer falls below by 0.01 or multiples there of, some additional charges are imposed. A discount may be allowed in case the power factor is above 0.8.

The depreciation on the plant is charged by any of the following methods
1. Straight Line method
2. Sinking fund method
3. Diminishing value method.

from ur's -- Bellapuri saikumar
( www.facebook.com/saikumar544)

Monday, 15 June 2015