Chapter 3
Power Plant Economics and Variable
Variable
Load Pr oblem
Problem
3.1 TERMS AND FACTORS
The main terms and factors are as follows:
1. Load Factor
It is defined as the ratio of the average load to the peak load during a certain prescribed period of
time. The load factor of a power plant should be high so that the total capacity of the plant is utilized for
the maximum period that will result in lower cost of the electricity being generated. It is always less than
unity.
High load factor is a desirable quality. Higher load factor means greater average load, resulting in
greater number of power units generated for a given maximum demand. Thus, the fixed cost, which is
proportional to the maximum demand, can be distributed over a greater number of units (kWh) supplied.
This will lower the overall cost of the supply of electric energy.
2. Utility Factor
It is the ratio of the units of electricity generated per year to the capacity of the plant installed in
the station. It can also be defined as the ratio of maximum demand of a plant to the rated capacity of the
plant. Supposing the rated capacity of a plant is 200 mW. The maximum load on the plant is 100 mW at
load factor of 80 per cent, then the utility will be
= (100 × 0.8)/(200) = 40%
3. Plant Operating Factor
It is the ratio of the duration during which the plant is in actual service, to the total duration of the
period of time considered.
4. Plant Capacity Factor
It is the ratio of the average loads on a machine or equipment to the rating of the machine or
equipment, for a certain period of time considered.
Since the load and diversity factors are not involved with ‘reserve capacity’ of the power plant, a
factor is needed which will measure the reserve, likewise the degree of utilization of the installed equip-
ment. For this, the factor “Plant factor, Capacity factor or Plant Capacity factor” is defined as,
Plant Capacity Factor = (Actual kWh Produced)/(Maximum Possible Energy that might have
produced during the same period)
POWER PLANT ECONOMICS AND VARIABLE LOAD PROBLEM 121
Thus the annual plant capacity factor will be,
= (Annual kWh produced)/[Plant capacity (kW) × hours of the year]
The difference between load and capacity factors is an indication of reserve capacity.
5. Demand Factor
The actual maximum demand of a consumer is always less than his connected load since all the
appliances in his residence will not be in operation at the same time or to their fullest extent. This ratio
of' the maximum demand of a system to its connected load is termed as demand factor. It is always less
than unity.
6. Diversity Factor
Supposing there is a group of consumers. It is known from experience that the maximum de-
mands of the individual consumers will not occur at one time. The ratio of the sum of the individual
maximum demands to the maximum demand of the total group is known as diversity factor. It is always
greater than unity.
High diversity factor (which is always greater than unity) is also a desirable quality. With a given
number of consumers, higher the value of diversity factor, lower will be the maximum demand on the
plant, since,
Diversity factor = Sum of the individual maximum Demands/Maximum demand of the total
group
So, the capacity of the plant will be smaller, resulting in fixed charges.
7. Load Curve
It is a curve showing the variation of power with time. It shows the value of a specific load for
each unit of the period covered. The unit of time considered may be hour, days, weeks, months or years.
8. Load Duration Curve
It is the curve for a plant showing the total time within a specified period, during which the load
equaled or exceeded the values shown.
9. Dump Power
This term is used in hydro plants and it shows the power in excess of the load requirements and
it is made available by surplus water.
10. Firm Power
It is the power, which should always be available even under emergency conditions.
11. Prime Power
It is power, may be mechanical, hydraulic or thermal that is always available for conversion into
electric power.
12. Cold Reserve
It is that reserve generating capacity which is not in operation but can be made available for
service.
122 POWER PLANT ENGINEERING
13. Hot Reserve
It is that reserve generating capacity which is in operation but not in service.
14. Spinning Reserve
It is that reserve generating capacity which is connected to the bus and is ready to take the load.
15. Plant Use Factor
This is a modification of Plant Capacity factor in that only the actual number of hours that the
plant was in operation is used. Thus Annual Plant Use factor is,
= (Annual kWh produced) / [Plant capacity (kW) × number of hours of plant operation]
3.2 FACTOR EFFECTING POWER PLANT DESIGN
Following are the factor effecting while designing a power plant.
(1) Location of power plant
(2) Availability of water in power plant
(3) Availability of labour nearer to power plant
(4) Land cost of power plant
(5) Low operating cost
(6) Low maintenance cost
(7) Low cost of energy generation
(8) Low capital cost
3.3 EFFECT OF POWER PLANT TYPE ON COSTS
The cost of a power plant depends upon, when a new power plant is to set up or an existing plant
is to be replaced or plant to be extended. The cost analysis includes
1. Fixed Cost
It includes Initial cost of the plant, Rate of interest, Depreciation cost, Taxes, and Insurance.
2. Operational Cost
It includes Fuel cost, Operating labour cost, Maintenance cost, Supplies, Supervision, Operating
taxes.
3.3.1 INITIAL COST
The initial cost of a power station includes the following:
1. Land cost
2. Building cost
3. Equipment cost
4. Installation cost
5. Overhead charges, which will include the transportation cost, stores and storekeeping charges,
interest during construction etc.