EET 411 Power Systems Operations

and Controls

Economic Power System Operation

EET 411 Power System Operations and

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Controls (2017)

Example 1
• The cost of turbo-alternator installed in generating
plant is RM 1 000 000 and its normal life expectancy is
30 years. At the end of this time, it is expected that the
turbo-alternator will have a scrap value of RM 30 000.
• Calculate by sinking fund depreciation method the
annual charges to be set aside in order to replace the
alternator-set with a new one at the end of 30 years.
• Compare this charge with that calculated by straight-
line depreciation method. Assume rate of interest as
10%. [1]

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Example 1 (Solution)
P = RM 1000000
S = RM 30000
Q = P − S = RM 1000000 − RM 30000 = RM 970000
n = 30
r = 10% = 0.1

• Annual depreciation charge sinking fund method

q=
(P − S )r = Q.r
(1 + r )n − 1 (1 + r )n − 1 [1]
RM 970000 x 0.1 RM 970000
= = = RM 5559 .93
(1 + 0.1)30 − 1 17 .4494 − 1

EET 411 Power System Operations and

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Controls (2017)

Example 1 (Solution) cont.

• Annual depreciation charge straight line depreciation
method
P−S Q
q= =
n n
RM 970000
= = RM 32333.33
30
[1]

EET 411 Power System Operations and 4

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Example 2
• The heat rate of a 50 MW fuel-fired generator unit
is measured as follows
– 10 MKcal/MWh at 25 % of rating
– 8.6 MKcal/MWh at 40% of rating
– 8.0 MKcal/MWh at 100% of rating
• Cost of fuel is RM 4 per MKcal. Calculate:-
a) Fuel cost function , C(Pg)
b) Fuel cost when 100% loaded,[1] 40% loaded and 25%
loaded
c) Incremental cost
d) Cost of fuel to deliver 51 MW

EET 411 Power System Operations and

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Controls (2017)

Example 2 (Solution) cont.

• Generally the heat input energy rate, Fi(Pgi) is found by
the formula,
Fi ( Pgi ) = Pgi H i ( Pgi )
H i ( Pgi ) = heat − rate ( MKCal / MWhr )
Fi ( Pgi ) = input energy rate ( MKCal / hr )

• Let the cost of the fuel be K, RM/MKCal,

[1] then the input
fuel cost, Ci(Pgi) is
Ci ( Pgi ) = KFi ( Pgi ) = KPgi H i ( Pgi )

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Example 2 (Solution) cont.
• The heat-rate curve of figure below, may be
approximate in the form,
α'
H i ( Pgi ) = + β 'i + γ ' Pgi
Pgi
•
[1]

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Controls (2017)

Example 2 (Solution) cont.

• Then, from previous equation become, Ci(Pgi)
become, C ( P ) = Kα ' + Kβ ' P + Kγ ' P 2
i gi i gi gi

Ci ( Pgi ) = ai + bi Pgi + ci P 2 gi

• Slope from the fuel cost curve, dCi/dPgi is

called incremental cost [1]
dCi
= ICi = bi + 2ci Pgi
dPgi

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Example 2 (Solution) cont.
a) The three measurement data given three points on
the curve and hence solve three unknown
coefficient,
25% of Pg=12.5 MW, 40% of Pg =20MW & 100% of Pg=50MW

α'
∴ + β ' + 12.5γ ' = 10
12.5
α'
+ β ' + 20γ ' = 8.6 [1]
20
α'
+ β ' + 50γ ' = 8.0
50

EET 411 Power System Operations and

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Controls (2017)

Example 2 (Solution) cont.

• Solving previous equations, solve
α’=55.56, β’=5.11, γ’=0.0355
Cost of fuel K=RM 4/MKCal
Therefore, a=Kα’=4 x 55.56 = 222.24
b=Kβ’=4 x 5.11 = 20.44
c=Kγ’=4 x 0.0355 = 0.142
Therefore, Fuel cost function is given
[1] by
C ( Pg ) = 222 .24 + 20 .44 Pg + 0.142 Pg2

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Example 2 (Solution) cont.
b) Fuel cost when 100% loaded, 40% loaded and 25%
loaded,
At 25%, Ci ( Pg = 12.5) = 222.24 + (20.44 ×12.5) + 0.142 × (12.5) 2
Ci ( Pg = 12.5) = 500 RM / hr
At 40%,
Ci ( Pg = 20) = 222.24 + (20.44 × 20) + 0.142 × (20) 2
Ci ( Pg = 20) = 688 RM / hr
[1]
2
At 100% Ci ( Pg = 50) = 222.24 + (20.44 × 50) + 0.142 × (50)
Ci ( Pg = 50) = 1599 RM / hr

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Controls (2017)

Example 2 (Solution) cont.

c) Incremental cost, dC
= IC = (20.44 + 0.284 Pg ) RM / MWhr
dPg

d) At 100% rating, Pg=50 MW

IC=(20.44+0.284x50)=34.64 RM/Whr
Approximate cost of fuel to deliver 51 MW is C(Pg=50)+ ICx∆Pg
∆Pg=(51-50)=1MW
C(Pg=50)=1599 RM/h
Therefore, Approximate cost = 1599 + [1]
34.64x1 =1633.64 RM/hr
Exact cost,
C(Pg=51)=222.24 + 20.44x51 + 0.142x(51)2 =1634 RM/hr

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Example 3
• A 500 MW (net) generator is 35% efficient. It is
being supplied with coal costing RM 1.70 per MBtu
and with heat content 9000 Btu per RM. What is
the coal usage in RM/hr? What is the cost?
For reference
-1 Btu (British thermal unit) = 1054 J
-1 MBtu = 1x106 Btu [1]
-1 MBtu = 0.29 MWh

EET 411 Power System Operations and

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Example 3 (Solution)
• At 35% efficiency required fuel input per hour

500MWh 1428MWh 1MBtu 4924MBtu

= × =
hr × 0.35 hr 0.29MWh hr
4924MBtu 1RM 547111RM
× =
hr 0.009MBtu hr
4924MBtu RM1.70 [1]
Cost = × = 8370.8RM / hr or RM16.74 / MWh
hr MBtu

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Example 4

• Incremental Cost Example

For a two generator system assume
C1 ( PG1 ) = 1000 +20 PG1 + 0.01PG21 $/hr
C2 ( PG 2 ) = 400 +15PG 2 + 0.03PG22 $/hr
Then
dC1 ( PG1 )
IC1 ( PG1 ) = = 20 + 0.02 PG1 [1]
$/MWh
dPG1
dC2 ( PG 2 )
IC2 ( PG 2 ) = = 15 + 0.06 PG 2 $/MWh
dPG 2

EET 411 Power System Operations and

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Example 4 cont.
If PG1 = 250MW and PG 2 = 150 MW then,
C1 (250) = 1000 + 20 × 250 + 0.01× 250 2 = $6625 / hr
C2 (150) = 400 + 15 × 150 + 0.03 × 150 2 = $3325 / hr
Then,
IC1 (250) = 20 + 0.02 × 250 = $[1]
25 / MWh
IC2 (150) = 15 + 0.06 × 150 = $24 / MWh

EET 411 Power System Operations and 16

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