Power Economics and Management

2nd Semester, 3rd Year (16EL)

B.E Electrical Engg. Program

Lecture # 20
Power Plant Rating, Relative Cost

Department of Electrical Engineering

Mehran University of Engg. & Technology, Jamshoro
Relative Cost of Various Power Plant
Cost of Electrical Energy
 Relative Cost of Various Power Plant

Hydro power Fuel power Nuclear power Solar power Wind power

Initial cost High Moderate Highest High High

Running cost Low Highest Least Moderate Moderate

Reserves Permanent Limited Abundant Day time only Permanent

Cleanliness Highest Lowest Low High High

Simplicity Simplest Complex Most complex Complex Complex

Reliability Highest Low High Low Low

 Relative Cost of Various Power Plant
Plant Costs
Overnight Capital Cost (2010
  $/kW) Fixed O&M Cost (2010$/kW) Variable O&M Cost ($/MWh)

Coal
Advanced PC $2,844 $29.67 $4.25
Dual Unit Advanced PC with CCS $4,579 $63.21 $9.05
Single Unit IGCC with CCS $5,348 $69.30 $8.04
Natural Gas
Advanced NGCC $1,003 $14.62 $3.11
Advanced NGCC with CCS $2,060 $30.25 $6.45
Conventional CT $974 $6.98 $14.70
Advanced CT $665 $6.70 $9.87
Fuel Cells $6,835 $350 $0.00
Uranium
Dual Unit Nuclear $5,335 $88.75 $2.04
Biomass
Biomass BFB $3,860 $100.50 $5.00
Wind
Onshore Wind $2,438 $28.07 $0.00
Offshore Wind $5,975 $53.33 $0.00
Solar
Solar Thermal $4,692 $64.00 $0.00
Small Photovoltaic $6,050 $26.04 $0.00
Large Photovoltaic $4,755 $16.70 $0.00
Geothermal
Geothermal – Dual Flash $5,578 $84.27 $9.64
Hydro
Hydro-electric $3,076 $13.44 $0.00

Source: Updated Capital Cost Estimates for Electricity Generation Plants

http://www.eia.gov/oiaf/beck_plantcosts/index.html
Cost of Electrical Energy
 The total cost of electrical energy generated can be
divided into three parts, namely ;
 Fixed cost ;
 Semi-fixed cost ;
 Running or operating cost.
Fixed Cost
 It is the cost which is independent of maximum demand
and units generated.
 The fixed cost is due to the annual cost of central
organization, interest on capital cost of land and
salaries of high officials.
 The annual expenditure on the central organization and
salaries of high officials is fixed since it has to be met
whether the plant has high or low maximum demand or it
generates less or more units. Further, the capital investment
on the land is fixed and hence the amount of interest is also
fixed.
Semi-fixed cost
 It is the cost which depends upon maximum demand but is
independent of units generated.
 The semi-fixed cost is directly proportional to the
maximum demand on power station and is on account of
annual interest and depreciation on capital investment of
building and equipment, taxes, salaries of management
and clerical staff.
 The maximum demand on the power station determines its
size and cost of installation.
 The greater the maximum demand on a power station, the
greater is its size and cost of installation.
Running cost
 It is the cost which depends only upon the number
of units generated.
 The running cost is on account of annual cost of
fuel, lubricating oil, maintenance, repairs and
salaries of operating staff.
 Since these charges depend upon the energy output, the
running cost is directly proportional to the number of
units generated by the station.
 In other words, if the power station generates more
units, it will have higher running cost and vice-versa.
Maintenance and Operating Costs
 Maintenance Costs
- Routine Maintenance - Budget Allocated on yearly Basis
- Preventive Maintenance – Budget Allocated on yearly
Basis
- Corrective Maintenance –Cost met from contingency
 Operating Costs
- Fuel Costs
- Finance Cost (Leasing and Insurance)
- Staff Salaries
- Management Salaries
THANKS