This document contains information about power generation economics, including definitions of key concepts and factors related to the costs of different generation technologies. It defines total cost, average cost of energy, average cost of capacity, and marginal cost of energy. It also defines factors such as load factor, capacity factor, plant use factor, diversity factor, and demand factor. Load factor measures how efficiently energy is used, while capacity factor depends on fuel type. Plant use factor is the ratio of energy generated to potential energy based on plant capacity and hours of operation. Diversity factor accounts for the fact that individual consumer demands do not peak at the same time. Demand factor is the ratio of maximum demand to connected load.

1. ECONOMICS OF
GENERATION

2. NAME- Gourav Singh
UNIV. ROLL NO- 12201619008
CLASS ROLL-55
YEAR/SEM- 4th/7th
SUB NAME- Power Generation Economics
SUB CODE- PE-EE 701C
CLG NAME- St thomas college of Engineering & Technology

3. Introduction
There are a lot of different
technologies and fuels that can be
used to generate electricity.
Comparing them is often difficult
because there is often a
fundamental tradeoff between the
cost to build a particular type of
power plant and the cost to run a
particular type of power plant.

4. Basic Cost Concepts
● Total cost: The total cost of producing Q MWh
of electricity (takes units of dollars);
● Average cost of energy: The average cost of
producing one MWh of electric energy (takes
units of dollars per MWh)
● Average cost of capacity: The average cost of
one MW of electric power capacity (takes units
of dollars per MW)
● Marginal cost of energy: The incremental cost,
in dollars per MWh, of producing an additional
unit of electric energy.
● Variable costs are those that change when output
changes. Examples of variable costs for power
generation include the cost of fuel, the cost of
labor or materials, costs to start up and shut down
plants, and some types of environmental costs.
● Fixed costs are those that remain at a fixed
amount no matter how much electricity the plant
produces. Examples of fixed costs include capital,
some types of labor costs, insurance and land.

5. Concept Of Load Factor
Load factor is defined as the ratio of the average load
over a given period to the maximum demand (peak
load) occurring in that period. In other words, the
load factor is the ratio of energy consumed in a given
period of the times of hours to the peak load which has
occurred during that particular period.
Load factor means how efficiently we use energy. It is
the measure of the utilisation of electrical energy
during a given period to the maximum energy which
would have been utilised in that period. The load
factor plays an important role in the cost of generation
per unit (kWh). The higher the load factor the smaller
will be the generation cost for the same maximum
demands.

6. Plant Capacity Factor
The capacity factor is defined as the ratio of the total actual energy
produced or supply over a definite period, to the energy that would have
been produced if the plant (generating unit) had operated continuously at
the maximum rating. The capacity factor mainly depends on the type of
the fuel used in the circuit.

7. Plant Use Factor
The plant use factor of a power station is defined as the ratio
of kWh generated to the product of plant capacity and the
number of hours for which the plant was in operation, i.e.,
Plant use factor=kWhgenerated/
(Plantcapacity×Hoursofoperation)

8. Diversity Factor
Diversity factor is defined as the ratio
of the sum of the maximum demands
of the various part of a system to the
coincident maximum demand of the
whole system. The maximum
demands of the individual consumers
of a group do not occur
simultaneously. Thus, there is a
diversity in the occurrence of the
load. Due to this diverse nature of the
load, full load power supply to all the
consumers at the same time is not
required.

9. Demand Factor
The demand factor of an electric power station is defined as the ratio of
maximum demand on the power station to its connected load, i.e.
DemandFactor=MaximumDemand/ConnectedLoad
Generally, the value of demand factor is less than 1. It is because the maximum
demand on the power station is usually less than the connected load to the power
station. The knowledge of demand factor is important in determining the
capacity of equipment of the power plant.

10. THANK YOU