Economic analysis of power plant By Prof. Kokare Amol Yashwant, Babasaheb Phadtare Polytechnic, Kalamb-Walchandnagar

1. Subject- Power Plant Engineering
Unit No. 6
Economic Analysis
of Power Plant.
Dnyan, Kala, Krida and Krishi Prathisthan’s
Department of Mechanical Engineering Prof. Kokare A.Y.

2. Babasaheb Phadtare Polytechnic, Kalamb-Walchandnagar.
Department of Mechanical Engineering Prof. Kokare A.Y.
Unit No.5- Economic
Analysis of Power
Plant. (12 Marks)
CO f.- Estimate
Economic parameters
of Power Plants.

3. Prediction Of Load And Its Necessity
Installation of a power plant in a particular region depends upon
the maximum demand of power for particular region.
1. Statistical Method:
In this method, the maximum demand for a year is collected for
the past several years.
Depending on the data available, the expected future load can be
approximated.
2. Field Survey Method:
In this method, the existing requirement for different needs such
as industrial, agricultural, municipal and residential area are
determined and the future load requirements are decided
considering various factors such as population growth, living
standard of future, climatic condition, industrial development etc.
Babasaheb Phadtare Polytechnic, Kalamb-Walchandnagar.
Department of Mechanical Engineering Prof. Kokare A.Y.

4. Factors Affecting Choice of a Power Plant For
Electricity Generation
1. Type of fuel available.
2. Fuel transportation cost.
3. Requirement and cost of land and cost of
foundation.
4. Cost of equipment for transmission of energy.
5. Availability of cooling water.
6. Type of load.
7. Site of power plant.
8. Generating unit.
9. Number of generating units.
Babasaheb Phadtare Polytechnic, Kalamb-Walchandnagar.
Department of Mechanical Engineering Prof. Kokare A.Y.

5. Different Terms Used In Economic Analysis Of
Power Plant
Babasaheb Phadtare Polytechnic, Kalamb-Walchandnagar.
Department of Mechanical Engineering Prof. Kokare A.Y.

6. Different Terms Used In Economic Analysis Of
Power Plant
Babasaheb Phadtare Polytechnic, Kalamb-Walchandnagar.
Department of Mechanical Engineering Prof. Kokare A.Y.
1. Connected load
Heater premises = 60 + 500 + 60 + 60 + 60 (500 W) (60 W) +500 +
100 + 60 = 1400 Watts.
2. Demand:
Demand is expressed in kilowatts (kW), kilovolt amperes (kVA),
amperes (A) or other suitable units.
3. Maximum demand:
4. Demand factor:
Demand factor is defined as "the ratio of maximum demand to
connected load."
5. Average load
Average load = Area under load curve/24
= Energy consumed in 24 hrs/24 …..in kWh

7. Babasaheb Phadtare Polytechnic, Kalamb-Walchandnagar.
Department of Mechanical Engineering Prof. Kokare A.Y.
6. Load factor (F):
Load factor (F):= Average load/Maximum demand or
Maximum load or Peak Load.
Load factor (F):= Total energy consumption in 24 hrs
/Maximum demand or load x 24
7. Diversity factor:
Diversity factor =Sum of individual maximum demands/
Simultaneous maximum demand
8. Plant capacity factor:
Capacity factor= Average load x t / Plant capacity x t
= Peak load x Load factor / Plant capacity
9. Plant use factor:
the ratio of energy produced in given time to maximum possible
energy that could have been produced during the actual number of
hours of operation."

8. Babasaheb Phadtare Polytechnic, Kalamb-Walchandnagar.
Department of Mechanical Engineering Prof. Kokare A.Y.
Plant use factor = Annual energy produced/ Capacity of plant
X No. of hours the plant is in operation
during the year
10. Utilization factor
the ratio of the maximum generator demand to the
generator capacity.
Utilization factor = Maximum generator demand /
Generator capacity.

9. COST ANALYSIS
Babasaheb Phadtare Polytechnic, Kalamb-Walchandnagar.
The two basic categories of cost are,
(A) Fixed cost and (B) Operating cost.
(A) Fixed Cost:
Fixed cost is usually incurred only once during the life of plant.
1. Cost of power plant.
i) Purchase of land,
ii) Purchase of machinery & equipment and their installation.
iii) Engineering and architectural fee of that project.
2. Capital cost of Primary distribution system.
i) Cost of construction of transmission line.
ii) Cost of construction of substation .
3. Interest, Taxes and Insurance:
i) Interest on capital cost.
ii) Taxes.
iii)Insurance

10. Babasaheb Phadtare Polytechnic, Kalamb-Walchandnagar.
Department of Mechanical Engineering Prof. Kokare A.Y.
4. Depreciation
5. Managerial cost:
B) Operating Cost / Variable Cost:
Operating cost means the expenditure incurred for operating the
power plant to produce electrical energy.
1. Cost of fuel (except the case of hydroelectric power plant):
2. Cost of salaries and wages:
3. Cost of maintenance and repair:
4. Operating taxes:
UNIT ENERGY COST
Unit energy cost = Annual fixed charges/ kW rating of plant
+ Annual running charges/ Power generated in kWh
Unit energy cost = A/kW + B/kWh

11. Babasaheb Phadtare Polytechnic, Kalamb-Walchandnagar.
Department of Mechanical Engineering Prof. Kokare A.Y.
METHODS TO REDUCE POWER GENERATION
COST
1. By using a plant of simple design, which does not need
highly skilled personnel/labour.
2. By selecting equipment's of proper capacities.
3. By selecting equipment's having longer life and
requiring minimum maintenance cost over the whole life.
4. By carrying out proper maintenance of equipment's to
avoid plant breakdowns.
5. By running the power plant/stations at high load factors.
6. By increasing the efficiency of power plant.
7. By supervising the plant operations carefully, which
ensures few breakdowns and extended plant life.

12. THANK YOU
Dnyan, Kala, Krida and Krishi Prathisthan’s
Department of Mechanical Engineering Prof. Kokare A.Y.