POWER PLANT ENGINEERING

1. Plant Economics
Prof. Swapnil Y. Gadgune, Department of Electrical Engineering, PVPIT, Budhgaon, Sangli
Photo Credit:
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2. LOCATION OF POWER PLANTS
• The location of hydroelectric power plants is usually predetermined
by the availability of water and the water head which is utilized.

3. LOCATION OF POWER PLANTS
• For conventional base load thermal power plants, the following
factors are to be considered:
1) Availability of cooling water (if cooling towers
are used the possibility of adequate make-up
water).
2) Availability of fuel (water, rail or pipe connection
to the fuel source, and the cost of fuel
transport).
3) Distance from the center of gravity of load
demand.
4) Cost of land (including space for extension,
maintenance workshop and storage yard).
5) Character of soil.
6) Main wind direction and water currents in
cooling water source (sea, lake or river) in order
to minimize air and water pollution, and other
ecological considerations.
7) With coal-fired stations, disposal of ash.
8) If the plant is erected far from a town,
accommodation for staff.
9) Rail and road connections.
10) Security considerations.

4. LOCATION OF POWER PLANTS
• For nuclear power plants two additional factors are to be considered:
1. Density of population in the vicinity.
2. Danger of earthquakes.

5. POWER PLANT ECONOMICS
• A power plant should provide a reliable supply of electricity at minimum
cost to the consumer. The cost per 𝑘𝑊ℎ𝑛𝑒𝑡 (annual amount of electricity
sent out by a power plant) is determined by:
1. Fixed costs (FC), mainly interest, depreciation, insurance, taxes,
depending on the capital invested, i.e. on the construction costs of the
plant including the cost of the land.
2. Operation and maintenance (O & M) costs covering salaries and wages,
overhauling of equipment, repairs including spare parts, water,
lubricating oil, chemicals and miscellaneous expenses.
3. Fuel costs, dependent on the amount of electricity generated.
4. 𝑘𝑊ℎ𝑛𝑒𝑡 of electricity sent out per year.

6. POWER PLANT ECONOMICS
• The total annual costs (𝐶𝑡) in a power plant can be calculated from:
𝐶𝑡 = (
𝐼+𝐷+𝑇
100
)𝐶𝑐 + 𝑊 + 𝑅 + 𝑀 + 𝐶𝑓………(1)
Where, 𝐼- interest %
𝐷- depreciation %
𝑇- taxes and insurances %
𝐶𝑐- construction cost
𝑊- wages and salaries
𝑅- Repairs (maintenance)
𝑀- miscellaneous
𝐶𝑓- fuel cost

7. POWER PLANT ECONOMICS
• The annual amount of electricity sent out by a power plant (𝑘𝑊ℎ𝑛𝑒𝑡)
is given by
𝑘𝑊ℎ𝑛𝑒𝑡 = 𝑘𝑊𝑖𝑛𝑠𝑡 × 8760 × (1 −
𝐿𝑎𝑢𝑥
100
) × 𝑛……….(2)
Where,
𝑘𝑊𝑖𝑛𝑠𝑡- rated or installed output of generators
𝐿𝑎𝑢𝑥- power consumption by auxiliaries %
𝑛- plant capacity factor

8. POWER PLANT ECONOMICS
• In order to calculate the electric power cost to a consumer, in
addition to the production cost (fixed cost, operation and
maintenance, and fuel cost), the transmission cost, distribution cost,
administrative expenses, and return or profit on the investment have
to be taken into consideration.

9. POWER PLANT ECONOMICS
• A measure for the reliability of a power plant is the forced outage rate
defined by the annual ratio of
𝑓𝑜𝑟𝑐𝑒𝑑 𝑜𝑢𝑡𝑎𝑔𝑒 ℎ𝑜𝑢𝑟𝑠
𝑠𝑒𝑟𝑣𝑖𝑐𝑒 ℎ𝑜𝑢𝑟𝑠 + 𝑓𝑜𝑟𝑐𝑒𝑑 𝑜𝑢𝑡𝑎𝑔𝑒 ℎ𝑜𝑢𝑟𝑠
• As forced outages raise operation and maintenance costs,
• Proven reliability of equipment and regular preventive maintenance
work are essential, not only to guarantee electric supply but also for
the overall economy of the power plant.

10. POWER PLANT ECONOMICS
• The costs, however, have a continuous upward trend due to monetary inflation,
rising fuel prices and increased demand for measures protecting the
environment.
• The cost of power generation can be reduced by
(a) selecting equipment of longer life and proper capacities,
(b) running the power station at high load factor,
(c) increasing the efficiency of the power plant,
(d) carrying out proper maintenance of power plant equipment to avoid plant
breakdowns,
(e) keeping proper supervision, since good supervision is reflected in lesser
breakdowns and extended plant life, and
(f) using a plant of simple design that does not need highly skilled personnel.

11. References
• P K Nag, "POWER PLANT ENGINEERING", Fourth Edition (Book),
McGraw Hill Education (India) Private Limited, NEW DELHI