Le 3
Le 3
Le 3
2023
Lecture 3
• Selecting power supply such as hydraulic power plant, steam power plant, gas power plant, I.C power plants, nuclear power
plants.
• Eliminate some choices based on other controlling factors: nonavailability of water power sites, unit capacities are too
small for the size of demand, inability to obtain certain fuels at economic prices in certain areas, lack of large water supply.
• When the type of plant is decided there are wide variety of designs to choose from.
• In case of steam-turbine plant the choice may be basic Rankine cycle, reheat, regenerative, also the throttle pressure and
temperature of the power cycle.
• Also, the choice of the basic equipment of certain power plant will affect the cost.
Annual Costs
• For power plants of the same capacity and type increasing the efficiency of the plant increase the Annual Fixed
charge and reduces the Annual operating costs
𝑅𝑅: Fixed charge rate = ( interest ratio + depreciation ration+ tax and insurance ratios)
P: Capital investment $
𝐶𝐶𝑜𝑜 : total operating costs= (fuel+ supplies+ labors+ supervision+ maintenance+ taxes)
• Point of minimum total annual costs occurs at optimum investment costs P* at which
An industrial plant needs 50,000,000 kwh of electrical energy a year with a maximum demand of 10,000 kW. These can be
purchased from the local utility for $ 480,000 annually. As an alternate scheme the industry consider installing a 10,000 kW
steam-turbine plant. The three plants in table 1 has been proposed:
The station will run 24 hr a day with operators working 8 hr per day and 5 days a week. The average annual salary for
operators is $ 5,200 . Repair costs are estimated to be 90 cents per ton of coal burned for all schemes. The installed costs
exceed original estimates by 20 %. General operating supplies are estimated at $10,000 annually for all plans. Money earns at
least 6 % in this business, which is expected to continue indefinitely, but the life of the plant is to be taken as 15 years.
Taxes on real estate and property amount to 4% and the various operating taxes add to 1 % of annual operating costs.
Annual insurance premiums equal 0.2 % of all equipment costs. Fuel will be coal at $ 6.5 a ton having a high heat value of
14,200 Btu per lb. Determine which scheme is the economic one.
Table 1 Alternate plant schemes.
Plant A Plant B Plant C
-Steam generators and auxiliary $ per lb/hr capacity 4.08 4.73 6.45
Table 2 Final answer for R = 14.5%, Fuel Costs $6.5 per ton.
• The plant with highest investment will have the largest impact on the
total cost.
Table 3 Final answer for R = 7%, Fuel Costs $6.5 per ton.
Total Annual costs Plant A Plant B Plant C
$ $ $
• If the purchase price of fuel is increased to $13 per ton at the same fixed charge rate, the plant of the highest
investment will have the largest impact on the total annual costs.
Table 4 Final answer for R = 14.5%, Fuel Costs $13 per ton.