Question

4.14 An electric utility, expecting to increase its system capacity by 400 megawatts, must choose between a high-technology combined-cycle plant, at a cost of $1800 per kW of installed capacity, and an oil-burning steam plant, at $1150 per kW. The combined-cycle plant has a variable cost of 18 mills per kW-hr, while the oil-burning plant variable cost is 39 mills per kW-hr. For an annual plant factor of 0.6 and fixed charges of 15% of the capital cost, determine (a) the total annual cost of operation of each plant, and (b) the cost of electricity, in cents per kW-hr, for each plant.

Answer 1

1 mill = 0.001 dollar

Annualized plant capacity factor means the ratio of the annual amount of electricity produced, measured in kilowatt hours, divided by the annual amount of electricity the powerplant could have produced if it had been operated at its maximum permitted capacity during all hours of the year, expressed in kilowatt-hours.

system capacity needs to increase by 400 MW

actual produced plant factor capacity of powerplant

actual produced = capacity of power plant * plan factor

actual produced 240MW

high technology combined cycle plant

cost = $1800 per KW

variable cost = 18 mills per KW-hr

variable cost = 18 mills/3600 per KW = 0.005 mills per KW

fixed charged = 15% of capital cost

oil burning steam plant

cost = $1150 per KW

variable cost = 39 mills per KW-hr

variable cost = 39 mills/3600 per KW = 0.010833 mills per KW

plant factor = 0.6

fixed charged = 15% of capital cost

high technology combined cycle plant

annnul cost = (0.15)* (fixed price)* (actual produced)+ (actual produced)* variable cost)

annnulcost = (0.15) * (1800) * (240 * 103) + (240 * 103) * (0.005 * 10-3)

annual cost = $ 64800001.2

oil burning steam plant

annnul cost = (0.15)* (fixed price)* (actual produced)+ (actual produced)* variable cost)

annnuleost = (0.15) * (1150) * (240 * 103) + (240 * 103) * (0.010833)

annual cost = $ 41402599.92

B) cost of electricity per KW-hr

high technology combined cycle plant

annual cost cost of electricity per KW hr 17 (actual production(K)3600)

$64800001.2 (240* 103 * 3600) cost of electricity per h

cost of electricity per KW-hr = $ 0.0750 per KW-hr

high technology combined cycle plant

annual cost cost of electricity per KW hr 17 (actual production(K)3600)

cost of electricity per KW-hr-(240* 103 * 3600)

cost of electricity per KW-hr =$ 0.0479 per KW-hr

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