Problem 1

a) Maximum demand of the power system = 100MW Maximum load which want to produce = Reserve capacity X maximum demand = 1.25 X 100MW =125MW Load factor = 0.3 = Required average load = 37.5 MW

Annual energy production = 37.5 X 1000 X 24 X 365 kWh = 3.285 108 kWh

b) i. A steam station in conjunction with a hydraulic station. Cost calculation for Hydraulic station Maximum output Capital cost = 40MW

= 40 X 1000kW X 5000 Rs/kW = Rs.200 million

Interest & depreciation

=Rs. 0.15 X 200 = Rs.30 million

Annual Energy production Annual Operational cost Annual Transmission cost

= 100 X 106kWh = Rs. 108 X .09 = Rs. 9 million = Rs. 108 X .4 =Rs. 40 million

Annual cost for power generation in hydraulic system = 30+9+40 = Rs. 79 million

Cost calculation for steam station

Required load = 125 40

= 85MW

Capital cost

= 85 X 1000 X 2500 = Rs. 212.5 million

Interest and depreciation

= 212.5 X .2

= Rs. 42.5 million = 2.285 X 108kWh = Rs. 41.13 million

Annual Energy production Annual Operation cost Annual Transmission cost

= (3.285-1) X 108 = 2.285 X 108 X 0.18 = negligible

Annual cost for power generation in steam system

= (42.5 + 41.13) =Rs. 83.63 million

Cost per kWh generated

= (83.63 + 79) X 106/3.285X108 = Rs. 0.495 per kWh

ii.

Steam station Capital cost = 125 X 1000 X 2500 = Rs.312.5 million = 312.5 X0 .2 = Rs. 62.5 million = Rs. 59.13 million

Interest and depreciation Annual Operation cost Annual Transmission cost

= 3.285X108 X 0.18 = negligible

Annual cost for power generation in steam system

= (62.5+59.13) =Rs. 121.63 million

Cost per kWh generated

= 121.63X106/3.285 X 108 =Rs. 0.370 per kWh

iii.

Hydraulic station Capital cost = 125 X 1000 X 5000 =Rs. 625 million = 625 X .15 = 3.285X108 X 0.09 = 3.285X108 X0 .4 =Rs. 93.75 million =Rs. 29.565 million =Rs. 131.4 million

Interest and depreciation Annual Operation cost Annual Transmission cost

Annual cost for power generation in hydraulic system = (93.75 + 29.565 + 131.4) = Rs. 254.715 million Cost per kWh generated = 254.715X106/3.285 X 108 = Rs. 0.775 per kWh

iv.

Coal station Capital cost = 125 X 1000 X 3000 = Rs. 375 million = Rs. 82.5 million = Rs. 39.42 million = Rs. 131.4 million

Interest and depreciation Annual Operation cost Annual Transmission cost

= 375 X .22 = 3.285X108 X 0.12 = 3.285X108 X 0.4

Annual cost for power generation in hydraulic system = (82.5 + 39.42 + 131.4) = Rs. 253.32 million Cost per kWh generated = 253.32 X 106/3.285 X 108 = Rs. 0.771 per kWh

Comparison of the unit costs of four generation method

Method of power generation Steam&Hydro Steam Hydro Coal

Capital Depreciation(Rs. Operating(Rs. Transmission(Rs. Total(Rs. Unit cost(Rs. millions) millions) millions) millions) cost(Rs.) millions) 414.5 72.5 50.13 40 162.63 0.495068 312.5 62.5 59.13 0 121.63 0.370259 625 93.75 29.565 131.4 254.715 0.775388 375 82.5 39.42 131.4 253.32 0.771142

a) Unit cost for different load factors

20% load factor

Annual energy production

= 100 X 0.2 X 1.25 X 1000 X 24 X 365 kWh = 2.19 108kWh

Steam& hydro &Hydro &Hydro Steam Hydro Coal

Capital Depreciation(Rs. Operating(Rs. Transmission(Rs. Total(Rs. Unit cost(Rs. millions) millions) millions) millions) cost(Rs.) millions) 412.5 72.5 30.42 40 142.92 0.652603 312.5 62.5 39.42 0 101.92 0.465388 625 93.75 19.71 87.6 201.06 0.918082 375 82.5 26.28 87.6 196.38 0.896712

40% load factor Annual energy production = 100 X 0.4 X 1.25 X 1000 X 24 X 365 kWh = 4.38 108kWh Capital cost(Rs. millions) 412.5 312.5 625 375 Depreciation(Rs. millions) 72.5 62.5 93.75 82.5 Operating(Rs. millions) 69.84 78.84 39.42 52.56 Transmission(Rs. millions) 40 0 175.2 175.2 Total(Rs. millions) 182.34 141.34 308.37 310.26 Unit cost(Rs.) 0.416301 0.322694 0.704041 0.708356

Steam&Hydro Steam Hydro Coal

50% load factor Annual energy production = 100 X 0.5 X 1.25 X 1000 X 24 X 365 kWh = 5.475 108kWh Capital Depreciation(Rs. Operating(Rs. Transmission(Rs. Total(Rs. Unit cost(Rs. millions) millions) millions) millions) cost(Rs.) millions) 412.5 72.5 89.55 40 202.05 0.369041 312.5 62.5 98.55 0 161.05 0.294155 625 93.75 49.275 219 362.025 0.661233 375 82.5 65.7 219 367.2 0.670685

Steam&Hydro Steam Hydro Coal

60% load factor Annual energy production = 100 X 0.6 X 1.25 X 1000 X 24 X 365 kWh = 6.57 108kWh Capital Depreciation(Rs. Operating(Rs. Transmission(Rs. Total(Rs. cost(Rs. millions) millions) millions) millions) millions) Steam&Hydro Steam Hydro Coal 412.5 312.5 625 375 72.5 62.5 93.75 82.5 109.26 118.26 59.13 78.84 40 0 262.8 262.8 221.76 180.76 415.68 424.14

Unit cost(Rs.) 0.337534 0.275129 0.632694 0.645571

1 0.9 0.8 Overall cost per kWh 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0

Overall cost per kWh generated Vs different method

20%
30% 40 50 60

Problem 2 Small hydro power unit Required energy = 150 X 5 X 200 X 365 X 100 /80 = 68.4375MWh
Annuity factor = [ Annuity factor = [
( )

], r= discount rate ] = 4.87

n= lifetime of plant

Total cost 1800000 Annual cost Unit cost

= Annual cost Annuity factor = Annual cost 4.87 = Rs. 369,610 = Rs. 369,610 / 68437.5 kWh = Rs. 5.40kWh

Supply of grid electricity Required energy = 150 X 50 X 12 = 90000kWh Total cost = cost of the 100kVA transformer + cost of the 10km of 33kV line + Cost of the 2km of LT distribution line = Rs. (500000 + 10 600000 + 2 400000) = Rs. 7,300,000 Total cost = Annual cost Annuity factor 7300000 = Annual cost 4.87 Annual cost Unit cost = Rs. 1,498,973 = Rs. 1,498,973/ 90000 kWh = Rs. 16.65kWh Small hydro power plant is more economical than supply of grid electrification. Therefore small hydro power plant can be used to electrification for the rural area.

Discussion
As a term, depreciation is defined as a loss in value, a diminishment in market price, always taking the time factor into account, because the view point of depreciation is always a rate of change in value in an asset (fixed or current) compared to the present value of that asset. If a company purchases or rents machinery, or any sort of equipment used for production purposes, it has to take into account the purchased or rented good's production life span, meaning that everything has a certain period of time in which it contributes to production before it is rendered useless. Generally the cost is allocated, as depreciation expense, among the periods in which the asset is expected to be used. Such expense is recognized by businesses for financial reporting and tax purposes. Methods of computing depreciation may vary by asset for the same business. Methods and lives may be specified in accounting and/or tax rules in a country. If we take consider about depreciation in power station the capital cost have been invested by government or loan from other countries. So if depreciation is not taken into cost then the capital cost will not be collect from customers. That mean capital cost is not shared by customers. So it will not give profit to suppliers. Therefore it is important to take into account when the cost is calculated. And also the interest rate also should be taken into account as it should also share by customers. Importance of high load factor If load factor is low it implies average load required is much smaller than maximum load factor. Therefore suppliers have to install power plant to supply maximum load, but it will provide maximum load in very small time period. This will cause to increase the unit cost per kWh. If we can improve load factor close to unity that mean the average load is close to maximum load. So it will not costly as it is used in long period of time and the unit cost per kWh will reduce. Not only the power station and also the transformers, transmission lines also want to install to bare maximum load. So if the load factor is low then these should install according to maximum load and it also used short period of time as power plant. So improving power factor we can reduce the cost for transmission also. So it is beneficial for both supplier and customer. Load factor can be improved by establishing time based cost system. From load graph we can find the maximum power consumption time period. Then we can cost high for that time period. Then the customer will reduce their usage in that time period. From that load factor can be improved.

ASSIGNMENT 01

Economical comparison of different power systems