4.1.2 General economic optimisation of plant
A central theme so far in this chapter, has been the improvement of cycle efficiency. The importance of efficiency in reducing the unit cost of electricity can best be seen by examining its relation to other factors affecting cost. What matters most to the utility manager is the reduction of the total lifetime cost of the plant (refer to Volume A for the full discussion).
The major concern of this chapter is the lifetime generation costs of turbine-generator plant, which breaks down into:
- Capital cost.
- Fuel cost.
- Operating and maintenance costs.
For a valid comparison of new designs, all these cost elements must be considered simultaneously at a certain reference date, e.g., the commissioning date. The Capital cost is conditioned by the timing of stage payments and the interest rates predicted over the construction period. Similar considerations apply to the Fuel cost and Operating/Maintenance costs, with interest rates being the determining factor. To enable a comparison between plant of different ratings, these costs are expressed as a Capital cost factor, measured in £/kW.
The Capital cost comprises not only the cost of the turbine-generator itself, but also the costs of the turbine hall to house it and the services required.
The historical trend has been to larger, higher output plant of compact design, which has had a considerable impact on reducing the Capital cost factor. The practical problems of transport and assembly indicate diminishing returns in this trend, which suggest that plant with an output of about 1000 MW may be a maximum limit.
The Fuel cost expended over the power station lifetime is of course directly influenced by the design cycle efficiency, and the means of achieving this is the prime topic of this section. It has been shown that the cycle efficiency can be improved by increasing the provision and complexity of the plant, e.g., increasing the number of reheating stages. The designer carries out a cost-benefit analysis to reach a reasonable compromise, to ensure that the benefits of improved efficiency are not eclipsed by excessive capital costs, or by complication leading to reduced reliability.
In different parts of the world and in a rapidly changing economic environment, the cost of fuel can show wide variations. For new plant, it is desirable for the utility to present the designer with a cost expressing the capitalised value of 1% improvement in the heat rate. This will enable him to identify the options best suited to the application.
Plant Operating and Maintenance Costs are reduced by improving the reliability of plant and by minimising the maintenance and overhaul outage times. Increased plant automation permits a reduction in the manpower required per MW produced.
Figure 1.59 depicts the typical breakdown of lifetime generation costs. Fuel costs form the largest element, such that a 1% improvement in efficiency of the plant is equivalent to a saving of approximately 2% of the Capital cost.