Economics of Power Generation and Electric Power Systems

UNIT I

Economics of Power Generation

What is Electric Power System?

An electric power system is a composite system that consists of three main components: generation, transmission, and distribution systems.

• Generation Stations: These are facilities that produce electrical power.

  • Step-up Transformers: These transformers increase the voltage of electricity generated for efficient transmission.

• Transmission Lines: These lines transport the electricity over long distances.

  • Step-down Transformers: Positioned at substations, they decrease the voltage for distribution.

• Distribution Systems: These deliver the electricity at lower voltages to end-users like homes, offices, and factories.

Electricity Journey from Generation to Consumers

1. Electricity generated by power plants travels through cables to a transformer that converts electricity from low voltage to high voltage.

2. High voltage electricity is moved through transmission lines to substations.

3. At substations, the electricity is transformed back to lower voltage for consumer use via distribution lines.

Types of Power Plants

• Thermal Power Plant: Utilizes thermal energy to generate electricity.

• Hydro Plant: Uses water flow to generate electricity.

• Transmission Lines and Substations: Integral components in the electricity delivery chain.

• Types of end-users include:

  • Industrial

  • Commercial

  • Residential

  • Transportation

Power Plants

Definition and Characteristics

A power plant is an assembly of systems or subsystems designed to generate electricity economically and with environmental consideration. Key characteristics include:

• Economic and environmental efficiency.

• Reliability in electricity supply, minimal cost, and acceptable environmental impact.

• Engineering decisions that weigh economic viability alongside technical performance.

Key Questions for Engineers

Engineers need to determine:

• Which plants should operate continuously?

• Which plants are needed to meet peak demand?

• Reasons for not utilizing the cheapest fuel universally.

Economics of Power Generation

A) Capital Cost

• Definition: The initial investment needed for land, building, equipment, and installation.

• High Initial Investment: Required for nuclear, hydro, and solar plants.

• Low Initial Investment: Associated with diesel and gas plants.

  • Examples:

    • Thermal plant: Moderate capital cost

    • Hydro plant: Very high capital cost but low running cost

B) Operating Cost

• Components include:

  • Fuel costs (coal, gas, diesel, uranium)

  • Water costs

  • Auxiliary power consumption

• Dominance of fuel costs particularly in thermal and diesel plants.

C) Maintenance Cost

• Routine inspections, repairs, replacements, and skilled manpower requirements.

Classification Based on Source of Energy

A) Conventional Power Plants

• Thermal: Powered by coal, oil, and gas.

• Hydroelectric: Using the energy of flowing water.

• Nuclear: Utilizing nuclear reactions to generate power.

B) Non-Conventional (Renewable) Power Plants

• Examples include:

  • Solar

  • Wind

  • Biomass

  • Tidal

  • Geothermal

Base Load and Peak Load Plants

Base Load Plants

• Characteristics:

  • Operate continuously

  • Low operating cost

  • Higher capital costs are acceptable

• Examples: Coal, nuclear, large hydro.

Peak Load Plants

• Characteristics:

  • Operate only during short durations of high demand

  • Lower capital costs preferred

  • Higher operating costs acceptable

• Examples: Gas turbine, diesel plants.

Sources of Energy

1. Fuels

2. Energy Stored in Waters

3. Nuclear Energy

4. Wind Power

5. Solar Power

6. Tidal Power

Fuels

A) Coal

• Formed from decomposed vegetation.

• Each 20 meters of vegetation yields approximately one meter of coal.

• In anaerobic conditions (high temperature and pressure), vegetation transforms into peat, progressing to various coal types based on aging processes.

  • Coal Types: Peat → Brown Coal → Lignite → Bituminous Coal → Anthracite.

  • Composition: Moisture, carbon, hydrogen, nitrogen, sulfur, oxygen, ash content.

B) Liquid Fuels

• Derived from refining crude oil (petroleum), containing about 84-87% carbon.

• Types include:

  • Naptha

  • High-Speed Diesel (HSD)

  • Orimulsion

  • Gas Turbine Fuel Oil

C) Gaseous Fuels

• Comprising natural or manufactured gas, with natural gas containing up to 80% methane.

• Efficiency of gaseous fuels is higher compared to solid and liquid fuels.

D) Nuclear Fuels

• Types include natural uranium, uranium dioxide, plutonium.

• 1 ton of natural uranium correlates to about 10,000 tons of coal.

Electric Power Issues in India

• Problematic factors include faulty planning, increased demand, project delays, interstate disputes, erratic monsoons, plant outages, line losses, coal shortages, and low equipment utilization.

Overview of India's Energy Scenario

• India ranks as the third-largest electricity producer globally.

• Rapidly evolving economy with rising power demand, moving towards renewable energy sources.

• Growth drivers include population growth, urbanization, industrialization, transport electrification, and climate commitments.

Measuring Electricity

• Units of power are called watts, where 1 W = 1 J/s.

• Other relevant measurements include kilowatts (1 kW = 1,000 W) and kilowatt-hours (kWh).

Classification of Sources of Energy

• Includes Renewable and Nonrenewable, Conventional and Nonconventional, Commercial and Non-commercial, Primary and Secondary sources.

Sources of Electrical Energy

• Conventional Sources: Fossil fuels, nuclear power, hydropower.

• Renewable Sources: Geothermal, tidal, biomass, solar, wind.

Energy Scenario in India

• The electricity sector is expanding rapidly, with peak demand at approximately 250,000 MW and an installed capacity of 446,190 MW.

• As of 31 March 2023, 43% of India’s electricity generation comes from renewable sources.

Power Generation by Energy Sources in India (as of June 2024)

• Natural Gas & Diesel: 47.3%

• Nuclear: 10.5%

• Hydro: 40.5%

• Renewables: Various (solar, wind, etc.)

Fossil Fuels Contribution

• Coal: 205,235 MW (49.3%)

• Lignite: 6,620 MW (1.6%)

• Gas: 24,824 MW (6.0%)

• Diesel: 589 MW (0.1%)

Non-Fossil Fuels Contribution

• Hydro: 46,850 MW (11.3%)

• Wind: 42,633 MW (10.2%)

• Solar: 66,780 MW (16.1%)

• Biomass: 10,248 MW (2.5%)

• Nuclear: 6,780 MW (1.6%)

Electrical Load Definition

• Defined as devices that consume electrical energy and may be resistive, inductive, capacitive, or combinations thereof.

• Types of Loads: Resistive, inductive, capacitive, domestic, commercial, industrial, agricultural loads.

Resistive Load

• Converts electrical energy into heat energy. Power factor is unity. Examples: lamps, heaters.

Inductive Load

• Uses magnetic fields to do work. Current lags voltage. Examples: motors, transformers.

Capacitive Load

• Voltage lags behind current; power factor is leading. Examples: capacitor banks.

Combination Loads

• Real-world loads often consist of mixtures of resistive, inductive, and capacitive components.

Domestic Load

• Includes lighting, appliances, motors etc., characterized by low load factor (10-12%).

Commercial Load

• Comprises lights, fans, and other electric devices used in commercial establishments. More stable than domestic loads with seasonal variations.

Industrial Load

• Varies based on industry size (small, medium, large) and typically consistent regardless of weather conditions.

Irrigation Load

• Power required for agricultural pumping, typically supplied for 12 hours at night.

Load Analysis Factors

Load Curve

• Graphical representation of load over time. Daily and annual load curves show variation in power demand.

Load Duration Curve

• Plotted in descending order, showing time duration versus load, aids in planning for base and peak load plants.

Reserve Capacity

• Extra generating capacity available to meet unanticipated demands.
  Formula:

• $\text{Reserve Capacity} = \text{Installed Capacity} - \text{Maximum Demand}$

• $\text{Reserve Margin} = \left( \frac{\text{Reserve Capacity}}{\text{Maximum Demand}} \right) \times 100$

Connected Load

• Sum of the rated capacities for all connected devices.
  Formula:

• $\text{Connected Load} = \text{Sum of All Loads Connected}$

Maximum Demand

• Highest load recorded during a specified period.
  Formula:

• $\text{Maximum Demand} = \text{Highest Recorded Demand}$

Demand Factor

• Efficiency of the connected load utilization.
  Formula:

• $\text{Demand Factor} = \frac{\text{Maximum Demand}}{\text{Connected Load}}$

• Always less than 1.

Diversity Factor

• Reflects simultaneous loads from different consumers. Higher diversity indicates better power utilization.
  Formula:

• $\text{Diversity Factor} = \frac{\text{Sum of Individual Maximum Demands}}{\text{Maximum Demand of the System}}$

Load Factor

• Ratio of average load to maximum demand.
  Formula:

• $\text{Load Factor} = \frac{\text{Average Load}}{\text{Maximum Demand}}$

• Alternatively: $\text{Load Factor} = \frac{\text{Energy (kWh) Used in Period}}{\text{Maximum Demand (kW) } \times \text{Time (hours)}}$

Plant Capacity Factor

• Indicates how much the plant is utilized over time.
  Formula:

• $\text{Plant Capacity Factor} = \frac{\text{Actual Energy Generated}}{\text{Maximum Possible Energy (Plant Capacity × Time)}}$

Questions

A 100 MW Power Station Load Factor Calculation

Given daily outputs of 100 MW for 2 hours, 50 MW for 6 hours, and shutdown periods.

Diversity Factor and Energy Supply Calculation

For different peak loads and annual loads.

Effect of Variable Load on Power Plant Design

Variable load impacts design, operation, control responses, and efficiency considerations, requiring tailored approaches in fuel, air supply, and equipment architecture.

Power Plant Engineering: Thermal Power Plants

Steam Turbine Plant Structure

• Converts thermal energy to mechanical energy using steam turbines and alternators.

Main Energy Conversion Stages

• Chemical energy → Heat energy → Steam energy → Mechanical energy → Electrical energy.

Site Selection Criteria

• Considerations for fuel, water resources, transmission network, land cost, and environmental impact.

Layout of Thermal Power Plant

• Includes components such as boilers, turbines, generators, and auxiliary systems responsible for operation and efficiency.

Coal-Fired Steam Turbine Power Plant Workflow

1. Coal combustion in the boiler

2. Steam generation through heating

3. Superheating of steam

4. Expansion through turbines

5. Power generation via alternator

6. Steam condensation

7. Water recirculation

8. Cooling water circulation

Main Equipment in Thermal Power Plants

• Coal handling system, pulverizing plant, boiler, ash handling plant, turbine, generator, cooling systems, and protective/control equipment.

Challenges in Ash Handling

• Proportion of ash produced per coal burned, including fly ash and bottom ash; concerns addressed through modern handling systems (belt, pneumatic, hydraulic).

Auxiliary Supply and Instrumentation

• Critical for maintaining operations across varying load demands and ensuring quality control via numerous sensing instrumentation.

Efficiency of Thermal Power Plants

• Overall ratio of electrical energy produced to heat energy supplied, typically 30-40% efficiency for coal-based plants.

Hydroelectric Power Plants Overview

• Harness energy from falling or flowing water to produce electricity.

Advantages and Disadvantages

• Benefits include low operating costs and reliability; drawbacks include high capital costs and dependency on water flow.

Essential Features for Site Selection

• Include availability of water, water storage, head elevation, distance to load centers, and transportation facilities.