Operating Cost of a Thermal Power Plant

India is among the nations where power sector is booming up. Of its total installed power capacity more than 60% share is of coal-fired power plants. Coal-fired or the thermal power plants have a significant operating cost and a matter of concern for the agencies that care for the environment.

The optimal power system operation involves factors such as economy of operation, system security, emission of fossil-fuel fired plants, etc. All the above considerations are conflicting and hence a compromise has to be made for the optimal operation of the power system. 

The main aim of economic dispatch problem is to minimize the total cost of generating the real power of various power plants while satisfying the constraints. The operating cost is insensitive to reactive loading on a generator, and hence the manner in which the reactive load on a station is shared among various on-line generators is not going to affect the operating economy. 

The operating cost of hydro power plants is negligible, but there is limitation of availability of water in case of such power plants.   

Factors affecting the Operating Cost of a Thermal Power Plant:

The operating cost of a thermal power plant depends on the operating efficiency of generators, fuel cost, and transmission losses. In many cases the plants are located far from the load centre and hence the transmission losses to transmit the power to the major substations may be considerably high. Under such a situation, even the most efficient generator in the system does not guarantee the minimum operating cost. 

Therefore, the operating cost a thermal power plant plays a very important role in the economic scheduling of generators.

Incremental fuel-cost curve

The input to the thermal power plant is usually measured in Btu/h, and the output is given in MW. A simplified input-output curve of a thermal generating unit is called the heat-rate curve. The fuel input in Btu/h can be replaced by cost of the fuel. Normally the fuel cost of a generator is expressed as a quadratic function of real power generation. The incremental fuel-cost curve is obtained by plotting the derivative of the fuel-cost curve and the real power. This incremental fuel-cost curve is a measure of how costly it will be to produce the next MW of power.

Impact of Transmission losses

In the simplest economic dispatch case the transmission losses are neglected i.e. the model assumes that the generator and the load is at the same bus. This is the case when the transmission distance is very small and the load density is very high. As the line or transmission losses are neglected, the total demand is the sum of all the generation. When the transmission losses are neglected, the optimal dispatch of generation is obtained with all plants operating at equal incremental production cost.

However, in an actual power system, thermal plants are usually pit-heads plants located far away from the load centre. Hence, it is necessary to consider the transmission losses and in this case the generation should equal the total demand plus the transmission losses.