Before studying the economics of generation let us see few terms which are commonly used in system operation.

1)

**Connected load**: The sum of continues ratings of all the equipments which are connected to the supply system is called connected load. The load of thousands of consumers is supplied by a power station. The load means various equipments and apparatus present in consumer premises. If the summation of these continuous ratings of all the equipments is made then it forms the connected load of that consumer. The sum of connected loads of all the consumers is the connected load to the power station.

2)

**Maximum Demand**: It is defined as the largest demand of load on the generating station during a specified period. The load on the generating station is never constant but keeps on varying from time to time. The demand of load which is maximum of all, during a given period, forms maximum demand. Maximum demand is normally less than the connected load because the connected load to the system of various consumers is not switched on at the same time. The installed capacity of the station is decided from the maximum demand. It is quite obvious that the power station must be able to supply the maximum demand.

3)

**Demand factor**: It is defined as the ratio of maximum demand to its connected load Mathematically it is given as We have seen that the maximum demand is generally less than its connected load hence the demand factor is less than unity. This factor is an important consideration in deciding the capacity of the plant equipment.

Consider for example a building with following connected load.No. of lamps = 200 each of 4 W = 8 KW

Power points = 150 each of 500 W = 75 KW

Lift = 10 KW

Pump = 10 KW

Total connected load = 8 + 75 +10 +10 = 103 KW

This is the total connected load of the building but it is not switched on at the same time. Consider that 100 lamps, 100 power points, lift and pump are on at the same time which is say maximum possible condition of the load for that building. All the other load demands are less than this peak.

Maximum demand = 100 x 40 + 100 x 500 +10 +10= 4 KW + 50 KW + 20 KW

= 74 KW

Hence the demand factor for this building is

Demand factor = (Maximum demand)/(Connected load) = 74 kW/103 kW = 0.7184

At is ratio of two similar quantities it is not having any unit.

Similarly the demand factor of the generating station is also calculated from the knowledge of maximum demand and the connected load on that power station.

4)

**Average load or Average demand**: It is defined as the average of the loads occurring on the power system or generating station in a given period. The period may be day or month or year. Mathematically it is given by as,5)

**Load factor**: It is defined as the ratio of average load to the maximum demand during a given period. Mathematically it is given as, Depending upon the consideration of time, the load factor may be daily, monthly or yearly. Suppose the operation time of plant is say T hours.

Load factor = (Average load x T)/(Maximum demand x T)The yearly load factor is defined as

Yearly load factor = (No.of units supplied in a year)/(Maximum number of units that can be supplied)

The load factor is always less than 1 as average load is similar than maximum demand. This is the key factor in deciding the overall cost per unit generated. With increases in load factor, maximum demand on the station will be less. We have already seen that the plant must supply its maximum demand. Thus with lower maximum demand, the capacity of the plant also lowers which reduces cost of plant with ultimate effect of reduction in cost per unit generated.

Monthly load power factor is given by, The load factor defined as above corresponds to the supplier and may sometimes referred as undertaking load factor.

6)

**Delivery factor**: To improve the working of the generating station the loads must be diversed or staggered. The maximum demand of various type of consumers which is supplied by a power station dose not occur at the same time. Hence the maximum demand on the generation station is always less than the sum of individual maximum demands. The diversity factor is thus defined as the ratio of sum of individual maximum demands to the maximum demand on power station. Mathematically it is defined as,

The diversity factor is always greater than 1 if defined in above way. Greater the diversity factor, lesser is the cost of generation since more diversity factor means less maximum demand which corresponds to lesser plant capacity which reduces cost of plant and hence that of generation.

For understanding this factor, let us consider an example. Let us consider that a generating station is supplying power to follow various consumers.

= (6000 + 1000 + 2000 + 500 + 400 + 100)/(600)

Diversity factor = 10000/6000 = 1.66

The maximum demand of each category of load is not occurring at the same time. If it is occurring at the same time then the station has to supply this demand for short duration. The average load on the station is around 50%. Hence the plant generators will remain idle in the remaining time after supplying this peak demand and this will not be economical operation of the plant. Under such case the consumers are advised to diverse their loads or advised to ask their maximum demands at different times then the operation of station will be economical. In case of industrial load or municipal load such diversification of load is possible. So if the maximum demand is made smaller then it will be economical operation

In the above example if instead of 6000 kW, the maximum demand is made 5000 kW by diversification of load then the new diversity factor is calculated as

New diversity factor = (Sum of individual maximum demands) / (Maximum demand)= 10000/5000 = 2

**Note**: In summery, we can say that by diversing the load, the capital cost of the plant and hence cost per unit can be reduced. Similarly the alternators in the plant can be operated to their maximum capacity.

7)

**Capacity factor**: It is defined as the ratio of actual energy produced to the maximum possible energy that could have been reduced during a given period.Capacity factor = (Average demand x T) / (Maximum demand x T)

= Average demand/ plant capacity

For a period of one year,

Thus it can be seen that plant capacity factor indicates the reverse capacity of the plant. A power station should have some reverse capacity for increased load demand in the future. Hence the installed capacity of the plant is greater than the maximum demand.

Reversed capacity = Plant capacity - maximum demand. If plant is not having any reversed capacity then plant capacity is equal to maximum demand which indicates that capacity factor and load factor are same.

Some important terms related to this factor are as given below**i)**

**Firm power**: It is the power which is available always even under emergency condition.

**ii) Cold reverse**: It is the reverse generation capacity which is available for service but not in operation.

**iii) Hot reserve**: It is the reverse generation capacity which is in operation but is not in service.

**iv) Spinning reverse**: It is that generating capacity which is connected to the bus and ready to take load.

**8) Plant use factor**: It is defined as the ratio of units generated (kWh) to the product of plant capacity and the number of hours for which the plant was in operation.

This factor is an indication of best possible and effective utilization of generating station. But it does not indicate the idle time of the plant.

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