Page 229 - Advanced Gas Turbine Cycles

Appendix E. Economics of gas turbine plants 191

discount) rate. He defines a discount rate as
i = ‘Yere + (1 - T)(Ydrd, (B.8)
where ae, ad are the fractions of investment from equity and debt, re, rd are the
corresponding annual rates of return and T is the corporate tax rate.

B.4. Examples of electricity pricing

In the unit price of electricity (YE) derived in Section B.2, the dominant factors are the
capital cost per kilowatt (Co/m, which generally decreases inversely as the square root of
the power (i.e. as Win), the fuel price [, the overall efficiency T~, the utilisation (H hours
per year) and to a lesser extent the operational and maintenance costs (OM).
Fig. B. 1 shows simply how YE, minus the (OM)/WH component, varies with Co/W and
m, for H = 4ooo h and 6 = 1 ckwh. Horlock [4] has used this type of chart to compare
three lines of development in gas turbine power generation:

(i) a heavy-duty simple cycle gas turbine, of moderate capital cost, with a relatively low
pressure ratio and modest thermal efficiency (e.g. 36%);
(ii) an aero-engine derivative simple cycle gas turbine, usually two-shaft and of high
pressure ratio, the capital cost per kilowatt of this plant being surprisingly little
different from (i) in spite of it being derived from developed aero-engines, but
thermal efficiency being slightly higher (e.g. 39%);
(iii) a heavy-duty CCGT plant, based on (i), which has a high thermal efficiency but

0 zoo0 4ooo m 1m 12OOo 14000 18ooo
HEAT RATE (kJkWh)
Fig. B. 1. Electricity price as a function of capital cost and plant efficiency (after Ref. [4]).