Page 161 - Handbook of Energy Engineering Calculations

293 = conversion of Btu to kWh
C = M/kW
m
where M = maintenance cost, dollars per operating (fired) hour.

Thus, the life-cycle working model can be expressed as

Where F = fuel cost, dollars per million Btu (higher heating value)
To evaluate the comparative capital cost of a gas-turbine electrical-
generating package, the above model uses the capital-recovery factor

technique. This approach spreads the initial investment and interest costs for
the repayment period into an equal annual expense using the time value of
money. The approach also allows for the comparison of other periodic
expenses, like fuel and maintenance costs.

3. Perform the computation for each of the gas turbines being considered
Using the compiled data shown above, compute the values for C , C , and C ,
p
m
f
and sum the results. List for each of the units as shown below.

4. Analyze the findings of the life-cycle model
Note that the initial investment cost for the turbines being considered ranges

between $200 and $320/kW. On a $/kW basis, only unit E at the $200 level,
would be considered. However, the life-cycle cost model, above, shows the
cost per kWh produced for each of the gas-turbine units being considered.

This gives a much different perspective of the units.
From a life-cycle standpoint, the choice of unit E over unit D would result
in an added expenditure of about $975,000 annually during the life span of
the equipment, found from [(51.9 − 46.6)/1000] (8760 h/yr)(21,000 kW) =