Page 163 - Handbook of Energy Engineering Calculations

Traditionally, the major focus has been on first cost of industrial gas-
turbine units, not on operating cost. Experience with higher-technology
equipment, however, reveals that a low first cost does not mean a lower total
cost during the expected life of the equipment. Conversely, reliable, high-
quality equipment with demonstrated availability will be remembered long

after the emotional distress associated with high initial cost is forgotten.
The life-cycle cost model presented here uses 10 independent variables. A
single-point solution can easily be obtained, but multiple solutions require

repeated calculations. Although curves depicting simultaneous variations in
all variables would be difficult to interpret, simplified diagrams can be
constructed to illustrate the relative importance of different variables.
Thus, the simplified diagrams shown in Fig. 18, all plot production cost,
mils/kWh, versus investment cost. All the plots are based on continuous

operation of 8760 h/yr at 21-MW capacity with an equipment life expectancy
of 20 years.