You have been given the responsibility of picking a steam turbine for an electri

Question

You have been given the responsibility of picking a steam

turbine for an electrical generation station that is to produce

300MW of electrical power that will sell for $0.05 per

kilowatt-hour. The boiler will produce steam at 700 psia and 700 °F,

and the condenser is planned to operate at 80 °F. The cost of

generating and condensing the steam is $0.01 per kilowatt-hour of

electricity produced. You have narrowed your selection to the three

turbines in the table below. Your criterion for selection is to pay

for the equipment as quickly as possible. Which turbine should you

choose?

Turbine ; Capacity (MW) ; ? ; Cost ($Million) ; Operating Cost

($/kWh)

A; 50 ; 0.9 ; 5 ; 0.01

B; 100 ; 0.92; 11; 0.01

C; 100 ; 0.93; 10.5; 0.015

Need full step by step

Explanation / Answer

Since the problem is based on a 300 MW plant, you will have to adjust costs in terms of the number of units since that will determine total capital costs.

You know for each turbine what the gross income can be based on the selling price of $.05 per KWH and the efficie With the operating costs of $.01and $.015 per KWH you can then determine the net income. By dividing the net income per day by the capital cost you can determine which will give you back the cost of the unit the fastest. Since the income and costs are based on the power generated, the efficiency of the various units is built into the costs and it no long a factor in the calculation.

What is not clear is the items that make up the operating costs. Does it include any taxes or other costs that might be charged against the unit? If it doesn't then this would be called a "before taxes payout or payback.."

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.