ECONOMICS OF HYDROPOWER DEVELOPMENT FOR PEAKING PURPOSES

Abstract

The power industry in the country is constantly facing the problem of meeting the peak demand. There is always a growing demand for power which requires establi-shing new plants. In this study suitable power plants for meeting peak demand has been discussed. The plants run by compressed air and gas turbine have also been found suit-able for generating peak load. The consideration regarding the planning of a new peaking stations has been discussed. The marginal cost pricing for the power industry is considered as a probable solution for peak load problem. The marginal cost concept results into a tariff which is cost reflecting. The consumer if charged with such tariffs will be made to think regarding his contribution of demand during peak load. Such tariff will result in proper return from consumer groups and will give a signal for increasing the demand during peak hours. By the economic analysis for a hydro power station and an alternative thermal station with respect to cost of installation and cost of generation of energy at various load factors it is concluded that the installation cost for hydro station will be lower if the station is to operate at lower load factors, which means for peak load genera-tion. The cost of energy from a hydel station is lower as compared to thermal the difference increasing as the load factor reduces. Thus for a system consisting of hydel and thermal stations the overall cost of generation will be cheaper. It is thus concluded that if a new station is to be established purely to meet the peak demand then the first choice should be of hydel which will have less installation cost and lower cost of generation for a peak power.