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Power Plant Economic Analysis: Maximizing Lifecycle Profitability by Simulating Preliminary Design Solutions of Steam-Cycle Conditions

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  • Chul-Seung Hong

    (Graduate Institute of Ferrous Technology & Graduate School of Engineering Mastership, Pohang University of Science and Technology (POSTECH), 77 Cheongam-Ro, Nam-Ku, Pohang 37673, Korea)

  • Eul-Bum Lee

    (Graduate Institute of Ferrous Technology & Graduate School of Engineering Mastership, Pohang University of Science and Technology (POSTECH), 77 Cheongam-Ro, Nam-Ku, Pohang 37673, Korea)

Abstract

Many existing financial models for power plants chose a design based on the maximum thermal efficiency excluding the operational (OPEX) and capital (CAPEX) cost variations of technical factors. These factors are often fixed because including them in financial assessments can be burdensome and it is assumed that maximum efficiency equals maximum profit. However, this assumption may not always be right. Through 19,440 power plant steam-cycle design solutions and their associated OPEX and CAPEX, this study found the eighth most thermally-efficient solution to be $1.284 M more profitable than the traditional thermally-optimized design solution. As such, this paper presents a model incorporating technical factors through parametric estimation by minimizing the burden on decision makers. While this may reduce precision, it allows for quick cost assessments across differing design solutions. The data for model development was collected from a Korean-constructed, operational 600 MW coal-fired power plant in the Philippines. Using the Thermoflex software, nearly all design configurations’ heat rate outputs are simulated. Profitability is then optimized based on the resultant design configuration’s impact on revenue and CAPEX and OPEX costs. The simulation inputs included variables found to be most impactful on the steam generated power efficiency per existing literature. Lastly, the model includes an assessment of cost impacts among recent environmental regulations by incorporating carbon tax costs and a sensitivity analysis. The economic analysis model discussed in this paper is non-existent in current literature and will aid the power-plant project investment industry through their project feasibility analyses.

Suggested Citation

  • Chul-Seung Hong & Eul-Bum Lee, 2018. "Power Plant Economic Analysis: Maximizing Lifecycle Profitability by Simulating Preliminary Design Solutions of Steam-Cycle Conditions," Energies, MDPI, vol. 11(9), pages 1-21, August.
    • Handle: RePEc:gam:jeners:v:11:y:2018:i:9:p:2245-:d:165966
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    References listed on IDEAS

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    Cited by:

    1. Hyun-Chul Lee & Eul-Bum Lee & Douglas Alleman, 2018. "Schedule Modeling to Estimate Typical Construction Durations and Areas of Risk for 1000 MW Ultra-Critical Coal-Fired Power Plants," Energies, MDPI, vol. 11(10), pages 1-15, October.
    2. Dong-Jin Cho & Eul-Bum Lee & Jae-Min Cho & Douglas Alleman, 2019. "Reducing the Superheating of Extraction Stream on Advanced-Ultra Super Critical Power Plants with Regenerative Turbines in South Korea: An Economic Analysis," Energies, MDPI, vol. 12(9), pages 1-22, May.
    3. Hee-Kwan Shin & Jae-Min Cho & Eul-Bum Lee, 2019. "Electrical Power Characteristics and Economic Analysis of Distributed Generation System Using Renewable Energy: Applied to Iron and Steel Plants," Sustainability, MDPI, vol. 11(22), pages 1-27, November.
    4. So-Won Choi & Bo-Guk Seo & Eul-Bum Lee, 2023. "Machine Learning-Based Tap Temperature Prediction and Control for Optimized Power Consumption in Stainless Electric Arc Furnaces (EAF) of Steel Plants," Sustainability, MDPI, vol. 15(8), pages 1-31, April.
    5. Dovichi Filho, Fernando Bruno & Lora, Electo Eduardo Silva & Palacio, Jose Carlos Escobar & Venturini, Osvaldo José & Jaén, René Lesme, 2023. "An approach to technology selection in bioelectricity technical potential assessment: A Brazilian case study," Energy, Elsevier, vol. 272(C).
    6. June Levi-Oguike & Diego Sandoval & Etienne Ntagwirumugara, 2022. "A Comparative Life Cycle Investment Analysis for Biopower Diffusion in Rural Nigeria," Sustainability, MDPI, vol. 14(3), pages 1-11, January.
    7. Satria Putra Kanugrahan & Dzikri Firmansyah Hakam & Herry Nugraha, 2022. "Techno-Economic Analysis of Indonesia Power Generation Expansion to Achieve Economic Sustainability and Net Zero Carbon 2050," Sustainability, MDPI, vol. 14(15), pages 1-25, July.

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