Cost analysis of a coal-fired power plant using the NPV method


1 Department of Mechanical Engineering, Maharishi Markandeshwar University, Mullana, Ambala, Haryana, India

2 Department of Mechanical Engineering, Deenbandhu Chhotu Ram University of Science and Technology, Murthal, Sonepat, India

3 Department of Mechanical Engineering, National Institute of Technology, Kurukshetra, India


The present study investigates the impact of various factors affecting coal-fired power plant economics of 210 MW subcritical unit situated in north India for electricity generation. In this paper, the cost data of various units of thermal power plant in terms of power output capacity have been fitted using power law with the help of the data collected from a literature search. To have a realistic estimate of primary components or equipment, it is necessary to include the latest cost of these components. The cost analysis of the plant was carried out on the basis of total capital investment, operating cost and revenue. The total capital investment includes the total direct plant cost and total indirect plant cost. Total direct plant cost involves the cost of equipment (i.e. boiler, steam turbine, condenser, generator and auxiliary equipment including condensate extraction pump, feed water pump, etc.) and other costs associated with piping, electrical, civil works, direct installation cost, auxiliary services, instrumentation and controls, and site preparation. The total indirect plant cost includes the cost of engineering and set-up. The net present value method was adopted for the present study. The work presented in this paper is an endeavour to study the influence of some of the important parameters on the lifetime costs of a coal-fired power plant. For this purpose, parametric study with and without escalation rates for a period of 35 years plant life was evaluated. The results predicted that plant life, interest rate and the escalation rate were observed to be very sensitive on plant economics in comparison to other factors under study.