Assignment # 2 POWER ECONOMIC

The Islamia University of Bahawalpur
Faculty of Engineering
Department of Electrical (Power) Engineering
B.S. Electrical (Power) Engineering Last Submission date: 11-08-2020

Assignment # 2
Course: Power Economics and Management (MGMT-00629) Instructor: Engr. Qazi Naeem
Q.No.1: Discuss the Terms and Factors introduced by variable load problem in Power
Plant Engineering?
Variable Load Problem:

The variable load problem has introduced the following terms and factors in power plant
engineering:
1. Connected load:
It is the sum of continuous ratings of all the equipment’s connected to supply
system.
2. Maximum demand:
It is the greatest demand of load on the power station during a given period.
3. Demand factor:
It is the ratio of maximum demand on the power station to its connected load.
4. Average Load:
The average of loads occurring on the power station in a given period (day or month or
year) is known as average load or average demand.
5. Load factor:
The ratio of average load to the maximum demand during a given period is known as
load factor e.,
If the plant is in operation for T hours,
6. Diversity factor:
The ratio of the sum of individual maximum demands to the maximum demand on
power station is known as diversity factor e.,
7. Plant capacity factor:

It is the ratio of actual energy produced to the Maximum possible energy that could
have been produced during a given period i.e.,
Thus, if the considered period is one year,
8. Plant use factor:

It is ratio of kWh generated to the product of plant capacity and the number of hours
for which the plant was in operation i.e.
Q.No.2: Explain the various methods of Determining Depreciation?

There is reduction in the value of the equipment and other property of the plant every year due
to depreciation. Therefore, a suitable amount (known as depreciation charge) must be set
aside annually so that by the time the life span of the plant is over, the collected amount equals
the cost of replacement of the plant.
The following are the commonly used methods for determining depreciation:
1. Straight line method
2. Diminishing value method
3. Sinking fund method
P = Capital cost of equipment

n = Useful life of equipment in years
S = Scrap value after useful life
Q.No.3: Describe some of the important types of tariff commonly used?
There are several types of tariff. However, the following are the commonly used types of tariff:
1. Simple tariff:
When there is a fixed rate per unit of energy consumed, it is called a simple
tariff or uniform rate tariff.
2. Flat rate tariff:

When different types of consumers are charged at different uniform per unit rates,
it is called a flat rate tariff.
3. Block rate tariff:

When a given block of energy is charged at a specified rate and the succeeding blocks
of energy are charged at progressively reduced rates, it is called a block rate tariff.
4. Two-part tariff:
When the rate of electrical energy is charged on the basis of maximum demand of the
consumer and the units consumed, it is called a two-part tariff.
In such type of tariff, the total bill is divided into two parts. The first one is the fixed
charge and the second is the running charge. The fixed charge is because of the
maximum demand and the second charge depends on the energy consumption by the
load.
The factor A and B may be constant and vary according to some sliding.
5. Maximum demand tariff:

It is similar to two-part tariff with the only difference that the maximum demand is
actually measured by installing maximum demand meter in the premises of the
consumer. This removes the objection of two-part tariff where the maximum demand is
assessed merely on the basis of the rate able value. This type of tariff is mostly applied
to big consumers.
6. Power factor tariff:

The tariff in which power factor of the consumer’s load is taken into consideration is
known as power factor tariff.
The power factor tariff is mainly classified into two types.
a. kVA maximum demand tariff – This is also a two-part tariff.
The low power factor increases the KVA rating of the load.
b. kWh and kVarh tariff – The bill is calculated by the sum of the kVarh and Kwh rating
of the load.
The kVarh is inversely proportional to the power factor of the load.

c. Sliding Scale or Average power factor tariff – In Average power factor tariff, the
particular value of the power factor is taken as reference. If the power factor at the
consumer end is low, then the consumer has to pay the additional charges. Similarly, if
the power factor of the load is above from the reference value, then the discount will be
given to the consumer.
7. Three-part tariff:
When the total charge to be made from the consumer is split into three parts viz., fixed
charge, semi-fixed charge and running charge, it is known as a three-part tariff. i.e.,
Total charge = Rs (a + b × kW + c × kWh) Where,
a = fixed charge made during each billing period. It includes interest and depreciation on
the cost of secondary distribution and labor cost of collecting revenues,
b = charge per kW of maximum demand,
c = charge per kWh of energy consumed

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The Islamia University of Bahawalpur

B.S. Electrical (Power) Engineering Last Submission date: 11-08-2020

Variable Load Problem:

If the plant is in operation for T hours,

7. Plant capacity factor:

Thus, if the considered period is one year,

8. Plant use factor:

Q.No.2: Explain the various methods of Determining Depreciation?

P = Capital cost of equipment

2. Flat rate tariff:

3. Block rate tariff:

5. Maximum demand tariff:

6. Power factor tariff:

The kVarh is inversely proportional to the power factor of the load.

Total charge = Rs (a + b × kW + c × kWh) Where,

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