Operating Ratio and Cost of Coal Power Generation

Operating ratio and cost of coal power generation

Hermin? Nalbandian-Sugden

CCC/272 December 2016 ? IEA Clean Coal Centre

Operating ratio and cost of coal power generation

Author: IEACCC Ref: ISBN: Copyright: Published Date:

Hermin? Nalbandian-Sugden CCC/272 978?92?9029?595-2 ? IEA Clean Coal Centre December 2016

IEA Clean Coal Centre 14 Northfields London SW18 1DD United Kingdom

Telephone: +44(0)20 8877 6280

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IEA Clean Coal Centre ? Operating ratio and cost of coal power generation

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Preface

This report has been produced by IEA Clean Coal Centre and is based on a survey and analysis of published literature, and on information gathered in discussions with interested organisations and individuals. Their assistance is gratefully acknowledged. It should be understood that the views expressed in this report are our own, and are not necessarily shared by those who supplied the information, nor by our member countries.

IEA Clean Coal Centre is an organisation set up under the auspices of the International Energy Agency (IEA) which was itself founded in 1974 by member countries of the Organisation for Economic Co-operation and Development (OECD). The purpose of the IEA is to explore means by which countries interested in minimising their dependence on imported oil can co-operate. In the field of Research, Development and Demonstration over fifty individual projects have been established in partnership between member countries of the IEA.

IEA Clean Coal Centre began in 1975 and has contracting parties and sponsors from: Australia, China, the European Commission, Germany, India, Italy, Japan, Poland, Russia, South Africa, Thailand, the UAE, the UK and the USA. The Service provides information and assessments on all aspects of coal from supply and transport, through markets and end-use technologies, to environmental issues and waste utilisation.

Neither IEA Clean Coal Centre nor any of its employees nor any supporting country or organisation, nor any employee or contractor of IEA Clean Coal Centre, makes any warranty, expressed or implied, or assumes any legal liability or responsibility for the accuracy, completeness or usefulness of any information, apparatus, product or process disclosed, or represents that its use would not infringe privately-owned rights.

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Abstract

Operating ratios are a representation of revenue and expense categories found on a typical financial statement. They are presented as a ratio or a percentage value. The smaller the operating ratio, the greater margin an organisation has to make a profit. Conversely, the greater the operating ratio is, the lower the margin to generate profit. Within operational costs, there are many factors that impact the operational efficiency of a power generating company. These include cost of fuel, staff/personnel, operation & maintenance (O&M) and depreciation and amortisation (the higher these factors are the higher the operating ratio and the lower the operational efficiency). The cost of coal-fired power generation differs not only from one country to another but also from one power plant to another. However, current coal-fired power generation is in competition with renewable energy and thus generation has shifted in many countries from baseload to load following mode necessitating flexibility in power plant operations. As such, frequent cycling of coal-fired power plants can cause thermal and pressure stresses. Over time, these can result in premature component failure and increased, necessary maintenance. Starting a unit, increasing its output, or operating at part load can also increase emissions compared to non-cyclic operation. Assessment and control of operation and plant maintenance costs play a major role in calculating operating ratios. These ratios allow a company to compare its operational performance across various times, analyse its data and take the necessary steps in order to maintain as good an operational performance as possible and as such, as low an operating ratio (%) as possible.

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Acronyms and abbreviations

ADB AEA AEMO AHP APEC BOP BTG CCGT CCS CCTS CCUS CDC CEC CHP CoE CPC CPP DCF DCOE DCS ECIU EDF EEX EFOR EIA EIA EOR EPA EPC EPRI ERIA ESP ETI EU FF FGD FOM FPL FYP GE IEA IER IGCC IMF INDCs IPCL IPP

Asian Development Bank American Economic Association (USA) Australian Energy Market Operators Analytical Hierarchy Process Asia Pacific Economic Cooperation balance of plant boiler, turbine and generator combined cycle gas turbine carbon capture and storage carbon capture, transport and storage carbon capture, utilisation and storage China Datang Corporation (China) China Electricity Council combined heat and power cost of electricity Communist Party of China Clean Power Plan (USA) discounted cash flow delivered cost of energy digital/distributed control system Energy & Climate Intelligence Unit (UK) ?lectricit? de France SA (France) European Energy Exchange equivalent forced outage rate Energy Information Administration (USA) Environment Impact Assessment enhanced oil recovery Environmental Protection Agency (USA) engineering, procurement and construction Electric Power Research Institute (USA) Economic Research Institute for ASEAN and East Asia electrostatic precipitation Energy Technologies Institute (UK) European Union fabric filtration flue gas desulphurisation fixed operating costs Florida Power & Light (USA) Five-Year Plan General Electric (USA) International Energy Agency Institute for Energy Research (USA) integrated gasification combined cycle International Monetary Fund Intended Nationally Determined Contributions India Power Corporation Limited Independent Power Producer

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