A Practical View of Heat Rate and Output
For any power plant in the world, there are two main parameters that determine its profitability; power plant heat rate and the power plant power output.
You can use our online calculator to calculate the impact of improving these 2 parameters by 1%.
Most of the OEM’s research and development efforts focus on increasing the plant electrical output; decreasing the heat rate or improving the reliability and maintenance intervals. The same way, the operation of the plant has many key performance indicators that focus on these same categories to improve the profitability of the plant.
We will discuss a how to translate these two parameters into fuel costs and revenue.
Power Plant Heat Rate is defined as the amount of energy needed by to plant to produce a kWh of electrical energy. Power Electrical Output in this case will be defined as the electrical output exported to the grid and that the plant gets paid for.
EXAMPLE
For practical purposes we will assume the following scenario.
A 850 MW combined cycle operating with gas fuel and a power plant heat rate of 7,250 kJ/kWh. The natural gas price of 3.25 USD/MMBTU and an electricity price of 0.08 USD/kWh.
We can start with the basic formulas.
Heat Rate = Heat Input / Power Output
Or
Heat Input = Power Output * Heat Rate
Then
Fuel Cost = Heat Input * Price
For our example the results are:
Revenue from Electricity Sales 68,000 USD/h
Fuel Expense 18,983 USD/h
Operating Margin 49,017 USD/h
This is the basic formula, many other aspects are into the detail revenue models and are dependent on the electrical market rules. For example, having the plant load fluctuates during the day therefore at different loads have a direct effect on the power plant performance. However, this already gives you a start to analyze your power plant revenue and fuel expenses.
