On appraising alternative power plant investment proposals - Part 1: the economic model

Combined energy plants operating on the Brayton-Rankine cycle have gained w ide acceptance as the most efficient energy conversion system. The technolo gy is well proven and numerous research activities are underway to develop it further past its present plateau of performance. In developed and emergi ng economies alike, the current situation in the global economic market has caused the Liberalization of the energy industry in some countries, and in others it is causing a rethink of economic and energy policies. A result i s that electric utility companies that have enjoyed a monopoly in power gen eration and distribution are seeing this privilege being eroded. This is op ening up opportunities for independent power production and, consequently, for gas/steam turbine plants because of the technical merits of the technol ogy and its ability to fill the vacuum being created in the energy industry . An economic model has been developed for carrying out life cycle costs an alysis of energy investment proposals involving gas and steam turbines in c ombined power and combined heat and power. A computer program for the econo mic analysis of combined energy systems (PEACES) was developed with a capab ility to evaluate the economic merits of individual and competing energy in vestment proposals. This paper describes the economic model around which th e computer code was structured.