Calculation of power generation cost of Thermal power plants & Co-generation plants

Power generation cost: It is the amount of rupees spent on generation of 1 unit of power

Power export cost: It is the amount of rupees spent on export of 1 unit of power

Generally power generation actual cost is the sum of Fuel cost, man power cost, operation & maintenance costs administration cost, river water cost, plant gardening & vehicles cost  etc

Power generation & Export cost in Thermal power plants:

Part A:Fixed data
  • Total power generation in KWH = A1
  • Total power export KWH = A2
  • Total fuel consumed = A3
  • Rate of per ton of fuel in = A4
  • Raw water consumption per day in MT or M3 = A5
  • Rate of per ton or   of river water in  = A6
  • Rate of per unit power for lifting water from source to Reservoir Rs= A7

Part B:
Operation cost head wise
  • Cost of fuel in Rs B1= A3 X A4
  • Cost of raw water in Rs B2 = A5 X A6
  • Cost of chemicals consumed for water treatment = B3
  • Cost of fuel feeding in =B4
  • Cost of raw water lifting charges from river to reservoir= B5
Total operation cost C = B1 + B2 +B3 + B4 + B5

Part C:
Maintenance cost head wise
  • Cost of spares,consumables consumed  = C1
  • Cost of Lubricants = C2
  • Cost of store inventory= C3
  • Tools tackles testing cost = C4
  • Measuring instruments calibration cost = C5
Total maintenance cost C = C1 +C2 + C3 + C4 + C5

Part D :
Administration cost head wise
  • Cost of  O &M man power salary = D1

  • Cost of site expenditures =  D2

  • Cost of gardening labours salary =D3

  • Cost of Security guards salary = D4

  • Cost of transportation vehicles =D5
Total administration cost = D = D1 + D2 + D3 + D4 + D5
  • Total Cost of production, E = B + C + D
  • Power generation cost per unit =A1/E....Rupees/KWh or Dollars/Kwh

  • Power export cost per unit = A2/E.....Rupees/KWh or Dollars/Kwh


1-In calculation power generation cost, power consumed for plant auxiliary running should not be considered

2-In co-generation plants:
  • Cost of power given to process plants should be considered
  • Cost of process steam given should be considered for power generation cost calculation


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Hi all,
This article is written based on practical experience..If liked, share with others, or any suggestions leave in comment box.

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