Theory of Economic Selection of Generating Units

Fundamental changes are now taking place in the electric utility industry which require a re-evaluation of the methods now being used to select new generating capacity for expansion plans. It will no longer be sufficient to consider only one or two types of units such as base load and peaking units in the analysis which will determine the minimum cost of system expansion. The consideration of other possible types of intermediate units complicates the problem to a considerable extent. The equations presented in this paper are designed to provide a power system planner and the equipment designers with a means of deriving a direct solution of the optimum selection of all types of generating units available. For those systems on which the future generator output can be reasonably well represented by means of the loading triangle, this should considerably shorten the work required in the detailed analysis of alternate facilities. In particular, it should eliminate the necessity of a trial and error computation of total annual costs for various amount of different types of capacity in order to select the optimum combination.