Cost-benefit analysis of BOT power plants

Among nonutility generation, the build-operate-transfer (BOT) arrangement has emerged as the dominant form of private investment. Pricing nonutility generation at its avoided cost is the breakeven point for the utility in the cost-benefit analysis. In this paper, a method of calculating the breakeven cost to the utility for BOT plants whose contract lasts for 10-25 years is proposed. The proposed approach requires the computation of production costs from long-term generation expansion planning (GEP). To facilitate the inclusion of constraints introduced by BOT plants in GEP, a genetic algorithm approach is utilized in GEP. The breakeven cost is a useful measure in cost-benefit analysis of BOT power plants. An example is presented to illustrate cost-benefit analysis of BOT plants using the concept of breakeven cost