Life cycle cost analysis on the operation of power generation

Abstract

Purpose

The purpose of this paper is to study the life cycle cost (LCC) on the operation of power generation. LCC is the total cost of ownership including the cost of the project or asset acquisition, operation and maintenance, and disposal. LCC includes both deterministic costs (such as acquisition costs, improvement costs and disposal costs) and probabilistic (such as the costs of failure, repairs, spare parts, downtime, lost gross margin). Most of the probabilistic costs are associated directly with the reliability and maintenance characteristics of the system.

Design/methodology/approach

To be able to analyze failure data using appropriate cost profile in order to represent the fact that each failure has different prices, in different time periods at an economical cycle the new methodology of LCCA Diagram is proposed. Developing criticality ranking of sub‐system, calculating values of Weibull Shape Factor β and Weibull Characteristic Life η for each sub‐system, calculating the time to failure of sub‐system, calculating the mean time to failure of sub‐system using Monte Carlo simulation, determining several alternatives, failure mode and effects analysis and root cause failure analysis are parts of the methodology.

Findings

To give a sample of case study, the LCC on the operation of coal fired power plant (CFPP) 330 MW is analyzed. Five alternatives calculation of LCC will be simulated. Graph of cash flow, break‐even graph, and graph of cost/benefit versus risk made for a period of 30 years can be used to asses an effective management program and costs of power plant with a low risk.

Originality/value

The paper suggests that LCC can be used to asses an effective management program and costs of power plant with a low risk.

Citation

Sinisuka, N.I. and Nugraha, H. (2013), "Life cycle cost analysis on the operation of power generation", Journal of Quality in Maintenance Engineering, Vol. 19 No. 1, pp. 5-24. https://doi.org/10.1108/13552511311304447