Comparison of natural gas, coal and wind power plants with respect to generalized cost of electricity generation

Abstract

Power plant investment decisions leading to much needed increases in installed capacity play a crucial role in national energy policies. Accordingly, these decisions should consider not only the monetary factors, but other affected aspects as well. The objective of this thesis is to evaluate and compare the ‘generalized cost of electricity generation’ for natural gas, coal and wind power plants. ‘Generalized cost’ is the aggregation of all economical and social factors associated with power plants’ investments. The Analytic Hierarchy Process (AHP) methodology is used in this study. In this regard, ten economic, twelve social factors are considered, whose relative importances are determined through a series of hierarchically structured comparisons extracted from twenty experts. The analysis results give the relative importance of each criterion for the generalized cost of electricity generation. According to the results, importance of economic criteria is equal to importance of social criteria. In economic criteria, the most important factor is investment cost; in social criteria, the most important factor is human health. Group analysis results show how each group perceive the relative importance of the generalized cost factors from their perspective. Since it is not possible to get all related data for specific power plants, generic power plants are defined for coal, natural gas and wind energy sources for the purpose of comparing specific plants. Wind power plant is at the top of the overall ranking mainly because of having a renewable energy source. Natural gas power plant is in the second position, mainly because of the highest fuel cost which is the most important criterion in the AHP structure. There are two types of generic coal power plants (coal-1 and coal-2) in the evaluation which differ in their emission control efficiencies and investment costs. Both types of coal power plants rank in the last two positions.