Join 60,000+ competitive exam aspirants
or with email
Your Cart
SubtotalтВ╣0
TotalтВ╣0
Examoogle тАв User тАв info@examoogle.com тАв EE-2024-8821
Chapter 1 of 12 тАв Page 1 of 248ЁЯФТ Protected PDF тАв Watermarked
Join 60,000+ competitive exam aspirants
How does the load factor impact the cost of a unit (kWh) of electricity?
Load factor only affects the demand charges, not the generation costs.
Higher load factor leads to higher generation costs per unit.
Load factor has no impact on the generation costs per unit.
Higher load factor leads to lower generation costs per unit.
Higher load factor leads to lower generation costs per unit.
A higher load factor implies that the maximum demand is being utilized over a longer period, resulting in a more efficient distribution of fixed capital costs. Since fixed costs (interest, depreciation, insurance) are spread over a larger number of total units generated, the cost per unit (kWh) decreases.
A higher load factor implies that the maximum demand is being utilized over a longer period, resulting in a more efficient distribution of fixed capital costs. Since fixed costs (interest, depreciation, insurance) are spread over a larger number of total units generated, the cost per unit (kWh) decreases.
Load┬аFactor=Maximum┬аDemandAverage┬аLoadтАЛ
Cost┬аper┬аunit=Total┬аEnergy┬аGenerated┬а(kWh)Fixed┬аCharges+Running┬аChargesтАЛ
The total cost of electricity generation consists of fixed costs and running costs. Fixed costs are independent of the energy produced, so as the total energy produced increases (via a higher load factor), the fixed cost per unit decreases. A high load factor indicates a steady demand, which allows power plants to operate closer to their maximum rated capacity for a longer duration, reducing idle capacity and overhead costs per kWh.
Load factor is a measure of the utilization of the generating equipment.
A load factor of 100% implies a perfectly constant load throughout the period.
Fixed costs are related to the capacity (Maximum Demand) of the plant.
Running costs are related to the total units generated.
Reduces the cost per unit of electricity.
Improves the economic efficiency of power generation systems.
Hard to maintain a high load factor due to variable human behavior.
Requires complex demand-side management (DSM) strategies.
Grid operation optimization.
Electricity tariff structure design for industrial consumers.
Option A is incorrect because demand charges are directly influenced by load factor and are a primary component of generation economics.
Option B is incorrect because higher utilization spreads out the depreciation and maintenance overheads, actually lowering costs.
Option C is incorrect because the load factor is a fundamental parameter in the economic analysis of energy pricing.
D is correct тАФ Higher load factor allows fixed generation costs to be spread over a greater number of kWh, thus reducing the total cost per unit.
Always remember that in power systems, higher capacity utilization (Load Factor or Plant Factor) inversely correlates with the cost of energy production per unit.
Get instant step-by-step AI explanations, full shift Previous Year Papers (SSC GD, RRB, SSC JE), and regional rank analysis on the official Examoogle App.
Free Download тАв 100K+ Aspirants