When aeroderivative gas turbines were first introduced into industrial service, the prime criterion for assessing the “relative value” of equipment was derived by dividing the initial (or capital) cost of the equipment by the number of kilowatts produced. The use of “dollars per kilowatt” as an assessment parameter emanated from the utility sector and is still valid providing that the turbomachinery units under consideration possess similar performance features with regard to thermal efficiency. Second-generation gas turbines being produced today possess thermal efficiencies approximately 45 percent greater than those previously available. Thus, a new criterion is required to provide the purchaser with a better “value” perspective to differentiate the various types of turbomachinery under consideration. This paper presents a technique for combining the initial cost of equipment with the costs of fuel consumed, applied labor, and parts to arrive at an assessment parameter capable of comparing the relative merits of varying types of turbomachinery. For simplicity, this paper limits the life cycle cost derivation and discussion to turbogenerator units; however, the principles of this type of life cycle analysis can also be applied to gas turbines in mechanical drive applications and/or combined cycles.

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