Marginal-utility-cost concept helps maximize plant efficiency

Operation conditions often subject industrial powerplants to off-design cyclic and permanent changes, making continual high-efficiency operation a challenge to even the most experienced engineer-especially when he considers the complex interconnections among boiler, turbines and headers at different pressures. In such cases, application of the marginal-cost concept can help in maintaining optimum performance level. It is also useful in evaluating retrofit and energy-conservation measures. The concept of marginal cost is not new, having been used by microeconomists for years. It is a simple yet powerful tool if used correctly, but there are two reasons why it has not yet been used to its full potential by powerplant engineers: there is a general lack of awareness of the concept and its usefulness; the terminology is confusing. It is important to understand the meaning of marginal cost in relation to terms such as steam price, steam value, financial cost, transfer price, enthalpy costing, entropy costing, etc.