New local diesel power stations: An economic assessment

Abstract

A recent investigation 1 examined the economic potential for electricity generation in the UK using large slow-speed two-stroke diesel engines of around 40 MW unit output. Large diesels are a high efficiency technology, resilient to fuel quality, and with high reliability. Economic analysis compared diesels with other generating options for a range of fuel scenarios and discount rates. Merit order potential and total costs were also assessed. The diesels show superior economic qualities, both in terms of investment criteria and high merit position. They are economically comparable with combined cycle gas turbines, but combined cycle plant is essentially large-scale, whereas diesels in 40 MW unit sizes can provide small-scale, high-efficiency local generation. Slow-speed diesels represent a sound investment for electricity supply. Diesels in local power stations in southern England would increase supply security and diversity. They are compatible with a cautious investment approach and are appropriate for the new market conditions in electrcity supply.