Determining the Cost of Electricity of a Natural Gas Generator

Nicholas Kenny, P.E. Extension Irrigation Specialist, Texas A&M University

As water well production

declines across many parts
of the Texas High Plains,
many pumping plants
currently using natural
gas engines are becoming
better suited for smaller
submersible pumping units
driven by electricity.
Infrastructure costs
associated with delivering
necessary electrical power
from the grid often make
this conversion to properly
sized, efficient pumping
plants an economic
compromise. An alternative
method for electrical power
delivery in these scenarios
is the installation of an onsite natural gas generator
that can power multiple
smaller electrical pumping
plants.
The following information
contains a basic method
for determining the fuel
costs associated with
producing electricity at
an on-site natural gas
generator. This cost can
be directly compared
to the market price of
electricity purchased from a
commercial provider.
To determine total
costs associated with onsite power generation,
1

Natural gas Caterpillar 3306TA driving a Marelli three-phase

generator, providing power to three irrigation wells.

operation and maintenance

expenses and amortized
capital expenses tied to
the purchase of the natural
gas generation unit also
must be considered. For
practical comparative
evaluations, the capital
expenses associated with
on-site generation usually
are similar to or less
than the capital expenses
related to delivering
power from the existing
commercial electrical

grid to a pump location.

Further, comprehensive
maintenance costs
associated with one natural
gas generator typically
are much less than the
costs associated with
multiple natural gas wells.
Upgrade costs at individual
pumping plants also will
need to be included in a
comprehensive economic
evaluation related to this
conversion.

LSU AgCenter Pub. 3241-D: Determining the Cost of Electricity at a Natural Gas Generator

The following
information
a basic
method
for on-site
determining
the fuel
costs are
associated
an
evaluations,
the capitalcontains
expenses
associated
with
generation
usually
similar with
to orproducing
less than electricity
the capitalatexpenses
on-site
natural
gas
generator.
This
cost
can
be
directly
compared
to
the
market
price
of
electricity
purchased
from
a
related to delivering power from the existing commercial electrical grid to a pump location. Further, comprehensive
commercial
provider.
maintenance costs associated with one natural gas generator typically are much less than the costs associated with multiple

natural gas wells. Upgrade costs at individual pumping plants also will need to be included in a comprehensive economic
Method
Calculating
Costs
To determine
total
coststoassociated
with on-site
powerof
generation,
operation
and maintenance expenses and amortized capital
evaluation
related
this conversion.
expenses tied to the purchase of the natural gas generation unit also must be considered. For practical comparative
Measure the elapsed time in seconds for consumption
evaluations, the capital expenses associated with on-site generation usually are similar
orCaterpillar
less than3306TA
the capital
expenses
Naturaltogas
driving
a Marelli threeof
a specified
of naturalelectrical
gas (the
the
related to delivering power
from thevolume
existing commercial
gridlonger
to a phase
pump
location.
Further,
comprehensive
generator,
providing
power
to three irrigation
interval with
is, the
moregas
accurate
measurement
willthe costs associated with multiple
wells.
maintenance costs associated
one natural
generator this
typically
are much less
than
be). This
measurement
is used
rate of in a comprehensive economic
natural
gas wells.
Upgrade
costs
at individual pumping
plants to
alsocalculate
will need tothe
be included
Method
of Calculating
Costsy
evaluation related tonatural
this conversion.
gas consumption. As a note, most natural gas

meters
the Texas
High Plains
requirevolume
that of
a natural
displayed
Measure the elapsed
time in
in seconds
for consumption
of a specified
gas (the longer the interval is, the more
Natural gas Caterpillar 3306TA driving a Marelli threereading
is
multiplied
by
a
correction
factor
to
account
for gas
accurate this measurement will be). This measurement is used to calculate
the
rate
of
natural
consumption.
As a note,
phase generator, providing
power
to three irrigation
most natural gas
meters
in
the
Texas
High
Plains
require
that
a
displayed
reading
is
multiplied
by a correction factor to
local conditions (for example: gas temperature,
wells. altitude,
account for local
conditions (for
example: gas temperature, altitude, pressure, etc.).
pressure,
etc.).
Method of Calculating Costsy

Measure the elapsed

time
in
seconds
of a specified volume of natural gas (the longer the interval is, the more
1.

for
consumption
3600

accurate this measurement will be). This

measurement is used to calculate the rate of natural gas consumption. As a note,
most natural gas meters in the Texas High Plains require that a displayed reading is multiplied
by a correction factor to
Where:
NGcons = natural gas consumption in cubic feet per hour (ft3/hour)
account for local conditions (for example:
gas temperature, altitude, pressure, etc.).
VolNG = volume of natural gas consumed during the specified time period (ft3)
Time = elapsed time (seconds)

3600
1.

Calculate the hourly fuel cost of the natural gas generator:

Where:
NGcons = natural gas consumption in cubic feet per hour (ft3/hour)
VolNG = volume of natural gas consumed during the specified time period (ft3)
2.

/1000
cost
Time = elapsed
time (seconds)
Calculate
the hourly
fuel
of the natural gas

generator:
Where:
NG Cost= cost of natural gas consumed per hour of operation ($ / hour)
purchase
price of natural gas per thousand cubic feet ($ / thousand cubic feet)
NG
unit =
Calculate the hourly fuel cost of the Cost
natural
gas
generator:
NGcons = natural gas consumption in cubic feet per hour (ft3/hour)

2.
using

/1000
Measure the electrical production of the generator
a properly rated, true-rms digital clamp meter. The measurements
necessary are AC volts and current in amps. It often is worthwhile to measure all three electrical legs to ensure balanced
Where:
cost of natural
hour of (These
operation
($ / hour) are for three-phase power (the
power
production andNG
useCost=
the average
voltagegas
andconsumed
amperageper
readings.
calculations
=
purchase
price
of
natural
gas
per
thousand
cubic
feet ($ / thousand cubic feet)
NG
Cost
unit
calculation for single-phase power does not include the square-root of three factor.)
NGcons = natural gas consumption in cubic feet per hour (ft3/hour)
Measure the electrical production of the generator using a properly rated, true-rms digital clamp meter. The measurements
necessary are AC volts and current in amps. It often is worthwhile to measure all three electrical legs to ensure balanced
power production and use the average voltage and amperage readings. (These calculations are for three-phase power (the
Measure
thenot
electrical
the
generator
calculation for single-phase
power does
include theproduction
square-root of of
three
factor.)

using a properly rated, true-rms digital clamp meter. The

measurements necessary are AC volts and current in amps.
It often is worthwhile to measure all three electrical legs
to ensure balanced power production and use the average
voltage and amperage readings. (These calculations are for
three-phase power (the calculation for single-phase power
does not include the square-root of three factor.)

Exercise extreme caution when working

around all agricultural electrical circuits!

LSU AgCenter Pub. 3241-D: Determining the Cost of Electricity at a Natural Gas Generator

Exercise extreme caution when working around all agricultural electrical circuits!

Determine the power generated by the generator in

kilowatt hours per hour (kwh / hour).

Determine the power generated by the generator in kilowatt hours per hour (kwh / hour).

33.

Exercise extreme caution when working around all agricultural electrical circuits!

Exercise extreme caution when working around all agricultural electrical circuits!
Where:
Power = kilowatt hours per hour generated (kwh / hour).
Determine the power generated by the generator in kilowatt hours per hour (kwh / hour).
V = output voltage generated (AC volts)
I = output current generated (amps)
of the generator in decimals (typically 85 percent or .85)
power factor
PF =
3. generated

Determine the power

by the
generator in kilowatt hours per hour (kwh / hour).

Calculate the cost of power:

= kilowatt hours per hour generated (kwh / hour).
Where:
3.

Power
V = output voltage
generated (AC volts)

4.

current generated (amps)
I = output

Where:
Power = kilowatt
hours
per hour
/ hour). (typically 85 percent or .85)
PF = power
factor
of thegenerated
generator(kwh
in decimals
Calculate
the
cost
of power:
V = output voltage generated
(AC volts)
= output
current
generated
(amps) cost in dollars per kilowatt hour ($ / kwh)
CalculateWhere:
the costI of
power:Elec
Cost=
unit electrical
PF = power
factor
of
the
generator
inper
decimals
percent or .85)
NG Cost = natural gas cost
hour ($(typically
/ hour of85
NG)

Power
= electrical
power generation rate (kwh / hour)
4. power:

Calculate the cost of

Example

4.
Cost=
electrical
cost
in dollars
per kilowatt
hour ($
/ kwh)

A naturalWhere:
gas generator setElec
with
an 85unit
percent
power
factor
is generating
480 volts
with
a system current load of 120 amps
Costgas
= natural
gas costfrom
per hour
($ / hour
of NG)
from two pumping plants. NG
Natural
is purchased
an off-site
supplier
at $5 per thousand cubic feet. Measurements of
Power
= electrical
poweringeneration
rateperiod.
(kwh /Determine
hour)
natural gas show that 20 cubic
feet
are consumed
a 50-second
the unit electrical power cost associated
Where:
Elec
with this generator
set.Cost= unit electrical cost in dollars per kilowatt hour ($ / kwh)
NG Cost = natural gas cost per hour ($ / hour of NG)
Example
Power = electrical power generation rate (kwh / hour)
Example
A natural gas generator set with an 85 percent power factor is generating 480 volts with a system current load of 120 amps
Example from two pumping
plants. gas
Natural
gas is purchased
from
an
supplier atpower
$5 per thousand

A natural
generator
set with
anoff-site
85
percent

cubic feet. Measurements of

natural gas
show
that
20
cubic
feet
are
consumed
in
a
50-second
period.
Determine
the
unit
electrical
1.

power cost associated
factor
is generating
480 volts with a system current load
power factor is
load of 120 amps
A naturalwith
gas generator
set
with
an
85
percent
generating
480
volts
with
a
system
current
this generator
set.
of 120 amps from two pumping plants. Natural gas is
from two pumping plants. Natural gas is purchased from an off-site supplier at $5 per thousand cubic feet. Measurements of
purchased from an off-site supplier at $5 per thousand cubic
natural gas show that 20 cubic feet are consumed in a 50-second period. Determine the unit electrical power cost associated
Measurements of natural gas show that 20 cubic feet
with this generator feet.
set.

are consumed
in a 50-second period.
Determine
the
unit

2.

electrical
power
cost
associated
with
this
generator
set.
1.

1.

2 2.
3 3.
4 4.
3

3.

2.

4.





3.

4.

LSU AgCenter Pub. 3241-D: Determining the Cost of Electricity at a Natural Gas Generator

www.LSUAgCenter.com
Louisiana State University Agricultural Center
William B. Richardson, Chancellor
Louisiana Agricultural Experiment Station
John S. Russin, Vice Chancellor and Director
Louisiana Cooperative Extension Service
Paul D. Coreil, Vice Chancellor and Director
Pub. 3241 D

(200)

7/13

The LSU AgCenter is a statewide campus of the LSU System and

provides equal opportunities in programs and employment.

LSU AgCenter Pub. 3241-D: Determining the Cost of Electricity at a Natural Gas Generator