Generating electricity is a highly complex process that involves a number of sub-processes with multiple critical parameters. A high load factor implies greater output and at a reduced cost per unit. The performance of the power plant which is based on the operational efficiency among other things, is essential to have a high PLF (plant load factors). Some factors that affect the efficiency of a power plant include, thermal efficiency, maintenance loss, plant load, forced outages, and plant availability.

Low thermal efficiency leads to high costs of electricity generation. This is because of greater fuel usage which leads to higher carbon footprints. This makes improvements in the performance of thermal power plants crucial. The performance of a thermal power plant can be expressed through some critical performance factors such as: Energy efficiency, thermal efficiency, capacity factor, load factor, economic efficiency, and operational efficiency. Increasing efficiency requires optimising decrease in losses. Efficient running of thermal power plants is vital relating to cost and reliability factors. The cost implication due to a rise in the heat rate, water consumption, oil consumption, condensed back pressure, excess air etc., indicate the urgent need to manage and maintain these parameters within the designed ratings. In all of these sub-processes, some amount of energy is lost to the environment.

A certain amount of the fuel is not burned completely, some energy is lost through the stack, and rejected to the cooling tower, some of the kinetic energy and mechanical energy, produce heat instead of electricity, and finally, some part of the electricity that is generated is used by these sub-processes.

The heat rate of a thermal power plant is the amount of chemical energy that is needed to produce one unit of electrical energy. Heat rate is expressed in kcal/kWh.

If a power plant can convert 100% of the chemical energy from the fuel into electricity, the thermal plant would have a heat rate of 860 kcal/kWh. Unfortunately, due to the losses explained above, a modern conventional power plant at its best design can be expected to have a full load heat rate of the order of 2200 kcal/kWh, which is only 39% efficiency.

Heat rate monitoring is focused on identifying heat rate gaps and then determining and implementing corrective actions to eliminate the efficiency loss. In this approach, heat rate deviations from expected or design levels are identified and quantified. Most of these measures are cost-effective and require little effort but go a long way in enhancing power plant operations.