Generating units may be classified into three categories based on their mode of operation. These are:
1. Base Load;
2. Intermediate;
3. Peaking.

Base load units tend to be large units with low operating costs. They are generally operated at full capacity during most of the hours that they are available.

They are designed to operate for long periods of time at or near their maximum dependable capability. Their low operating costs result from their use of low-cost nuclear and coal fuels and/or lower heat rates (higher efficiencies) than other units on the system.

For a typical region, base load is on the order of 40% to 60% of the annual maximum hourly load and, since this represents the amount of load that will be supplied in the region at essentially all hours, it represents perhaps 60% to 70% of the annual energy requirements of the region.

Base load units are usually shut down for forced outages or maintenance only. Because of their size and complexity, these units may require from 24 hours to several days to be restarted from a “cold” condition.

Once the decision has been made to shut down one of these units, periods of up to 24 hours may be required before another “start-up” may be attempted. When operating a power system decisions on the time of restarting units play an important role in hour-by-hour schedules for generation.

Intermediate units are those generating units which are used to respond to the variations in customer demand which occur during the day. They are designed to withstand repeated heating and cooling cycles caused by changes in output levels.

Intermediate units usually have lower capital costs, and somewhat higher heat rates (lower efficiencies) than base load units. The intermediate load may be on the order of 30–50% of the maximum hourly load for a typical system and represents perhaps 20–30% of the annual energy requirements for the utility.

Peaking units are those generating units that are called upon to supply customer demand for electricity only during the peak load hours of a given period (day, month, year). Combustion turbines, reciprocating engines and small hydroelectric units comprise the majority of peaking units.

These are ordinarily units with a low maximum capability (usually less than 150Mw), which are capable of achieving full load operation from a cold condition within ten minutes. Peaking units usually have the highest heat rate sand lowest capital costs of the three categories of units.

In addition to supplying system needs during peak load hours, they may be called upon to replace the capability of  other base load or cycling units which have been suddenly removed from service due to forced outages. They generally supply about 5% of the total energy requirements of a system.

As generating units age, unit efficiency and performance generally decrease. In addition, newer, more efficient, lower operating cost units are continuously added to a power system. These two occurrences tend to cause most generating units to be operated fewer hours as they age.

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