Correct Answer - Option 1 : load factor

Load factor: The ratio of average load to the maximum demand during a given period is known as the load factor.

Load factor = average load/maximum demand

If the plant is in the operation for T hours

\(Load\;factor = \frac{{Avearge\;load \times T}}{{Maximum\;demand \times T}}\)

\(= \frac{{Units\;generated\;in\;T\;hours}}{{Maximum\;demand \times T}}\)

- The load factor may be daily load factor, monthly or annually if the period considered is a day or month or year
- Load factor is always less than 1 because the average load is smaller than the maximum demand
- It plays a key role in determining the overall cost per unit generated.
- Higher the load factor of the power station, the lesser will be the cost per unit generated, it is because a higher load factor means lesser maximum demand
- The station capacity is so selected that it must meet the maximum demand
- Now, lower maximum demand means a lower capacity of the plant which reduces the cost of the plant