ABSTRACT
The marginal conditions for an optimal plant mix have been presented both because they are of use in studying the cost structure of electricity supply and because they can serve to check upon the optimality of a proposed plant programme for a particular year. As economists have found in other contexts, the assumptions of uniform growth and the absence of history powerfully simplify a dynamic analysis-by transforming it into a static one. In order to continue with the simplified case of uniform growth, no technological progress and so on, it is necessary to adopt two further assumptions. The first is that the only item of costs which differs between the two nodes is the running cost of new conventional plant. The second new simplifying assumption is that the loads at each of the nodes are identical. This chapter simplifies the problem enormously in order to derive some qualitative results.
