The cost of switchgear ownership can be very much greater than simply the initial capital cost of purchasing the switchgear. Some accountants are only interested in the expenditure within a current financial year. However, it could be argued that this first cost will only be a small percentage of the total cost of ownership over the lifetime of the switchgear.

The true cost of ownership should include the cost of the substation, as different types of switchgear will occupy different volumes of substation space and, therefore, influencetheoverallsubstationcost. Inaddition, costswillbeincurredfortheerection, installation and commissioning of the switchgear. Once the switchgear is installed, other costs will be incurred, such as maintenance, labour, materials and outage time. Finally, disposal at the end of useful life must be considered. For example, SF ₆ switchgear will incur disposal costs, as only specialist companies have the facilities necessary to safely dispose of the equipment without risk to personnel and without contaminating the atmosphere. Conversely, disposing of oil and vacuum switchgear at the end of their life will generally be self-financing or even yield a small profit. All of these costs combine to give the true lifetime cost of ownership.

There are many ways of arriving at the true cost of ownership, but the following is one that is easy to comprehend and allows the costs to be expressed in today's value of currency.

Given that:

• The substation land and building costs total = S

• The initial cost of the switchgear = A

• The life of the...