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Integrated Energy Planning
A Framework
Energy Policy Perspective
• Two Schools of Thought- The optimistic View and the
Pessimistic View also known as the doomsday
prophecy
• The Pessimistic View :
-Oil and Coal are exhausted rapidly
- Conventional Hydro has reached its peak
development
- Nuclear ruled out – Fukushima accident has even
brought greater restrictions
- Renewable Energy is viewed with scepticism – cannot
be a good substitute for conventional sources
-Continuing population growth – spiraling energy
demand
Energy Policy Perspective Cont…
• The optimistic View –
- No time limit can realistically be framed as can be
seen in the past trends
- Sluggishness in the growth of Nuclear is more socio political than realistic. Fusion technology is more a
reality now than in the past
- Renewable sources are becoming more acceptable for
energy planners as they find more ways of dealing with
techno – economic barriers
relatively inexhaustible in nature.
- Energy Demand Management and re-adjustment of
lifestyles will provide adequate opportunities for future
generations.
Energy Policy Perspective - Policy Options
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Reduce dependence on Oil
Substitute Oil by Coal
Proceed with caution on Nuclear
Widen the use of traditional energy such as biomass and
substitute where ever possible commercial fuels convert fuel
fired furnaces with bio mass etc.
Continue R&D on Renewable energy sources to make them
cost effective, technically superior and on Energy storage
processes.
Intensify energy conservation and DSM initiatives.
Identify more appropriate less energy intensive technologies
– sheltered walkways in cities cycling tracks etc. Change
towards less energy intensive lifestyles.
Continue population growth
Systematise Energy Planning
Salient Features that Govern Energy
Planning initiatives
• Energy consumption per capita especially that of commercial
energy is still seen as an index of development
• Energy Planning was taken seriously due to very high cost of
commercial energy, Energy sector which was not thought of as
a separate sector of the economy is taken as a sector which
demand equal emphasis competing with other sector for
limited resources a mere decision to install a power plant may
not materialise due to lack of funding and even if installed will
not be able to run as planned due to the same limitations
including those of human and financial resources.
• Energy sector is no longer in the domain of engineers alone
rather it will be in the hands of economists , administrators,
statisticians, planners and politicians.
• Major techno-economic barriers will only be achieved through
proper panning, commitment of large sums of R & D money
and due to other compulsions imposed by climate change.
Traditional Planning Paradigm
• Keep increasing the level of supply on a least cost
basis to meet the increasing demand sector wise
– in the electricity sector, petroleum sector
closely following optimising exploration in
keeping with the demand, and lining up the
refining processes to meet the changes in the
demand structure Coal sector likewise
responding to the demand.
• However this will result in a collection of
disaggregated sector investment plans and
recurrent budgets that burden the national
budgets for expenditure on imported fuels.
Traditional Planning Paradigm – Problems
• Inter-sectoral of Objectives – rural electrification directly
affects in a reduction of biomass and other traditional sources
of fuel
• Intra-sectoral sub-optimisation predominance of Oil in
generation of electricity vs Coal – which was a classic case in Sri
Lanka
• Lack of balanced resource development Ex. Dominance of
hydro development in the past which delayed focus on
alternative means of generation to cater for sudden demand
growth that was spurred by open economy in late 70’s
• Diffusion of DMS measures due to lack of coordination among
sector, demand groupings may deter such interventions such
as in transport , some commercial demand groups etc.
• Absence of mechanisms to deal with energy – environment
interfaces climate change etc. Often public policy depend on
geo-politics and global issues and agreements that may have
little or no relevance to energy sector.
Integrated Energy Planning – new Paradigm
• IEP Means the analysis of all energy issues within
a unified policy framework in order to arrive at a
set of nationally optimal energy solutions over the
long term. Say 15 to 20 years.
• It is said Long Term Planning is not about the plan
for the future but the future of the present!
Constraints to IEP
• Lack of adequate Data related to energy demand
especially in the traditional fuels, supply technologies
from a standpoint of potential, economics of
harnessing and environmental limitations .
• Even in case of availability of data with the
sophistication of analytical tools that are being
developed with advancement of computational power.
• Unavailability of manpower who have mastered
complicated interrelationships in energy, economy,
social ,political and environmental dimensions.
• Lack of proper institutional arrangements to deal with
inter-sectoral and often conflicting interests.
Integrated Energy Planning - Energy Master
Plans are not the Final Outcome! Because…
• Unreliability data used
• Indiscriminate an at times in-appropriate use of
over-sophisticated analytical tools.
• Use of experts in certain areas leading the
studies in a skewed manner.
• Inadequate attention to feasibility of
implementation of the ‘Plan’
• Contrived linkages with economic plans
• Lack of updating and difficulty of being resilient
to changing scenarios.
Anatomy of an Integrated National Energy Plan
• Objective – Visionary generally long term future
this is necessary to assess, evaluate strategic
options open to a country in line with the socioeconomic- politico policies. It should give the
immediate decisions one has to make in seeking
say finances for large scale investments needed
say in short to medium term, One can also have
different variants of objectives say maximising
indigenous energy resources, DSM, minimising
carbon foot print, minimising cost of energy etc.
Anatomy of an Integrated National Energy Plan
• Detail – The level of detail will vary with the level of
complexity and the comprehensiveness sought. As an
example if the objective of the plan is to design a
comprehensive DSM strategy for the country the
level of detail of energy demand say going down to
the level of consumption of electricity for airconditioning , lighting, use of petroleum products in
relation to different modes of transport etc may be
required and the level of sophistication will be hence
related to these demand on the other hand if the
objective is to assess the overall demand of electricity
in the country the detail will entail running a model
that use only overall energy consumption in various
sectors.
Anatomy of an Integrated National Energy Plan
• Time – In a country Industrial, agricultural,
economic policy may span from say 5 to 10 or
even 15 years, however the energy plan should
ideally span about 15 to 20 years to take account
of the large scale investments required. Hence
Energy Plans may have a lower limit of say 4 to 5
years for say very short term objectives or
generally 20 years . However some plans may
even span 30 to 40 years to have a vey long term
snapshot view of say “scenario of energy situation
in 2050”totake care of some specific strategic
objective.
Anatomy of an Integrated National Energy Plan
• Linkages with Economic Plan – This is the most
difficult and least reconciled aspect of the Plan
be it Economic or Energy. Ideally an energy plan
should have close and direct linkages with the
national economic plan as the two provide
mutual inputs. This is not easy to achieve, as gthe
two data bases may be different, and analytical
methods may be different as well. However there
is a dire need for the National Energy lan t be
integrated in one way or another with the
economic plan.
Anatomy of an Integrated National Energy Plan
• A statement of Goals and Objectives – Such a
statement originates from the policy makers of
the country at a given time it may come from the
political authority. This is akin to the ‘end result’
specification of the planning exercise.
• A statement of Policy Guidelines – Major policy
guidelines derived from the broad objectives
stated above need to be spelt out. These can be
looked upon as system constraints. Typical factors
can be pricing, conservation, environmental
considerations, nuclear and non-conventional
energy sources and so on…
Anatomy of an Integrated National Energy Plan
• A statement of the current Energy Situation Essentially a stocktaking exercise, this will be
important to the energy plan, defining the existing
energy supply system and energy flows there
from to various demand groups and end uses . It
can be represented in the form of an Energy
Balance Table
or an Energy System Network.
Energy System Network
Anatomy of an Integrated National Energy Plan
• A description of possible Growth ScenariosAlternative scenarios of economic growth (say high
medium or low)and the scenario(s) eventually
chosen – need to be stipulated since the likely
structure of the economy and changes in the levels
of activity during the plan period will have influenced
the projections of energy demand patterns and
levels as well as the various supply side choices.
• An Estimate of Energy Demand - Initially based on
each economic growth scenario, detailed projections
of energy demand by growth sectors ( say domestic,
commercial , industrial etc) and end uses ( say
lighting, cooling, rail, boilers motors etc) will be
derived.
Anatomy of an Integrated National Energy Plan
• An Assessment of Energy Resources and Supply
Technologies – An inventory of resources both renewable –
indigenous and non renewable either indigenous or
imported, will be contained in the plan, followed by an
evaluation of the associated supply/conversion
technologies.
• A Supply – Demand Balance – With the use of a Energy
Balance Table or a Reference Energy System (RES) Network,
tracing individual fuels from source to end uses a set of
alternative supply – demand balances will be developed for
various demand projections made corresponding to various
economic scenarios chosen and the available energy
resources and technologies screened as feasible. Enegy Plan
will spell out the logic of the supply-demand balance
chosen.
Anatomy of an Integrated National Energy Plan
• A Supply System Configuration – The supply side
of the supply – Demand Balance chosen defines
the Energy Supply System plan to adopt. The
configuration of energy supply system along with
the fuel supply system, transformation /
conversion technologies, investment and
recurring costs , environmental impacts, timing of
the investments and the implementation Plan,
forms the backbone of the plan.
• Financial Outlay Plan - Capital Investment Plan,
Operation and Maintenance Plan and Energy
Import/ Export Plan.
Anatomy of an Integrated National Energy Plan
Finally…
A set of Energy Management (or implementation)
Strategies.
This will include a set of strategies to achieve the
projected demand and supply configurations. On
the demand side it will include DSM measures
including pricing policies , regulatory
mechanisms etc. On the supply side sequencing
of suppy augmentation efforts , investments,
energy related infrastructure , Transmission lines,
oil pipe lines, manpower training and
development plan etc will be included
The Mechanics of Integrated Energy
Planning
Three Levels of Integration is envisaged.
• Integration of the Economic and the Energy Plan
• Integration of Different Energy sub- sector Plans
• Integration of individual components of te
energy sub-sector plans
Integration Process
The Mechanics of Integrated Energy
Planning - The Processs
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Establishing Energy Data Base
Building Economic Growth Scenarios
Making Energy Demand Projections
Assessing Energy Resources
Evaluating Supply Technologies
Supply Demand Balancing
Carrying Out Impact Analysis
Developing Investment and other Financial Plans
Framing Supply – Demand Management
Stratergies
IEP Process
Establishing The Energy Data Base
• Start with the existing Energy Data , usually relate to
demand side - consuming sector wise usage wise,
supply side - of existing systems, future plans already
committed, probable supply sources not already
tapped etc. The level of data required depend on the
sophistication of the model, policy objectives, policy
guidelines, focus of the plan etc. may start with the
available data with approximations and assumptions
made for missing data and refined as the plan
progresses. Data Base development requires
continuous data gathering and compilation. DB
Development involves a) Identification, b) Collection
and c) Assembly in the form of EBTs or RES.
Building Economic Growth Scenarios
• Present Structure of the economy will be modeled
Input – Output Table , National Accounting
Framework
• Use Reference low or High Scenarios
• As a minimum economic sectors such as Industry,
Agriculture, Transportation, Residential and
Commercial can be considered this can be refined
depending on data availability and sophistication
desired to further divided into rai and road
transport , large small and medium scale
industries etc.
An Example of an Input Output Table
Making Energy Demand Projections
• Relate the current level of energy consumption to the
corresponding economic growth rates.
• For more exact analysis instead of Gross energy
consumption useful energy consumption will give a more
accurate analysis of the useful energy – economy linkages.
This will take into account conversion efficiencies of
devices etc. so that any improvement in conversion
efficiencies can be factored into the analysis.
• In the approach using useful energy demand inter-fuel and
inter-factor substitution effects can be taken into account.
• Demand Projections can be made by using one or more
analytical tools such as a) process analysis, b) trend
analysis, c) elasticity analysis d) econometric analysis, or e)
input output analysis.
Assessing Energy Resources
• Resource Assessment generally refers to indigenous
resources and classified according to internationally
accepted norms:
• Identified Resources Undiscovered Resources and
Reserves in case of non- renewable energy sources.
Depending on the need for a particular resource to
meet the domestic energy requirement status of the
resource may change its status from different stages
as defined above and at a given cost.
• Incase of renewable energy sources generally they
tend to get estimated as the total potential depending
on the technology used and the economics of
exploitation of course subject to environmental
constraints
Evaluating Supply Technologies
• Non Renewable resource Technologies –fossil Fuel
type
• Renewable Resource Technologies
• Electric system Technologies – a combination of all
types of technologies with a types of energy
resources. – treated separately.
• Which ever Technology - have to be evaluated
under the following criteria: Engineering
Performance ( Input energy needed, Output Energy
Delivered, thermodynamic efficiency, performance
limits and status of technology) , Economic
Performance ( Capital Cost non fuel operating cost,
output energy cost, financial cost) and Ancillary
Criteria( environmental resources consumed, labour
requirement, socio-political barriers to implement)
Supply Demand Balancing
• This is usually done for each year using the EBT
approach or the RES approach
Carrying out Impact Analysis
• Both Economic and Environmental Impact Analysis
need to be done for each of the alternatives.
• Economic Impact Analysis shall check the
a) impact on the macro economic structure and
growth rates.
B) impacts on the structure and rate of growth of
major economic sectors
c) impacts on real aggregate consumption
d) inflationary impacts
e) impacts on external trade and balance of
payments
• Environmental Impact Analysis is warranted on many
development projects and it shall be carried out as
required by regulations
Developing Investment and other Financial Plans
• The Capital Investment Plan this is the most
important and the crucial plan that will either
make the plan feasible to implement or other
wise.
• Investments in supply side efficiency
improvements in already installed facilities
• Investments in Demand Side Efficiency
improvements
• Investments in explorations and/or resource
assesments and feasibility studies
Forming Supply and Demand Side Management
Strategies
• Supply Side Management Strategies include
investment planning and scheduling, Infrastructure
planning, human resource planning, coordination
with other sectoral development plans, Ex
transport sector,
• Demand Side Management Strategies including
pricing and non pricing strategies, mandatory
energy reporting and audits etc.
Long Term Generation Expansion Plan
• CEB uses Least Cost principles
• Why?
- CEB is a monopoly
- CEB has a captive consumer Base
- CEB is a state owned utility
- CEB is a service oriented organisation
- Electricity is an essential service for
economic and social needs.
Objective
The Generating System Should Meet The
Demand at Least Cost with Adequate
Reliability
Utilities Should Optimise Their Costs
TOTAL ECONOMIC COST
SYSTEM COST
OUTAGE COST
SYSTEM RELIABILITY
Dimensions of
Electric System Planning
CATEGORY OF ELECTRIC
SYSTEM PLANNING
Short
(<5 years)
Demand
Generation
Transmission
Distribution
Medium
(5-10 years)
Long
(>10 years)
AREA OF INTEREST
IN GENERATION
EXPANSION PLANNING
Reasons For Long-term Power
System Planning
 Long Gestation Periods and Long Economic Lifetime
 Generation Projects Require Large Investments
 Impacts on Other Subsectors: Fossil fuel Supplies,
Rrfinery Capacity, Ports
Generation Expansion Plan Provides
What - Capacities to be installed to ensure an
appropriate level of system reliability
When - Is the proper time to commission them
How
- To pick the most economic combination
among the different technologies
Where - To locate the new power plants
Generation Planning Study Process
•
Prepare the Demand Forecast
•
Assess the Capability of Existing Generating System
•
Screen Available Generating Technology Options
•
Formulate and Prepare The Generation Expansion
Plan
•
Check Weather the Plan is Robust and Practically
Feasible
15 year generation plans updated on
annual basis by Generation Planning Branch
Prepare the Demand Forecast
15 year generation plans updated on
annual basis by Generation Planning Branch
Demand Projection
• Econometric Method
• End User Method
• Elasticity Approach
• Trend Analysis
End User Method
• Reference Energy System Approach
• MAED Model from IAEA
Illustration of Decomposition of Final Energy
Consumption
Sectors
Industry
Service
Household
Transport
Sub-sectors
Agric.
Materials
Constr.
Mining
Equipment
Manufact.
Non-durables
Passenger
Miscell.
Freight
Miscell.
End-use
Motive power (track,
conveyer, motor, …)
Category of
final energy
Motor
Fuel
Thermal use
(process, heating, …)
Fossil
Fuel
Electri
city
District
Heat
Electricity specific use
(conditioner,light,, …)
Soft
Solar
Noncommercial
47
Demand Projection –Econometric Method
Sector
Explanatory Variables
Domestic
Past Demand, GDP Per Capita, GDP, Population, Avg.
Electricity Price,
Previous Year Demand, Domestic Consumer Accounts,
Previous Year Dom. Consumer Accounts,
Industrial
Past Demand, GDP, Avg. Electricity Price, Previous Year
Demand, Previous Year GDP, Population, Sector wise
GDP (Industrial, Agriculture, Service)
Commercial
Past Demand, GDP, Avg. Electricity Price, Previous Year
Demand, Previous Year GDP, Population, Sector wise
GDP (Industrial, Agriculture, Service)
Religious & Street Previous Year Demand
Lights
Results
Demand
Projection
Sri Lanka for 20
Years
Econometric Method
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
Growth
(%)
Generatio
n (GWh)
12,278
12,901
13,451
14,377
15,367
16,426
17,557
18,420
19,327
20,281
21,286
22,345
23,462
24,641
25,867
27,136
28,444
29,788
31,164
32,591
34,078
35,629
5.20%
Time Trend
Peak
Generatio
Peak (MW)
(MW)
n (GWh)
2,467
12,278
2,456
2,592
13,468
2,698
2,677
14,773
2,936
2,801
16,204
3,163
2,989
17,774
3,469
3,190
18,915
3,686
3,449
20,129
3,944
3,614
21,421
4,195
3,765
22,795
4,442
3,932
24,258
4,711
4,124
25,815
5,015
4,311
27,472
5,292
4,528
29,235
5,638
4,756
31,112
6,004
4,994
33,109
6,396
5,224
35,234
6,796
5,428
37,495
7,142
5,695
39,901
7,617
5,947
42,463
8,103
6,210
45,188
8,623
6,503
48,088
9,194
6,708
51,175
9,627
4.88%
7.03%
6.72%
End User -MAED
Method
Generatio
Peak
n (GWh)
(MW)
12,910
2,297
13,761
2,445
14,668
2,604
15,326
2,716
16,014
2,832
16,732
2,954
17,483
3,081
18,268
3,214
19,028
3,345
19,821
3,482
20,646
3,624
21,506
3,772
22,402
3,927
23,347
4,085
24,332
4,250
25,359
4,421
26,430
4,600
27,545
4,785
28,590
4,962
29,674
5,145
30,799
5,335
31,967
5,531
4.41%
4.27%
Assess the Capability Of Existing
Generating System and the
Future Expansions
Screen Available Generating
Technology Options
Generation Planning
Data Base
 Existing Plant data - from the
power stations
 Candidate Power Plant data from
latest available studies
commissioned by CEB
Costs Of Power Generation
Capital
Costs
Fixed
O&M
Costs of
Power
Generation
O&M
Costs
Variable
O&M
Operation
Costs
Fuel
Costs
Typical Daily Load Curve
1600
1400
Demand (MW)
1200
Peaking
1000
Peaking
800
Peaking
600
Intermediate
Base
400
Base
200
Base
Base
0
0
1
2
3
4
5
6
7
8
9
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Time of Day
The plants in a system are
characterised by their type of duty
 Base Load
 Intermediate load
 Peak load
Duty
Cycle
Plant
Factor
Cost factors
Base Load
40-85%
Low fuel cost, High
Capital cost
Intermediate
Load
15- 40% Intermediate to high
capital cost,
Intermediate fuel cost
Combined
Cycles
Peak Load
0-15%
Gas turbines
Low Capital cost, high
operating cost
Type
Coal or oil
fired steam,
Diesel engines
Total Annualised Cost (US$/kW-Yr)
Screening of Generation Options
602
Steam -Fuel oil
502
Coal WC
CCY -Auto DSL
402
GT 105
302
202
102
2
0
0.1
0.2
0.3
0.4
0.5
Capacity factor (%)
0.6
0.7
0.8
Candidate Technologies
 For Base Load duty - PF 40-80% over the planning period
• COAL FIRED STEAM TURBINE -
• OIL FIRED STEAM TURBINE -
Coal
Fuel oil
 For Intermediate load duty - PF 15-40%over the planning
• OIL FIRED COMBINED CYCLE -
Auto Diesel
Peak Load Duty - PF 0-15%over the planning period
• OIL FIRED GAS TURBINE -
Auto Diesel
period
Fuel Types Considered
Coal
-
Steam Plants
Fuel oil
- Steam Plants
Residual oil
- Diesel plants
Auto Diesel
- Gas Turbine
and Combined Cycle plants
Naphtha- Committed Combined Cycle Plant
Formulate and prepare the
Generation Expansion Plan
Planning Criteria
• Minimum of 5% Reserve Margin is kept even
under worst hydro condition
• Acceptable rates of Loss of Load Probability
• Cost of unserved energy (shortfalls in supply)
• Discount rate of 10% with sensitivity values of 8%
and 12% correct
• Twenty year planning horizon
• Optimisation of fuel mix
Planning Tools
WASP Generation Expansion Planning Program
WASP - Wien Automatic System Planning Package
Developed by International Atomic Energy Agency

used to derive least cost generation plans

Favoured by the international lending agencies

Widely used by power utilities in many countries
WASP Input Data Requirements
•
•
•
•
•
Electricity demand forecast - energy, peak load, load curves
Details of existing hydro and thermal plant
Details of candidate plant
–
investment costs & lifetimes
–
scheduled maintenance requirements
–
forced outage rates
–
operating (fuel) costs
–
operating constraints (e.g. minimum stable load)
Economic parameters
–
discount rates
–
cost of unserved energy
–
acceptable LOLP (loss of load probability)
–
fuel cost escalation rates
Hydro plant capabilities
–
energy (GWh) & capacity (MW) for existing & candidate plant
Minimised Cost Function (Bj)
T
B
j
Where,
Bj
=
[ I -S
+ F j,t+ M j,t + U j,t ]

j,t
j,t
t=1[
=
Total cost of the plan
I
=
Capital investment costs
S
=
Salvage value of investments
F
=
Fuel costs
M
=
Operation and maintenance costs
U
=
Cost of energy not served
The optimal expansion plan is defined by :
Minimum Bj among all j.
Dynamic Programming
Objective Function
𝑇
Bj =
Ij,t − Sj,t + Fj,t + Mj,t + Uj,t
𝑡=1
Bj
=
I
S
F
M
U
Total cost of the plan
=
Capital investment costs,
=
Salvage value of investments,
=
Fuel costs,
=
Operation and maintenance costs,
=
Cost of energy not served.
Planning Process and Consideration of
Constraints
Model for
Economic
Optimization
of Generation
System
Expansion
Best Schedule of
Plant Additions
Demand Projection
• Econometric Method
• End User Method
• Elasticity Approach
• Trend Analysis
End User Method
• Reference Energy System Approach
• MAED Model from IAEA