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Building on the Findings of t he Electricity Governance Initiative South Africa . The Integrated Resource Plan 2. Durban 10 May 2010. Energy Research Centre. IRP 2 is Critical. Determines whether South Africa: has adequate electricity to meet demand

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the integrated resource plan 2

Building on the Findings of the Electricity Governance Initiative South Africa

The Integrated Resource Plan 2

Durban

10 May 2010

Energy

Research

Centre

irp 2 is critical
IRP 2 is Critical

Determines whether South Africa:

  • has adequate electricity to meet demand
  • extends access to electricity for the poor
  • reduces its GHG emissions
  • continues on an energy intensive economic path, or charts a new path to green growth
coordination
Coordination
  • Renewable Energy White Paper
  • Integrated Energy Plan
  • Climate Change Policy
  • Industrial Policy Action Plan
  • National Planning Commission
irp 2 process
IRP 2 process
  • IRP 1 released by cabinet in December 2009
    • interim 5 year plan
  • MYPD 2 decision made, but without clarity on long term plans
  • Now proposing a 2 part consultation
    • First on the assumptions that go into energy models (May)
    • And second on the scenarios developed (late June)
    • Working group on IRP 2 reports to the IMC on energy
  • Maximize opportunities to have input
proposed irp 2 process

MAY - JUNE 2010

  • JUNE – JULY 2010
Proposed IRP 2 process
  • MARCH – MAY 2010
integrated resource planning and scheduling

Integrated Resource Planning and Scheduling

Andrew Marquard, Brett Cohen, Mavo Solomon, Bruno Merven

Energy Systems Analysis and Planning

Energy Research Centre

contents
Contents
  • Global history of IRP
  • South African history of IRP
  • NIRP I
  • NIRP II
  • NIRP III
  • *IRP 1
  • Dispatching/scheduling of units
  • Integrated Energy Planning
history of electricity planning
History of Electricity Planning
  • US Electricity planning in the 1960’s
    • Strong and consistent electricity growth
    • Easily matched by bulk supply
    • Simple trending techniques addressed concerns on future requirements
  • Changes in the 1970’s
    • Arab oil embargo with price volatilities
    • Nuclear Plant 3 Mile Island
    • Less growth, rampant inflation, implied less predictability in planning
history cont
History cont.
  • Energy conservation prominence in the 1980’s
      • Balancing the need build plants with using less energy
      • Evolved into demand side management
      • Complexity of planning analysis
      •  LEAST COST PLANNING
      • Integrated Resource Planning
irp versus traditional planning
Traditional Planning

Focus on utility-owned central power plants

Planning within utility system planning department

All resources owned by the utility

Resources selected to minimise electricity prices and maintain system reliability

Integrated Resource Planning

Diversity of resources - utility plants, power purchases, DSM, T&D improvements

Planning spread among several departments, involving customers (and government?)

IPPs and small producers could also be included

Diverse resource selection criteria - prices, revenue requirements, utility financial health, risk, fuel diversity, environmental quality

IRP versus Traditional Planning

Source: Spalding-Fetcher

irp a balancing act
IRP, a balancing act
  • Reliable service,
  • Economic efficiency,
    • Balancing customer and investor interests
  • Environmental protection, and
  • Equity/energy access - balancing interests of the various consumers against interests of present and future generations.
  • Local, regional, national
energy supply in south africa
Energy Supply in South Africa
  • Aggressive industrial growth (1970’s – 1980’s)
    • Investment in bulk supply
  • Overshooting in the1990’s
    • Post 1994 economic aspirations
    • Asian economic crisis impact (1998)
    • Surplus capacity (mothballing and slowing of Majuba Power Plant).
  • Stalled proposed market reform (2000’s)
    • Early signs of declining surplus capacity (reserve margin)
    • Documented work predicting power shortages by 2006-8
    • Eskom still monopoly
south africa s history of irp
South Africa’s history of IRP
  • NIRP 1 (2002)
  • NIRP II (2003/4)
    • Post 1994 economic aspirations
  • NIRP III
    • Not published
  • IRP 1
    • Published and gazetted 31 Dec 2009
    • Controversial
  • IRP 2
    • Currently underway
nirp i
NIRP I
  • Uses the basic planning assumptions of Eskom’s ISEP8 with a few changes:
      • National electricity forecast (not just Eskom’s share thereof)
      • Costs and performance parameters of non-Eskom generation
      • Fuel cost changes to some of Eskom’s existing generation
      • Cost and performance parameters of new simple cycle gas turbines
        • Uses revised cost and performance parameters for:
          • PBMR
          • Pumped Storage Plants
          • Simunye (mothballed) plant
nirp i conclusions and comments
NIRP I conclusions and comments
  • Strategies to diversify away from coal as primary fuel source produce best relative environmental performance but more expensive than the base plan. Not very diversified.
  • Access to water will become more difficult in future.
  • Legislative changes on emission limits, water allocation and an effluent levy will impact on costs of future options, cause delays and influence site preferences
  • Lead times for EIAs impact on the IRP planning process
  • Environmental costs, as input into the preferred strategy, need to be justified for localised conditions
nirp i recommendations
NIRP I recommendations
  • Whereas the base plan is the least cost option, it is important to incorporate strategies for fuel and geographic diversity and multiple investment opportunities in the energy market. These strategies will produce better relative environmental performance and have greater potential for regional development.
nirp ii
NIRP II
  • Two-stage process
    • Stage 1: like NIRP 1, developed base/reference plan
    • Stage 2: explicit risk modelling to develop reserve margin
  • Reserve margin:
    • RM =
conventional approach to irp
Conventional approach to IRP
  • Process
    • Stakeholder involvement
    • Scenario development
  • Choosing supply options
    • Resource availability
    • Costs (capex, operational and fuel)
    • Environmental concerns
  • Demand analysis
    • Appliance costs and cost of efficiency improvements
    • Cost of no-supply (cost of unserved energy)
  • Integrated Resource Plan
scheduling of units
Scheduling of units
  • Dispatching/scheduling of units
    • To meet load requirements with the cheapest energy sources
  • Chronological hourly consumption
  • Random events impacting available units
  • Scheduling
    • Baseload plants – inflexible thermal plants:
      • Coal plants (as function of coal contract)
      • Nuclear plant
    • Mid-merit plants – minimal flexibility
      • Pumped storage
      • Combined cycle gas turbine plants
scheduling of units cont
Scheduling of units ... cont.
  • Scheduling ... cont.
    • Peaking units – maximum flexibility
      • open cycle gas turbines (fully variable costs)
  • Spinning reserve (thermal units)
    • standby reserve in the event of
      • load increases or
      • unit failures
integrated resource vs energy planning
Integrated Resource vs Energy Planning
  • IRP is relatively mature, with standardized analytical tools
  • Integrated Energy Planning (IEP) in infancy
    • Interlinking of all energy carries
    • Analytical tools becoming more widely available
the irp 2 process this is what we know so far
The IRP 2 processThis is what we know so far

Proposed process for developing IRP 2

a multi criteria decision framework
A Multi – Criteria Decision Framework
  • Ran several scenarios:
    • 1. Reference Case
    • 2a. Domestic emissions
    • 2b. Regional emissions
    • 2c. Delayed Regional Emissions
    • 2d. Carbon Tax
    • 3a. IPP alternates 1
    • 3b. IPP alternates 2
    • 2. Lowest CO2
    • 3. Policy Portfolio
    • 4. Risk-adjusted emission portfolio
    • 5. Policy-adjusted IRP

Criteria for Assessment:

Risk factors

Diversity

Costs

Technology

electricity planning policy politics and democracy
Electricity planning, policy, politics and democracy

Traditional - technical and cost barriers – also a necessity!

Detailed technical studies / tenders / market mechanisms etc.

Scenarios

- Detailed technical elaborations of possible aspirations

Stakeholders

Problems

Preferences

Goals

Implementation:

- Infrastructure development (plants, transmission, etc)

Policymaking

The main goal of SNAPP and similar tools is to empower a wider group of stakeholders to elaborate policy goals for the electricity sector through scenario development

why snapp is different from traditional planning tools
Why SNAPP is different from traditional planning tools
  • For scenario development and exploration – although rigorous, it does not have many of the sophisticated features of professional planning frameworks (e.g. optimisation, accurate dispatch simulation)
  • Simple and easy to use, even for people with few technical skills
  • Because SNAPP is a spreadsheet, it provides instantaneous feedback on changes to parameters in the system, is transparent, easily and infinitely adaptable – results are replicable, and assumptions are visible
  • Free – you can start today
electricity supply generation planning process
Electricity Supply (generation) Planning Process
  • Analyze current/past demand (energy and power/load shape)
  • Project demand (energy and power) over the study horizon
  • Analyze existing supply system, costs, and technical parameters (e.g. availability, efficiency, FOR) and retirement schedule
  • Analyze future technology options, costs (incl. learning curves) and technical parameters
  • Analyze fuel costs, current and projected over study horizon
  • Design supply system over study horizon – looking at costs, within constraints (reliability standards, resource potential)
  • Study and cost demand-side options, for comparison to new generation
  • Study alternative scenarios: e.g. policy targets and compare to ref
  • Do sensitivity studies on uncertain parameters
  • Compile findings
  • Present to Stakeholders and iterate steps 4,5, 7-9
slide38
4. Analyze future technology options, costs (incl. learning curves) and technical parameters: Tech Parameters sheet
slide39
7. Study alternative scenarios: e.g. policy targets and compare to ref: Cost graphs and Environmental Impacts sheets
moving forward
Moving Forward
  • DoE to brief the Energy Caucus on the IRP 2 process
  • Online resources to share information

http://irp2.wordpress.com

  • Second round of workshops when DoE releases its scenarios
  • Independent research and information on the proposed assumptions
  • Note: Leaked Sep 09 DRAFT IRP 1 available at http://www.mg.co.za/article/2010-01-08-eskoms-secret-tariff-plan-revealed
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