Integrated Energy Planning

Energy System
Models
• Simulation/accounting models
• A model of the entire energy system
• User develops and test scenarios in the model that represent
different policies or potential futures
• Compare results, select preferred path and develop action plan
• LEAP (Long-range energy alternative planning model) is common

• Optimization models
• Also consists of a model of the entire energy system
• Based on input parameters and constraints, models produces an
“optimized” energy development/resource path given the inputs
and constraints
• Models detailed market activities and elasticities
• TIMES, PDPAT II, MESSAGE and others
2
Output of
Energy System Models

• Total Discounted Energy System Cost (all sectors)

• Change in energy system investments ($ spent on energy
processes, power plants, demand devices)
• Power Plants Generation by Fuel Group (billion Kwh by
coal, diesel, gas, hydro, renewables, nuclear, etc)
• Gas Production (Mtoe by country)
• Change in natural gas consumption (Mtos by sector
transport, residential, power sector, industry, commercial)
• Final Energy by Sector – Difference from Reference (in
Mtoe – transport, residential, industry, commercial, ag)

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 Planning and Forecasting Horizons

1. Short Term – Operational, Forecasting and Planning

2. Medium Term – Investment Forecasting and Planning

3. Long Term – Investment Forecasting and Planning

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 Planning and Power Procurement Cycle

Planning Cycle Procurement

Integrated
Energy Plan Procurement
(IEP) Plan
 Technology
Energy Forecasts type
Fuel Mix Targets for
 Size PPIB, AEDB,
Electricity Sector
 Timings PPDB etc.
National Fuel Mix Targets
Electricity Policy Other policy inputs Indicative Gen. Cap.
Issuance of
Exp. Plan (IGCEP)
LoIs or
(NTDC PC4.2)
Bidding
Long-term
Reconciled Demand
Forecasts & Energy Forecasts
(NTDC PC4.2)

Medium-term
Forecasts Mandatory Trans.
DISCOs (DPC 5) Expansion Plans
 Pakistan’s Power Sector Structure

• Pakistan’s electricity sector is a single buyer model

• Government through its administratively controlled companies is

responsible for the purchase and distribution of electric power
throughout the country.
 Pakistan’s Power Sector Structure
Wholesale Electricity Market Operator
Generators as Market Participants Transmission Service
Provider NTDC
- DISCOs: Wire Business & Supplier - BPC > 1MW
- Participants as Retail Suppliers - Others non-eligible
10 DISCOs and KE customer
- Service Provider for
wire business/distribution
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Pakistan Power Sector Structure – Power and Commercial flows
Power Flows
Generation
Portfolio K Electric
IESCO

NTDC LESCO
IPPs
FESCO
1. National
Transmission
GENCOs and Dispatch GEPCO
Company
MEPCO
Nuclear 1. NPCC SEPCO
Renewables
1994 IPPs HESCO
WAPDA QESCO
(Hydel)
Financial Flows PESCO

CPPA-G TESCO
EPP & CPP
 Power Flow and Cash Flows

Settlement
Central Dispatch Self Dispatch
(NEPRA Act Sec.14D and 23G) (Grid Code)
Power Flow
Transmission Distribution Consumers
System System Non-Eligible Consumer
GG (<1 MW)
Eligible Consumer
(>=1 MW)

𝑃𝑃𝑃 = 𝐸𝑃𝑃 + 𝐶𝑃𝑃𝑃 𝑈𝑜𝑆𝐶 + 𝑀𝑜𝐹 𝐷𝑀 𝑃𝑃𝑃 + 𝑈𝑜𝑆𝐶 + 𝑀𝑜𝐹 + 𝐷𝑀

DGs
 Pakistan’s Power Sector Overview
Installed Capacity
35,961 MW

PESCO
Total Traded Volume
IESCO
Peak Demand GEPCO
109,552 GWh
24,921 MW (2019) TESCO
FESCO
26,741 MW (2018)
LESCO Energy Sales
88,806 GWh
MEPCO
QESCO
No. of Consumers Avg. Unit Price
28.3 Million SEPCO 15.28 Rs/KWh

HESCO T & D Losses

17.30 %

Key Figures-Up to May 2019

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 Power Sector Entities

Government of Pakistan NEPRA

(Regulator)

Pakistan
CPPA-G Private Sector
Power Division Atomic Energy
Commission
Ownership

Licensees
CHASHN SPPs/ K-
WAPDA AEDB PEPCO PPIB KANUPP IPPs
UPP CPPs Electric
Ownership

Mega Water
GENCOs DISCOs NTDC
Dams Projects
 Roles of Power Sector Entities
• All the power generated from different sources is procured by the National Grid Company
(NTDC) through Central Power Purchasing Agency (CPPA) on behalf of DISCOs at the rates as
per tariff determined by NEPRA.

• NTDC constructs, operates, maintains 500/220 kV lines/grid stations, provides transmission

facility to DISCOs for purchase of power from generators and selling to consumers

• National Power Control Center (NPCC) - Power System Operator of Pakistan is part of National
Transmission and Despatch Company (NTDC)

• NPCC being system operator is responsible for safe and reliable operation of the grid

• DISCOs construct, operate, maintain 132/66 kV lines & grid stations and 11/0.4 kV distribution
system

• NTDC has a Transmission License granted by NEPRA. DISCOs get their Distribution License from
NEPRA
 Roles of the Regulator (NEPRA)
• Why Regulator?
• Regulator is an independent entity, responsible for exercising autonomous authority in
activities in supervisory capacity.
• Regulator is a custodian of consumer interest:
• Codifies and enforces rules and regulations,
• Ensures supervision or oversight for the benefit of the public at large,
• Avoids the drawbacks of political interference,
• Enforces standards
• Major taks for NEPRA are
• Tariff
• Licensing
• Standards
• Consumer Affairs
13
 Tariff Setting in Power Sector

• The price of each commodity is set to recover the operating and

maintenance cost of doing business and a reasonable return on investment
involved in such business.
• Two approaches:
1.Free market: Price is set according to the demand and supply principal
(e.g., in stock market, real estate, etc.). Common case in New Zealand and
some other advanced countries.
2.Regulated market: Price is set by the regulator to achieve certain
objectives.

• In Pakistan we have a regulated electricity market.

 Drivers in determining the power tariff ?

There are number of drivers which affect the cost, price and electricity
tariffs:
• Generation Mix
• Expansion Plan
• Operating and Maintenance cost of existing infrastructure
• Cost of capital for new investment
• Socio-economic objectives of the Federal Government
 Tariff setting process by NEPRA

Tariff setting process of NEPRA can be classified into three categories

i.e.,
• Generation Tariff
• Transmission Tariff
• Distribution Tariff
 1. Generation Tariff

This tariff has two components:

• Capacity charge: It is for the available power generation capacity of
the GENCO and it is fixed in nature.
• Energy charge (Variable Charge): It is of variable nature and it is for
the energy actually dispatched to the grid on the basis of actual kWh
off-take.
 Example of Generation Tariff

Plant Number Capacity (MW) Fixed Costs (USD) Energy Production

Or Capacity charge Costs (marginal
cost) (USD/kWh)
A (Coal) 100 1000 0.05
B(gas) 50 800 0.1
C(furnace oil) 25 500 0.15
 1. Generation Tariff: Fixed Capacity Charge

Fixed capacity charge is calculated for every new power plant based on:
• Erection, Procurement and Construction (EPC) Cost
• Taxes & Duties
• Land purchase, fees and infrastructure
• Insurance
• Admin & Utilities
• Financing Fees & Charges
• Interest During Construction
• Debt Service Charges
• Return on Equity
 Generation Tariff: Energy Charge

Energy charge is variable and it further consists of two parts:

• Fuel Component: It is determined based on the price of fuel, thermal
efficiency of a plant, ageing factor, output, etc.

• Operation & Maintenance (O&M) Component: It can include the

cost of lubricants, spare parts, etc.
 2. Transmission Tariff

Transmission tariff is determined by NEPRA and it includes:

• Use of System Charges (UoSC): It is a fixed cost for using the
transmission system. Generally, UoSC is used to factor in the
transmission line losses and other O&M expenses of NTDC. UoSC is
given in terms of Rs/kW.

• NEPRA assumes 2.5-3% transmission line losses.

 3. Distribution Tariff

The Distribution tariff includes:

• Power Purchase Price (PPP): This price is determined based on
transfer pricing mechanism and it is the sum of pool generation cost
and UoSC. It is important to note that PPP is supposed to recover all
the costs for Generators and NTDC (TransCo).
• Distribution Margin (DM): It is of fixed nature, required to sustain the
operations, expansion plans and business of the DISCOs.
 Some Observations

• The cost of electricity is high due to over reliance on fossil fuels, which results in a
bad energy mix and increases the generation cost.
• The regional variations in load shedding may be due to different amount of line
losses.
• Government provides a significant amount of subsidy to consumers (some of
which is circular debt).
• Fulfilment of customer requirements and financial requirements are mandatory
for uninterruptable power supply.
• Issues with Long term contracts with IPPs is a major problem in any restructuring
of the energy markets.
Part-3
System Operations
 Unit Commitment and Economic Dispatch

• Electricity is a unique commodity in that it cannot generally be stored

at a large scale at reasonable cost, so the entities that operate the
transmission grid need to make plans and take actions to keep supply
and demand matched in "real-time“
• Different combination of generators are to be connected in the
system to meet the varying load.
• Economic dispatch control determines the power output of each
power plant, and power output of each generating unit within a
power plant , which will minimize the overall cost of fuel needed to
serve the system load.
Dispatch- NPCC

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 Scheduling and Dispatch
• The process of continuously adjusting the output of power plants to meet
electricity demand is known as dispatch of power plants.

• There are actually two stages to the dispatch process, and they occur over
different time horizons.
• Scheduling / Commitment: occurs a day or more in advance of the need to
meet real-time electricity demand
• Dispatch: where the scheduled plants are selected to run at a given level to
meet total electricity demand

• The dispatch decision is driven primarily by economic factors, but other types of
operational considerations such as ramp rates and minimum run times are also
considered in the dispatch decision
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 A typical Economic Dispatch example

Plant Number Capacity (MW) Fixed Costs (USD) Energy Production

Or Capacity charge Costs (marginal
cost) (USD/kWh)
A (Coal) 100 1000 0.05
B(gas) 50 800 0.1
C(furnace oil) 25 500 0.15

Q: For a specific time you have a requirement of 125 MW (or 125MWh if your time resolution is 1-hr).

Overall cost / kWhr?

 A typical Economic Dispatch example

Plant Number Capacity (MW) Fixed Costs (USD) Energy Production Environmental Cost
Costs (marginal g(CO2)/kWhr
cost) (USD/kWh)
A (Coal) 100 1000 0.05 900-1000
B(gas) 50 800 0.1 800-900
C(furnace oil) 25 500 0.15 450-600
D (Solar) X Y z 50

E (Wind) Xx Yy Zz 25

Q: For a specific time you have a requirement of 125 MW (or 125MWh if your time resolution is 1-hr).

What is the optimal Economic dispatch operation?

Overall cost / kWhr?

 Indicative Dispatch Illustrated in Future
E.g. Supply as E.g. Demand:
per Merit Order 35,000 MW

All other plants according to economic

merit dispatch order

RLNG Plants ---35,000 MW

Gets priority in the merit
dispatch order due to Local Coal Plants
contractual set-up Imported Coal Plants

Nuclear
Solar
Out of merit order,
must run Wind
Bagasse
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Hydel ---0
 Real Time Dispatch
• Demand is continuously varying in time
• Every MW of power required at any point in time must be supplied at the same
instance
• Indication to SO – System Frequency
Frequency = 50 Hz Frequency < 50 Hz
Generation Demand Generation

Demand

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Load Duration Curve of a Typical Winter Day

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Load Duration Curve of a Typical Summer Day

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Load Curve - Example

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 Generation Demand Balance
• Load is continuously varying in time and so the generation has to be varied in
order to keep frequency in permissible limits

• Variation in generation

• Hydel (Fastest ramping rates)

• Thermal

• Steam Turbines

• Gas Turbines

• DG Sets

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Generation Plants in Pakistan
Distribution Infrastructure in Pakistan
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 Concept of Decentralized Renewable Generation

• With changing technology (especially with Solar), many counties have

moved forward with decentralized solar PV generation.
• Solar and Wind is typically incorporated through a consolidated
(central) generation and integration with the grid. e.g QA Solar in
Bahawalpur and Wind projects in Sindh
• Another alternative for solar is to allow generation at consumer level
i.e. on domestic rooftops and allow them to feed back to the grid!
• Two pricing mechanisms are used in this domain:
• Feed-in-tariff
• Net-metering
Thank you