Microsoft word - 031-038 avdeyev, voropai, trufanov, selifanov.doc

On Expansion Planning of Regional Electric Power Systems
Taking into Account Plurality of Interests and Power Export
V.A. Avdeyev, N.I. Voropai, V.V. Trufanov, and V.V. Selifanov
Abstract- The paper deals with the problem of
expansion planning of regional electric power
systems taking into account plurality of The EPS expansion methodology that has
interests and power export. A staged approach
to the analysis of perspective ways of electric
been created in Russia during many years is power system expansion in a multi-interest mainly oriented to the centralized economy
environment is suggested. Different variants of
perspective electric power industry
Various interests of many interacting parties development in the Far East of Russia have
manifest themselves in power supply. The been analyzed.
essence of all these interests can be presented Keywords- electric power systems, expansion as an aggregated set of the following factors:
planning, plurality of interests, decision 1) current electricity tariffs;
The situation in Russia’s economy and 4) an environmental impact of electric energy has drastically changed in the past decade. A new structure of ownership in The degree of significance of these factors electric power industry has formed, the varies for different subjects of relations. organizational structure and management system have changed. The restructuring Table 1 presents the main subjects of process has not completed, there is still no relations that are interested in development well-established legal basis for operation of of regional electric power industry, their electric power systems. The role of the State interests and criteria of assessing the in the energy management has changed decisions made. enormously. A direct consequence of the The table shows that there is no single economic reforms in Russia is the formation criterion for all parties to characterize the of a great number of energy-related markets. optimality of decisions made on electric The federal wholesale capacity and power power industry development. This implies market has emerged, there are regional retail the necessity of a compromise acceptable for electricity markets, markets for power plant the society and all parties involved. fuels, energy equipment, construction works, technical services, etc. The compromise should be reached through an explicit, democratic and transparent The number of parties interested in procedure. Lack of the procedure or its development of electric power industry has closed character may lead to an unjustifiable increased, their priorities and capabilities of infringement of interests of some or other affecting the decision making process have interested parties as a result of different information awareness and inequity in trade- V.A. Avdeyev is with RAO “EES Rossii”, Vostokenergo”, Khabarovsk. Analysis of the known multi-criteria methods for making decisions on expansion of bulk N.I. Voropai, V.V. Trufanov, and V.V. Selifanov are with Energy Systems Institute, Irkutsk, Russia, e-mail: This study was supported by the Grant of Leading interests of different parties during decision Russian Scientific School #6468.2006.8 making is common for all these methods [1]. 2. The stage of external conditions formation. It supposes formation of scenarios of uncertain external conditions for EPS expansion. They should be chosen taking into account the interests of all parties, in particular, consideration should be given to the most “probable” or dangerous scenarios not only in terms of electric power system but in terms of the other subjects of relations 3. The stage of formation of EPS expansion options (strategies). The set of the expansion options formed should also take into account the plurality of interests. In particular, the set should include the most preferable options from the viewpoint of individual subjects. consequences of implementing the formed EPS expansion options. This stage should Good result in quantitative values of all optimality criteria for different subjects of relations. However, such a formalization is not always appropriate mathematical models, possible when solving the power system information support, expert estimates. expansion problems due to their specific character. Even the interests of one subject of 5. Determination of an invariant constituent relations in electric power industry are often of decisions. The measures that appeared in contradictory and can not always be all the options at issue should satisfy all the formalized. It is even more difficult to parties. This stage is aimed to confirm the formalize and coordinate the ties among opinion of all the interested parties on the interests of different subjects of relations. need to implement these measures. They are Besides, the known methods of a multi- noted and excluded from further process of criteria analysis are, as a rule, rather labor selection and coordination of decisions. intensive. Therefore, the applicability of the formalized methods of coordinating interests 6. Determination of extreme decisions. to decision making on electric power Actually, this stage is the beginning of the industry development is essentially limited. main part of the coordinating procedure of interested parties’ interests. Below suggested is a staged approach to the analysis of perspective directions of EPS The stage aims to find in the obtained set of expansion in a multi-interest environment. options those to a greater extent meeting or, The approach is practice-oriented and to the contrary, contradicting the objectives supposes a sequential implementation of the of interested parties. This, on the one hand, determines the most favorable decisions for 1. The stage of target analysis determines a each subject, on the other hand, makes clear range of interested parties, their goals and the most negative consequences of the most requirements. A set of criteria (quantitative unfavorable decisions. It goes without saying indices of achievability of goals of the that implementation of this stage should 7. Determination of preferable decisions. the Far East is embraced by the East This stage supposes preliminary coordination Interconnected Power System (EIPS) [2, 3]. of interested parties’ interests. Each The main parameters of these systems are participant independently analyzes the given in Table 2. situation, assesses the achievability of their goals and determines the preferable decision accepted further. An expert estimation of possible reaction of the other participants of the process is necessary to find such options. participants can form to jointly support the The stage results in the plan of measures to DALENERGO 1174 9.59 3.93 5.94 support decisions preferable for each party. 8. Coordination of interests and decision MAGADAN 504 making. This stage aims to select a rational Kolyma system expansion variant and make specific SAKHALIN 544 decisions on implementation of the first Okha KHABAROVSK 2126 1960 8.26 5.43 YAKUTIA 1999 Organizationally this stage can be rather Total difficult, with intermediate decisions to be Including: TPP 8211 7394 26.20 made, their discussion at different levels of hierarchy of state authorities, etc. The main principles of implementing this stage should The Far East’s electric power industry has be openness and democratic character, i.e. been a typical “critical” sector before 2000. equal participation of all parties in discussion The main reason for the crisis was shortage of the decisions made, including equal access of working capital due to a difficult financial to the information required. During this stage situation in power supply companies. it is necessary to pursue the interests of all This shortage was a consequence of many interacting parties and reach compromise factors. These were: massive, chronic non- payments for electricity and heat consumed; It should be noted that the presented the use of substitute scheme of payment for approach is iterative. When needed one energy (mutual offsets, bills of exchange, should return to the previous stages of the barter); unbalanced relations between procedure and go through the subsequent regional and federal budgets, including stages on the basis of new information. The incomplete and untimely support of the application of the procedure described can be regions from the federal budget; understated exemplified by the analysis of prospects for level of electricity rates in a number of power industry development in the Far East regions in the Far East; unstable relations, of Russia. conflicts and “political wars” among administrations of the regions, regional energy companies and RAO “EES Rossii” and Federal authorities, etc. Centralized power supply to consumers in the Far East is provided by seven regional Some of these problems have become no power systems: Amur, Far Eastern, longer urgent in the last years: the level of Kamchatka, Magadan, Sakhalin, Khabarovsk payment for electricity has reached 100%. and Yakutian power systems. The south of The payment is made only in “hard” cash. However, the burden of these problems that have not been solved for several years still remains: the past debts are not settled, the financial situation in regional energy TOTAL The main fuel used by thermal power plants of JSC “Vostokenergo” was hard and brown coal, its share in the total fuel consumption in considerable part of coal consumed was Depreciation 1.262 supplied from other regions (up to 50% in 2000). The railway rate component in price of the supplied coal was currently about component of rate The local coal industry in the Far East was suffering a crisis. The coal production Funded by: volumes decreased. Their increase and Cash assets restoration required time and funds. Mutual offsets Dependence of the Far East on external fuel economical and political impacts which A considerable amount of generating weakens the economical independence of the equipment was obsolete, its share made up Far East regions thus affecting negatively the about 60%. For this reason by 2005 more geopolitical position of the Far East and than 3.0 million kW or about 30% of the Russia, as a whole, in the Asia-Pacific installed capacity had to be taken out of service. The most difficult situation was in Energy of the Far East was going through a the JSC “Dalenergo” (the retiring capacity severe investment crisis. There have been was about 77% of the installed capacity) and practically no changes in the installed in the JSC “Khabarovskenergo” (the retiring capacity of electric power plants in the Far capacity was about 50%). East in 1990-2000. The installed capacity of power plants in the EIPS increased only by Lack of funds in energy companies, 300 MW over the period of 1990-2000 which progressive aging of equipment and other was insufficient to replace the naturally factors had a negative impact on production retiring generating equipment. and economic activity of power systems. Among their consequences were the In the 1990s (Table 3) the yearly investments following: in electric power industry of the region fell. • a significant extension of repair periods This was the main reason for the failure to and increasing costs of energy equipment repair, frequent interruptions of repair Development of the Far East and • irregular coal deliveries from remote The investment crisis in the Far East’s energy • a growing fuel component in power affected the energy-related building generation cost due to high coal enterprises in the region. • irrational operating conditions of power base strategy (Variants 9-14). The proposals systems because of lack of flexing of “The EIPS expansion plan” underlie the capacity and weak electric ties within the base strategy. The variants differ in EIPS; • a high environmental impact of widely condensing power plants (Table 6). as a result, increase in unused capacity at thermal power plants; • a rise in power generation cost and Power consumption in the EIPS is considered. The minimum variant corresponds to “The EIPS STRATE- expansion plan” [2]. It supposes an yearly GIES increase in consumption up to 2.7 – 3.5% till 1. Base yearly increase up to 3.7 – 4.1%. In 2020 2. Coal power consumption in the EIPS in these 3. Hydro 3 variants will make up 46.2 and 52.7 billion 4. Nuclear 4 kWh, respectively, at a reported value of The levels of future fuel prices varied to The analyzed strategies differ little in Supplying power volumes of dismantling, re-equipment and reconstruction of generating equipment. The re-equipment program, which is common for all variants, was used. The program Dalnevostochnaya corresponds to that proposed in “The EIPS EPS The EIPS expansion strategies considered in the paper are given in Table 4. Numbers of calculated variants are indicated by figures. The main criteria calculated to assess the Variants 1-8 assume a relatively small border strategies are given in Table 7. They include power export. The exporting power system is total capital investments, power generation indicated for the variants with power export. cost, yearly fossil fuel consumption for The volume of possible power export in these power generation in 2020 highlighting solid variants is shown in Table 5. fuel and fuel delivered from remote suppliers, reduced costs of system expansion Four expansion strategies are analyzed and operation. (Table 4). These are: base, coal, hydro and nuclear strategies. Each of them is formed for Let us consider the calculation results from low and high power consumption levels the viewpoint of extreme decisions that (Variants 1-8). Three variants of power correspond to minimum and maximum export are considered additionally for the values of some assessment criteria. (Numerator – low level of power consumption, (Numerator – minimum power consumption, Denominator – maximum power consumption) Strategies Base
Strategy Base Coal
HPPs, total
Condensing
power plants
Co-generation 5375 /
delivered to the region corresponds also to the “nuclear” strategy. The largest volume of As is evident from these tables, base variants coal delivered from remote suppliers is are intermediate in terms of the criteria observed in the “coal” strategy. applied. All the other variants in different situations have extreme values of individual The “coal” strategy variants are the best in criteria. terms of the criterion of reduced costs. The “hydro” strategy is the most expensive. Whereas the “coal” strategy is the best in terms of total capital investments in the Thus, taking into account the plurality of expansion of the EIPS power plants, interests and a great number of assessment maximum capital investments are required in criteria the calculation does not result in an the “hydro” strategy. unambiguous estimate of the considered strategies. All of them, except the base However, the “hydro” variants have the least strategy, may be formally optimal when power production cost. The highest cost estimated in terms of some of the given corresponds to the “nuclear” strategy. The maximum fossil fuel consumption is Let us point out preferable strategies from the observed in the “coal” strategy. The least viewpoint of different parties. value corresponds to the variants oriented to “Hydro” and “nuclear” strategies are the most efficient from the viewpoint of power
producers owing to the growing investments
environmentally safe owing to lesser fossil in expansion of generating capacities and fuel combustion and absence of risk of minimum dependence on fossil fuel supply radioactive pollution from nuclear power from other regions. plants. In the end, this strategy is attractive as it may increase energy potential in the Power consumers are interested in low rates region, population employment, development
(the “hydro” strategy with the minimum of local industry and construction base, etc. power generation cost), low capital The strategy is also most effective in terms of investments from the funds of local budget power export from Russia. (the “coal” strategy), environmental protection (the “hydro” strategy). A serious disadvantage of this strategy for some interested parties is considerable long- regional
term capital investments required for its authorities are close to those of consumers.
As they are interested in capital construction implementation. However, these investments
in the region they are more interested in the in the hydropower industry and their
“hydro” strategy.
repayment periods may be essentially reduced by modern hydroelectric - Local fuel suppliers would prefer the “coal” construction methods.
From the results obtained it can be concluded construction has a number of positive effects that the “hydro” strategy meets the interests on the other sectors of the Far East’s of the majority of the interested parties. economy. Besides, the hydroelectric facilities The variants with large-scale power export are of special importance for the region’s from Russia, from additional export-oriented economy, and the Far East has a significant power plants, were employed to calculate geopolitical position in Russia, therefore it is minimum values of electricity export rates possible to attract additional investments that are admissible from the viewpoint of from the federal budget and funds of energy domestic power consumers. The rates make companies of a federal level. up 3.7 – 5.0 cent/kWh. The lower value It is expedient to develop hydropower corresponds to the variant of export from the resources in the Far East by constructing Amur power system. These figures are low-head HPPs by the float-on method. somewhat higher for the variant of export from Yakutia. The upper value corresponds The conception of such a development The power export rates lower than those 1. A two-stage development of hydropower mentioned may lead to an infringement of interests of domestic consumers (as the rates Let us give a more detailed characteristic of the first stage – constructing cascades of of a river, the second stage – constructing of construction of the Bureya HPPs in 2010 - The “hydro” strategy of EIPS expansion is collectors, sluices and other facilities are generation cost, which may be conducive to a decrease in electricity rates. This strategy is 3. While modular units are manufactured, 2. Different interests of many interacting parties manifest themselves in the sphere of power supply, their characteristic is 4. Construction of the foundation pits and 3. A methodological approach is proposed structures of the hydro system, encasing need a laborious and lengthy preparation several stages of research: target analysis, construction bases of different sections and facilities for living on a rotational consequences, determination of invariant basis are located on floating structures. Technical fleet is able to start the main work immediately upon arrival at the hydro system 4. Different variants of perspective electric 5. Since, cargo can be transported only by acceptable for the majority of interested 6. Construction of several low-head HPPs in cascade on the tributaries of main rivers will expand an electrification area in the region. This is also fostered by spreading investments in small and cheap hydro systems to be constructed in shortest [1] Voropai N. I., Ivanova E. Yu., Trufanov V. V., “A Method for Multi-Criteria Decision 7. Local bases for ship building and repair, Analysis for the Problems of Analyzing the EPS Expansion Variants”. Izvestiya RAS. building the hydraulic structures may be Energetika, 1998, № 6, p. 42-53 (in Russian). [2] Avdeyev V. A., Ognev A. Yu., Gomolya N. D., Filatova A. D., “Main Provisions of constructed by the float-on method in the Far Expansion Program up to 2010”, and the Most Important Strategic Problems of East. According to the feasibility study this will reduce essentially, almost twice, the Operation in the Region”. Elektricheskie construction periods, decrease working hours stantsii, 1999, № 9, p. 61-65 (in Russian). on construction site and volumes of housing [3] Voropai N. I., Gnesyuk O. F., Lagerev A. V. et al, “Main Provisions of the Program for the Far East’s Energy Development up to 2010”.Preprint of ESI SB RAS, Irkutsk, system expansion that has been [4] Avdeyev V. A., Ivantsov N.M., “The Float- developed in Russia is mainly oriented to Plants in the Far East”. Gidrotekhnicheskoye stroitelstvo, 1999, №112, p. 2-6 (in

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