Planning of Energy Demand and Supply in Macedonia Using the MAED and MESSAGE Model

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1 ABSTRACT Planning of Energy Demand and Supply in Macedonia Using the MAED and MESSAGE Model Nikola Popov, Igor Ilijovski, Vladimir Popovski Macedonian Power Plants - ELEM, Skopje, Macedonia nik.popov@rogers.com This paper provides a brief description of the technical cooperation program with the IAEA, and a description of the MAED and MESSAGE methodology. The paper also provides a brief overview of the energy situation in Macedonia, gives a summary of the energy supply options, and covers the work scope of ELEM, and in particular of the Department for Development and Investments. Finally, the paper discusses the results obtained with the MAED methodology of the energy demand situation in Macedonia and also with MESSAGE methodology of the energy supply site until 2040, and compares it with the energy demand in the regional countries of the South-Eastern Europe. 1 INTRODUCTION Over the past decades nuclear energy has been proven as reliable and economical energy supply that is capable of meeting demanding energy market requirements. Many countries around the world consider entering into new nuclear energy programs and building new power reactors for satisfying their increasing electrical energy needs. Entering into a new nuclear power program is a major undertaking requiring careful planning and preparation. Preparations for making a decision to enter into a new nuclear energy program requires a significant amount of financial and human resources, time, and assistance from developed countries and international nuclear organizations. Planning of energy demand in a country is a very important step in developing a strategy for energy sources development, and for coping with the challenges, uncertainties and needs in energy supply. The energy planning is a part of development of energy strategy in a country, and for making a decision to enter a new nuclear power program or to expand an existing program. Several energy demand and supply studies have been performed in Macedonia in the recent years in support of development of national strategy for energy supply. These studies were conducted using different methodology. During 2014, as part of the national technical cooperation program with the International Atomic Energy Agency (IAEA), the Macedonian Power Plants (ELEM) has performed a study of the energy demand until 2040 using the IAEA methodology MAED (Model for Assessment of Energy Demand). The study is continuing in 2015 and is focused on the assessment of electrical energy supply. The results of this study will be compared with the results of other studies conducted in Macedonia. MAED (Model for Assessment of Energy Demand) is a software model used for forecasting of the consumption in the power system. It uses a simple mathematical model with detailed analysis on all the sectors of consumption. MAED model evaluates future energy 116.1

2 116.2 demand based on the medium to long-term scenarios of socio-economic, technological and demographic developments. The approach used in MAED is bottom-up, using detailed access, many input data s and take into account the political measures and technical changes. MESSAGE (Model for Energy Supply Strategy Alternatives and their General Environmental Impacts) is software designed for setting up models of energy systems (i.e. energy supplies and utilization) for optimization. MESSAGE was originally developed at International Institute for Applied Systems Analysis (IIASA). The IAEA acquired latest version of MESSAGE and several enhancements have been made in it, most importantly addition of a user-interface to facilitate its application. The underlying principle of a model, built using the MESSAGE, is optimization of an objective function under a set of constraints that define the feasible region containing all possible solutions of the problem. The value of the objective function helps to choose the solution considered best according to the criteria specified. In general categorization, models built using the MESSAGE belong to the class of mixed integer programming models as they may contain some integer variables. The MESSAGE can be used to develop a model of a system other than energy system. The main objective of developing the MESSAGE software, however, was to facilitate building of an energy system model. Therefore, in this phase a manual energy system models are referred. An energy model is designed to formulate and evaluate alternative energy supply strategies consonant with the user-defined constraints such as limits on new investment, fuel availability and trade, environmental regulations and market penetration rates for new technologies. Environmental aspects can be analysed by accounting, and if necessary limiting, the amounts of pollutants emitted by various technologies at various steps in energy supplies. This helps to evaluate the impact of environmental regulations on energy system development. The results from the models MAED and MESSAGE in this paper for the Electric Power System in Macedonia are not final, and should be taken as preliminary, and they are just to represent the model s possibilities. 2 OBJECTIVES This project for energy planning is part of the cooperation with the International Atomic Energy Agency, which is also financed by IAEA through the project MAK2006. A two Trainings were organized for these two models (MAED and MESSAGE software). This work will be finalized with final report, which will be conducted at the end of The results in this paper are preliminary and should not be taken as official, as they will go through final procedure of calibration and optimization. 3 ASSUMPTIONS Every model that is calibrated in MAED uses different input parameters and the results can be used as input parameters in the MESSAGE model. The energy planning according to this models, starts with data and indicators collection from various institutions in the analysed country, in this case Macedonia. They include all the aspects of the sustainable development. The data is gathered from the national relevant institutions, such as Ministry of Economy, Department of Energy, Statistical Data Agency, different financial organizations, etc. With the

3 116.3 model calibration regarding input data which are on a disposal, a scheme for the existing energetic system and infrastructure for the base year 2012 is formed. Existing Table 1: Power Plants in Macedonian Electric Power System Commissioning Technology Installed Capacity [MW] Resources /32/35 TPP Bitola 675 Existing coal + Zivojno and Mariovo mine TPP Oslomej 125 Existing coal TETO Skopje 230 Import gas TPP Negotino 210 Oil HPP Drim 126 / HPS Mavrovo 198 / HPS Treska 130 / HPP Tikves 116 / WPP Bogdanci / Future Small HPPs 60 / PV 15 / TPP Bitola Imported coal TPP Oslomej Imported coal KOGEL Skopje Zapad 250 Imported gas NPP 1000 Nuclear fuel WPP / HPP Boskov Most 70 / HPS Vardarska dolina 210 / HPP Cebren 330 / PV Households 1 / After the input data calibration, different scenarios for long-term (20-50 years) projections for socio-economic and technological aspects are modelled. With using of different models for analysis of the system, developed by the International Atomic Energy Agency (IAEA), different profiles and requirements for electricity services and resource optimization are developed. Beside the input parameters for the MAED model, for the energy supply site in MESSAGE model are also implemented technical, economical, etc. parameters for all power plants which will be analysed in the system, and also for the resources which are used by the plants.

4 THE MAED MODEL AND SOME PRELIMINARY RESULTS This section provides information about the energy demand model and the scenarios analysed in this paper. In the MAED model different scenarios are analysed for the Macedonian Power System. As defined in the Objectives, all the results are preliminary, and they are subject to future calibration and improvement. There are four scenarios defined in the model, as it is stated bellow: 1. Referent Scenario (RS): normal growth of the consumption assumption for continuation of the current trend of GDP, population, economy, technology and human behaviour. 2. Energy efficiency Scenario (EE): Scenario with energy efficiency measures assumption that there will be implemented measures for improvement of the energy efficiency, and also technologies with better energy efficiency will be used. 3. Scenario with low growth of GDP (LGDP) assumes that the expected growth of GDP will not be managed in the projected period, taking in account all other input data of the Referent Scenario unchanged. In this Scenario a low gasification rate will be taken into consideration. 4. Scenario with referent demand growth and low gasification rate growth (RS w/o Gas) is Referent Scenario without gasification plan of the country. The assumption and analysis are made by different sectors of consumption. The total needs of energy for all end users or consumers are summed in four main sectors: 1. Households; 2. Industry (Agriculture. Mining, Construction and Manufacturing); 3. Transport and 4. Services RS 3755 RS w/o Gas 3488 LGDP 3378 EE ktoe RS EE LGDP RS w/o Gas Figure 1: Final energy consumption for all Scenarios The end users of energy needs are: thermal energy, electricity for non-thermal needs and motor fuels. The thermal need can be fulfilled by different types of final energy: fossil fuels, electricity, heat from public Heating Power Plants, traditional fuel and biomass, solar energy and geothermal sources. The final energy consumption for the four scenarios is given on Figure 1.

5 THE MESSAGE MODEL SOME PRELIMINARY RESULTS The final energy consumption, or more exactly the part for the electricity consumption is taken from the forecast with MAED model from the Base Case Scenario and put into the MESSAGE model as an input parameter for the Supply site forecast. The main idea of MESSAGE model is firstly to identify where all of the structures of the electric power system belong. The levels are defined as: resources, primary level, secondary level, final level. They are shown on Figure 2 and Figure 3. So, for the Macedonian Power System are identified appropriate natural resources, energy forms, and technologies that are used and those that may be used in the country. Figure 2: Levels of the MESSAGE model Figure 3: Energy Chain The whole system is separated in several levels with the existing and future Power Plants and Resources in Macedonia, as it is shown on Figure 4.

6 116.6 Figure 4: Macedonian example for levels of the existing and future power plants In this model a several scenarios are also defined, for the elasticity checking of the output results. Also through these scenarios are taking into consideration some policy issues and questions in the domestic electric power system. In the modelling procedure in MESSAGE there are several questions that should be addressed for more consistent results, such as: (a) necessary policy interventions to ensure adequate, reliable, and affordable energy supplies; (b)

7 116.7 the costs to supply of energy sources to remote areas; (c) possibility of stringent environmental regulations; (d) level of electricity imports, etc. Energy Produced, MWh Figure 5: Final energy generation in BAU Scenario MESSAGE Figure 5 shows the generated electrical as predicted by MESSAGE from all power plants in the electrical power system of Macedonia with their appropriate resources (Table 1 lists the assumed energy sources in Macedonia). For model development and testing purpose, the model assumes smooth introduction of the nuclear power plant and other new coal-fuelled power plants into the Macedonian system. In the final model appropriate constraints will be put into the system to model more realistically the introduction of new power plants in the system. The model assumes no significant portion of gas and oil utilization in Macedonia. Also, for this scenario, negligible contribution of solar energy is assumed in the model. However, other scenarios have been tested in which different realistic contributions of gas, wind, and solar energy are being assessed. The black line in Figure 5 shows the energy demand change over the analysed period. It is obvious that even with this modest demand, Macedonia needs a significant amount of new energy sources, which can be achieved by different energy mix scenarios. The results in the Base Case Scenario are given on Figure 3. It is clearly shown that according to the MESSAGE optimization process, the Nuclear Power Plant (NPP) is connected to the grid from 2040 with full capacity of 1000 MW. It means that the biggest part of the energy generation which comes from import, is reduced, due to the more optimal results of the NPP. 6 CONCLUSIONS Years This paper presents the methodology and preliminary results from analysis performed in Macedonia using the IAEA models MAED and MESSAGE for energy demand and energy supply analysis, respectively. This paper was prepared during the training and preliminary application of this methodology, as part of the IAEA national project in Macedonia (MAK2006), that was focused on the investigation of the benefits and challenges for implementation of a regional nuclear power program. The results in this paper demonstrate that the used IAEA methodology (MAED and MESSAGE) is very useful in planning long term energy demand and supply options. Several scenarios were analysed in addition to the base scenario, such as scenario with increased energy

8 116.8 efficiency, scenario with slower GDP increase, etc. A model was built which included all currently operating power units in Macedonia from various sources, including hydro, coal-fired, gas-fired, wind and solar power plants, and all possible new future units, including a regional nuclear power plant. The preliminary results obtained in Macedonia during this project show that a modest energy demand increase is appropriate. However, even in this scenario, it is obvious that in the next 25 years, the energy dependency on external imports will steadily increase. The energy supply analysis has shown that building new energy sources using new coal-fired power plants with domestic coal from existing and new coal mines, and imported coal, with a modest increase of renewable sources of wind and solar energy, along with an increase of hydro energy utilization, will be part of the future energy mix in Macedonia. Also, a regional nuclear power plant can also be part of the energy future in Macedonia and regionally. The question that energy planning activities in the future need to address is which type of energy imports will be most optimal: increase imports of primary energy sources, such as coal, gas or nuclear fuel with associated technologies to use these, increased imports of electrical energy from the European markets, or a combination of these. REFERENCES [1] International Atomic Energy Agency (IAEA). IAEA Tools and Methodologies for Energy System Planning and Nuclear Energy System Assessments. VIENNA: August, 2009 [2] International Atomic Energy Agency (IAEA). Model for Analysis of Energy Demand (MAED-2). VIENNA: IAEA, [3] International Atomic Energy Agency (IAEA). Model for Energy Supply Strategy Alternatives and their General Environmental Impacts. VIENNA: IAEA, [4] Energetski Institute Hrvoje Pozar, Strategija energetsko razvitka Republike Hrvatske. Zagreb, [5] Energetski Institut Hrvoje Požar, Institut za Istraživanja u Energetici Ekologiji i Tehnologiji. Strategija Razvoja Energetike Republike Crne Gore do 2025 Godine, Knjiga B: Predviđanje Potrošnje Finalne Energije, Lubljana, Jul [6] N. Popov, Perspectives for Implementation of Nuclear Energy in Macedonia: Strategic Study on the Needs, Benefits, and Possible Implications, Macedonian Academy of Sciences and Arts, April [7] K. Naumoski, E. Achovska, and A. Paunoski, Macedonian Transmission Grid Capability and Development; Conference of Bulgarian Nuclear Society, Chiflica Palace Resort, September, 2014.