MEDIUM-TERM SYSTEM ADEQUACY OUTLOOK to 2021

Transcription

1 MEDIUM-TERM SYSTEM ADEQUACY OUTLOOK 2016 to

2 Medium-term System Adequacy Outlook TABLE OF CONTENT 1. Précis Introduction MTSAO Methodology and Approach Assumptions Demand forecast Supply Resources Demand-side Resources Eskom Plant Performance New Committed Build Dates Study Cases Results Conclusion Glossary and Abbreviations LIST OF FIGURES Figure 1: MTSAO methodology... 3 Figure 2: Comparison of historical and forecast demand trends... 6 Figure 3: Energy demand forecasts... 6 Figure 4: Existing plant... 7 Figure 5: Plant under construction... 8 Figure 6: Plant nearing contract closure... 8 Figure 7: Plant performance (percentage EAF)... 9 Figure 8: REIPPP Bid Window 1, 2 and 3 cumulative capacities Figure 9: Adequacy space Figure 10: Moving to an adequate future Figure 11: Cases analysed Figure 12: Blue Path - additional capacity (MW) required Figure 13: Blue Path - additional capacity (MW) required with the plant nearing contract closure included Figure 14: Red Path - additional capacity (MW) required Figure 15: Red Path - additional capacity (MW) required with the plant nearing contract closure included LIST OF TABLES Table 1: Adequacy Metrics... 4 Table 2: Commercial operation dates of Eskom committed build Table 3: Assumptions used in the Study Cases

3 1. Précis Eskom System Operator, produced the System Adequacy Outlook for the period 2016 to The South African Grid Code: System Operation Code, Version 9.0 requires on or before 30 October of each year, the SO shall publish a review (called the Medium Term System Adequacy Outlook ) of the adequacy of the IPS to meet the long term (5 year future) requirements of electricity consumers. This review will be limited to the adequacy of the generation system for South Africa. The next Medium-term System Adequacy Outlook (MTSAO) will be published in October 2016 and, thereafter, annually in October. 2. Introduction The Medium-term System Adequacy Outlook (MTSAO) provides a statement of generation adequacy to meet the expected electricity demand for the next six years (calendar years 2016 to 2021). The adequacy to transport and distribute electricity does not form part of the MTSAO. The MTSAO determines the adequacy of the system to meet the expected demand of the country. The expected demand is the country s demand plus exports, and the system to meet the demand is all generation resources licensed by NERSA plus imports plus demand-side management resources. 3. MTSAO Methodology and Approach The methodology is as follows: Figure 1: MTSAO methodology 3

4 1. Generation and demand response resources, both existing and new when in commercial operation, are dispatched to meet expected demand on an hourly basis for all hours in the study period. The dispatch is done on a least-cost basis and adhering to all system requirements (demand and reserves), resource constraints (capabilities) and the generator or demand response resource owner dispatch regime. 2. The outcome of the hourly dispatch is compared to a set of adequacy metrics (see Table 1). If ALL the Adequacy Metrics are met, the system can adequately supply the expected demand. If not, additional resources are required to get to an adequate situation. 3. Additional resources (mitigation options) are added incrementally, and the process of hourly dispatch and comparison of the outcome to the adequacy metrics is repeated until all the adequacy metrics have been met. Figure 1 shows the MTSAO methodology in a schematic format. The Adequacy Metrics are chosen to provide information on the operational, capacity and energy adequacy of the generation system to meet expected demand. The threshold for each of the metrics is set at the point of least total cost to the consumer. Adequacy Metric Threshold Detail AM1 Unserved Energy (UE) < 20 GWh per annum The amount of energy in a year that cannot be supplied due to system supply shortages. AM2 OCGT 1 Load Factor < 6% per annum The combined Load Factor of the OCGT plant in operation in a year. AM3 Emergency Level 1 energy < 133 GWh per annum The energy supplied in a year by generators operating above their continuous rating under instruction during supply emergencies. AM4 Expensive Baseload Stations Load Factor < 50% per annum The combined Load Factor of the expensive Coal-fired Base-load Stations in a year. Table 1: Adequacy Metrics The mitigation options, added to get an adequate system, are quantified in terms of base-load, mid-merit and peaking capacity in MW. The base-load options represent plant capable of generating all day, mid-merit represents plant typically generating from before the morning peak demand to after the evening peak demand, and peaking only operates during the peak demand or emergency hours. 1 Open-cycle gas turbine 4

5 The capacity of the mitigation options does not represent the capacity that cannot be supplied and, thus, the expected load shedding. It is demand supplied at a lower level of certainty than the rest of the demand following from the stochastic simulation process. The outcome of the MTSAO aids discussion on additional supply and demand reduction resources to assist in achieving an adequate system in the short- to medium-term. The next sections discuss the assumptions, study cases and results. Eskom plant plus imports and independent power producers (IPPs) contracted to Eskom provide the bulk (about 96%) of the supply capability of the country. The assumptions are then primarily based on Eskom information. 5

6 4. Assumptions The data assumptions with the largest impact on system adequacy are the demand forecast, available resources to meet demand, the performance of the plant and the commercial operation dates of plant under construction. 4.1 Demand forecast Five demand forecasts were developed by Eskom and the CSIR. The highest growth demand forecast exhibits a similar annual growth rate as was experienced between the years 1994 and The lowest growth demand forecast continues with the virtually zero growth experienced since Figure 2: Comparison of historical and forecast demand trends CAGR = 3,2% CAGR = 2,5% CAGR = 2,2% CAGR = 1,8% CAGR = 0,4% Figure 3: Energy demand forecasts 6

7 The annual growth rates of the Eskom Corporate Plan demand forecast adjusted to the country demand and the low Eskom demand forecast (CAGR = 0,4%) are similar for the study period. The base case of the IRP 2016 Revision under development by the Department of Energy uses the High Growth Low Intensity Sectors demand forecast (CAGR = 2,5%) of the CSIR. 4.2 Supply Resources Generation resources and demand-side initiatives are both used to meet the forecast demand. The capacities of the generation resources are further grouped in terms of existing plant, plant under construction and plant nearing contract closure (at the time of doing this study). The Eskom plant forms the bulk of the existing capacity. Non-Eskom plant is comprised of imports, plant in operation and licensed by NERSA, and the peaking and renewable IPPs in commercial service by beginning The Non-Eskom Other is mostly co-generation plant. Figure 4 2 : Existing plant 2 Note that the zero of the vertical axis is supressed in Figure 4. 7

8 The plant under construction is from Eskom and the IPP programmes. Plant under construction includes Medupi, Kusile, Ingula, Peaking and Renewable IPPs Bid Windows 1 to 3 not in commercial service at the beginning of The final Kusile unit is planned for commercial service in 2022 and is not included in the above capacities. Figure 5: Plant under construction The supply options nearing contract closure are primarily guided by the Department of Energy s Ministerial Determinations - RE-IPPP Bid Windows 3.5 to 5 (bulk of the Non-Eskom Renewables), Smalls and Co-generation. Excluded is the Coal-fired Base-load IPP and Gas IPP procurement programmes, the assumption being that these will enter commercial service after Also included in plant nearing contract closure are Kiwano (Eskom renewable), MTPPP, STPPP and Rooftop PV. Figure 6: Plant nearing contract closure 8

9 4.3 Demand-side Resources The following are the demand-side resources contributing to the system adequacy: 1. Demand-side Management The historical demand-side management had a verified impact in 2015 of GWh energy and MW demand (aggregated without considering diversity). The study assumes, as part of existing resources, that the future demand-side management grows at the same rate as the energy demand. The expected Residential Mass Roll-out Lighting Programme s impact is further added. 2. Demand Response (2 950 MW) Instantaneous Reserve response, Interruptible Load contracts and Power Alert are included as existing capacity. Peaking Demand Response is considered as a nearing contract closure option. 4.4 Eskom Plant Performance Three plant performance scenarios were developed by Eskom for the MTSAO: The High EAF scenario is aligned with the Eskom Design-to-cost targets. The Low EAF is based on statistical modelling. The Medium Plant Performance is based on the Financial Year 2017 Eskom Shareholder Compact and the Eskom Corporate Plan target. Figure 7: Plant performance (percentage EAF) Plant performance of the Non-Eskom generation was derived from data submitted to NERSA and the performance of equivalent Eskom plant. 9

10 4.5 New Committed Build Dates The commercial operation dates for the Eskom plant under construction are as per the Eskom Corporate Plan. Table 2: Commercial operation dates of Eskom committed build The commercial service dates of the Renewable IPPs are the contractual dates. The cumulative capacities - based on plant added at the contractual dates for Bid Windows 1, 2 and 3 - are shown in Figure 8. Figure 8: REIPPP Bid Window 1, 2 and 3 cumulative capacities A scenario assuming delays in the commercial operation dates for the Eskom plant under construction is contemplated in the MTSAO. 10

11 5. Study Cases The system adequacy situation in recent years - and up to mid was characterised by frequent load shedding caused primarily by deteriorating Eskom plant performance and delays in the completion of the Eskom plant under construction. This inadequate electricity supply has contributed to the lack of growth in electricity demand for the past eight years. The leading interventions to attain system adequacy are improving plant performance, completion of the build programmes and other resource options that can contribute in the appropriate timeframes. The realisation of these measures is central to guiding the system to a desired outcome of: an adequate system; medium to high demand growth as per the Integrated Resource Plan 2016 Base Plan; and financial sustainability. The framework for the combinations of these interventions is set by the Eskom Corporate Business Plan and the Department of Energy s Integrated Resource Plan of 2016 currently under development. Before developing the study cases, it is necessary to discuss the adequacy space. Figure 9 illustrates the adequacy space. Figure 9: Adequacy space 11

12 Figure 9 illustrates moving to an adequate state in the medium-term future. Figure 10: Moving to an adequate future The following cases are analysed in the MTSAO: Figure 11: Cases analysed The Blue Path is a combination of an initial low demand growth, the Medium Plant Performance and commercial operation dates for the Eskom plant under construction are as per the Eskom Corporate Plan. The Red Path is a combination of the CSIR high demand growth scenario, the Low Plant Performance and delayed commercial operation dates for the Eskom plant under construction. 12

13 Demand Forecast Eskom Plant Performance Eskom plant under construction Blue Path Earlier years low growth. Medium- to high growth in later years. Medium On time Red Path High growth Low Delayed Table 3: Assumptions used in the Study Cases The Yellow Path(s) can be various combination(s) of the demand growth, plant performance and commercial operation dates for the Eskom plant under construction parameters. All the study cases have been done with the existing plant and plant under construction included. These cases have been balanced for adequacy. The plant nearing contract closure has then also been included in each case and the system again balanced for adequacy. The results are shown in terms of the additional capacity required in each year to have an adequate system. 13

14 6. Results The Blue Path (Base Plan) requires additional capacity in 2016 and 2017 for an adequate system, as shown in Figure 12. The system is adequate from 2018 and can then accommodate a medium to high growth in demand. Figure 12: Blue Path - additional capacity (MW) required The situation with the plant nearing contract closure included is shown in Figure 13. The system is now adequate from 2017, and a high growth in demand can be accommodated from Figure 13: Blue Path - additional capacity (MW) required with the plant nearing contract closure included 14

15 The Red Path (Sensitivity A) requires additional capacity in all years for an adequate system, as shown in Figure 14. The system is not adequate in the medium-term, and it is unlikely that this assumed high growth in demand is sustainable. Figure 14: Red Path - additional capacity (MW) required The situation with the plant nearing contract closure included is shown in Figure 15. The system is now adequate from Figure 15: Red Path - additional capacity (MW) required with the plant nearing contract closure included 15

16 7. Conclusion Base Plan: The Blue Path follows the Eskom Corporate Plan: The adequacy is restored by 2018 by means of improved plant performance and additional short-term capacity of MW, mostly to be provided by midmerit resources plus some peaking resources. With further plant performance improvements plus the coming into service of (primarily) Medupi and Kusile units, a medium to high demand growth can be accommodated from Earlier demand growth can be accommodated if more short-term capacity is contracted. Sensitivities: A. The Red Path relies on Non-Eskom resources: The Eskom plant performance remains below par (Low EAF scenario), and the commercial operation of the Eskom committed plant is delayed. The additional capacity required to restore the system adequacy plus to allow a high demand growth is some MW for the study period to be provided by base-load, mid-merit and peaking resources. The growth in demand will be delayed due to the lead-times for procuring the additional capacity. The situation is improved when the plant nearing contract closure is included. The system now reaches adequacy in Some MW of additional capacity (over and above the capacity included for the plant nearing contract closure) is required to have an adequate system from 2016 to B. Alternative paths (Yellow Path) between (combinations of aspects of) the Blue and Red Paths can be considered. Eskom System Operator considers the Base Plan (Blue Path) to have a high probability of successful execution, while it sees Sensitivity A (Red Path) as having a lower probability: In order to accommodate demand growth sooner rather than later, short lead-times are needed for the increase in available capacity. This can be achieved at lower risk when improving existing plant performance compared to establishing new capacity. In the medium-term, the Blue Path will likely cost less and will require less investment. The MTSAO looks at the next six years. A life-cycle analysis (for example, an Integrated Resource Plan) is needed to determine the economic ranking of these alternative plans. 16

17 8. Glossary and Abbreviations Adequacy relates to the existence of sufficient facilities within the system to satisfy the customer load demand or system operational constraints. Adequacy is therefore associated with static conditions which do not include system dynamic and transient disturbances. 3 Adequacy Metrics are the output parameters analysed to determine Adequacy. CAGR means compound annual growth rate. CSIR means Council for Scientific and Industrial Research. CSP means Concentrated Solar Power EAF means Energy Availability Factor and reflects a unit, plant or industry s availability to produce energy. The Energy Availability Factor is the ratio of available energy over the nominal energy (sent out energy capability) and refers to the energy that could have been produced at available capacity for the reference period over the nominal energy for the same period. 4 IPP means Independent Power Producer IPS means the Interconnected Power System Load Factor or LF reflects the ratio of the actual generated energy against the nominal energy (sent out energy capability) and thus portraits the extent to which the installed capacity is utilised. The calculation method of this measure is similar to the term Capacity factor which is used in certain electricity generating references. 5 MTPPP means Medium-term Power Purchase Programme. NERSA means National Energy Regulator of South Africa. PV means Solar Photovoltaic RE-IPPP means Renewable Independent Power Producers Programme. SO means the System Operator. STPPP means Short-term Power Purchase Programme. 3 Reliability Assessment of Electric Power Systems Using Monte Carlo Methods: Roy Billinton, Wenyuan Li 4 Eskom Generation Plant Performance Reporting Standard GGL rev 9, September Eskom Generation Plant Performance Reporting Standard GGL rev 9, September