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Enhancing Institutional Capacity for the Market Development of Decentralised Energy Systems in Thailand WADE DE Model Development for Thailand and Key Results Sridhar Samudrala Director ASIA World Alliance for Decentralized Energy (WADE) Follow-up WADE DE Modelling Training Workshop 18 th June 2010 Pullman Bangkok King Power, Beta Room 2
WADE DE Modelling Methodology Thailand s Energy Situation Electricity Sector in Thailand Scenario Development Results and Findings Conclusions 3
Methodology 4
Methodology (Cont d) 5
Institution Department of Alternative Energy Development and Efficiency (DEDE) DEDE and Danish International Development Agency (DANIDA) Electricity Generation Authority Thailand (EGAT) Ministry of Energy (MoE), Energy Policy and Planning Office (EPPO) Data Collection Document Annual Report 2009 on: Thailand Alternative Energy Situation Thailand Energy Situation Annual Report 2008 on: Oil in Thailand Electric Power in Thailand Technology Catalogue, Technology Data for electricity and steam generating plants based on renewable energy. Annual report 2008 Power Development Plan 2010 EGAT Power Plants List of Independent Power Producer (IPP), Small Power Producer (SPP) and Very Small Power Producer (VSPP) Joint Graduate School Energy and Environment (JGSEE), Thailand United State Environmental Protection Agency (USEPA) World Bank World Alliance Decentralised Energy (WADE) Research on Natural Gas Based Cogeneration Potential in Commercial and Industrial Sector. Research on Policy for Renewable Energy Promotion and Energy Efficiency Phase 1 (June 2005 April 2006). Database of emission factor for external combustion source. Technical and Economic Assessment of Off Grid, Mini Grid and Grid Electrification Technologies. Study on Decentralised Energy System in China. 6
Input Worksheet Input Data of WADE DE Model Type of data Capacity and Generation Technology selection to be included in the generation mix of CG and DE Existing capacity and generation by technology Current and future load factor by technology Pollution Emission factor for NOx, SO2, PM10 and CO2 by technology Heat rate by technology Costs Current and future capital cost, Operation and Maintenance (O&M) cost by technology Current and future fuel cost T&D costs, financing term, return on capital by technology CO2 emission costs Growth properties Annualised demand growth and peak growth System losses - Average T&D losses - Peak T&D losses DE peak deliverability penalty Back up capacity: CG, DE, and T&D safety margin Coincident peak DE random outage Existing capacity yearly retirement determination New capacity: future growth determination 7
Thailand s Energy Situation 2009 Electricity 17.39% Renewable energy 18.82% Coal 10.68% Transportation 35.70% Agriculture 5.20% Manufacturing 36.54% Natural Gas 5.45% Petroleum Product 47.66% Commercial 7.63% Residential 14.93% Final Energy Consumption by Type Final Energy Consumption by Economic Sector 8
Power Generation by Type of Fuel 2008 The figure shows that gross energy generation in Thailand is dominated by natural gas. This is understandable because domestic NG production has a fast increasing trend. For example, EGAT is planning four more NG based power plants between 2008 and 2010 (ASEAN Energy News, Oct. 2007). Biomass for power generation by SPPs is a good indication of domesticating and greening the power generation. 9
Recent Power Generation Trend Type of Power Plant 2008 2007 Increase/Decrease EGAT s Power Plants MW Percentage MW Percentage Percentage (%) Thermal 5.660,00 18,94 6.370,00 22,33 11,15 Combined cycle 5.084,35 17,01 5.146,95 18,04 1,22 Hydropower 3.424,18 11,46 3.424,18 12 0 Gas turbine 847 2,83 847 2,97 0 Diesel 4,4 0,01 4,4 0,02 0 Renewable energy 1,03 0 1,04 0 0,96 Subtotal 15.020,96 50,25 15.793,57 55,36 4,89 Purchase from Domestic Private Power Plants IPPs 12.151,59 40,65 10.017,59 35,11 21,3 SPPs 2.079,10 6,96 2.079,10 7,29 0 Neighboring countries Laos 340 1,14 340 1,19 0 EGAT TNB Interconnection System 300 1 300 1,05 0 Subtotal 14.870,69 49,75 12.736,69 44,64 16,75 Grand Total: 29.891,65 100 28.530,26 100 4,77 Source: EGAT Annual Report 2008 10
Sectoral Distribution PURCHASES INSTALLED CAPACITY, MW 2008 2,079.10 340.00 300.00 IPPs SPPs Laos 12,151.59 EGAT TNB Interconnection System 11
Primary Energy Supply Thailand s primary energy supply 2009 was approximately 85,855 ktoe. Also imports appx. 60,000 ktoe Natural Gas 930,982 MMscf. Still importer of energy Oil 46,608 million litres of oil per yr Lignite 2,870 Mtons Reserve Renewable Can sell excess into grid Renewable 19,594 ktoe for VSPP, SPP Hydro 1,496 ktoe 12
Electricity Sector in Thailand Electricity Generation of Centralised Power Plant by 2009 0.54% 5.26% 2.12% 22.41% 0.15% 11.22% 58.30% Coal ST Oil ST Gas ST CCGT Diesel Large hydro Power Purchase 13
Electricity Sector in Thailand (Cont d) Electricity Generation of Decentralised Energy by 2009 1.60% 1.28% 0.44% 7.51% 0.17% 32.36% 56.64% Coal CHP Oil CHP Gas CHP Biomass Biogas Small hydro Others 14
Scenario Development Energy scenarios -- developed to forecast power generation scheme over 15 year. 2009 Base year - period 2010-2025 for study Five variations - CG and DE: 0%DE / 100%CG, 25%DE / 75%CG, 50%DE / 50%CG, 75%DE / 25%CG, and 100%DE / 0%CG is impractical. 15
Alternative Energy Scenario Development Business as Usual (BAU) Scenario 0% DE / 100% CG - NO new DE added during simulation period (2010-2025). - The incremental demand would be fulfilled by CG. - The retired plants were all replaced by centralized power generation. High DE scenario 25% DE / 75% CG - 2009, 90% of total electricity (132 TWh) was generated by CG plants with CCGT having the highest share. - Remaining generations were calculated as DE (10% of total generation or 15 TWh), with 6.5% of total generation was from CHP mode (9.5 TWh), and 3.5% from RE sources (5.5 TWh). 16
Heat Rate by Technology Technology Heat rate [kj/kwh] Source Steam Thermal 10,108 DEDE, 2008, p.22 Combined Cycle 7,720 Gas Turbine 14,400 Diesel Engine 10,632 Combined Heat and Power 8,633 Somcharoenwattana, 2008, p.3 Biomass / biogas 24,000 Interview with energy expert Waste to Energy 20,000 http://www.mauicounty.gov/depart ments/environmentalmgt/pdf/nov %2015%20WTE%20pres- Energy%2 0conf.pdf 17
Technology Capital Cost [USD/kW] Cost Source % annual change 2007-2026 Source Centralized Generation Coal ST 1,080-1.7% Oil ST 780-1.5% Gas ST 430-2.3% Combined Cycle 570 ESMAP 2007-2.3% ESMAP 2007 Gas Turbine 430 (p.52-54) -2.3% (p.52-54) Diesel Engine 430-2.3% Hydro - Large 1,930-0.5% Lignite ST 1,024 EGAT 2005-1.7% Decentralized Energy Coal CHP 1,150 IEA, 2005, p.121 0% IEA 2008, p.33 Oil CHP 1,150 0% Gas CHP 530 0% Small biomass 1,415 DEDE 2006 as -1.9% ESMAP 2007 Biogas 1,491 quoted by -1.2% (p.52-54) Solar (local) PV 4,084 USAID 2007, -4.3% Wind 1,336 p.13-2.6% Hydro power 1,630-0.8% Waste to Energy 5,736-1.8% 18
Cost (Cont d) Type of fuel Base Energy Prices in Thailand in 2008 Energy Price [USD/GJ] Source NG-CHP 7.41 PTT, 2008, as quoted by Hasanbeigi, 2007, p.31 NG-industry 9.35 Heavy oil 18.13 Imported coal 2.1 Lignite 0.48 EGAT, 2006, p.33 Diesel 33.48 EPPO Renewable 2.06 Gvozdenac et al, 2005, p.9 19
Cost (Cont d) Annual Compound Growth Rate of Fuel Cost for Electricity Generation Type of fuel Annual compound growth rate [%] Source Natural gas 8.90% PTT, 2008, as quoted by Hasanbeigi Imported coal 10.99% 2007, p.31 Oil 14.14% Annual Energy Outlook, 2008, with Projections to 2030 Lignite 3.00% IEA, 2008, p.33 Diesel 19.64% EPPO, 2008 20
Reference Scenarios Validation Generation Capacity of BAU Scenario and PDP 2010 [MW] 2015 2020 2025 BAU PDP 2010 BAU PDP 2010 BAU PDP 2010 Total capacity [MW] 39,626 39,949 49,697 44,773 59,951 52,683 Percent difference -1% 11% 14% 21
Sensitivity Analysis Scenario Development Case A: Low electricity demand growth scenario The input of annual electricity demand growth is changed from 4.19% to 3.0% Case B: High annual compound growth rate of natural gas price scenario The input of annual compound growth rate of natural gas price is changed into 13% from 8.9%. It is assumed that the future growth will be similar with the average growth rate of natural gas price in the past 4 years. Case C: High T&D costs scenario Doubling the transmission and distribution costs to 480 USD/kW and 720 USD/kW respectively. 22
Results and Findings Total Capacity and Generation Fuel Consumption Economic Analysis Environmental Impact Sensitivity Analysis 23
Total Capacity and Generation Electricity Supply in Thailand by Scenario in 2011-2025 70,000 60,000 50,000 [MW] 40,000 30,000 20,000 10,000 2011 2015 2020 2025 BAU high DE 24
Total Capacity and Generation (Cont d) Capacity Share of Different Power Plants in the BAU Scenario Capacity Share of Different Power Plants in the high DE Scenario System Shares by Scenario by 2011 BAU scenario High DE scenario % share Total capacity [MW] % share Total capacity [MW] Centralised Generation 92% 30,159 90% 31,814 Decentralised Energy 8% 2,656 10% 3,060 Renewable Energy 3% 987 4% 1,390 25
Fuel Consumption Fuel Consumption [TWh/year] for Electricity Generation in 2025 by Scenario Scenario Coal Oil Natural gas Bio - fuel Total BAU 141 10 309 33 493 High DE 125 8 260 279 673 26
Economic Analysis Impact on Capital Cost in 2025 by Scenario Billion USD 70 60 50 40 30 20 10 BAU high DE new CG new DE new T&D 27
Environmental Impact The Pollution Level by Scenario by 2025 Scenario Emissions (Mton) NOx SO2 PM10 CO2 BAU 130 576 46 72 High DE 149 420 34 58 DE saving -15% 27% 26% 20% 28
Sensitivity Analysis (Cont d) Total Capital Cost by Scenario billion USD 100 90 80 70 60 50 40 30 20 10 0 13% 9% 8% 8% BAU high DE BAU high DE BAU high DE BAU high DE Reference case 3% (low) demand growth 13% (high) NG annual growth Doubling T&D cost new CG new DE new T&D 29
Sensitivity Analysis (Cont d) Retail Cost by Scenario 30 US cent/kwh 25 20 15 10 14% 12% 15% 14% 5 0 BAU high DE BAU high DE BAU high DE BAU high DE Reference case 3% (low) demand growth 13% (high) NG annual growth Doubling T&D cost O&M of New Capacity CO2 cost T&D Amortization Capital Amortization Fuel 30
THE ROAD MAP EU Directive for CHP/DE is a good basis to follow and can be adopted to the Thai scenerios -- legislation for defining CHP/DE should be clearly established. CHP/DE penetration should be accelerated and implemented widely. For remote plants value adding new energy demand sectors around such plants must be promoted. District energy systems must be implemented with co-generation and tri-generation concepts (chillers and heaters). Alternative energy resources like solar, wind, and biogas must be hybridized with power plants especially in the rural areas in addition to cities. 31
THE ROAD MAP (Con t) Heat pump, absorption cooling technologies and solar PV technologies must be embedded to the economy in a sustainable manner. Biomass must be widened and extended to farms, dairy farms, and livestock. National CHP/DE technology must be implemented in an economically sustainable manner. Green city and Smart/Intelligent Grid concepts must be developed and implemented. Energy efficiency, demand side management and integrated resource planning methods should play a major role in planning. 32
Conclusion (Cont d) Economic analysis of capital cost shows that high DE share will provide substantial economic benefit compared to BAU (total DE saving is accounted 6 billion USD) by 2025. Saving -- investment in transmission lines Require 11 billion USD Investment in high DE scenario due to the relatively high investment costs of DE technologies compared to CG. Govt. target to reach a decline up to 45% of natural gas fuel by 2025 reached by high DE. High DE share part of future electricity -- replace part of centralized power generation and meet the growth demand by 2025. DE provides more benefit in economic and environmental sectors in a condition that DE has to be able compete with CG. In both reference scenarios BAU/High DE, fossil fuel power plants particularly steam turbines and combined cycles are still dominating generators. This means high DE share in Thailand s electricity mix may meet the demand growth by 2025 and provide a highly cost-effective solution and reduce pollutant emission level. A more comprehensive and systematic power sector planning process is necessary for DE to be more reflected in the electricity scheme. 33
THANK YOU ssamudrala@localpower.org Director - ASIA World Alliance for Decentralized Energy (WADE) 34