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Integrated Energy Planning – the path towards CLEAN ENERGY

March 4th, 2016 Posted in Clean Energy

Integrated Energy Planning – the path towards CLEAN ENERGY

Recently, Mr. Bill Gates renewed mankind’s yearning for CLEAN ENERGY as the way forward towards sustainable and inclusive growth for all peoples of mother earth.

But this would require technical effort, economical approach and environmentally sound action plan that could only be developed through a scientific-based “integrated energy planning”. For such planning to gain wide-spread reach, technical, economic, financial and optimization tools must be within reach by energy and development planners, be it at the level of a community such as off-grid remote areas, river-basin based development regions, island groups, countries, and continents with integrated energy and power networks.

This would require, I believe, easy access to a set of tools and processes that will automate and institutionalize the technical and economic analysis of renewable energy (RE) projects and non-RE projects to determine feasibility, provide inputs to both short-term and long-term optimal dispatch and capacity expansion planning, in order to achieve optimum energy and power generation mix, least cost of energy, lower fuel consumption, reduced GHG emission, sulfur emission and global warming impact of the power industry.

In this regards, I have a complete line of project finance models for renewable energy (biomass, solar PV, wind, mini-hydro, ocean thermal) and conventional fossil (diesel/bunker genset, oil thermal, coal thermal PC, petcoke thermal, gas thermal, geothermal, combined cycle GT, simple cycle GT, large hydro, pumped or storage hydro, nuclear, clean coal CFB and IGCC, WTE, CHP, gasification and pyrolysis, direct combustion, cogeneration for heat and power, and tri-generation for heating, cooling and power), RE-fossil off-grid hybrid energy systems (biomass, solar PV, wind, mini-hydro and diesel/bunker genset) and RE-fossil-energy storage technologies.

It can be very useful in determining the economic feasibility of each power generation technology (calculates the equity and project IRR, NPV and PAYBACK), calculates the first year tariff (non-RE technologies) or feed-in-tariff (FIT rate of RE technologies), selects the most appropriate technology given the nature of the energy/power demand, fuel supply availability, energy resource availability, and determines which technology provides the largest benefit to cost ratio (B/C ratio of gov’t taxes and benefits plus net income to investor to the all-in capital cost of the technology).

There are cases where an RE technology seems promising but has a less than unity (1.0) B/C ratio when compared to other non-RE technologies. Also, RE technologies, being intermittent, may require also fossil power generation (diesel/bunker genset, coal supercritical, natural gas simple cycle GT or combined cycle GT) with high response ramp up rates to provide electricity network backup and ensure network stability and overall network reliability in case the sun or the wind dies down and provides diminished or nil solar power and wind power.

As an integrated energy planner, you may want to take a look into this complete line of project finance models that are based on one model template so that the results are purely the outcome of the technical and economic features of the technology, and not on varying modeling techniques. See sample inputs & assumptions worksheet below:

Model Inputs and Results.xlsx – Copy

These models are helpful in determining the short run marginal cost (SRMC = fuel cost + variable O&M cost) which can be used in determining the short-term optimal dispatch or hourly optimal supply mix in a Wholesale Electricity Spot Market (WESM) and long run marginal cost (LRMC = annualized capital cost + fixed O&M costs + SRMC) which is the same as the levelized cost of energy (LCOE) of each technology which can be used as inputs to a long-term optimal dispatch or least cost capacity expansion planning Mixed Integer Linear Programming (MILP) model for each country so that future power plants may provide the optimal power generation mix that also minimizes greenhouse gas (GHG) and sulfur emissions, minimizes fuel and operating costs and capital costs.

Existing power plants are modeled with replacement cost (not depreciated cost) so that in case an old power plant conks out, there is an opportunity to replace it since electricity tariffs are economically sustainable and priced to allow cost recovery. The capacity and generation potential is made open and not fixed (greater than zero capacity constraint instead of equal to capacity constraint) so that the capacity expansion model can shut it down and retire it should future power plant technology candidates can provide capacity and energy generation at greater efficiency and lower fuel consumption, GHG emission, sulfur emission and operating costs.

For developing a country’s least cost capacity expansion planning model, the WASP or MESSENGER of the International Energy Agency (IEA) and other international and private institutions (e.g. PLEXOS) provide the modeling tools for maintaining the data inputs and generating the LP matrix, solving the problem using an LP simplex optimizer (e.g. IBM CPLEX, GUROBI) and LP report writer to display the results in the prescribed format.

The LP results of a “feasible” run provide among others the optimal generating capacity mix (hourly or annual average) for existing and future power generation technologies that produces the least cost (fuel costs, fixed and variable O&M costs, and all-in capital cost) on an hourly or yearly basis.

On the other hand, the LP results of a “not feasible” run would provide the cost penalty for not meeting the violated constraint. For instance, a cheaper technology is being encouraged by the LP model but its capacity is limited (maximum constraint) – this signifies an opportunity to provide more capacity with this more cost-effective technology. On the other hand, an expensive technology is being discouraged by the LP model but its capacity is restricted to a level (equal constraint or minimum constraint) – this signifies an opportunity to reduce capacity or retire this expensive technology.

When applied to an electrical network, a “not feasible” run due to a violated constraint on a sub-station bus capacity or transmission line capacity would provide opportunities for new capital investments to decongest the transmission system so that cheaper power generation technologies could be dispatched to the other nodes of the electrical network in order to meet power demand. The shadow price (pi value) of the violated constraint provides an indication on the maximum value of the investment that may be made to decongest the network.

You may download the RE power generation technology models:

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Sample Project Finance Model

Here is a sample project finance model for a biomass thermal power plant that can be customized for your specific need: (Advanced regulator model)

adv-biomass-direct-combustion-model4-demo9

The same model above is also presented in just one worksheet (tab) so you would be able to understand better the structure of a project finance model: (OMT Energy Enterprises model)

omt-biomass-direct-combustion-model4-demo9

A sample non-thermal power plant (no fuel GHV and no fuel cost) can also be downloaded:

adv-mini-hydro-model3-demo5

A sample liquid fossil thermal power plant (with fuel GHV, fuel density and fuel cost) is also available:

adv-diesel-genset-model3-demo5

Email me if you need customization:

energydataexpert@gmail.com

You may order on-line any project finance model of any renewable, conventional, fossil, nuclear, combined heat and power, and energy storage power generation technologies by visiting this website:

www.energydataexpert.com

Or please visit this blog for any power generation technology article:

www.energytechnologyexpert.com

Regards,

The energy technology expert and financial modeling expert

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SAMPLE PROJECT FINANCE MODELS:

RENEWABLE ENERGY

adv-biomass-cogeneration-model3-demo5 – process heat (steam) and power

adv-biomass-direct-combustion-model3-demo5 – bagasse, rice husk or wood waste fired boiler steam turbine generator

adv-biomass-gasification-model3-demo5 – gasification (thermal conversion in high temperature without oxygen or air, pyrolysis)

adv-biomass-igcc-model3-demo5 – integrated gasification combined cycle (IGCC) technology

adv-biomass-wte-model3-demo5 – waste-to-energy (WTE) technology for municipal solid waste (MSW) disposal and treatment

adv-biomass-wte-model3-pyrolysis-demo5 – waste-to-energy (WTE) pyrolysis technology

adv-mini-hydro-model3-demo5 – run-of-river (mini-hydro) power plant

adv-solar-pv-1-mw-model3-demo5 – solar PV technology 1 MW Chinese

adv-solar-pv-25-mw-model3-demo5 – solar PV technology 25 MW European and Non-Chinese (Korean, Japanese, US)

adv-wind-onshore-model3-demo5 – includes 81 wind turbine power curves from onshore WTG manufacturers

adv-wind-offshore-model3-demo5 – includes 81 wind turbine power curves from  offshore WTG manufacturers

adv-ocean-thermal-model3_10-mw-demo5 – ocean thermal energy conversion (OTEC) technology 10 MW

adv-ocean-thermal-model3_50-mw-demo5 – ocean thermal energy conversion (OTEC) technology 50 MW

CONVENTIONAL, FOSSIL AND NUCLEAR ENERGY

adv-geo-thermal-model3-demo5 – geothermal power plant  100 MW

adv-large-hydro-model3-demo4 – large hydro power plant 500 MW

adv-coal-fired-cfb-thermal-model3_50-mw-demo5 – subcritical circulating fluidized bed (CFB) technology 50 MW

adv-coal-fired-cfb-thermal-model3_135-mw-demo5 – subcritical circulating fluidized bed (CFB) technology 135 MW

adv-coal-fired-pc-subcritical-thermal-model3-demo5 – subcritical pulverized coal (PC) technology 400 MW

adv-coal-fired-pc-supercritical-thermal-model3-demo5 – supercritical pulverized coal (PC) technology 500 MW

adv-coal-fired-pc-ultrasupercritical-thermal-model3-demo5 – ultrasupercritical pulverized coal (PC) technology 650 MW

adv-diesel-genset-model3-demo5 – diesel-fueled genset (compression ignition engine) technology 50 MW

adv-fuel-oil-genset-model3-demo5 – fuel oil (bunker oil) fired genset (compression ignition engine) technology 100 MW

adv-fuel-oil-thermal-model3-demo5 – fuel oil (bunker oil) fired oil thermal technology 600 MW

adv-natgas-combined-cycle-model3-demo5 – natural gas combined cycle gas turbine (CCGT) 500 MW

adv-natgas-simple-cycle-model3-demo5 – natural gas simple cycle (open cycle) gas turbine (OCGT) 70 MW

adv-natgas-thermal-model3-demo5 – natural gas thermal 200 MW

adv-petcoke-fired-pc-subcritical-thermal-model3-demo5 – petroleum coke (petcoke) fired subcritical thermal 220 MW

adv-nuclear-phwr-model3-demo5 – nuclear (uranium) pressurized heavy water reactor (PHWR) technology 1330 MW

WASTE HEAT RECOVERY BOILER (DIESEL genset; GASOLINE genset; PROPANE, LPG or NATURAL GAS simple cycle)

adv-diesel-genset-and-waste-heat-boiler-model3-demo5 – diesel genset (diesel, gas oil) and waste heat recovery boiler 3 MW

adv-fuel-oil-genset-and-waste-heat-boiler-model3-demo5 – fuel oil (bunker) genset and waste heat recovery boiler 3 MW

adv-gasoline-genset-and-waste-heat-boiler-model3-demo5 – gasoline genset (gasoline, land fill gas) and waste heat recovery boiler 3 MW

adv-propane-simple-cycle-and-waste-heat-boiler-model3-demo5 – simple cycle GT (propane) and waste heat recovery boiler 3 MW (e.g. Capstone)

adv-simple-cycle-and-waste-heat-boiler-model3-demo5 – simple cycle GT (natural gas, land fill gas, LPG) and waste heat recovery boiler 3 MW (e.g. Capstone)

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Should you need the actual models (not demo) that could be revised for your own needs (additional revenue streams, additional expense accounts, additional balance sheet accounts, etc.), you may:

Email me:

energydataexpert@gmail.com

Visit me:

www.energydataexpert.com

www.energytechnologyexpert.com

THANK YOU

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