IMPORTANCE OF INTEGRATED ELECTRICITY PLANNING FOR THE ELECTRICITY PLANNING FOR THE

MEKONG REGION

Tira Foran, Ph.D.Unit for Social and Environmental Research,

Chiang Mai University Chiang Mai University TiraForan@gmail.com

MRC Basin Development Plan Program Stakeholder Workshop Stakeholder Workshop

15 October 2009

Key arguments y g

Energy markets & ecosystems greatly gy y g yinfluenced by planning practices

demand forecastingoptions assessment integration of environmental & social goals

Th i h f l The time has come for energy planners to adopt IRP practices

Integrated resource planningIntegrated resource planningProven, international best practiceDo it, and public acceptance of new power p p pplants will increase

Community mobilization around power plants & local rights, Thailand

Power Planning’s Three Simple Questions

How Much Energy Will We Need?When Will We Need It?What Should We Build?What Should We Build?

Demand forecastingWhen will we need electricity? How much?When will we need electricity? How much?

High rates of forecasted power demand growthHigh rates of forecasted power demand growthVietnam: 10% per annum (PDP VI)Thailand: 5% per annum (PDP 2007 Rev2 base case)Thailand: 5% per annum (PDP 2007 Rev2 base case)GMS: >6% per annum (prior to financial crisis)

Demand is high but also uncertainDemand is high but also uncertain

Thailand power demand 2007 vs. 2008 forecastsMWMW

51 - 54 55 - 59 60 - 64 MW ผลตาง MW ผลตาง MW ผลตาง

2007 5.77 6.07 5.63 27,540 36,968 48,614

2009 3.29 6.07 5.63 25,085 -2,455 33,673 -3,295 44,281 -4,333

อตราเพมเฉลย 2011 (BE 2554) 2016 (2559) 2021 (2564)

DECEMBER 2008 BASE CASE

SEPT 2007

5

Thailand Electricity generation fuel mix Thailand Electricity generation fuel mix –– previous PDPprevious PDPGWhGWh/yr/yr

10%10%5%5%

((PDP PDP 2007 2007 Revision Revision 11))

28%28%2727%%22%22%17%17%

14%14%13%13%

8%8% 1010%% 1111%% 1010%%1212%% 16%16%

17%17% 16%16% 15%15%

14%14%14%14%

13%13%

1414%%1414%%

99%%66%%

8%8%

7474%% 7070%% 71%71% 68%68% 66%66% 63%63% 61%61% 59%59% 58%58% 5656%% 52%52% 43%43% 38%38%

ปป

Thailand Electricity generation fuel mix Thailand Electricity generation fuel mix ––current PDPcurrent PDP

GWhGWh/yr/yr PDP PDP 2007 2007 Revision Revision 22

10%10%10%10%99%%

99%%

5%5%33%%2%2%

2%2%

2%2%

2%2%

7%7%7%7% 6%6% 66%%

1111%%1111%% 1515%%

1919%%18%18%

1717%%16%16% 15%15%88%%

77%%7%7%

6%6%66%%

77%%

2%2%22%%

33%%33%%

33%%2%2%

2%2%

11%11% 11%11% 1111%% 1010%%99%%

99%%8%8% 88%% 7%7%

88%% 88%% 99%% 10%10%10%10%

1111%%77%%66%%

55%%

2%2%22%%

7373%% 7070%% 6969%% 67%67% 6969%% 68%68% 69%69% 65%65% 61%61% 6262%% 6363%% 6161%% 6060%%

4%4% 44%% 4%4% 3%3% 3%3% 3%3% 33%% 33%% 33%% 22%% 2%2% 2%2% 22%% ปป

Demand forecastingg

Are we doing best-practice demand forecasting?Are we doing best practice demand forecasting?

Top-down statistical modelsDemand = function(GDP temperature )Demand = function(GDP, temperature, …)

But best practice = bottom-up sector-by-sector modelsmodels

Demand is modeled by sector-by-sector variables + GDP forecasts

Options assessmentWh h ld b ild?What should we build?

Current objectives (Thailand): Current objectives (Thailand): Minimize financial costsMaximize system reliabilityMaximize system reliabilityComply with environmental lawsC l i h i l liComply with national energy policyPractical planSocial acceptance

Do other objectives deserve emphasis?

Environmental & social goals

Minimize health impacts Priority for electricity

Environmental & social goals for energy planners?

California (since 2005)

pMinimize ecosystem damage

including climate

services1. Energy efficiency including climate

change from CO2 emissions

Manage financial risks

gy y

2. Renewable energy & distributed generationManage financial risks

from fuel price volatilityCreate quality jobs for rural sector

3. Clean & efficient fossil-fuel generation

Options Assessment

Options assessment p

Emphasis is on Emphasis is on LARGE supply-side options

gas, coal, hydro, nuclear

Assumption is that large scale low per-unit cost

Options assessment: Energy Efficiency Are we giving EE first priority? Are we giving EE first priority?

Energy efficiency (EE) is <50% of cost of new Energy efficiency (EE) is <50% of cost of new supply

What can we do to increase EE?What can we do to increase EE?Key appliance minimum standards & labelingBuilding retrofits [e.g. EGAT light bulb substitution]Building retrofits [e.g. EGAT light bulb substitution]Insulation Window overhangsgUse of fan + air conditioner, not AC only

. . . But EE options are not given equal status when p g qcompared to supply side options!

Results from U.S. Northwest Power & Conservation Council 20- l d f t d l (5th Pl )

4500

5000

Coal (ICG) (MW)

year load forecast and resource plan (5th Plan)

3500

4000

4500

(MW

)*

Coal (ICG) (MW)

CCGTurbine (MW)

SCGTurbine (MW)

2500

3000

Cap

acit

y DR (MW)

Wind (MW)

Conservation (aMW)

1500

2000

mula

tive

C

( )

0

500

1000

Cum

02004 2007 2010 2013 2016 2019 2022

Thailand Electricity generation fuel mix Thailand Electricity generation fuel mix ––current PDPcurrent PDP

GWhGWh/yr/yr PDP PDP 2007 2007 Revision Revision 22

1010%%10%10%99%%

99%%

5%5%33%%22%%

22%%

22%%

2%2%

77%%77%% 6%6% 66%%

11%11%1111%% 1515%%

1919%%18%18%

1717%%1616%% 1515%%88%%

77%%7%7%

6%6%6%6%

77%%

2%2%22%%

33%%33%%

33%%2%2%

2%2%

11%11% 11%11% 11%11% 1010%%99%%

99%%8%8% 88%% 77%%

88%% 88%% 99%% 10%10%10%10%

11%11%77%%66%%

55%%

2%2%2%2%

7373%% 7070%% 6969%% 67%67% 6969%% 6868%% 6969%% 6565%% 61%61% 6262%% 6363%% 6161%% 6060%%

4%4% 44%% 44%% 33%% 33%% 3%3% 33%% 33%% 33%% 22%% 2%2% 2%2% 2%2% ปป

Isn’t it time we integrated the planning?g p g

Thai officials + civil society study exchange to U.S.

Integrated Resource Planning definitiondefinition:

Systematic evaluation of the least cost/least risk portfolio of resource choices where energy efficiency and demand side management are treated equivalent to generating resourcesresources

ConservationRenewableCoalGasCo generationCo-generation

IRP can be designed as an integrated participatory assessmentintegrated, participatory assessment

Demonstration of IRPW k i ( F 2008 [i Th i])Work in progress (see Foran 2008 [in Thai])

How much electricity (kWh, MW) from large stations could be avoided if Thailand were to attain its f‘practically achievable potentials’ in

Energy efficiency R blRenewable energyNatural gas CHP (combined heat and power) ?

Timeframe: 2008‐2018; 2008‐2027 (for RE)“Practically achievable potential”

It is < Commercially viable potential < Economically viable potential < Technical potentialการประหยดพลงงานไฟฟาทคมคาทางการเงนและบรรลไดในทางการตลาด

. . . thus it is an estimate, requires  dialogue

Clean, distributed, domestic options achievable b 2018 f Th il d ( li i lt )by 2018 for Thailand (preliminary results)

T t l hi bl b 2018Total achievable by 2018: 7913 MW (~ 33,000 GWh)Based on detailed review + 

d limodeling

Near‐term potential: 3023 MW (Programs for <100MW producers)

Medium‐term potential: 4890 MW (our analysis)Needs increased feed‐in tariffs for RE Needs enhanced support for EE 

If all clean domestic (7913 MW) substitutes for imports Thailand might a oidimports, Thailand might avoid:

2011 ~ Nam Ngum 2 (597 MW)2012 Th Hi b E i (220 MW)2012 ~ Theun Hinboun Expansion (220 MW)2013 ~ Nam Ngum 3 (440 MW) + Hongsa 1 (490MW)2014 ~2014  

Either: Nam Theun 1 (523 MW), Nam Ngiap (261 MW), Nam Ou 1 (200 MW)Or: Hongsa 2 & 3 (2 x 490 MW)

2015 ~ Nam Ou 2 (843 MW)2017 ~ U ifi d (510MW)2017 ~ Unspecified (510MW)

(Purchase dates from PDP 2007 R i i 1)Revision 1)

Isn’t it time to integrate the planning?

Additional points about IRP & l i i Th il dplanning in Thailand

Selected References1. du Pont P. 2005. Nam Theun 2 Hydropower Project (NT2). Impact of Energy Conservation, DSM, and

Renewable Energy Generation on EGAT's Power Development Plan, World Bank, Bangkok2. EGAT. 2008. Thailand Power Development Plan (PDP 2007: Revision 1), Electricity Generating Authority of

Thailand, Nonthaburi,3. Foran T. 2008. Analysis of Thailand's electricity planning process and demonstration of integrated

electricity planning. USER Working Paper 2008-WP-xx., Unit for Social and Environmental Research, Chiang Mai University, Chiang Mai

4. Foran T, du Pont P, Parinya P. 2006. Securing Energy Efficiency as a Top Priority Resource: Scenario Analysis of Thailand's Household Electricity Consumption. Final Report to Joint Graduate School of Energy and Environment. March 2007. M-POWER Working Paper No. MP-2006-05. http://www.mpowernet.org/mweb.php?pg=92 Chiang Mai University, Unit for Social and Environmental Research, Chiang Mai

5 Gvozdenac D Menke C Vallikul P 2006 Potential of Natural Gas Based Cogeneration in Thailand 5. Gvozdenac D, Menke C, Vallikul P. 2006. Potential of Natural Gas Based Cogeneration in Thailand. Presented at 2nd Joint International Conference on “Sustainable Energy and Environment (SEE 2006), 21-23 November 2006, Bangkok, Thailand

6. Jepsen FK, Møller L, Clausen NO, Garnak A, Engberg T, et al. 2006b. Promoting of Renewable Energy Technologies, Thailand. Action Plan for the Development of Renewable Power in Thailand - Part I, Department f Al E D l d Eff (DEDE) M f E Th l d D h M f of Alternative Energy Development and Efficiency (DEDE), Ministry of Energy, Thailand. Danish Ministry of

Foreign Affairs (DANIDA), Bangkok7. Joint Graduate School of Energy and Environment (2007). Summary Report: Policy Research to Support

Development and Use of Renewable Energy and Energy Efficiency Improvement in Thailand [in Thai]. N th t P & C ti C il (2009) Si th P Pl P tl d O N th t P & 8. Northwest Power & Conservation Council (2009). Sixth Power Plan. Portland, Oregon: Northwest Power & Conservation Council. www.nwcouncil.org

IRP: who typically does it & in what context?context?

Requires engineering and economic data. . . utilities typically do it it In North America: required to do so by strong regulatorsstrong regulatorsHasn’t always been popular

belief that privatization makes detailed planning unnecessary

Thai PDP still does not take energy efficiency seriouslyseriously

Energy efficiency is not MWgy ymodeled in a detailed manner

A ti th t 50 000

60,000

70,000MW

Assumption that “elasticity” of economy will improve

30 000

40,000

50,000

= Top-down approach

EGAT’s DSM division 10,000

20,000

30,000

does a 5-year plan, but PDP is a 15-year plan 19

9719

9920

0120

0320

0520

0720

0920

1120

1320

1520

1720

1920

21

Actual M ar07 Elasticity=1.18 Elasticity=1.32

Thai PDP still does not consider renewable energy seriouslyrenewable energy seriously

Many Small Power Producers (10-100MW) are treated as y ( )“non-firm” power

Their MW supplied not included in the PDP

All power from Very Small Power Producers (1-10MW) is treated as “non-firm”

Their MW supplied not included in the PDPTheir MW supplied not included in the PDP

Energy from “non-firm” plants is accounted for on the demand-side (external to cost optimization) the demand side (external to cost optimization)

analyzed in a superficial manner in the Load Forecast

Options assessment – renewablesp

Thailand: Renewable options are given second Thailand: Renewable options are given second priority

Mi i t f E 3 858 MWMinistry of Energy target by 2022

3,858 MW

Power plant in EGAT PDP by 2021 MW %Renewable 900 4%Non‐renewable 21,753 96%Total 22,653 100%, %

If we want to integrate environmental & social goals environmental & social goals . . .

We need to increase: We need to increase: Public disclosure & accessTransparencyp yPublic participationProfessional capacity

Overall, we find increasing of non-financial, non-financial, nonengineering criteriaPerformance varies between countries

Conclusion: Isn’t it time we i t t d l t i it l i ?integrated electricity planning?

Electricity markets are profoundly shaped by y p y p yplanning practicesCurrent practices focus too much on financial costs & pengineering reliability

Social tension in & between countries

IRP (integrated resource planning) is proven best practicePreliminary IRP analysis for Thailand shows >7900 MW can be avoided from large power plants

Defer building / buying power from coal, gas, hydro & nuclear