Planning Tools

In this chapter, various categories of planning tools are discussed and explained. These tools are proposed to be applied at the different stages of the project. They are applicable to the strategic planning stage and for the monitoring and evaluation stages. As the planning process is dynamic in nature, it is highly recommended to apply different tools at different phases of the project.

Tariff Studies

Electricity tariff, in general, needs to reflect the true cost of supply in order to ensure maintaining an adequate level of security of supply and the financial viability of the electricity sector including private and public entities. The true cost of supply needs to be determined accurately by an independent body. This is the role of the regulatory agency responsible for setting the tariff, taking into consideration the welfare of all stakeholders.

System Expansion Studies

A case study serves in making the picture clearer to the reader. This case study covers an expansion in the generation area of a real life electric power system.

Renewable Energy Technologies

The role of RE resources in the electricity industry is explained from present and future perspectives. The promotion strategies and methods of utilizing these resources are outlined. Such promotion is a very important issue that must be adopted by all countries. This will lead to encouraging investments in this promising area, and will result in huge long-term benefits for countries, institutes, and individuals.

Demand Side Management

The implementation of DSM programs is likely to introduce improvement in the efficiency of power systems, reduce financial burdens on utilities to build new energy facilities, improve the environmental situation, and lower the cost of delivered energy to consumers; thus lowering O&M costs as well as consumer bills, enhance system reliability by reducing power shortages and power cuts, improve the national economy by improving the value added of the electricity sector, and increase job creation and new business ventures.

Power System Planning Process

This chapter aims at providing the basic background and foundation to the whole power system planning process covered in this book. It helps in setting the stage for a clearer and better understanding of the ensuing chapters. This is needed in the case of all readers, but it is especially important for readers who are not from the power industry such as regulators, policy makers, or legislators. Moreover, the planning process itself is also introduced in this chapter. This is particularly helpful for practicing engineers and other readers who might not be familiar with such issues. Finally, power system planning is introduced in this chapter to emphasize specific functions used in this context, especially those that are different than general planning functions.

Interconnected Systems

Power systems operate on either AC (50 Hz), or AC (60 Hz). Interconnection can be implemented based on an AC/AC or AC/DC basis. Technical, economical, and environmental considerations must be investigated to establish the best interconnection configuration. Moreover, the social, legal, and political impacts are of potential importance and must be considered.

Planning Criteria

Usually planning criteria are set by management, although some input from planners is needed. Knowledge of such criteria—and how they are calculated—provides planners with good practices and enhances the planning process.

Financing of Power Projects

Economy and finance represent major factors in the planning process. For power system planning, the investments are very huge in amount (billions of dollars). In this free market era, almost all governments are trying to reduce budgetary expenses. This results in governments divorcing themselves from being involved in such huge investments. The economy of scale forces governments to rely on the private sector. However, as the profit is the driving force for the private sector, incentives must be set clear, and regulations must be flexible enough to encourage the Public-Private Partnership (PPP), which comprises many financing schemes. These may be attractive to the private sector and, hence, enable the financing of such projects. This chapter discusses issues related to economic feasibility and financing factors that govern investment in the power industry. Different PPP schemes are discussed in further details and their potential contribution and roles in the future of the power industry are pinpointed.

Integrated Resource Planning

IRP can provide a vehicle to test and put into force regulatory policies and actions. Environmental externalities, risk reduction, improving continuity of service, market distortions, and lack of inexpensive financing are all included in the IRP process. Policies are usually translated to fiscal or monetary measures through licensing procedures, tariff design, environmental penalties, renewable energy encouragement acts, and additional taxes or levies. This would certainly provide demand side options with some advantage over the conventional ones.