Outline of a Total System Analysis
A Total System Analysis would address the main requirements of an electricity system in a comprehensive set of studies by:
- using a total system cost approach
- allowing for a generation plant commissioning programme to ensure Security of Supply in relation to the risk that peak demand will not be met
- assessing the amount of carbon emissions that are likely to be avoided
- allowing for the transmission reinforcement that is required for each programme
The basis of the total system cost methodology is to include all the costs (both capital and revenue) for both generation and transmission that will be paid by customers. Various generation plant programmes can then be compared on the basis of both cost (present valued) and carbon emissions.
Taking each major item of cost in turn:
- Generation capital – the generation plant programme should be such that the specified risk to Security of Supply is not exceeded, and the Interest During Construction (IDC) is calculated and included in the capital spend. All de-commissioning costs should be included. The follow-on programme of generation commissioning would be adjusted to identify the needed plant margin to contain the risk to Security of Supply.
- Generation revenue – Other Works Costs (OWC) and fuel costs. Fuel costs (and usage) are possibly the most difficult items to estimate, and it is suggested that similar software to that known as GOAL (Generation Optimization and Loading) that was used at the time of the Pool (from privatisation to the introduction of NETA) be considered for this purpose. This program was used to minimize the cost of generation on a daily basis taking into account start up costs, loading rates, part load running efficiency, and the constraints on load factor caused by the shape of the load demand curve. The program would compute the fossil fuel station running needed to accommodate the intermittent nature of wind generation so as to ensure proper frequency control. The program would need modification to accommodate the stochastic and non-despatchable nature of wind generation. A levelised cost approach cannot accommodate these features. With wind generation, further checks would be required to ensure that proper voltage control could be exercised, and the system had sufficient synchronous inertia.
- Transmission capital - For each generation option examined, a different programme of transmission reinforcement will be required to ensure that the Transmission Security Standards are not breached. This will be dependent on the location and size of the generating stations.
- Transmission revenue - For each generation programme, the cost of transmission revenue and losses would be calculated.
Adding the present value (PV) of all the costs above would allow for the comparison of total system costs of different generation plant programmes.
By comparing the amounts of fossil fuels used, it would be possible to assess the amount of carbon emissions saved by any measure included for this purpose.
For each scenario modelled, risks will inevitably differ, and will need to be assessed. A quantified risk analysis should be used to yield the range of probable outcomes of costs and carbon to better inform strategic decisions.