The Civil Engineering Contractor February 2019 | Page 39

BUSINESS INTEL
investments of regional significance
that can provide adequate electricity
supply to the region under different
scenarios, in an efficient and
economically, environmentally, and
socially sustainable manner, and
support enhanced integration and
power trade in the SAPP region,” said
Robinson.
The PP incorporates the SAPP
generation
planning
criteria
published in 2011. The security
criterion requires the minimum level
of generation capacity to be equal to
or greater than 100% of demand. The
reliability criterion defines the reserve
capacity obligation (10.6% of annual
peak demand for predominantly
thermal systems, 7.6% for mainly
hydro systems, and weighted average
for mixed systems). SAPP permits
the reliability criterion to be met
through a country contracting reserve
auxiliary services from others.
The conventional approach in a
regional power sector master plan is
to treat the interconnected region as
though it were a single country and
use optimisation planning software to
derive the least-cost generation and
transmission investment sequencing.
However, an economically optimal
regional plan is often not optimal from
an individual country perspective due
to other important non-cost factors.
Robinson outlined the three
principal case studies or components,
with the third bringing in the factors
of importance from individual
country perspectives:
• 
Component A / Benchmark
Case: This is a combination of
country-by-country expansion
plans based on national master
plans extended (where necessary)
to 2040 with a consistent set of
assumptions. The results of this
component are driven by two
important assumptions: a large
proportion of the generation
options are defined by the
countries as ‘committed’, and
trade is limited by the only new
transmission interconnectors
allowed being those already under
construction.
• Component B / Full Integration
Case: This is the full optimisation
case whereby the region is
treated as though it is a single
country and a least-cost sequence
of generation and transmission
expansion projects is derived.
• 
Component C / Realistic
Integration Case: This is an
intermediate integration case,
whereby certain constraints
are applied to Component B to
ensure that each country, at a
minimum, fulfils SAPP security
and reliability planning criteria.
This was interpreted to mean that
by 2040, each country should
have sufficient installed or firm
imported capacity to be able to
meet its maximum demand and
reserve obligations, and large
thermal power plants should
operate at or above minimum-
capacity factor levels.
The ministers ultimately selected
Component C.
Comparison of A, B, and C
The executive summary of the SAPP
PP 2017 describes the objective
function as the optimisation “to
minimise investment costs (overnight
capital costs discounted from the
year of commissioning), short-term
operational costs (fuel and O&M
costs), plus the cost of unserved
energy (calculated at a notional cost
of USD1 000/MWh) using a social
discount rate of 6%.
“The NPV of the total costs is the
main indicator that can be used to rank
the three components. Component B,
the idealised Full Integration Case,
is clearly superior to Component
A, the Benchmark Case. To meet
the demand forecast, only 127GW
of installed capacity is needed in
B as compared with 143GW in
A. There is a significant saving in
Panel discussion at a workshop hosted by SAPP in November 2018.
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