Indicative PlanningThe traditional approach to the future planning of the power sector was allied to the concept of a centralised power utility with control over the location of new generation and transmission projects.The result of the computationally intensive approach was the development of a least cost development programme giving a recommendation on the sites for development, the size of the projects and the proposed commissioning dates. In the modern environment, however, the centralised utility may have become “unbundled” into a number of generation company, possibly competing with new IPPs. Ownership of the transmission system may be vested in another company, and yet another entity might be responsible for operation of the system. In this context the old prescriptive approach to planning is no longer appropriate, and it is important that the plans for the development of the power system should be therefore be flexible to accommodate the commercial aspirations of the new stakeholders in the industry, whilst at the same time ensuring that economic considerations are broadly met. The form of indicative planning required in any electricity market will vary depending on the way in which the market operates. In the case of full competition, where generators and retailers strike bilateral contracts, a more open environment exists and the requirement for indicative planning may be limited to the need to map the generalised optimum development path. This path may be used by governments or regulators to examine strategic issues associated with the sector, and risks which the market may face in the future. These may include over-reliance on a single fuel. Where the operation of an electricity pool is more limited, or where the market remains centralised, more detailed indicative planning is required. This will differ from the historic optimised least cost development planning of the past, however, as it will aim to provide guidelines for developers, utilities and national governments as to the overall requirements for new plant, and the differences in costs in economic terms between new projects based on alternative fuels and plant types. The deliverables will therefore be indicative and not prescriptive, and should not constrain the private sector to a single development path. Power Planning Associates has experience in trying to meet the planning requirements in the new environment, and has undertaken studies for generating companies, regulators and private developers to determine the potential future generation portfolio. For further information, please contact Neil Pinto |
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