1121 Planning Considerations

An electric power system is the ultimate just-in-time delivery system; the consumption is being simultaneously produced. Maintaining this balance between generation and load for various time scales is one of the primary objectives of the electric utility industry. Deregulation has significantly compromised the ability of industry to maintain this balance throughout the system.

At the longest time scale, a source of adequate supply requires multi-year planning horizons. Where to build generation capacity, how much, and what type of fuel is to be used are questions that often require years of lead time in order to be adequately prepared to meet demand. Planning studies to determine adequate transmission capacity and the process of citing and constructing this infrastructure also take several years. These assets are very expensive (a large coal-fired plant can have a capital cost of over two billion dollars; large transmission lines can be as much as one million dollars per mile). Thus, if wrong choices are made, unnecessary investment or stranded assets can result.

Historically vertically integrated, utility companies, with the approval of their associated regulatory oversight bodies, made these decisions. By virtue of their monopoly status, investor-owned utilities (IOU) are heavily regulated by appropriate state and federal regulators. A regulatory body, typically a state public utility commission (PUC), approves these investments by allowing the capital outlays for capacity expansion to be added to the utilities' rate base. The rate for electrical service is then determined to be that necessary to recover this investment, including operating expenses and a specified rate of return for the shareholders.

Deregulation is intended to change the way these long-term investment decisions are made. Removing energy generation from the domain of the monopoly utility companies and allowing open competition for electrical production, will enable energy generators to make market-based decisions regarding where and how much generation should be built. The theory is that the free market will be more efficient, encourage more innovation, and result in fewer stranded assets when too much or the wrong type of generation is built.

To ensure that incumbent utility players will not exert excessive market power, many regions that have begun the deregulation process have instituted independent system operators (ISO) to operate the transmission and distribution grid. The nature of the ISO varies dramatically throughout the U.S. It can either be a wholly new organization, as is the case in California, or a slight modification of an existing power pool, such as the Pennsylvania-New Jersey-Maryland (PJM) interconnection.

At the next time scale, arranging for the operation of existing generating plants requires that fuel contracts be arranged, maintenance outages scheduled and coordinated, and long-term contracts to either buy or sell power with neighboring systems or between regions determined. It is common for utilities to plan fuel purchases years in advance. Sometimes, however, these decisions may be made in relatively short time scales (e.g., spot market purchases). The primary consideration is economic optimization — how to best meet the power-generating obligations with a minimum fuel investment.

Unit commitment is the next time scale whereby generating plants are committed to operation. Which units are committed to be on-line, and which units are taken off-line and shut down? This decision generally takes into account near-term load requirements as well as short-term load forecasts. The basic question here is how to optimize the available generation assets in order to minimize the cost of starting plants and shutting them down as the load changes throughout the day.

Solar Stirling Engine Basics Explained

Solar Stirling Engine Basics Explained

The solar Stirling engine is progressively becoming a viable alternative to solar panels for its higher efficiency. Stirling engines might be the best way to harvest the power provided by the sun. This is an easy-to-understand explanation of how Stirling engines work, the different types, and why they are more efficient than steam engines.

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