Power system planning in single-buyer markets of Asia traditionally assesses the need for new generating capacity with relatively static models using expected load duration curves as indicators for quantity and type of capacity needed. This may create a bias towards investing in base load capacity that eventually is not fully utilized or is too inflexible to respond to demand variations, thus unnecessarily increasing electricity cost. This paper introduces dynamic investment plan assessment as an alternative tool for power investment planning in single-buyer markets of Asia. This tool may offer a better justification for the choice of technology that minimizes the cost of electricity to consumers.

The use of dynamic investment plan assessment originates from the USA where regulated utilities must use this approach to justify investments in new power plant capacity. In the assessment, the utility analyzes the feasibility of a new power plant on a system level, not only on a project level. In other words, the utility analyses how the new plant will affect the operating profiles of other plants in the power system, and if the new investment results in the lowest cost to consumer.

Dynamic investment plan assessments have quickly become a well established industry practice in the USA. Regulators and utilities have understood that dynamic modelling provides more accurate information into the investment planning process, helping them to make better investment decisions. However, it is not yet widely used in the single-buyer markets of Asia. This paper in-troduces the dynamic investment plan assessment approach and discusses its benefits for the Asian markets.

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Saara Kujala - Contact

  Saara Kujala

   Development Manager, Ipp Development
   Wärtsilä Energy Solutions
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