High gas dependence for power generation in Thailand: The vulnerability analysis

Thailand uses 74% of its natural gas supply for power generation and 70% of its power comes from gas-based technology. High dependence on natural gas in power generation raises concerns about security of electricity supply that could affect competitiveness of Thai manufacturing and other industries at the global level. The effect of fuel dependence on security of electricity supply has received less emphasis in the literature. Given this gap, this research examines the economic impact of high dependence on natural gas for power generation in Thailand by analyzing the effect of changes in fuel prices (including fuel oil and natural gas) on electricity tariff in Thailand. At the same time, the research quantifies the vulnerability of the Thai economy due to high gas dependence in power generation. Our research shows that for every 10% change in natural gas price, electricity tariff in Thailand would change by 3.5%. In addition, we found that the gas bill for power generation consumed between 1.94% and 3.05% of gross domestic product (GDP) between 2000 and 2004 and in terms of GDP share per unit of energy, gas dependence in power generation is almost similar to that of crude oil import dependence. We also found that the basic metal industry, being an electricity intensive industry, is the most affected industry. Additionally, we find that volatility of gas price is the main factor behind the vulnerability concern. The research accordingly simulates two mitigation options of the problem, namely reducing gas dependence and increasing efficiency of gas-fired power plants, where the results show that these methods can reduce the vulnerability of the country from high gas dependence in power generation.     

Electricity capacity expansion in Thailand: An analysis of gas dependence and fuel import reliance

Electricity generation in Thailand is highly dependant on natural gas. Recent research has revealed that the Thai economy would become more vulnerable from high gas dependence in the power sector. This paper aims to assess the economic impact of gas dependence in power generation in the coming decades. To fulfil this objective, two scenarios of electricity capacity planning were developed and the results were analysed to understand the changes in gas dependence and the effects on import reliance. It is found that from 2011 to 2025, the average cost of natural gas for power generation will account for 2.41% of gross domestic product (GDP) while high oil price in international energy markets would push this cost to 2.97% of GDP. In addition, reliance on fuel imports for power generation, particularly natural gas and coal, is going to be another crucial concern to the security of energy supply as the costs of these imports during the planning horizon will increase significantly at an average rate of 6.78% per year.     

Changes in fuel input of electricity sector in Hong Kong since 1982 and their implications

Since 1982, the electricity sector in Hong Kong, which accounts for more than half of the total energy consumption, has undergone two major changes in terms of the type of fuels used for power generation. In 1982, it switched from oil to coal generation. In 1994, nuclear power was introduced; and in 1996, natural gas was imported for power generation. Given the dominance of electricity in the energy economy, these changes led to drastic modifications in the fuel mix and the geographical sources of energy supply for Hong Kong. This study analyses the rationale behind the above changes in fuel selection, the impact on the fuel mix and the geographical sources of energy supply, the security of energy supply, and the cost of power.     

Energy,environmental and economic effects of Renewable Portfolio Standards (RPS) in a Developing Country

This paper analyses the potential of renewable energy for power generation and its energy, environmental and economic implications in Pakistan, using a bottom up type of long term energy system based on the MARKAL framework. The results show that under a highly optimistic renewable portfolio standard (RPS) of 80%, fossil fuel consumption in 2050 would be reduced from 4660 PJ to 306 PJ, and the GHG emissions would decrease from 489 million tons to 27 million tons. Nevertheless, price of the electricity generation will increase significantly from US$ 47/MWh under current circumstances (in the base case) to US$ 86/MWh under RPS80. However the effects on import dependency, energy-mix diversity, per unit price of electricity generation and cost of imported fuels indicate that, it may not be desirable to go beyond RPS50. Under RPS50 in 2050, fuel consumption of the power sector would reduce from 21% under the base case to 9% of total fossil fuels supplied to the country. It will decrease not only GHG emission to 170 million tons but also will reduce import dependency from 73% under the base case to 21% and improve energy diversity mix with small increase in price of electricity generation (from US$ 47/MWh under the base case to US$ 59/MWh under RPS 50).     

计入峰谷分时上网电价的天然气发电竞争力分析

针对当前天然气发电燃料成本高、天然气供应不足而导致上网电价水平偏高,难以与煤电竞价的问题,提出考虑在发电侧实施峰谷分时上网电价机制,鼓励燃气电厂提高峰时段的上网电量,同时制定计入峰谷分时电价补贴标准来提高天然气发电的市场竞争力。算例结果表明,该措施明显提高了天然气发电的经济优势、气价的承受能力、与煤电平等竞价上网的竟争力。     

Renewable energy as a natural gas price hedge: the case of wind

Electric utilities use natural gas to fuel many of their power plants, especially those plants which provide electricity at peak and intermediate hours. Natural gas prices are highly volatile and have shown a general upward trend. Wind energy can provide a cost-effective hedge against natural gas price volatility or price increases. This conclusion is based on analysis of the costs of marginal conventional generation given the historical probability distribution of natural gas prices, the cost of wind energy, wind integration costs, transmission costs for wind energy, the capacity value of wind, and environmental benefits of wind energy for a hypothetical utility in the Southwestern United States. The efficacy of using wind energy as a hedge at a particular utility will depend on site specific conditions.     

Economic comparison between coal-fired and liquefied natural gas combined cycle power plants considering carbon tax: Korean case

Economic growth is main cause of environmental pollution and has been identified as a big threat to sustainable development. Considering the enormous role of electricity in the national economy, it is essential to study the effect of environmental regulations on the electricity sector. This paper aims at making an economic analysis of Korea's power plant utilities by comparing electricity generation costs from coal-fired power plants and liquefied natural gas (LNG) combined cycle power plants with environmental consideration. In this study, the levelized generation cost method (LGCM) is used for comparing economic analysis of power plant utilities. Among the many pollutants discharged during electricity generation, this study principally deals with control costs related only to CO₂ and NO₂, since the control costs of SO₂ and total suspended particulates (TSP) are already included in the construction cost of utilities. The cost of generating electricity in a coal-fired power plant is compared with such cost in a LNG combined cycle power plant. Moreover, a sensitivity analysis with computer simulation is performed according to fuel price, interest rates and carbon tax. In each case, these results can help in deciding which utility is economically justified in the circumstances of environmental regulations.     

Critical analysis of Thailand’s past energy policies towards the development of a new energy policy

This research originated from the researchers’ participation in the Thai senate Committee on Energy. It studies energy strategies and guidelines for Thailand’s energy development in line with the country’s potential, its energy resources as well as the needs of the Thai people with the ultimate goal to help bring about sustainable energy development. The research found that continuing dependence on natural gas crisis will pose a major threat with sustainable development of energy. According to its current power development plans, Thailand will likely increase its dependence on natural gas. The country should therefore diversify the use of energy sources since over-dependence on a single fuel will create risks to energy security, especially security of the fuels used in the generation of electricity. It is imperative to increase promotion of measures for energy conservation and energy efficiency, including measures to reduce fuel consumption and switching to renewable energy.     

Power sector scenarios for Thailand: An exploratory analysis 2002–2022

Power sector scenarios for Thailand are constructed in this paper to represent the range of opportunities and constraints associated with divergent set of technical and policy options. They include Business-As-Usual (BAU), No-New-Coal (NNC), and Green Futures (GF) scenarios over a 20-year period (2002–2022). The results from the BAU scenario show that fossil fuels will continue to dominate electricity generation in Thailand during the study period. Similar results are obtained for the NNC option, although the dependence shifts from coal and oil towards natural gas-based power generation. This may represent a better environmental pathway but an all out shift from coal to natural gas is likely to increase Thailand's dependence on imported fuel, making it more vulnerable to unstable global oil and gas prices. The GF scenario offers a more optimistic route that allows the country to confront its energy security dilemma whilst fulfilling its environmental commitments by giving renewable energy technologies a prominent place in the country's power generation mix. Over the study period, our result showed little difference between the three scenarios in terms of financing new generation plants despite an early misgiving about the viability of an ambitious renewable energy programme. This paper also goes beyond the financial evaluation of each scenario to provide a comparison of the scenarios in terms of their greenhouse gas emissions together with the comparative costs of emissions reductions. Indeed, if such externalities are taken into account to determine ‘viability’, the GF scenario represents an attractive way forward for the Thai power sector.     

Analysis of imperfect competition in natural gas supply contracts for electric power generation: A closed-loop approach

The supply of natural gas is generally based on contracts that are signed prior to the use of this fuel for power generation. Scarcity of natural gas in systems where a share of electricity demand is supplied with gas turbines does not necessarily imply demand rationing, because most gas turbines can still operate with diesel when natural gas is not available. However, scarcity conditions can lead to electricity price spikes, with welfare effects for consumers and generation firms. We develop a closed-loop equilibrium model to evaluate if generation firms have incentives to contract or import the socially-optimal volumes of natural gas to generate electricity. We consider a perfectly-competitive electricity market, where all firms act as price-takers in the short term, but assume that only a small number of firms own gas turbines and procure natural gas from, for instance, foreign suppliers in liquefied form. We illustrate an application of our model using a network reduction of the electric power system in Chile, considering two strategic firms that make annual decisions about natural gas imports in discrete quantities. We also assume that strategic firms compete in the electricity market with a set of competitive firms do not make strategic decisions about natural gas imports (i.e., a competitive fringe). Our results indicate that strategic firms could have incentives to sign natural gas contracts for volumes that are much lower than the socially-optimal ones, which leads to supernormal profits for these firms in the electricity market. Yet, this effect is rather sensitive to the price of natural gas. A high price of natural gas eliminates the incentives of generation firms to exercise market power through natural gas contracts.     

Energy security vs. climate change: Theoretical framework development and experience in selected EU electricity markets

Electricity generation in different countries is based on a variety of fuel mixes compromising solid fossil fuels, oil, natural gas, nuclear and renewable energy sources. While in the past, national energy agendas have directed the optimal utilisation of domestic resources as a means to achieve supply security, today's environmental debates are influencing the electricity fuel mix in new directions. In this paper we examine the electricity sectors of Germany, Greece, Poland and the UK in an attempt to identify the policy and technology choices implemented in each country. The country selection is deliberately made to facilitate an extended overview of national agendas, varying domestic energy resources and industrialisation levels but still within the common EU framework. The focus is placed on policies related to two objectives, climate change mitigation and improving electricity supply security. The theoretical framework developed provides the possibility to assess the electricity sector independence at a national level using a multi-parametric analysis of the fuel mix data. Through a comparative assessment of the knowledge gained in different countries the authors provide insights and suggestions that allow for an improved understanding of the trade-offs and synergies that various policy options may introduce.     

Coproduction of district heat and electricity or biomotor fuels

The operation of a district heating system depends on the heat load demand, which varies throughout the year. In this paper, we analyze the coproduction of district heat and electricity or biomotor fuels. We demonstrate how three different taxation scenarios and two crude oil price levels influence the selection of production units to minimize the district heat production cost and calculate the resulting primary energy use. Our analysis is based on the annual measured heat load of a district heating system. The minimum-cost district heat production system comprises different production units that meet the district heat demand and simultaneously minimize the district heat production cost. First, we optimize the cost of a district heat production system based on the cogeneration of electricity and heat with and without biomass integrated gasification combined-cycle technology. We considered cogenerated electricity as a byproduct with the value of that produced by a condensing power plant. Next, we integrate and optimize different biomotor fuel production units into the district heat production system by considering biomotor fuels as byproducts that can substitute for fossil motor fuels. We demonstrate that in district heating systems, the strengthening of environmental taxation reduces the dependence on fossil fuels. However, increases in environmental taxation and the crude oil price do not necessarily influence the production cost of district heat as long as biomass price is not driven by policy measures. Biomotor fuel production in a district heating system is typically not cost-efficient. The biomotor fuels produced from the district heating system have to compete with those from standalone biomotor fuel plants and also with its fossil-based counterparts. This is also true for high oil prices. A carbon tax on fossil CO₂ emissions based on social cost damage will increase the competitiveness of biomass-based combined heat and power plants, especially for BIGCC technology with its high electricity-to-heat ratio.     

Life cycle energy,emissions and cost inventory of power generation technologies in Singapore

Singapore is one of the most industrialised and urbanised economies in South-East Asia. Power supply is an important sub-system in its economy and heavily reliant on imported oil and natural gas. Due to its geographical area, clean/renewable energy sources for power generation are limited. At the same time, in its deregulated electricity market, the adoption of clean/renewable based power generation technology may be hindered by a market pricing mechanism that does not reflect externality costs. For a sustainable power supply, there is a need to change the conventional appraisal techniques. Life cycle assessment (LCA) and life cycle cost analysis (LCCA) are good tools to quantify environmental impacts and economic implications. LCA and LCCA are performed for centralised and distributed power generation technologies in Singapore, namely, oil and Orimulsion-fired steam turbines, natural gas-fired combined cycle plant, solar PV and fuel cell systems. A life cycle energy, emission and cost inventory is established. The results are discussed from the perspectives of fuel security, environmental protection and cost effectiveness of future power generation strategies for Singapore.     

Fuel cost uncertainty,capacity investment and price in a competitive electricity market

This paper studies the effect of natural-gas fuel cost uncertainty on capacity investment and price in a competitive electricity market. Our model has a two-stage decision process. In the first stage, an independent power producer (IPP) builds its optimal capacity, conditional on its perceived uncertainties in fuel cost and electricity demand. In the second stage, equilibrium prices and quantities are determined by IPPs competing in a Cournot market. Under the empirically reasonable assumption that per MWh fuel costs are log-normally distributed, we find that a profit-maximizing IPP increases its capacity in response to rising fuel cost volatility. Consequently, the expected profit of the IPP and expected consumer surplus increase with volatility, rejecting the hypothesis that rising fuel cost uncertainty tends to adversely affect producers and consumers. Expected consumer surplus further increases if the IPP hedges the fuel cost risk. However, the IPP's optimal strategy is not to do so. The policy implication of these results is that the government should not intervene to reduce the price volatility of a well-functioning spot market for natural gas, chiefly because such intervention can have the unintended consequence of discouraging generation investment, raising electricity prices, and harming consumers.     

Investigating the need of nuclear power plants for sustainable energy in Iran

Over the decades, the consumption of all types of energy such as electricity increased rapidly in Iran. Therefore, the government decided to redevelop its nuclear program to meet the rising electricity demand and decrease consumption of fossil fuels. In this paper, the effect of this policy in four major aspects of energy sustainability in the country, including energy price, environmental issues, energy demand and energy security have been verified. To investigate the relative cost of electricity generated in each alternative generator, the simple levelized electricity cost was selected as a method. The results show that electricity cost in fossil fuel power plants presumably will be cheaper than nuclear. Although the usage of nuclear reactor to generate power is capable of decreasing hazardous emissions into the environment, there are many other effective policies and technologies that can be implemented. Energy demand growth in the country is very high; neither nuclear nor fossil fuel cannot currently cope with the growth. So, the only solution is rationalizing energy demand by price amendment and encouraging energy efficiency. The major threats of energy security in Iran are high energy consumption growth and economic dependency on crude oil export. Though nuclear energy including its fuel cycle is Iran's assured right, constructing more nuclear power plants will not resolve the energy sustainability problems. In fact, it may be the catalyst for deterioration since it will divert capital and other finite resources from top priority and economic projects such as energy efficiency, high technology development and energy resources management.     

Renewable energy: Externality costs as market barriers

This paper addresses the impact of environmentally based market failure constraints on the adoption of renewable energy technologies through the quantification in financial terms of the externalities of electric power generation, for a range of alternative commercial and almost-commercial technologies. It is shown that estimates of damage costs resulting from combustion of fossil fuels, if internalised into the price of the resulting output of electricity, could lead to a number of renewable technologies being financially competitive with generation from coal plants. However, combined cycle natural gas technology would have a significant financial advantage over both coal and renewables under current technology options and market conditions. On the basis of cost projections made under the assumption of mature technologies and the existence of economies of scale, renewable technologies would possess a significant social cost advantage if the externalities of power production were to be “internalised”. Incorporating environmental externalities explicitly into the electricity tariff today would serve to hasten this transition process.     

Biogas derived from municipal solid waste to generate electrical power through solid oxide fuel cells

Depleting fossil fuels and the pollution resulting from their consumption indicate an urgent need for clean and dependable alternatives such as renewable energies. Biomass is a free and abundant source of renewable energy. Municipal solid waste (MSW) as one of the main categories of biomass has always been an issue for metropolitan cities. It has, however, a high potential for biogas production. In this study, the technical and economic aspects of generating electrical power through solid oxide fuel cells (SOFCs) powered by injecting biogas derived from Tehran's MSW, as a case study, are investigated. The main objectives of the current study are to identify the power generation capability of the process and find out if it can result in a competitive energy resource. The total amount of obtainable methane through anaerobic digestion of MSW and then the achievable power generation capacity by using the obtained biogas are computed using the electrochemical relations inside the SOFC. The economic calculations are carried out to estimate the final price of the generated electricity, taking into account the major capital and ongoing costs of the required equipment. The effect of variations of MSW composition on the power generation capability and final electricity price is also studied. Moreover, the application of a gas turbine (GT) with the SOFC as a hybrid SOFC–GT system to recover the produced heat by SOFC and its effect on the power generation capability and the final electricity price are investigated. Results indicate that around 997.3 tons day^?1 biomethane can be generated using Tehran's MSW. By using the SOFC, the produced biogas can generate 300 MW_AC electrical power with a final cost of Depleting fossil fuels and the pollution resulting from their consumption indicate an urgent need for clean and dependable alternatives such as renewable energies. Biomass is a free and abundant source of renewable energy. Municipal solid waste (MSW) as one of the main categories of biomass has always been an issue for metropolitan cities. It has, however, a high potential for biogas production. In this study, the technical and economic aspects of generating electrical power through solid oxide fuel cells (SOFCs) powered by injecting biogas derived from Tehran's MSW, as a case study, are investigated. The main objectives of the current study are to identify the power generation capability of the process and find out if it can result in a competitive energy resource. The total amount of obtainable methane through anaerobic digestion of MSW and then the achievable power generation capacity by using the obtained biogas are computed using the electrochemical relations inside the SOFC. The economic calculations are carried out to estimate the final price of the generated electricity, taking into account the major capital and ongoing costs of the required equipment. The effect of variations of MSW composition on the power generation capability and final electricity price is also studied. Moreover, the application of a gas turbine (GT) with the SOFC as a hybrid SOFC–GT system to recover the produced heat by SOFC and its effect on the power generation capability and the final electricity price are investigated. Results indicate that around 997.3 tons day^?1 biomethane can be generated using Tehran's MSW. By using the SOFC, the produced biogas can generate 300 MW_AC electrical power with a final cost of $0.178 kWh^?1. By using the hybrid SOFC–GT, the electrical power capacity is increased to 525 MW_AC, and the final electricity cost drops to $0.11 kWh^?1, which indicates its competitiveness with other common energy resources in the near future, especially by considering different governmental subsidy policies that support renewable energy resources. The considerable environmental benefits of the proposed procedure, from both MSW management and CO₂ emission reduction points of view, make it a promising sustainable energy resource for the future. Copyright © 2016 John Wiley & Sons, Ltd.     

A review on the pattern of electricity generation and emission in Indonesia from 1987 to 2009

The level of energy demand plays a fundamental role in today's society. It is a vital input in supporting the physical and social development of a country, as well as national economic growth. Looking at the energy demand scenario in present time, the global energy consumption is likely to grow faster than the population growth across the world. Like any other energy sectors, electricity demand has significantly increased in Indonesia over the past years. Currently, there are six types of power plants in the country. The main sources of electrical energy are generated using the gas turbines, steam turbines, combined cycles, geothermal, diesel engine and hydro-powers. Most of Indonesia's power plants are using fossil fuel for electricity generation. Substantial growth in domestic energy demand, however, would be a major challenge for Indonesia's energy supply sector in the future. Over the past decade, thermal power plants generated about 86.69% of electricity and about 13.31% was generated by renewable energy such as hydro-power and geothermal in 2009. The purpose of this study is to chronicle and show a clear view of 23 years trend of Indonesia's electricity generation industry. Furthermore, the capacity of power generation installed and electricity generation from 1987 to 2009 has been gathered for this study. The total pollutant emissions and emission per unit electricity generation for each type of power plants have been also calculated using emission factors. Also, the pattern of electricity generation and emission has been presented. The results show that the implementation and contribution of combined cycle power plants should be increased together with renewable energy and natural gas which are recommended to reduce greenhouse gas emission.     

Evaluation of post‐Fukushima Japanese electricity strategies: A stochastic simulation model

Japan has not settled on a coherent long‐term electricity strategy for its post‐Fukushima reality. In this analysis, a stochastic electricity sector simulation model is formulated and used to evaluate alternative strategies prescribing different generation mixes for 2050. The generation mix evolves deterministically, demand is endogenous, and social cost of carbon is randomly sampled. The model treats fossil fuel prices and advanced technology cost dynamics stochastically. Monte Carlo simulation produces a distribution of net present social cost for each strategy, and the alternatives are assessed based on the median (expected cost) and standard deviation (risk). Aggressively expanding renewables is a promising strategy; it has the lowest expected cost and moderate risk. Whether this is preferred to substantial nuclear generation is sensitive to parameter assumptions, but a general finding is robust: severely limiting nuclear generation and substituting liquefied natural gas (LNG) and other fossil fuels is costly and risky. Principal component analysis confirms the vulnerability of such strategies to LNG price and social cost of carbon uncertainty. Japan's dominant short‐term response to Fukushima has been a dramatic decrease in nuclear generation coupled with increased use of fossil fuels, particularly LNG. This study suggests that continuing this approach would constitute a poor long‐term Japanese electricity strategy. Copyright © 2014 John Wiley & Sons, Ltd.     

Using natural gas generation to improve power system efficiency in China

China's electricity sector faces the challenge of managing cost increases, improving reliability, and reducing its environmental footprint even as operating conditions become more complex due to increasing renewable penetration, growing peak demand, and falling system load factors. Addressing these challenges will require changes in how power generation is planned, priced, and dispatched in China. This is especially true for natural gas generation, which is likely to play an important role in power systems worldwide as a flexible generation resource. Although natural gas is commonly perceived to be economically uncompetitive with coal in China, these perceptions are based on analysis that fails to account for the different roles that natural gas generation plays in power systems—baseload, load following, and peaking generation. Our analysis shows that natural gas generation is already cost-effective for meeting peak demand in China, resulting in improved capacity factors and heat rates for coal-fired generators and lower system costs. We find that the largest barrier to using natural gas for peaking generation in China is generation pricing, which could be addressed through modest reforms to support low capacity factor generation.