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WORLDEBANK
TECHNICALPAPERtNUMBER.106
iNDUSTRYAND ENERGYSERIES
\A/TPIO
H989
A~Us
Demand and Netback Values

for Gas in Electricity
Neil Pinto and John Besant-Jones
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Demand and Netback Values for Gas in Electricity
Industhy and Energy Series

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WORLDBANKTECHNICALPAPERNUMBER106
INDUSTRYAND ENERGYSERIES
Demand and Netback Values

for Gas in Electricity
Neil Pinto and John Besant-Jones
The World Bank

Washington, D.C.
Copyright 1989
The International Bank for Reconstruction
and Development/THE WORLD BANK
1818H Street, N.W.
Washington, D.C. 20433,U.S.A.
All rights reserved
Manufactured in the United States of America
First printing August 1989
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The World Bank, 66, avenue d'Iena, 75116Paris, France.
Neil Pinto is group manager at Kennedy & Donkin Power Systems, Godalming, Surrey,
United Kingdom, and a consultant to the World Bank's Industry and Energy Department.
John Besant-Jones is a senior energy economist in the same department of the Bank.
Libraryof Congress Cataloging-in-PublicationData
Pinto, Neil, 1954Demand and netback values for gas in electricity / Neil Pinto and
John Besant-Jones.
p.
cm. -- (World Bank technical paper, ISSN 0253-7494 ; no.
106. Industry and energy series)
ISBN 0-8213-1280-4
1. Gas, Natural--Prices. 2. Gas power plants.
I. Besant-Jones,
John
II. Title. III.
Series: World Bank technical paper
no. 106. IV. Series: World Bank technical paper. Industry and
energy series.
HD9581.A2P56 1989
333.8'233--dc2O
89-16746
CIP
ABSTRACT
This paper updatesan analysisof relationships

betweenpriceand demandfor
naturalgas in power generationthat was carriedout in 1982 in a greatly
differentfuel priceenvironment.The two analysesshow the effecton these
relationshipsof large declines in oil and coal prices and changes in
of powergeneratingplant.
capitalcosts and fuel efficiencies
The paper also presentsthe convenientbut robustmethodologydevelopedto
siimplify
the analysis. This methodology
may be used to derivethe netback
fuel costs and the lower
valuesof gas for powerfrom savingsin alternative
capitalcosts of gas generatingplant. It also capturesthe influencesof
investmentlumpinessand the dynamiccharacterof powersystems.
The methodology
determinesthe quantityof gas that would be demandedfor a
trialgas price that representsa powerproducer'swillingnessto pay under
a long-termgas supplycontract. The analysisshows that the pattern (as
distinctfrom the level)of the relationships
betweenprice and demand for
using gas in a specific power system is not sensitiveto changes in
competingfuel prices despitenumerousinfluentialfactors. Furthermore,
which are
tlhere
appearsto be two distinctcomponentsto this relationship
it is
relevantto the strategicplanningof gas development.In particular,
usuallypossibleto identifya singlepricethatreflectsa powerproducer's
willingnessto pay for a significant
proportionof power system-dependent
demandfor gas. This featureprovidesthe scope for identifying
a value of
gas for power that is analogousto the netbackvalue for gas in non power
uses. Thus, it can be used to screenoptions for gas use. This feature
simplifies considerablythe process of planning strategies for gas
utilization
that involvepower.
i~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~:f:
::
- vii
CONTENTS
PREFACE
.....................
1.
INTRODUCTION
AND SUMMARY
.....................
1.1 Introduction
.....................
1.2
2.
3.
4.
Termsof Reference
......................................
1
1.3 Summary
.......................
METHODOLOGY.
2.1 Introduction.
2.2 Approach.
2.3 Computer
Program.
2.4 Generation
Planning.
5
5
5
6
DATAANDASSUMPTIONS.
3.1 Introduction.
of Systems
Modelled.
3.2 Description
3.3 Generating
PlantDetails
.10
3.4 FuelPrices
.11
3.5 Characteristics
of Converted
Plants
.12
9
9
RESULTS
.15
4.1
4.2
4.3
4.4
4.5
5.
ix
Introduction
.15
SystemA.
SystemB.
SystemC.
Comparison
with1982results
.23
15
18
21
CONCLUSIONS
.26
.26
5.1 Introduction
5.2 Generalised
Conclusions
.26
5.3 Changessince1982
.27
Appendix
A
BasicDataandAssumptions
.....................
68
- viii
LISTOF TABLES
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
A.1
A.2
A.3
A.4
A.5
A.6
Annualgas consumption
for varyinggas prices- SystemA..........28
29
Plantingprogrammesfor SystemA..................................
31
Energygenerationby gas firedplants- SystemA..................
for varyinggas prices- SystemB..........32
Plantingprogrammesfor SystemB..................................
33
37
Energygenerationby gas firedplants- SystemB..................
for varyinggas prices- SystemC..........38
Plantingprogrammesfor SystemC..................................
39
Energygenerationby gas firedplants- SystemC..................
42
Comparisonbetweenannualdiscountedaveragegas consumptions
calculatedin November1982reportand currentvalues
.............
43
Inheritedplantmix...............................................
69
Assumedretirementdates for inheritedplants- SystemB..........70
Committedplant - SystemB........................................
71
72
Assumedplantcharacteristics
.....................................
............................................
77
Fuel price assumptions
Costsof plantconversionto gas firing
...........................
79
LIST OF FIGURES
3.1
3.2
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
4.12
4.13
4.14
4.15
4.16
4.17
4.18
4.19
4.20
4.21
4.22
Annualfuel costs for SystemsA and C.............................

13
Annualfuel costs for SystemB
..
14
Gas demandcurvefor SystemA
..
44
Undiscounted
gas demandcurvefor SystemA........................
45
for leastcost programmes- SystemA ... 46
Gas demandcurvefor SystemA - 1990..............................
47
48
49
50
Gas demandcurvefor SystemB
..
51
52
Undiscounted
gas demandcurvefor SystemB........................
for leastcost programmes- SystemB ... 53
Gas demandcurvefor SystemB - 1990..............................
54
55
56
57
Gas demandcurvefor SystemC
..
58
Undiscounted
gas demandcurvefor SystemC........................
59
for leastcost programmes- SystemC ... 60
Gas demandcurvefor SystemC - 1990.61
ComparisonbetweenNovember1982 reportand currentdemandcurve SystemA
..
65
4.23 ComparisonbetweenNovember1982reportand currentdemandcurve 66
SystemB
..
4.24 ComparisonbetweenNovember1982reportand currentdemandcurve SystemC
..
67
ix
PREFACE
Backgroundand Objectives
Mary developingcountriespossessnaturalgas resources,but developmentis
often constrained
by limitedmarketopportunities.The power sectoris one
of the largestpotentialusers of gas in these countries,and it is an
importantsource of benefits to justify the initial investmentin gas
infrastructure.
This Reportupdatesthe analysisof price/demand
relationships
for natural
gas in power generationpresentedin Energy Dept Paper No. 18 entitled
and publishedin November1984.
"Valueof NaturalGas in PowerGeneration"
The former analysiswas undertakenby the British consultingengineers
Messrs.Kennedy& Donkinin 1982 and incorporated
the then prevailingprice
assumptionsfor capital plant and fuels. The same consultantswere
commissioned
in 1988by the Industryand EnergyDepartmentof the World Bank
to re-examinethese relationships
under the greatlydifferentfuel price
environmentfor power supplyof the late 1980s. This Reportpresentsthe
resultsof this analysisand alsogivesa fulldescription
of the convenient
but; robust methodologydeveloped by the consultantsto simplify the
analysis.
The two studiesshow the impactof three major changesin power economics
between1982 and 1988 that affectgas values for power. The first is the
declineof about60% in real international
oil prices from an historically
high level to one of the lowest recordedlevels. A similar decline of
neiarly
50% has occurredin real coal prices,the main competitorto oil and
gas for thermalpower generation. Projections
of fuel prices to the year
2000 have also been loweredsubstantially.The second is the change in
relativecapitalcostsbetweengeneratingplant types,and the third is the
improvements
in fuel use efficiencyfor powergeneration.The 1982 and 1988
representextremesof the range of the economic
price/demand
relationships
vaiue of gas for power. In particular,they show that gas values are
sensitiveto oil and coal pricemovements.
Limitations
of AverageNetbackValues
In a conventional
analysisthe initialstageof planningthe development
of
a gas resourceis usuallya processof screeninga wide range of possible
uses on the basis of the averagenetbackvalue in each use. This value is
calculatedfrom the differencebetween the discountedpresent values of
annualproductrevenuesand costswith zero cost beingattributedto the gas
quantitysupplied,dividedby the discountedpresentvalueof the annualgas
quantities. The competinguses for gas are then rankedby averagenetback
valuesto identifythose useswhichwarrantdetailedconsideration.
However,the averagenetbackapproachis unreliablefor screeninggas using
power projects. This is because the approach does not reflect the
multiplicityof a values for gas in power production,i.e. the price
elasticityof powerdemandfor gas is not generallyzero. Furthermore,
the
netbackapproachyieldsoverestimates
of power demandfor gas undera least
cost power developmentscenario, since the approach is based on the
assumption
of zerogas costfor a quantity
linkedto gas availability.
Nor
is averagenetbackvalue an appropriate
indicator
of a power producer's
willingness
t-opay for gas sincethisvaluediffersfromthe marginal
value
of gas to the powerproducer.
The marginalvalue varieswith the patternof a gas use for power
production.This patternchangessubstantially
over time,can be highly
irregularand, in the case of predominantly
hydropowersystems,is
of power
unpredictable.
Thisfeature
arisesfromchangesin the utilisation
generation
planttypesand the variablelevelsof capacityutilisation
of
eachplanttype. The main causesof thispatternare variation
in system
loadbetween
dailypeakand baseloadperiods,
seasonal
variations
in system
output,and the changein plantmix of a powersystem
loadand hydropower
due to the commissioning
of new plantor the retirement
of old plant.
Investment
in gas usingpowerplantcan even be justified
for a periodin
whichit will havevirtually
zerodemandfor gas, sincethe relatively
low
capitalcostsof this plant type make it attractive
as systemreserve
capacity.The possibility
of converting
existingoil-fired
powerplantto
gas usageand the installation
of new plantthatcan operateon bothoil and
gas are additional
complications
foranalysing
the valueof gas in power.
use of gas in a power
Thusfor example,the marginalreturnsto increasing
systemat a giventimewilldiminish
as moregas is usedfor the lowervalue
base load aftermeetingthe relatively
smalldemandfor the highervalue
over
peakload. Alternatively,
the marginalreturnsto gas couldincrease
timeas systemgrowthallowsgas to be usedat leastcost in combined
cycle
plantwhichhas greaterfuel efficiency
but higherunit capitalcost than
gas-fired
turbines.
Advantages
of Price/Demand
Relationship
Reliable
estimates
of the valuesof gas for powercan be obtainedfrom the
compares
powersystemdevelopment
price/demand
relationship.
Thisapproach
programmesthat involvegas with those that do not for a particular
development
of systemloads.It thus derivesthe valuesof gas savingsin
plant
alternative
fuelcostsand the lowercapitalcostsof gas generating
relativeto the costsof oil, coal and hydro-based
plant. It does not
reflectthe economicvalueof any incremental
demandfor powerthat could
arisefrom a reduction
in powerproducer's
supplycostsif gas priceswere
set at lowerlevelsthan thesevalues. It alsocaptures
the influences
of
investment
lumpiness
and the dynamiccharacter
of powersystems. Undera
specificannualsystemloadingand plantoperating
mix, the relationship
usuallytakes the form of a seriesof discretesteps in the quantity
demandedat particular
switching
gas prices. In otherwords,the demand
curve consistsof discontinuous
segmentswith zero or infiniteprice
elasticities.
The valuesof switching
gas pricesare particularly
sensitive
to the pricesof the majorcompetitor
fuelsfor powergeneration.
The demandfor gas is expressed
as a seriesof annualquantities
consistent
withthe leastcostdevelopment
programfor a powersystemat a particular
gas price. This pricerepresents
a levelof willingness
to pay by a power
producerunder a long term supplycontract. The sum of the annual
quantities
demandedat a particular
gas pricein a givenpowersystemgives
the totalquantity
of gas thatwouldbe demanded
at thisprice. The demand
is computed
for various
gas pricesto produce
the relationship.
xi
The gas price/demand

relationship
for power, adjustedfor costs of
delivering
gas to powerplants,is analogous
to marginalnetback
valuesfor
specified
quantities
of gas for non-power
uses. Analysis
of thesetwo sets
of valuesgivesthe combination
of useswhichmaximises
the economic
value
of the totalamountof available
gas. The relationship
is alsorelevant
to
setting
the termsfor gas supply.
Thisapproach
alsoprovidesa soundmethodfor screening
powerusesfor gas
with non-poweruses. It is usuallypossibleto identifyfrom the
price/demand
relationship
a single gas price that reflectsa power
producer's
willingness
to pay for a largeproportion
of systemdependent
demand,as outlined
below. This pricecan be usedwith netbackvaluesof
gas in non-power
usesfor the screening
process.
Proposed Methodology
The computational
effortfor derivinggas price/demand
relationships
for
powercan be extremely
heavywithrigourous
optimisation
of leastcostpower
development
programs.The methodology
proposedin this reportderivesthis
relationship
with considerably
less effort. This simplification
is
justifiedbecausethe gas price/demand
relationship
is not significantly
sensitive
to the minorcompromises
in the methodology
for programming
power
systemdevelopment.
The methodology
has been appliedin this Reportto case studiesfor three
powersystems. Thesesystemswere selectedto illustrate
varioustypical
features
of gas demandfor power,particularly
itsrelationships
withsystem
size,differentcompetingfuel (distillate,
residualoil and coal),the
impactof inherited
generating
plant,the conversion
of thispowerplantto
gas firing,the influenceof hydropowerin the power system,and the
potential
for advancedcommissioning
of gas-firedplantand retirement
of
plant. The methodology
can alsoaccommodate
readilyan escalation
oil-fired
in the realpriceof gas, althoughthiswas omittedfrom the case studies
for simplification.
Parameters
for StrateQic
Gas Planning
The casestudies
showthatthe demandfor gas forpowerat a givengas price
is highlyspecificto the characteristics
of the power systemand to
full analysisis
competitor
fuel prices. Thus for powersystemplanning,
thisrelationship
reliably.However,
the casestudies
required
to establish
the importantparametersfor
reveal a useful featurefor identifying
strategicgas developmentplanning. The underlyingshape of the
price/demand
curve,as distinctfrom the level,does not appearto be
sensitiveto the wide range of competitorfuel prices evaluated.
Furthermore,
thereappearsto be two distinctcomponents
to gas demandfor
curve. The
powerthat arise from the segmentation
of the price/demand
for
each
of
these
components
relevant
parameters
are the critical
gas price
and the growthin gas demandoverthe longtermat eachof thesegas prices.
The casestudies
clearlyillustrate
thisfeature.
a baseload
One of the two majorcomponents
of totalgas demandrepresents
for a largeproportion
of totalgas demand
demand. This component
accounts
low price,and thusis critical
to the economics
of gas
but at a relatively
xii-
for power use. It can thus be used

investments
productionand transmission
correspondsto averagenetback
that
sector
power
the
for
parameter
the
as
The other componentrepresents
process.
screening
a
in
uses
other
in
value
small proportionof the total
a
for
accounts
which
load
peak
equivalent
an
componentinfluencesthe
This
price.
high
relatively
a
at
but
demand
in
sites and investments
plant
power
at
facilities
storage
gas
of
economics
deliverycapacitydedicatedto satisfyingpeak gas demandsof a group of
proximategas users.
INTRODUCTION
AND SUMMARY
Li
Introduction
This report is submittedin accordancewith the terms of reference
for a study into the value of naturalgas in power systems.The
terms of reference(detailedbelow) required Kennedy and Donkin
PowerSystems (henceforth
referredto as the Consultant)to update
a previousstudytakinginto consideration
changesin capitalcosts
and efficienciesof generatingplant, and using current and the
most recentforecastof fuel prices.
Previous studies were carried out by Kennedy and Donkin in
September 1982 and November 1982. The reports were entitled
"EconomicValue of NaturalGas in Power Generation"and "Economic
Value of NaturalGas in Power Generation(Supplementary
Report)".
The reports are referredto as the September1982 Report and the
November1982 Reportrespectively.
The Consultantwas requiredto producedemand curves for prototype
powersystemswhich vary in terms of plantmix and size.The demand
curve for gas is a functionof systemspecificfactorssuch as the
inheritedplant mix (i.e.the relativeproportionsof hydro,coalfired thermal plant, oil-firedthermalplant, gas turbinesetc.),
detailsof futureplant mixes, generatingunit sizes and rate of
growth in demandfor electricity.
The same threepower systemswere
used for the analysisas in the November1982 Report.
Comparisons
of the resultsof the analysisin this reportwith the
results of the November 1982 Report give an indicationof the
considerable
variationin economicvaluesfor gas in power that can
occur over a few years, and the links betweengas values,oil and
coal prices.
1.2
Terms of Reference
The termsof referencefor the studyare as follows:
1.
The Consultantshallassessthe demand for naturalgas in

power generation. The methodology
to be adoptedfor this
work will be basedon that used in two reportsproducedby
the Consultantfor the World Bank in 1982.
2.
The assumptions
made regardingfuel prices and generating
plant capitalcosts and efficiencies
will be updated to
1988 values. All other assumptionscontained in the
November1982 Reportwill remainunchanged,exceptthat a
notional depletionpremiumwill not be included in gas
priceprojections.
In particulartheseassumptionsinclude
detailsof inheritedplant,load forecastsetc.. The least
cost generationdevelopmentprogrammeswill, however,be
reoptimisedto take accountof the changesto the basic
data.
2-
1.3
3.
Three prototypepower systemswill be optimisedusing

computer
modelsto determine
the leastcostplantmix for
different
assumedpricesof naturalgas, and thencethe
powersystemswill
quantities
of gas whichthe optimised
utilise
at eachpriceof gas.
4.
The gas pricesto be assumedwill be $1/MMBTU,

$2/MMBTU,
and $6/MMBTU.
$3/MMBTU,
$4/MMBTU,
$5/MMBTU,
5.
A calorific
valuefor the gas of 1000 BTU/CFTwill be
assumed.
6.
The timeframe
for the studywillbe 20 years.
7.
The rate of growthof demandfor electricity

shall be
assumedto be 7% per annumfor all threepowersystems.
The effectof a lowergrowthrateon the resultsshallbe
considered.
8.
The power systems'demandfor gas shall be calculated

assumingan investment
programmewhich allowsfor the
of inherited
capacity.
conversion
to gas-firing
9.
Optimisation
of the power systemswill be based on a
discount
rateof 10%per annum.
10.
The Consultant
shallnot optimisegeneration
plantunit
sizes.
11.
A reporton the analysisshallbe completedby 30 June

1988.
Summary
In the reportsfor the previous
studyundertaken
by the Consultant,
to estimatethe economicvalueof gas
a methodology
was developed
in the electricpower sector. Althoughthis method6logyis
complexin termsof the amountof analysis,
it is
computationally
more straightforward
than the fullmethodology
associated
with the
determination
of leastcost development
analysis(whichhas not
been used in this study).The methodology
adoptedwas, however,
sufficiently
complete
to fulfilthe objective
of the study,namely
to estimate
gas consumption
undera rangeof gas prices.
The 1982studiesformedpartof a set to estimatethe valueof gas
in a numberof sectors.Other studiesincludeduse of gas as a
use.
feedstock
for a fertiliser
plant,domesticuse and industrial
Many otherpossibleuses for gas exist.In the MiddleEast,for
of aluminium.
Liquefaction
example,gas is used in the production
In
of gas is also possiblefor exportto developedcountries.
of gas in the powersector,due
determining
the optimalallocation
consideration
needsto be givento thesealternative
usesfor gas.
An overalldemand/price
curve coveringall sectorscan then be
producedwhich can be matchedagainsta supply/cost
curve.The
demand/price
curvewillnot be smoothand will includea numberof
- 3 -
discontinuities.
With a supplycurvealso basedon the economic
costsof exploitation
of the gas reserves(or costsof import),
a
firstestimate
can be madeof the overall
economicpriceof gas in
the countryin question.
This then enablesidentification
of the
optimalallocation
of gas between
the varioussectors.
Thisreportis presented
in a totalof fivesections.
It is written
so as to be read withoutrecourseto the September1982 and
November1982 Reports,and thereforethe underlying
principles
behindthemethodology
adopted
are restated.
Inevitably,
however,
a
numberof references
stillremain,especially
comparison
of key
data such as fuel prices, and consequentchanges in gas
demand/price
characteristics.
In Section
2 the methodology
and computer
modelling
procedures
used
in the studyare discussed.
Section3 presentsthe data base used for the study,including
detailsof the powersystemsmodelled,
assumptions
on generating
plantcostsand operational
parameters
and fuelprices.
In Section4 the resultsof the studyare given.Gas demand/price
curvesfor all three systemsare presented.
In additionto the
overallcurves,the demand/price
curvesin fourspecific
yearsare
examined
and the reasons
for the shapesof the curvesanalysed.
The
sensitivity
of the resultsto loadgrowthare examinedfor one of
the systems.In conclusion
the differences
betweenthe shapesof
the curvesas derivedand those producedin the November1982
Reportare discussed.
The finalsectionof the reportpresentsthe conclusions
to the
study. The mainconclusions
of the studyare reproduced
below:
1.
For all powersystemsthereis a priceof gas belowwhich

demandis relatively
inelastic.
Thisvalueis a function
of systemspecific
variables
suchas the available
fuels,
the mix of generating
plantetc.. For the threesystems
investigated
this critical
priceof gas was foundto lie
in the range $2/MMBTUand $3.5/MMBTU.
These critical
priceswere foundto be independent
of the rateof load
growth.
2.
As the priceof gas varies,the demandfor gas does not

changeat a constantrate,but rathermoves througha
seriesof discontinuities.
3.
The preciseshapeof the demand/price

curve is system
specific.It can only be determinedusing generation
planning
techniques
wherebythe operation
of the systemis
modelledover a twentyto thirtyyear periodunder a
numberof gas pricescenarios.
4.
The discontinuities
in the gas price/demand
relationships
occur at prices which represent switches between
investment
decisions.
Thesepricesdependupona numberof
- 4factorsthe most importantof which are the expected

futurefuel pricesand the relativecostsof different
plants.
typesof new generating
5.
The specificconsumption
of gas for powergeneration
can
vary between approximately
9 and 12.5MMCFT per GWh
generated,dependingupon the efficienciesof the
generating
plants.
6.
The mostimportant
factorwhichhas resulted
in reductions
in gas consumption
at highergas pricelevelsis the fall
in international
fuel prices.The consequences
of this
factoron the consumption
of gas are muchgreater
thanthe
potential
effects
of technical
improvements.
7.
Below the critical gas prices (see 1 above) the

consumption
of gas is similarto that observedin the
November1982Reportand is not, therefore,
sensitive
to
the substantial
changein fuel pricesthat has occurred
between1982and 1988.
8.
In contrast,
abovethe critical
gas pricesthe relatively
smallconsumption
levelsof gas pertainto much lower
(about60%)gas pricesin 1988comparedto levelsin the
November
1982Report.
9.
The generalshapeof the demandcurve is not greatly

sensitive
to changesin fuelprices.
10.
The effectof technicalchangesin the designof gas

turbineand combinedcycleplantssincethe time of the
November1982 Report,resulting
in improvedefficiencies
for theseplants,
slightly
increases
gas demandat low gas
prices.
-52
METHODOLOGY
2.1
Introduction
The objectiveof this studyis to map the characteristics
of demand
for naturalgas in power systemsby meansof demandcurves in three
power systems under six gas price scenarios. These price
assumptionsrange from $1/MMBTU to $6/MMBTU,deliveredto power
generatingplant.. In all cases it was assumedthat there was no
constrainton the supply of gas, and the generationmix on each
system was optimisedto determinethe amount of gas which the
electricity
utilitywould burn in its power stationsat the assumed
gas price.A full rigorousdetermination
of the leastcost solution
under each scenariowas not carried out, as this exercise was
neither practicalnor warrantedin the context of this study.
Rather the analysissoughtto concentrateon those aspectswhich
might most be expected to influencegas demand. The previous
studiesundertakenby the Consultanthave shown that this is a
complexissue.
2.2
ADproach
The demand for gas at a given price will be a functionof, among
other variables,the price of substitutefuels,the capital costs
of gas-firedgeneratingunitsrelativeto thoseof otherfuels,the
costs of convertingexisting (i.e. inherited)capacity to gasfiring,the demandfor electricity
in the baseyear and its rate of
increaseover time.The estimationof a price/demandcurve for gas
involvesholdingall of these variablesconstantexcept the price
of gas. The demand for gas should be estimatedfor each of an
assumedrange of gas prices.This process identifiesa number of
pointson the demandcurve.A demandcurve can then be derivedby a
processof interpolation.
The valuesof many of the parameterswhich are used for estimation
of the demandfor gas are systemspecific.The two systemsdenoted
A and B were formulatedfor purposesof this analysis.They differ
significantly
in size, inheritedplant and expansionoptions.The
gas demand/pricecurvewas also estimatedfor a third systemwhich
may be termeda greenfieldcase. This correspondsto a systemwith
no restrictionon inheritedgeneratingcapacity,thus removingone
of the major systemspecificconstraints
in the analysis.
2.3
ComputerProgram
The Consultant's
INVOPTcomputerprogramwas used to create models
of three thermal and mixed hydro-thermalpower systems. These
models simulatethe operationof these systemsand allow a number
of alternative system developmentprogrammes to be compared
quickly.
The versionof INVOPTused for this analysiscalculatesthe energy
productionof the availablegeneratingplant using a digitalload
duration curve of elements 100 by 100. This digital approach
-6 enablesthe stackingconfiguration
of generatingplant to be
readilydetermined
but suffersfromthe disadvantage
of a rounding
error.
Hydropowerplanton the systemis lumpedtogether
and treatedas a
composite
unit.The totalhydropoweravailable
is thusstackedon
the load durationcurve,takingfull accountof the power and
energypotentialof the composite
unit.An iterative
calculation
the bestfit.
withthe programselecting
determines
thisposition,
The resultsof the analysis
wouldnot be significantly
affected
by
in gas consumption
to the model, any distortions
refinements
estimatestending to be cancelledout over the period of
evaluation.
After the hydropower elementhas been stacked,the model then
duringthat portionof time
seeksto stackthermalplantoperating
whichhas beendeclared
to correspond
to the peakperiodof demand.
The availableplant is stacked in merit order ignoring,if
applicable,
the elementtakenup by the composite
hydropowerunit.
Finally
generating
plantis stackedin meritorderon the remainder
of the load durationcurve,taking into accountrestrictions
imposed
by plantavailability.
2.4
Generation
Planning
The INVOPTcomputermodel was used to determinethe leastcost
generation
development
programme
for a givengas price.In orderto
limitthe numberof alternatives
to be considered,
a screening
curveanalysiswas adoptedto derivequicklyan approximation
to
the optimumplant mix. In this approachthe annual cost of
as a function
plantswas calculated
typesof generating
different
of load factor.The breakeven
load factorsbetweenthe different
plantswerethencalculated
and relatedto the loaddurationcurve
to give estimatesof the relativeproportions
of the generating
planttypeswhichminimise
overallsystemcosts.
Generation
planting
programmes
werebroadlybasedon the results
of
the screening
curveanalysis
for the six gas pricesconsidered.
It
was not possibleto undertake
rigorousoptimisation
of the power
systems.A limiteddegree of marginalanalysiswas, however,
undertaken
to seek confirmation
thatthe adopted
programme
at each
gas pricewas closeto the optimumleastcost programme,
taking
into accountthe assumedchangesin fuelpricerelationships
over
timeand the influence
of inherited
plant.
In the caseof the greenfield
systema closecorrelation
was sought
betweenthe theoretical
optimumplantmix as determined
by the
screening
curveanalysisand both the inherited
and futureplant
mix.Somedistortion
fromthisoptimal
mix was,however,inevitable
in someyearsbecause
of the discretesizeof generating
units.
The candidategeneratingplant options were limited to the
following:
- 7 -
SystemA- 30 MW
(Initially120MW
100MW)
40 MW
30 MW
gas firedgas turbine

gas firedcombined
cycle
residual
oil firedsteam
distillate
firedgas turbine
SystemB- 70 MW
(Initially400 MW
2400MW) 600 MW
600 MW
600 MW
70 MW

cycle
gas firedcombined
gas firedsteam
coalfiredsteam
residual
oil firedsteam
distillate
firedgas turbine
SystemC- 50 MW
(Greenfield
200 MW
Case
200 MW
Initially200 MW
800 MW)
50 MW

gas firedsteam
coalfiredsteam
residual
oil firedsteam
distillate
firedgas turbine
In general for all three systems the candidateplants were

restricted
to gas turbines,
combinedcycleunitsand steamunits,
with the fuel optionsof coal,oil and gas. In systemA it was
assumedthatthe systemwas too smallfor the importof coaldue to
the highcostsassociated
withcoalhandling
plant.In systemB the
completefeasiblerange of plant types and fuel types was
considered.
Preliminary
screening
analysisindicated
thatcombined
cycle plant is not economicwhen comparedwith gas fired steam
plantin the 200 MW sizerange,on the capitalcost and heat rate
made.In systemC, therefore,
the candidate
plantswere
assumptions
limited
to gas turbines
and steamplant.
was limitedto avoid the
The range of unit sizes considered
which would be introducedby the
analyticalcomplications
optimisation
of unit size.This aspectof generation
planningwas
explicitly
excluded
fromthe Termsof Reference
for the study(see
of the study is to determinethe
item 10) sincethe objective
leastcostsolution
demandforgas ratherthancarryout a rigorous
carriedout in the studyis
analysis.
The levelof optimisation
adequate
to meetthisobjective.
on an annualbasis
In all casesthe powersystemswere simulated
was adoptedin order
overa 20 year period.A time sliceapproach
to avoidany calculations
of residual
values.In thisapproach
the
are kept
annualoperating
costsin the finalyear of simulation
runoutperiod.Any plantwhich is
constantover a pre-determined
with identical
scheduled
to retireoverthis periodis reinserted
when it was firstcommissioned.
The
capitalcoststo thoseincurred
runoutperiod adoptedwas 10 years. Reservemargins for the
generation
programmes
wereestimated
on a simplebasis.The margin
was set to be equalto:
n x Largestuniton system
wheren, an integer,is a functionof the maximumdemandof the
the reserve
margin
Againin a rigourous
leastcostanalysis
system.
-8 requirementwould be calculatedusing a probabilisticapproach.

This sophistication
is not necessaryin the contextof this study.
-9-
DATAAND ASSUMPTIONS
3.1
Introduction
This sectiondescribes
the assumptions
and data baseused in this
analysis.
Theyare consistent
withthe corresponding
basesusedfor
the September
1982and November1982Reports,althoughthey refer
to the 1988marketsituation.
3.2
Description
of Systems
Modelled
Threedifferent
powersystems
weremodelledin the analysis.
Two of
them were looselybased on actual systems,with appropriate
assumptions
made regardinginheritedplant,shape of the load
durationcurveetc..The thirdsystemexaminedcorresponds
to a
'greenfield'
site with no pre-determined
constrainton the
inherited
plant.Thesesystems
were alsoanalysedfor the November
1982 Report,and the effectsof updatingboth capitalcostsand
fuelpricesare identified.
System A is fairly sma'llwith a current maximum demand of
approximately
100 MW. The loadfactorof the systemwas assumed
to
be constantoverthe simulation
periodat 54.5%.The powersystem
is entirelythermalwith no possibility
of futurehydro.The
inherited
plantmix consistsof five 33 MW steamunitsfiredby
residual
fueloil and variousdieselunitsamounting
to a totalof
70 MW s.o..The steamunitsare new and are not retiredoverthe
simulation
period,
whereasthe dieselsare retiredbetween
6 and 14
yearshence.It was assumedthat thereis no committed
plantand
the rateof loadgrowthwouldbe 7% p.a..
SystemB is significantly
largerthan SystemA with a current
maximumdemandof 2400MW. The systemload factoris also higher
than that of SystemA at 69.7%.Again it was assumedthat there
wouldbe no changein the systemload factorover the periodof
simulation.
SystemB has a variedplantmix comprising
hydrowith
storage,
lignite-fired
steamplant,gas turbinesand dieselplant.
The capacities
of each of these categories
togetherwith the
inherited
plantmix forSystemA are shownin TableA.1 of Appendix
A. All of the inheritedthermalplant is retired over the
simulation
period,and the assumedretirement
datesare shownin
Table A.2. Plantswhich were taken to be in the processof
construction
have been assumedto be committed.
Since they are
commonto all generating
programmes
evaluated,
theircapitalcosts
have beenexcludedfromthe analysis.
Detailsof theseplantsare
givenin TableA.3. A singlerateof load growthof 7% p.a. was
adopted.
SystemC (thegreenfield
case)is takento havean initial
maximum
demandof 800 MW. It is assumedto havean identical
loadduration
curveto that adoptedfor SystemA. The rationale
behindadoption
of this case is to eliminatethe effectsof inheritedplant
constraints
on the results.Two alternative
assumptions
were made
regarding
the rateof loadgrowth,namely7% p.a. (asfor Systems
A
and B) and a lowerrateof 3% p.a..As for SystemA the effectsof
10
possiblehydro plantswere eliminatedby the assumptionthat there

is no hydro potentialin the system.
3.3
GeneratingPlantDetails
Detailsof the assumptionsmade regardingthe thermal plants are
shown in TableA.4. Theseassumptions
includethe following:
Nameplaterating
Sent out rating
Maximumavailability
Full load heat rate (forsteam plant)
Averageheat rate (forgas turbineand dieselplant)
Variableoperationand maintenance
costs
Fixedstaffingcosts
period)
Capitalcosts (phasedover the construction
These assumptions
were similarto those made in the November1982
Reportwith the followingimportantdifferences:
1.
Improvements
were assumedin the efficiencyof gas turbine
and combinedcycle plants.
2.
Capitalcosts of generatingplants were assumedto have

increasedby 30%. This increasecorrespondsto a change
approximately
5% lower than the change in manufacturing
unit value (MUV) index over the period since 1982. The
real reductionin price is due to increasedefficiencyin
manufacturingof power plant and the high level of
competition.
It is very difficultto give precisevalues
for generatingplant costsbecauseof this competition
and
actual tendered values in specific instancescan vary
greatly from these values. In the case of gas turbine
plant, however, a lower increase was assumed, with a
reduced cost for the first gas turbine unit in a power
station.
3.
Fixedoperationand maintenancecosts, and staffingcosts

were assumedto have increasedby 35%.
It was assumed that gas fired steam plant would have identical
characteristics
to those of oil fired steam plant, but with a
capitalcost savingof 9%.
Economiclives assumedfor the differenttypes of generatingplant
were as follows:
Steam
CombinedCycle
Gas Turbine
25 years
20 years
15 years
These lives are greater than those assumed in the November 1982
Report for both steam and combinedcycle plant by 5 years due to
technicaladvances.
3.4
11 -
FuelPrices
Fuel priceassumptions
are shownin TableA.5. Thesevaluesare
basedon international
worldpricesof coalof $35.1/Te
and oil of
$16.6/bbl(in 1988 $). It was assumedthat fuel priceswould
escalatein real termsin linewith WorldBank forecasts.
In the
contextof this studytheseforecasts
are very important
as fuel
prices in the future are an importantdeterminanton gas
consumption
(ieafterthe construction
of new gas firedcapacity
or
the conversion
of existingcapacity).
Gas pricesare assumedto
remainconstantin 1988priceterms.Thesepricesare treatedas
equivalent
to pricesfor long term gas supplycontracts
to power
utilities.
A rangeof gas pricesrangingfrom averagevaluesof $1/MMBTUto
$6/MMBTU
wereassumed
for all threesystems.
The actualfuelprices
assumedfor SystemsA and B are shownin Figures3.1 and 3.2 on a
heat basisfor the periodof simulation
of the systems.It was
assumedthatthe costsof fuelin SystemC were identical
to those
in SystemA. For verylow gas prices(i.e$2/MMBTU
and below),gas
is cheaperon a heatbasisthanresidual
fueloil and coaloverthe
wholeperiodof simulation
in SystemA. In SystemB, however,
coal
is cheaperthangas at $2/MMBTU
overthe period1988to 1991. From
1989to 1995 significant
real increases
in the priceof coal are
forecast
whichresultin coalbecoming
moreexpensive
thangas. In
all systems$3/MMBTUrepresents
an important
gas price.At this
levelit is more expensivethan coal over the whole periodof
simulation
for SystemB and is cheaperfor the period1988to 2005
for Systems
A and C. It is cheaperthanresidualfueloil for the
periodfrom 1993for SystemsA and C and from 1994for SystemB.
Gas at $4/MMBTUis cheaperthanresidual
fueloil from2000 in the
caseof SystemsA and C, and from 2002 in the case of SystemB.
Above $4/MMBTU there are crossoversbetween the prices of
distillate
andgas.At $5/MMBTU
gas is cheaper
thandistillate
from
1994in bothSystemA and SystemB. At $6/MMBTU
gas is cheaper
than
distillate
from2004in SystemA and 2005 in SystemB. Thesedates
are important
in determining
the typesof fuelused in gas turbine
plant which,it was assumed,could be fired by eithergas or
distillate.
Substitution
possibilities
for other fuels in other
generating
planttypesare additionally
dependant
on differences
in
capitalcosts, forced and scheduledoutage rates, fixed and
variable
maintenance
costsetc..
Geographycan also play a significant
role in the relative
economics
of differentfuel types.Transportcosts,particularly
for bulkyfuelssuchas coal,can varyovera wide rangedepending
not only on the distancethe fuel is transported
but also on the
size of the cargo lots. In this study it was assumedthat the
transport
cost of coal is 57% of its fob price in the case of
Systems
A and C and 29% in the caseof SystemB. For residual
fuel
oil transportcostswere taken to be 13% of the fob price for
SystemsA and C and 7% for SystemB. In the case of distillate
transport
costsrepresent
4% of the fob pricefor SystemsA and C
and 3% for System B. In practiceit is probablethat these
percentages
wouldtendto fallovertime if the sizeof the cargo
- 12 lots increases(dueto increasesin fuel burn resultingfrom growth

in energydemand).
3.5
Characteristics
of ConvertedPlants
Costs of conversionof existingplant to gas firing are shown in
TableA.6. In SystemA the only generatingplantscapableof being
convertedare the 33 MW oil fired steam units. These were not
designedto allow for conversionand thereforea relativelyhigh
specificconversioncost of $110/kWhas been assumed.
In SystemB the followingconversions
were considered:
(a)
existing300 MW oil firedsteam
(b)
committed80 MW distillatefiredGT to gas fired GT
The same conversionassumptionswere made in the November 1982

Report.
ANNUAL FUEL COSTS FOR SYSTEMS A AND C

32 -
30 -
26
--
24
224
20
->
v
V
vV
18
4.~..-
16.
.4-..+or......
~14
U1/MM8TU
12
IL.
$5/MM8TUI3/MMBT
x--*-
1~~i0**.......
v.
.. . II
.-
AC
A&
I~~~~~~~~~~~~~~~~~~~..
.....
8
64
A&
at
di
I&
2
0-
1991
1988
2000
1997
1994
2003
2006
Year
*Distillate
Residual
Coal
Gas at
91/MMBTu
v
Gas at
$3/MMBTU
Gas at
$5/MMBTU
ANNUAL FUEL COSTS FOR SYSTEM B

30--
28 -o2
22
207
0~
r'V
16-*'.,
12
14
. ......
.$....
()( 5|!
<
1 988
1991
1994
1 997
Residual
Coal
-.
~~
2000
Year
Distillate
+."".+.*+tF+
6~~~
Gas at
$1 /MMBTU
~~~~
2003
x
Gas at
$3/MMBTU
2006
v
Gas at
$5/MMBTU
15
RESULTS
4.1
Introduction
The resultsforthe threesystemsare separately
presented,
and the
gas demand/price
curvesestimated
are shownon threebases.The
firstbasisshowsthe demandfor naturalgas over the simulation
periodat eachof the trialgas pricesin termsof averageannual
discountedquantitiesof gas. The second basis shows the
relationship
betweentotalundiscounted
quantities
of gas and gas
in tabularform showingthe
price.The thirdbasisis presented
for eachgas price.
year by yearconsumption
Demand/price
curvespresented
usingthe firsttwo basesare summary
measuresand as such do not revealany information
about the
betweenthe shape of the demand curve and, for
relationship
example,changesin the plantmix over time.Both the basesare
illustrative
only of the shapeof the demandcurve and do not
indicate
the rateof gas demand.
The discount
rateusedfor present
valuingfor the first basiswas 10% p.a.. The effectof this
is to reducethe impacton the demandcurvesof the
discounting
period.
higherconsumptions
towards
the end of the simulation
In a finalsectionthe comparison
betweenthe resultsderivedin
thisreportand thosein the November
1982Reportis discussed
with
particular
reference
to SystemC.
4.2
SystemA
The estimated
demandcurvesfor SystemA are presented
in Figures
of gas consumedare shownin
4.1 and 4.2. The annualquantities
Table4.1.The inherited
plantin SystemA is entirelythermalas
shownin TableA.1 of AppendixA. Thereis a considerable
reserve
marginin the earlyyearsof the simulation
period,thusthereis
potential
for conversion
to gas firingfor someof thiscapacity.
The consumption
of gas is effectively
limitedinitially
to these
units.
Detailsof the generation
planting
programmes
considered
forSystem
A are shownin Table4.2.A totalof 12 programmes
wereconsidered.
In programmes
1 to 7 the existing
oil firedsteamplantwas assumed
to be converted
to gas firing.The plant mix graduallychanges
throughthese programmes
as the relativeproportion
of new gas
turbineplant is reduced,with varyingamounts of gas fired
combinedcycleplantintroduced.
The orderof commissioning
of gas
turbine and combinedcycle plant is also changed in these
programmes.
In programmes
8 to 12 oil fired steam plant is
introduced
intothe plantmix. In all programmes
no new capacityis
commissioned
for 10 years,and the only possiblechangein plant
mix is due to the conversion
of the existing
steamfiredplant.
Table 4.3 showsthe proportion
of totalenergydemandwhich is
supplied
by the gas firedplantsfor eachgas priceassumption.
- 16 -
4.2.1
Gas PricesandDiscounted
Ouantities
demandcurve at the variousgas
Figure4.1 showsthe estimated
rateof
at a discount
gas quantities
pricesin termsof discounted
10% per annum.
at gas pricesbetweenzero and
The curveis seen to be inelastic
$2/MMBTU,
with a demandof 9.2 billioncubicfeet per annum.The
does not changeover
development
programme
leastcost generation
The
is maximised.
this rangeof gas pricesand gas consumption
over this gas price range is Programme1,
leastcost programme
of the steamunits
basedentirelyon gas turbineplant.Conversion
is the
to gas firingin the earlyyearsof the periodsimulated
to
leastcost optionfor this plant.As the gas price increases
of the combinedcycle plant
$3/MMBTU,the improvedefficiency
becomes importantand the gas consumptionis correspondingly
of the steamunits to gas firingis still
reduced.Conversion
the breakeven
cost at
the costsof conversion,
economic.
Ignoring
is $3.17/MMBTU
(the
is no longerworthwhile
whichthis conversion
in 1982
valuein theNovember1982Reportwas $6.4/MMBTU
comparable
in 1988 prices).This price therefore
prices or $8.64/MMBTU
on the demandcurve as, above this
a discontinuity
represents
price, conversionof the steam units to gas firing is not
worthwhile.
At a gas priceof $4/MMBTUthereis no demandfor gas
at this
programme
development
until1998.The leastcostgeneration
fuel efficient
of additional
gas priceinvolvesthe commissioning
combined
cycleplant.
As the gas pricerisesstillfurtherto $5/MMBTUand $6/MMBTUthe
reduces.The least cost
potentialfor use of gas progressively
of a
plantingprogrammebecomesone basedon the commissioning
limitednumberof steamunitsburningresidualfuel oil and gas
or gas.At a gas priceof
whichcan burneitherdistillate
turbines
$5/MMBTU,
the gas turbines
commissioned
are assumedto be firedon
gas from 1994and at a gas priceof $6/MMBTUfrom 1997.Sinceno
thereis
by gas turbinesuntil1999,however,
energyis generated
no consumption
of gas until this time. Above a gas price of
$7.60/MMBTU
therewill be no consumption
of gas duringthe period
in 1988
(cf $10.51/MMBTU
in 1982pricesor $14.19/MMBTU
simulated
pricesin the November1982Report).
The demandcurvelinkingthe pointshas been plotted.The curve
three distinctregions.For both low gas prices
demonstrates
the demandis relatively
and high prices(>$4/MMBTU)
(<$2/MMBTU)
range the least cost generation
In the intermediate
inelastic.
to gas priceand demandis
programme
is very sensitive
development
elastic.The shapeis exploredin more detailin
correspondingly
on a yearby
curvesare considered
Section4.2.3wheredemand/price
yearbasis.
4.2.2
quantities
Gas Dricesand undiscounted
gas
demandcurvewith undiscounted
to the total
quantities.
The 'x' axis in this Figurecorresponds
gas consumption
over the 20 year periodsimulatedand not an
- 17 averageannual value as in Figure 4.1. As would be expected,the

curvesare of broadlysimilarshape.
4 2.3
Gas Demand/Price
curvesover time
The annualconsumptions
of gas at each gas price are shownin Table
4.1. These values are illustrated
graphicallyin Figure 4.3. The
gas consumptionsat $1/MMBTU and $2/MMBTU are identical.At
$3/MMBTUthe consumptions
are marginallylower in the early years
becausethe price of residualfuel oil is less than that of gas,
and thereforethe unconverted
33 MW plant operatesat higher merit
than the convertedunits. (It was assumedthat conversionof the
unitswould be phasedover a fiveyear periodwith a maximumof two
of the five units undergoingconversionat any one time.) After
1993,however,gas at $3/MMBTUis cheaper.Conversionof the units
is still, however,economic because the price of gas over the
lives of the units is less than the averageprice of oil. Ideally
conversionof the unitswould be delayedto 1993, but such a delay
would result in unacceptablylow reserve margins. From 2005
consumptions
at $3/MMBTUare below those for lower gas pricesdue
to the improved fuel efficiency of the combined cycle unit
commissioned
in that year. A reductionin gas consumptionis shown
in 2005. This is because the combinedcycle unit displacesthe
other less efficientgas fired plant higher up the load curve
resultingin a reductionin consumption
despitean increasein gas
firedenergygenerated.A highergas price of $4/MMBTUthus further
improvesthe economicsof combinedcycle plant. Conversionof the
33 MW oil fired units is not economicat this price and therefore
of gas is delayed.The increasesin consumption
seen in
consumption
1999 and 2003 correspondto the dates of commissioningof the
combined cycle units. At gas prices of $5/MMBTU and $6/MMBTU
reducedand, as alreadynoted,
consumptionis furthersignificantly
gas is limitedto use in gas turbineplant after the price of gas
becomesless than that of distillatefuel.
A more comprehensive
analysisof the shape of the demandcurveshas
been undertakenfor the four snapshotyears: 1990, 1995, 2000 and
2005.These curvesare presentedin Figures4.4 to 4.7 inclusive.
In 1990 gas use is restrictedto the converted33 MW steam units,
and thereforethe discontinuities
correspondto changes in merit
order of these plants and the price at which conversionbecomes
economic.At a 1990 gas price of $2.44/MMBTU
the variablecosts of
the gas fired33 MW units are equal to thoseof the oil fired33 MW
units still awaitingconversion.The idealiseddemand curve would
thereforeshow a single discontinuity
at a price of $2.44/MMBTU,
with demand perfectlyinelasticbelow this value and demand zero
above it. However, as previouslynoted, at a price of $3/MMBTU
conversionof the unitsto gas firingwas not delayedto 1993 (the
date at which it would become economically
viable)becauseof the
impact on the reserve plant margin. Since it was assumed that
conversionto gas eliminatesthe capabilityfor oil burn on a
significant
scale,a consumption
of gas is shownfor a gas priceof
$3/MMBTU.The demand curve shown in Figure 4.4 is based on the
idealisedvalues.
- 18 -
By 1995 there is no potentialfor a changein merit orderover the

range of gas prices for which conversion is economic as the
conversionof the 33 MW units has been completed.The single
discontinuityon the demand curve thereforecorrespondsto the
price at which this conversionis no longereconomic($3.52/MMBTU).
In 2000 the shape of the demand curve becomes more complex.The
priceat which conversionof the oil fired unitswould be economic
is now $4.11/MMBTU.Conversionhas, however, not taken place
becausethe discountedsavingsat $4/MMBTUby burninggas from 2000
to the end of the period of evaluationdo not outweigh the
additionalcosts of gas burn prior to this date. Again,therefore,
the difficulty is illustratedin interpretingsnapshot demand
curves in the contextof an overallpower developmentprogramme.
Between gas prices of $3/MMBTU and $4/MMBTU, the least cost
generationprogrammefavoursan increasedamount of combinedcycle
in
plant.There is, therefore,likelyto be a furtherdiscontinuity
the curve betweenthese pricesas the plant mix changes.The curve
is shown as a dotted line in this area. Above $4/MMBTUtherewill
be further changes in the optimal plant mix as oil fired steam
units becomecheaperthan gas fired combinedcycle units, and then
distillatebecomescheaperthan gas. The price at which distillate
becomesmore expensivethan gas is $6.53/MMBTU.Above this value
the demandfor gas drops to zero.
In 2005 the shape of the demand curve is essentiallysimilar to
that in 2000,but with the addedcomplication
of an additionalstep
betweenthe pricesof $2/MMBTUand $3/MMBTU.This step corresponds
to a changein plantmix due to the justification
of combinedcycle
plant in the generationmix at the higherprice.Above a gas price
of $7.60/MMBTU
gas consumption
will fall to zero.
Table 4.3 shows the energygeneratedand the proportionof total
energydemandsuppliedby the gas fired planton an annualbasisat
each gas price. As previouslynoted the gas consumptions(and
energy generatedusing gas fired plants) are identicalfor gas
pricesof $1/MMBTUand $2/MMBTU.At $3/MMBTUthe energygeneration
is less over the period to 1993 because of the change in merit
order betweenthe convertedand unconverted33 MW steam units.For
gas at $4/MMBTU there is a delay of some nine years until a
substantialproportionof the energy is generatedby gas fired
plant, since conversionof the 33 MW units is not economic and
thereforethere is no gas burningplant on the systemuntil 1998.
At the highergas pricesof $5/MMBTUand $6/MMBTUgas fired energy
generationdoes not rise to more than 11% of total demand even in
the long term.
4.3
SystemB
The estimateddemand/pricecurves for System B are presentedin
Figures4.8 and 4.9, and the annual quantitiesof gas consumedare
shown in Table 4.4 . SystemB comprisesa mix of thermaland hydro
plant with storage.The hydro plant operateson the peak with low
capacity factors.This limits the potentialfor the introduction
19
of new thermalpeakingplant.There is some potentialfor the

conversion
of generating
plantsto gas firing;in particular
a gas
turbine
unitcommitted
to be commissioned
in 1988and a 300 MW oil
firedunit.
Detailsof the plantingprogrammes
considered
for SystemB are
shownin Table4.5.Six basicprogrammes
wereconsidered.
Theseall
includedthe conversion
of the existing80 MW gas turbineand
300 MW steamturbineto gas firing.The programmes
are basedon
alternative
mixes of gas turbine,combinedcycle and gas fired
steamplant.In programmes
1 to 5 new plantsare limitedto gas
turbines
and steamturbines;
combined
cycleunitsare introduced
in
programme
6. The proportion
of new gas turbineplantreducesfrom
programme
1 to 5.
A furthersix programmes
were derivedbasedon thesesix basic
programmes.
These'second
generation'
programmes
(programmes
10 to
60) assumeidentical
commissioning
dates to those in the basic
programmes,
but differin that all steam plant is coal fired.
Eleven'thirdgeneration'
programmes
(11 to 61 and 12 to 52) were
derivedbasedon programmes
10 to 60. In thesethirdgeneration
programmes
it was assumedthat the 300 MW oil firedsteamplant
wouldnot be converted
to gas firing(programmes
11 to 61) and that
the committed80 MW gas turbinewould also not be converted
(programmes
12 to 52).
Table4.6 showsthe annualenergygeneration
and the proportion
of
totalenergydemandsuppliedby the gas firedplantsat each gas
price.
4.3.1
Gas pricesand discounted

guantities
demand/price
curvefor variousgas
pricesin termsof discounted
gas quantities
at a discount
rateof
10% per annum.
At a gas priceof $1/MMBTU
the discounted
annualconsumption
of gas
is 158.9billion
cubicfeet.The leastcostgeneration
development
programme
is Programme
1, basedon the futurecommissioning
of a
mix of gas turbineand gas firedsteamunits.Belowa gas priceof
$1/MMBTUit may be expectedthat the least cost generation
development
programme
will changeto one based entirelyon gas
turbine
plant,thereby
minimising
capital
costs.Thishas not been
investigated
in the studyand therefore
the demand/price
curvein
Figures4.8 and 4.9 has been showndottedbelow $1/MMBTU.As
indicated,
however,gas consumption
will be increased
due to the
lowerefficiency
of the gas turbineunitswhencompared
with steam
units.Above $1/MMBTUthe least cost generation
programmes
are
thosebasedon Programme
5.
At $2/MMBTU
the gas priceis sufficiently
highto penalise
the gas
turbineplantto such an extentthat the leastcost development
becomesthat basedsolelyon the commissioning
of new gas fired
steam plant, with the hydro plant fulfillingthe peaking
requirements
of the system(Programme
5).Averageannualdiscounted
- 20 gas consumptionfallsmarginallyto a levelof 144.3billioncubic

feet.
At $3/MMBTUconversionof the oil fired steam unit and the gas
turbinecontinueto remaineconomic.The pricedifferential
between
coal and gas is, however, sufficientto justify a generation
plantingprogrammebasedon the commissioning
of 600 MW coal fired
steam units (Programme50). Gas consumption
falls significantly
at
this gas priceto a discountedaverageannuallevel of 9.2 billion
cubic feet.Above an averageprice of $3.1/MMBTUconversionof the
oil firedunit is no longereconomic(cf $6.14/MMBTU
in 1982prices
or $8.29/MMBTUin constant 1988 prices in the November 1982
Report).At $4/MMBTUtherefore,only the gas turbineis converted,
and thus the consumption
of gas is furthersignificantly
reducedto
an averagediscountedvalue of 0.6 billioncubic feet.Above a gas
priceof $4/MMBTUthe consumption
of gas fallsto zero.
The peakingpotentialfor gas turbinesis probablyunderestimated
in the analysis.Any quantitiesconsumedwould, however,be small
and wouldnot significantly
affectthe shapeof the demandcurve.
4.3.2
Gas oricesand undiscounted

guantities
Figure4.9 showsthe estimateddemandcurvewith variousgas prices
and undiscounted
gas quantities.
Again the differencein 'x' scale
when comparingthis Figurewith Figure4.8 shouldbe noted.
4.3.3
Demandcurvesover time
The annual consumptionsof gas at each gas price are shown
graphicallyin Figure 4.10. The consumptionsat $1/MMBTU and
$2/MMBTUare significantly
greaterthan thoseat highergas prices.
In some early years of the study the consumptionis marginally
higher for gas at $2/MMBTU.This apparentanomaly is due to the
lumpy nature of the generatingplantingprogrammes.In the least
cost generationdevelopmentprogrammeat $2/MMBTU,a 600 MW gas
fired steamunit is commissioned
in 1991, whereasin the leastcost
generationprogrammeat $1/MMBTU only a 70 MW gas turbine is
commissioned
in that year. The total potentialfor consumptionof
gas is thereforegreaterat the highergas price in 1991. As more
generatingunits are commissioned,
however,the additionaldemand
for gas at the lower gas price becomes evident. At higher gas
prices the demand for gas is limitedto those plants which have
been convertedto gas firing.At $3/MMBTUboth the committedgas
turbineand a 300 MW oil firedunit are converted.At $4/MMBTUonly
the gas turbineis converted.
Demandcurvesfor the snapshotyears of 1990, 1995, 2000 and 2005
are presentedin Figures4.11 to 4.14.
In 1990 the demand curve consistsof a number of steps.Over the
rangeof gas pricesfrom $1.27/MMBTU
to $1.64/MMBTU
the meritorder
of the convertedgas turbinechangessuch that it falls below the
lignite fired and oil fired plants. Similarly over the range
$1.79/MMBTUto $2.32/MMBTUthe merit order of the convertedsteam
- 21 unit graduallyfallsbelowthat of the ligniteand oil firedplant.

Neglectingdifferences
in capitaland operatingcosts the breakeven
gas price abovewhich coal fired plantshave lower operatingcosts
is $1.91/MMBTU.
In practice,however,becauseof the significantly
highercosts associatedwith coal fired units the breakevenprice
is in excessof this price. Excludingthe costs of conversionthe
breakevengas price above which conversionof the gas turbine is
Above this price there is no demand
not economicis $3.88/MMBTU.
for gas.
The shapeof the demandcurve in 1995 is broadlysimilarto that in
1990. As the gas price graduallyrises the merit order of the
convertedplantschangeand thus the gas consumptionfalls.Between
$2/MMBTUand $3/MMBTUthe step changesin quantityof gas consumed
correspondto the change in the least cost generationplant mix
fromgas firedsteamplantto coal firedsteamplant.Conversionof
the oil fired steam unit is not economic at gas prices above
$3.34/MMBTU,and conversionof the gas turbine is no longer
economicat gas pricesabove$5.59/MMBTU.
In 1995the convertedgas
turbine generatesno electricity,however,and thereforeat gas
is zero.
gas consumption
pricesabove$3.34/MMBTU
Similareffectsto those describedabove dictatethe shape of the
demandcurvein 2000.
In 2005 the shape of the demandcurve is somewhatsimplerin that
the consumption
of gas fallsrapidlyto zero at a gas pricebetween
$3/MMBTUand $4/MMBTU.
Table 4.6 showsthe annualenergygenerationand the proportionof
total energy demand suppliedby the gas fired plant on an annual
basisat each gas price.At gas pricesof $1/MMBTUand $2/MMBTUgas
fired plants provide very high proportionsof the total energy
requirementsin the long term (up to 89% at $1/MMBTUand 81% at
$2/MMBTU).The presenceof hydroplant on the systemmeansthat the
proportionof energy suppliedcannot rise to 100%. As previously
noted the effect of the lumpy nature of the generatingplanting
programmes is clearly identifiable,with higher gas fired
generationat a highergas price in someyears.At $3/MMBTUthe gas
fired energy generationis significantlyless, with no energy
generationat all in some years. Unlike at lower gas prices the
proportionof gas fired energy declinesover time. At higher gas
zero.
pricesgas firedenergygenerationis effectively
4.4
SystemC
As noted in Section3, System C corresponds
to a greenfieldcase
inheritedplant.The estimateddemandcurves
with no pre-determined
are presentedin Figures4.15 and 4.16.The quantitiesof gas which
would be consumedat each gas price are shownin Table4.7.
Details of the alternativegeneration development programmes
consideredare given in Table 4.8. A total of 12 programmeswere
derived.In programmes1 to 4 the plant mix was limited to gas
- 22 turbinesand gas fired steam plant, with the proportionof gas

turbinesgraduallyreducing.In programmes5 to 8 coal and oil
fired steam plantswere also consideredin varyingproportions.In
programmes9 to 12 gas fired steam plant was eliminatedfrom the
plantmix.
The annual energy generationand the proportionof total energy
suppliedby gas fired plant is shown in Table 4.9 for each gas
price. At $3/MMBTUand below gas fired plant is responsiblefor
100%of energygeneration.
There is a very sharpcut off abovethis
pricewith gas firedplantonly supplyingbetween7% to 9% of total
energyin the longterm.
4.4.1
Gas pricesand discountedquantities

Figure4.15 showsthe estimateddemandcurvefor variousgas prices
in termsof discountedgas quantitiesat a discountrate of 10% per
annum.
As for System B, at gas prices below $1/MMBTU the least cost
generationprogrammewill change such as to increasethe relative
proportionof gas turbineplant.Over the price range to $2/MMBTU,
therefore,the demand curve has a conventional
negativeslope as
this trend continues,with the least cost generationdevelopment
programmechangingfrom Programme1 at $1/MMBTUto Programme4 at
$2/MMBTU.It is probablethat this gradual change in plant mix
would also occur up to $3/MMBTU,but the resultsof the analysis
indicatedthat the leastcost generationdevelopmentprogrammewas
unchangedin movingfrom gas price levelsof $2/MMBTUto $3/MMBTU.
Above $3/MMBTUgenerationbased on coal fired steam plant offers
lowercost than that basedon gas firedsteamplant.The leastcost
generationdevelopmentprogrammechanges to Programme11 and gas
At $4/MMBTU the gas turbines
consumptionfalls significantly.
operateon gas throughoutthe periodof the study, but as the gas
price rises furtherto $5/MMBTUand $6/MMBTUgas is not used until
1994 and 1997 respectively.
For gas prices above $7.60/MMBTUgas
consumptionfalls to zero for the period of the study (cf
$10.33/MMBTUin 1982 pricesor $13.95/MMBTU
in 1988 prices in the
November1982 Report).
4.4.2
Gas pricesand undiscounted

guantities
Figure 4.16 shows the demand curve for various gas prices and
undiscounted
quantities.As in the previouscases this curve is
broadlysimilarin shapeto the discountedcurve in Figure4.15.
4.4.3
Demandcurvesover time
Table4.7 showsthe annualgas consumptions
over the period1988to
2017 at each gas price.The values are illustrated
graphicallyin
Figure4.17. At low prices of $1/MMBTU and $2/MMBTU the gas
consumptionprofiles are very similar, with consumptionbeing
marginallyhigher at the lower price because of the increased
relativeproportionof gas turbine plant. At higher prices gas
- 23 consumptionsare very much reduced as coal fired steam plant is

providingthe base loadenergy.
Demandcurvesare shown for the snapshotyears of 1990, 1995,2000
and 2005 in Figures4.18 to 4.21 inclusive.The general shape of
the curves is similar to that for the price and quantity
relationshipgraph shown in Figure 4.16, with a single step
correspondingto the crossovergas price when the least cost
generationdevelopment
programmechangesto one basedon coal fired
generatingplant. In the curvesfor 1995onwardsa furtherstep is
introducedas gas becomescheaperthan distillatefor use in gas
turbines.The price at which gas usage falls to zero rises from
$5.66/MMBTU
in 1995to $6.61/MMBTU
in 2000 and $7.60/MMBTU
in 2005.
4.5
Comparisonwith 1982results
A table givinga comparisonbetweenthe annualdiscountedaverage
gas consumptions
as calculatedin the November1982 Reportand the
valuescalculatedin this reportfor the threesystemsis presented
at the end of this sectionin constant1988 $. Details are also
givenof the datum fuelprice assumptions
in both the November1982
Report and this report. In the November1982 Report the range of
gas pricesconsideredwas from $1/MMBTUto $9/MMBTUin 1982 $, or
approximately$1/MMBTU to $12/MMBTUin 1988 $, reflectingthe
higher pricesof alternativefuelsat that time. The analysiswas
not carriedout at all pricesover this range, however,and there
are thereforesome gaps in the estimatedconsumptions.
The values
are comparedgraphically
for each systemin Figures4.22 to 4.24.
Care must, however,be exercisedin this comparisonbecausein the
November1982 Reportthe gas pricewas escalatedin real terms.The
impactof this escalationon the price/demand
curve, however,was
not generallysignificant.
For System A (Figure4.22) the generalshapes of the gas demand
curves are similar.At low gas prices ($2/MMBTUand below) annual
are higher in this report.This is
discountedaverageconsumptions
becausethe leastcost generationdevelopment
programmeis basedon
the commissioning
of gas turbineplantsonly.Very low gas prices
were not investigated
in the November1982 Report. It is probable
that similar resultswould, however,have been produced,though
with increasedconsumptions
due to the assumedlower efficiencyof
the gas turbinesat that time. The consumptionsat $3/MMBTUare
similar in both this report and the November 1982 Report. The
slight increasein consumption
displayedin this report is due to
the change in the least cost generationdevelopmentprogramme.In
this report the relativeproportionof gas turbineis higher (due
to the assumptions
regardingimprovements
in efficiencyrelativeto
those made in the November1982 Report).This in turn has led to
At a gas priceof $5/MMBTU
the slightincreasein gas consumption.
there is a very large differencein gas consumption.This is
becausethe breakevenprice of gas, abovewhich it is not economic
to convertthe oil fired steam units,occursbetween$3/MMBTUand
$4/MMBTUin this report, whereas the higher oil prices in 1982
resulted in a breakeven price at that time of $8.6/MMBTU.
- 24 Furthermore
the leastcost generationdevelopment
programmein this
reportat $5/MMBTUis based on residualoil fired steam units as
opposed to the gas turbine and combinedcycle programmein the
November1982 Report.In the case of SystemA, therefore,the most
significant
changesin the shapeof the demandcurvewould seem to
be due to the changes in fuel prices, with only minor changes
resultingfrom improvements
in technology.
In System B (Figure4.23) the change in the demand curve is more
complexdue to the greatervariationin fuel utilisation.
At a gas
priceof $1/MMBTUthe annualdiscountedaverageconsumptions
of gas
are very similar.In common with SystemA the consumptionat low
prices is marginallyhigher in this report.This again is due to
the assumed improvementin efficiencyof the gas turbine units
which has resultedin an increasein their relativeproportionin
the least cost generationdevelopmentprogramme.As the gas price
rises the breakevenvalue at which the costs of gas fired steam
generationare equalto thoseof coal fired steamgenerationdrops
from approximately$3.9/MMBTU in the November 1982 Report to
approximately
$2.1/MMBTUin this report (excludingthe effect of
capitalcost differences).
At $3/MMBTUthe consumptionof gas is
lower in this report.This is againdue to fuel price changes.The
energygeneratedby the gas fired plant is reduced in this report
because of changes in merit order relativeto the November1982
Report. In particularthe price of ligniteis significantly
lower
in this report ($5.84/MMkcalin the first year of simulation,
comparedwith $20.33/MMkcal).
The ligniteburningplant therefore
displacesthe gas burningplant in the merit order in this report.
At higher gas prices gas consumptionis effectivelyzero in this
report becauseof the reducedcost of oil. In the November 1982
Report the small level of gas consumptionoccurred only in gas
turbineplant in a singleyear. In this reportit was not economic
to burn gas in placeof distillatein the year in question.
The comparisonin results for System C is shown in Figure 4.24.
Again the overallshape of the demand curves is similar.As with
Systems A and B higher gas consumptionsare displayedin the
current report at very low gas prices. Unlike the other demand
in the currentstudyare
highergas consumptions
curvecomparisons,
also seenfor gas pricesof $4/MMBTUto $6/MMBTUinclusive.This is
becausethe least cost generationdevelopmentprogrammesinclude
higherproportions
of gas turbineunits than those in the November
1982 Report. The intrinsicflexibilityof System C in allowing
varying inheritedplant mixes at differentgas prices is an
importantfactorin this resultbecomingapparent.
25 -
COMPARISONBETWEENANNUALDISCOUNTEDAVERAGEGAS CONSUMPTIONS
CALCULATEDIN NOVEMBER1982REPORTAND 1988VALUES
(1988Prices)
System
Notes
Report
November1982
1988
9.2
9.2
8.5
Gas Pricein $/MMBTU

4
5
6
7
8.3
3.2
0.5
0.5
November1982 156.0
13.7 13.5
1988
160.5148.7 14.2 1.3 0.0
0.0
November1982 70.1
69.2
1988
70.8 68.0 68.0 4.6
3.9
2.5
4.0
10
12
8.1
3.3
0.4
12.6
0.7
0.7
1.8
0.3
0.3
1. All consumption
quantitiesare in BillionCubic Feet per annum
2. Gas pricesfor November1982 Reportroundedto nearestintegral
value.
COMPARISONOF BASE YEAR INTERNATIONAL

PRICE
ASSUMPTIONS
FOR OIL AND COAL
Report
November1982 - 1982 $
- 1988 $
1988
Oil
$/bbl
Coal
$/Te
33
45
55.5
76
16.6
35.1
Note:The priceswere projectedover the planningperiods

accordingto the prevailingWorldBank forecasts.
- 26 5
CONCLUSIONS
5.1
Introduction
to this studymay be dividedinto two groups.The
The conclusions
for the study as a whole.
conclusions
firstrelatesto generalised
The second group relate to changes in the value of natural gas
sincethe time of the November1982 Report.
5.2
Generalised
Conclusions
can be drawn from the analysis,as
A numberof generalconclusions
follows:
1.
For all power systemsthere is a price of gas belowwhich

demand is relativelyinelastic.This value is a function
of systemspecificvariablessuch as the availablefuels,
the mix of generatingplant etc.. In the case of a
relativelysmall systemwith an initialmaximumdemandof
100 MW and no provisionfor coal burning and no hydro
capacity(SystemA), gas demandis not sensitiveto price
reductionsbelow $3/MMBTU.For a much larger systemwith
an initialmaximumdemandof 2 400 MW, a mix of generating
plant includinghydro with storage, coal and lignite
burningsteam,and gas turbines(SystemB), the critical
price of gas is approximately $2/MMBTU. For an
intermediate
size systemwith an initialdemandof 800 MW,
a full range of availablefuel types and no constrainton
inheritedplantmix (SystemC), the criticalprice of gas
is approximately
$3/MMBTU.
2.
At the price of gas varies,the demand for gas does not

change at a constant rate, but rather moves through a
Sharp increasesin gas demand
seriesof discontinuities.
of new gas fired generation
resultfrom the commissioning
plant,and decreasescan be the resultof changesin merit
orderof gas firedplantrelativeto other plant.
3.
relationships
in the gas price/demand
The discontinuities
occur at prices which represent switches between
investmentand operatingdecisions,for examplefrom gas
firedsteam unitsto coal fired steam units.These prices
depend upon a number of factors the most importantof
which are expectedfuture fuel prices and the relative
costsof differenttypesof new generatingplants.
4.
The preciseshape of a demand curve is dictatedboth by

the critical prices of gas which are important in
determining the optimal plant mix (the investment
decision)and by changes which alter the merit order
rankingof plant. It is this system specific. Where the
latteris importantthe demand curve usuallyassumesthe
shapeof havinga negativeslopewith respect
conventional
to the price axis.
- 27 5.
5.3
The specificconsumption
of gas for power generationcan
vary between approximately9 and 12.5MMCFT per GWh
generated, depending upon the efficiencies of the
generatingplants.
Changessince 1982
Additionalconclusions
resultingfrom comparisonof the resultsin
this report with those of the November 1982 Report may be
summarisedas follows:
1.
Below the criticalgas prices observedand discussedin

Section5.2, the consumptions
of gas are similarto those
observed in the November 1982 Report and are not,
therefore,sensitiveto the substantial change in fuel
pricesthat has occurredbetween1982 and 1988.
2.
In contrast,above the criticalgas pricesthe relatively

small consumptionlevels of gas pertain to much lower
(about60%) gas pricesin 1988 comparedto 1982.
3.
Whilstthe levelsof the demandcurveshave changed,their

generalshape is not greatlysensitiveto changesin the
pricesof fuelsotherthan gas.
4.
The effect of technicalchanges in the design of gas

turbineand combinedcycle plants since the time of the
November1982 Report,resultingin improvedefficiencies
for theseplants,slightlyincreasesgas demandat low gas
prices.
5.
The most importantfactorwhich has resultedin reductions

in gas consumption
at highergas price levels is the fall
in international
fuel prices. The consequencesof this
factoron the consumption
of gas are much greaterthan the
potentialeffectsof technicalimprovements.
- 28
TABLE 4.1
ANNUAL GAS CONSUMPTIONFOR VARYING GAS PRICES

SYSTEM A
(ALL vaLues in MMCFT)
l--
Year
Gas prices in $/MMBTU

--
Year
--
--
1988
1
1989
1990
4939
1991
4939
1992
7201
1993
7605
1994
8309
1995
8851
1996
9405
1997
9820
1998
10844
1999 i11771
2000
12582
2001
13636
2002
14735
2003 I 15979
2004 j
17113
2005
18524
2006
20146
200721551
2017
--
--
--
4939
4939
7201
7605
8309
8851
9405
9820
10844
11771
12582
13636
14735
15979
17113
18524
20146
21551
3600
3924
7201
7605
8309
8851
9405
9820
10844
11771
12582
13636
14735
15979
17113
15637
16938
18290
528
6222
6391
6507
6551
11209
11556
11982
12374
12702
42
139
1681
1083
611
792
1417
2444
2611
421
139
1153
1083
611
792
1417
2444
2611
9198
9198
8539
3150
474
460
|Total|
Gas
433454
Demandl-
433454
389142
213047
36931
36403
10
11
11
Average
Annual
Value l
|Leas t|l
Cost
Programne.
--
1
-
--
--
--
--
--
29 -
TABLE 4.2
PLANTING PROGRAMMESFOR SYSTEM 'A'
I
IYear
-- -----------------------------------------
1988
Page 1 of 2
-~-~~~------------------------------------~
119891
| 1990 2x33MW ST(G) |2x33MW ST(G) |2x33MWST(G) 12x33MWST(G) I2x33MWST(G) 12x33MWST(G)
119911
|1992 |2x33MWST(G) 1 2x33MW ST(G) 1 2x33MWST(G) 1 2x33MW ST(G) |2x33MWST(G) 1 2x33MW ST(G) |
11993I11
11994
|1 x33MW ST(G)
|1 x33MW ST(G) |1x33MWST(G) |1x33MWST(G) |1 x33MW ST(G) 1X33MWST(G)|
119951
1
19971
1
| 1998 | x30MW GT(G) | x30MW GT(G) |1x3OMW MT(G) | x12OMW CC(G)11x12OMW CC(G)|1x3OMWGT(G)
| 1999 |1 x3OMW GT(G) |1x3OMWGT(G) |1 x3OMW GT(G) I
120001
12001 |2x30MWGT(G) j2x30MWGT(G) |1x12OMWCC(G)l
12002 | x30MW GT(G) | x30MW GT(G) I

| 2003 | x30MW GT(G) j1x30MW GT(G) I
1
I2004 I
| 2005 |1 x30MW GT(G)
1 2006
|1x30MWGT(G) |I
I2007
1
I- -- -- I- ----
I
----
-I-
1x12OMW CC(G)|
1
| x12OMW CC(G)|
x30MW GT(G) I
|1X12OMWCC(G)j
--- I--------------I
-- I ---- --- - --- I----
|1 x30MW GT(G) |1 x12OMW CC(G)|
|11x3OMW
----
|1x12OMWCC(G)|
1x120MWCC(G)l
GT(G)
----
---
30 -
TABLE 4.2
PLANTING PROGRAMMESFOR SYSTEM 'A'
|
Year.
P-RIO
7
---
1988-----
11990 |2x33MWST(G)
I1991
| 1992 j2x33MW ST(G)
11993
1
10
11
12
- -I-- - - -- - - - - - -I-- - - - - - -I---- - -- -
I- - - -- - I
1989
8
Page 2 of 2
1 1994 |1 x33MW ST(G) I

I 1995
I111III
1996
|1997|
I
x120MW CC(G)|1x3OMWGT(G) | x3OMW GT(O) I
1
1
| 1998 1X12OMWCC(G)|
x30MW GT(G) j1x120MWCC(G)|
x3OMW GT(G) |1 x3OMW GT(G) |1 x30MW GT(O)
| 1999 |
I 2000
X12OMW CC(G)|
| 2001 |
12002 |1X30MWGT(G) I
12004
1
| 2005
12006
2007
|2x3OMWGT(G)
J2x3OMW
I
GT(O)
|1 X4OMW ST(O) |1x4OMW ST(O) I
|1X40MWST(O)
12003 | x120MWCC(G)| x40MW ST(O) |ix4OMWST(O)

1
1
1x12OMU CC(G)|
x40MW ST(O) |1 x40MW ST(O)
I
|1x3OMWGT(O) |1 x3OMW GT(O) |
1x4OMW ST(O) |lx4OMWST(O)
1
lx3OMW GT(G) |lx3OMWGT(G) |
1
1
| x3OMW GT(O) |1X3OMWGT(O)
I--------------------I-----------------------
31
TABLE4.3
ENERGYGENERATION
BY GAS FIRED PLANTS- SYSTEMA
I---I ---------------I-------I
Energy Generated by Gas Fired PLants for Gas Prices
jYear;Energy
IDemand| ------------------------1 (GWh)I
S1/MMBTUI
GWh% of Tot.|
11988|
$2/MMBTU
$3/MMBTU
GWh% of Tot.1
GWh% of Tot.1
S4/MMBTU_|
S5/MMBTU
GWh% of Tot.
GWh% of Tot.1
GWh% of Tot.1
S6/MMBTU_|
4771
119891 510
119901 546
428
78.4
119911584
428
73.3 |
119921 625 1
624
99.9
1199531669
659
98.6 |
715 |
715
100.0 1 715
765
100.0
819 |
815
99.5 |
851
97.1
119981 938 1
932
99.4
|19991 1003 | 1003

120001 1074
119'41
of
119951765
312
57.2 |
340
58.2 |
428
78.4 |
428
73.3
624
99.9
1 624
659
98.6 1 659
765
100.0
100.0 |
99.9
715
100.0 I
765
100.0
815
99.5
98.6
815
99.5
851
97.1
851
97.1
932
99.4
932
99.4
100.0
1 1003
100.0
1 1003
100.0
700
69.8
11074
11149
100.0
11074
100.0 | 1074
100.0
67.0
0.9 I
10
100.0
63.7
1
1
10
121
10.5 |
121
1200211229 | 1229
100.0
11149
11229
1 719
1 732
60.0
78
6.3
95.9 |
44
819961
119971876
1200111149
1200311315
11315
100.0 | 1149
100.0
11229
100.0
100.0 | 1315
100.0 | 1261
92.4
57
100.0 | 1506
100.0 | 1348
89.5
102
100.0 | 1611
100.0 | 1611
100.0
86.4
176
100.0 | 1724
100.0
11724
100.0
11392
11429
188
100.0
120051 1506 | 1506
100.0 | 1506
120061 1611 | 1611

120071 1724 | 1724
I--
737
4.1 |
11300
11407
1200411407 | 1407
I- --.
100.0 | 1315
100.0 |
38
I-
100.0
11407
100.0
I-
82.9 |
0.3
0.3 |
0.9
10.5 |
78
6.3
3.3 |
44
3.3
4.1 |
57
4.1 |
6.8
1
1
102
6.8
10.9 |
176
10.9
10.9 |
188
10.9 |
!I
32 -
TABLE 4.4

SYSTEM B
(ALL values in MMCFT)
l
ll
--
Gas prices in $/MMBTU

-
--
Year
--
--
--
--
1988 1
1989
1990
1991
1992
1993 J
1994
1995 i
1996 j
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
20072017
25371
25243
74920
73945
76954
109806
127296
167214
149674
188157
211760
235996
263823
302609
324377
353473
376371
417041
440827
17816
23520
56335
54107
55619
98023
117468
153939
148387
181756
205094
229341
257174
276506
313966
327203
360080
383202
422179
10249
22504
14542
12794
15070
16438
17862
16697
17899
18648
19011
32173
36192
23333
7132
18416
21188
5422
15754
Average I
Annual 1
Value-
160505
148691
14210
1340
8335305 7903501
379785
43564
TotaL
Gas
Demand
l
l
6361
1458
7996
8145
3850
l
-.
Least
Cost
Progranmml
--
2
-
--
20
2
-
--
--
31
--
--
52
52
-
--
--
- 33 -
TABLE 4.5
PLANTING PROGRAMMESFOR SYSTEM 'B'
IYear1
~~~P
R
2
G
3
Page 1 of 4
M
5
E
6
| 1989 |1x80MWGT(G) |1x80MWGT(G) |1X80MWGT(G) |1X80MWGT(G) |1 x80MW GT(G) |1 x80MW GT(G)

I 1990 j1x300MWST(G)J1x300MWST(G)j1x300MWST(G)|1x300MWST(G)|1x300MW ST(G)|1x300MWST(G)|
| 1991 |7x70MWGT(G) j3x70MWGT(G) |2x600MWST(G)|3x70MWGT(G) |2x600MWST(G)| 5x7OMW GT(G)|

1992 lIx600MWST(G)|
I1x600MWST(G)|
|1x42OMWCC(G)|
1 x600MW ST(G)|
11993
| 1994 j1x600MWST(G)j1x600MWST(G)|
|2x7OMWGT(G) |
1x600MW ST(G)l
| 1995 j2x70MWGT(G) I
11996 |2x70MWGT(G) |
11997 | x600MWST(G)|
|1x7OMW GT(G) | x600MU ST(G)|
x600MW
ST(G)J1x600MWST(G)|
|1x600MWST(G)l
x7OMWGT(G)
| x42OMW
CC(G)l
11998 |1x70MWGT(G) | x7OMW GT(G) |2x600MWST(G)I2x600tMWST(G)I2x600MWST(G)| 3x7OMW GT(G)|

1
19
1x600MW ST(G) 1x600MWST(G)
1999 4x70MW GT(G) 1x600MW ST(G)
1x600MW ST(G)
1x42OMW CC(G)l
i2x7OMW
GT(G)
12000 | x600MW ST(G) 2x7OMW GT(G) | x600MW ST(G)|1x600MWST(G)| x600MW ST(G)|lx600MWST(G)|

1
| 2001 j2x70MWGT(G) |1 X600MW ST(G)12x70MW GT(G) 1 2x7OMW GT(G) |1 x600MW ST(G)| 1x7OMW GT(G)|
12002 |1x7OMWGT(G) j2x600MWST(G) 2x600MW ST(G)| x70MW GT(G)

1
2x600MWST(G)
***
|
2x600MW ST(G)|
|2X600MWST(G)|
1
1 2003 |x600MW ST(G)|1x600MWST(G)|
x600MW ST(G)1lx600MW ST(G)|1x600MWST(G)l[x600MWST(G)|
| 2004 j2x70MW GT(G) j1X600MWST(G)1 2x7OMW GT(G) |2x7OMWGT(G) |1x600MWST(G)|1x42OMWCC(G)|
1x600MW ST(G)
1x600MW ST(G) 1x600MW ST(G)
1x600MW ST(G)
I2005 3x7OMW GT(G) I
2x600MW ST(G) 3x70MW GT(G) 1x600MW ST(G) 2x7OMW GT(G)
|1x600MW ST(G)|
I
|lx600MWST(G)|
11x42OMWCC(G)l
| 2006 W7X7OMW
GT(G) |3x7OMW GT(G) |3x7OMWGT(G) |3x70MWGT(G) |1x600MWST(G) 1x600MW ST(G)l
lx600MW ST (G) 1x600MWST(G)
1x600MW ST(G) 6
2007 1x600MW ST(G) 10MW ST(G)jlx 600MW ST(G) 1x600MW ST(G) 1x600MW ST(G)1lx600MW ST(G)1
----------- I-----
-------
II
I-- -
- -- - -I-- - - - - -
3x7OMW GT(g)
1x42OMW CC(G)
1x600MW ST(G)
34 -
TABLE 4.5
Page 2 of 4
P-
I
I
10
R
20
10
1
G
30
R1
A
40
M
1
M
50
E
1
I
60
1-1988
1- - - - - --I-- - - -- - -I-- - - - - - -I--- - -- - -I-- - - - - - -I---- - -- -
11989
1
1
1
1x80MWGT(G) 1x8xMW GT(G) | x8OMW GT(G) ixBOMW GT(G) |1x8OMWGT(G) 11x8OMWGT(G) I
1990
ST(G)1lx300MW ST(G)11x300MW ST(G)1 X300MU ST(G) 1x300MW ST(G) 1x300MW ST(G)j
11991
J1x300MW
1
7x7OMW GT(G) j3x7OMWGT(G) 1 2x6OOMW ST(C)j3x7OMWGT(G) j2x600MWST(C)| WX7OMWGT(G)|

1x42OMW CC(G)
1x600MW ST(C)lx600MW ST(C)
1X600MU ST(C)
1992JI
11993
1
ST(C)|
ST(C)lx600MW
11994j1X600MW
11995 2x7OMWGT(G)I
1
I
1
2x7OMW
GT(G)I
j1x7OMUGT(G)1Ix6OOMW ST(C)|
1
1 1996 12x7OMW
GT(G) 1x6OGMW
ST(C)lx600MWST(C)I
1 199711x600MWST(C)|
1
1
ST(C)
I|X6OOMW
11x6OOMW
ST(C)I
1x7OMW GT(G)I
1x42OMWCC(G)|
1 1998 j1x7OMWGT(G) 1x7OMW GT(G) 2x6OOMW ST(C)I2X6OOMWST(C)j2x600MWST(C)I 3x7OMW GT(G)I

|1x600MW ST(C)l
I
1| 9 |1x600MW ST(C)1lx600MW ST(C)l I
1999 4x7OMW GT(G) jlx600MWST(C)
I12x7OMW
GT(G) I
11x42OMWCC(G)
1
1
1
12000 |1x6OOMWST(C) 2x7OMW GT(G) j1x6OOMWST(C) lx600MW ST(C) lx600MW ST(C)j1X6OOMWST(C)|
12001 2x7OMl GT(G) jlx600MIST(C) 2x7OMW GT(G) j2x7OMWGT(G) 1x6OOMWST(C)| 1x7OMW GT(G)|
I
ST(C)Ix7OMWGT(G) 2x6OOMWST(C)|
12002 j x7OMWGT(G) 2x6OMW ST(C)M2X6OOMW
1
I2003
2X600MW ST(C)T
2x600MW ST(C)
ST(C)lX600MWST(C 1X600MWST(C)1x600MWST(C)
1x600MWST(C)1X600MWST(C)IlX600MW
12004 f2x7OMWGT(G)
1
1
1
1x6O0MWST(C)I2x7OMWGT(G) 2x7OMW GT(G) 1x6OOMW ST(C) lx420MW CC(G)|
1x600MW ST(C)l
11x600MWST(C)1lx600MW ST(C)l
ST(C)l 2x7OMW GT(G)
ST(C)13x7OMWGT(G) j1x60OMW
|2x6OOMW
GT(G)I
2005
lx42OMW CC(G)l
11x600MWST(C)i
I
ST(C)j
I1x600MW
2006 7x7OMW GT(G) 13x7OMWGT(G) j3x70MWGT(G) 3x7OMW GT(G) 11x600MWST(C)I1x6OOMWST(C)|
ST(C)lI
Cx600MW
ST(C)j10x6TOM(
1x600MU ST(C)W1X600MW ST(C)M
1
| 11x600MUST(C)
|3x7OMW
2007
11x6OMW
ST(Qlx600MW ST(C)lx600MWST(C)
1
ST(C)|
Sx600MW
3x7OMW GT(g)
1x420MW CC(G)
1x600MW ST(G)
- 35 -
TABLE 4.5
Page 3 of 4
21
31
41
51
Year
I
11
I-
1 988 -
61
I -I
11989 | x80MW GT(G) j1x8OMWGTt(G)j1x80MWGT(G) | x8OMW GT(G) | x80MW GT(G) l1x8GMWGT(G) I

1
11990
1
11991 |7x70MWGT(G) |3x70MWGT(G) |2x600MWST(C) 3x7OMW GT(G) |2x600MWST(C)j 5x7OMW GT(G)|

1
'1x6OOMWST(C)lx600MW
1992
11993
1
ST(C)l
I'60MW
ST(C)'
|1x420MU CC(G)'
160Wjx2M
1
1
| 1994 j1x600MWST(C)jlx600MWST(C)
11995 12x70MWGT(G) I
|1 x600MW ST(C)j
2x70MWGT(G)
|1x7OMUGT(G) |1x600MWST(C)|
| 1996 2x7OMW GT(G) | x600MW ST(C)jlx600MWST(C)|

| 1997 lx600MW ST(C)|
|1 x70MW GT(G)
I
1
|1x600MWST(C)
|1 x420MW CC(G)|
1
| 1998 |1 x7OMW GT(G) |1 x7OMW GT(G) 1 2x600MWST(C)1 2x600MW ST(C)j2x600MWST(C) 3x7OMW GT(G)|
I
1x600MW ST(C)l
I
I1X600MWST(C)|lx600MW ST(C)
|1x42OMWCC(G)
12x70MWGT(G) I
| 1999 |4x7OMW GT(G) lx600MW ST(C)I
1
1
| 2000 |1 x600MW ST(C)1 2x7OMW GT(G) |1X600MWSTCC) 1x600MW ST(C)llx600MWST(C)j1x600MWST(C)
1
1
1
1
| 2001 |2x7OMWGT(G) | x600MW ST(C) 2x70MW GT(G) 2x70MW GT(G) | x600MW ST(C)j lx7OMW GT(G)|
1
1
1
| 2002 |1 x7OMW GT(G) |2x600MUST(C)1 2x600MW ST(C) lx7OMW GT(G) 2x600MW ST(C)
ST(C)l 6
|2x600MW
|
|2x600MWST(C)|
ST(C)llx600MW
TC600MW
S
x
WT)6
2003 x.
SC600MW
I
ST(C)l
| 2004 |2x7OMWGT(G) | x600MW ST(C)|2x7OMWGT(G) 2x7OMWGT(G) | x600MW ST(C)j1x420MWCC(G)l

I 1x600MW ST(C)
lx600MW ST(C) 1x600MW ST(C)
1x600MW ST(C)
2x600MW ST(C) 3x7OMU GT(G) 1x600MW ST(C) 2x7OMW GT(G)
2005 3x7OMW GT(G) I
j1x600MWST(C)l
|
1x600MW ST(C)l
|1x420MWCC(G)j
| 2006 |7x7OMWGT(G) I3x7OMWGT(G) |3x70MW GT(G) |3x7OMWGT(G) |1x600MWST(C)|1x600MWST(C)l
I
M
jlx600MW
ST(C)
1X600MWST(C)|1x600MW ST(C)| 1
12
|2007|1X600MUST(C)|lx600MST(C) lx600MW ST(C)llx6O0MWST(C)l
3x7OMW GT(g)
lx42OMW CC(G)
lx600MW ST(G)
- 36 -
TABLE 4.5
Page 4 of 4
PLANTING PROGRAMMESFOR SYSTEM 'S'
R-
|I|-P-
O-
G-R
1YerYer-----1-------!---------------------2-------------4--------!---------------!--------------1
22
1
32
1
42
1
52
1
1
| 1988 |1x8OMW GT(O) j1x80MWGT(O) |1x80MWGT(O) 1x80#MWGT(O) 1lx80MWGT(O)

11989
11990
11991 |7x70MWGT(O) j3x70MWGT(O)

|1992
Jx600MW
1
2x600MWST(C)j3x70MUGT(O) 2x600MWST(C)(
ST(C)1
J1x600MW ST(C)|
S
1
1 1993
11994 | x600MW ST(C)j1x600MWST(C)|

1
| 1995 2x70MWGT(O) I
2x70MWGT(O)
|1x7OMW GT(O) |1x600MWST(C)|
11996 j2x70MWGT(0) | x600MW ST(C)f1x600MWST(C)|

1
11997
1x600MW
ST(C)|
|1x600MWST(C)|
I
| x7OMW GT(O) I
1
I1
I
| 1998 j1x7DMWGT(O) j1x70MWGT(O) |2x600MWST(C)|2x600MWST(C)j2x600MWST(C)|

I
I
l1x600MWST(C)|1x600MWST(C)|
I
I
|2x70MWGT(O)
i 1999 |4x70MWGT(O) |1x600MWST(C)l
12000 | x600MW ST(C) 2x70MW GT(O) | x600MW ST(C)|1x600MWST(C)|lx600MWST(C)|

1
1
200
270M
fl600W
I(CI2xIMWII
1 2001 j2x7OMWGT(0) |1x600MUST(C)12x7OMWGT(O) '2x70MW GT(O) 11x600MW
ST(C)I
12002 | x7OMW GT(O) j2x600MWST(C)12x600MWST(C)|lx70MWGT(O)
1
1
2x600MW ST(C)|
I
2x600MW ST(C)
j2x600MWST(C)
| 2003 1x600MW ST(C) 1x600MW ST(C)I1x600MWST(C)I1x600MWST(C) lx600MW ST(C)I
12004
1
1
1
1
2x7OMW GT(O) j1x60OMWST(C) 2x70MW GT(O) 2x70MW GT(O) | x600MW ST(C)|
1x600MWST(C)jlx600MW ST(C)|
j1x600MWST(C)
I
ST(C)|
12x600MWST(C)13x7OMWGT(O) I1x600MW
| 2005 |3x70MW GT(O) I
1x600MW ST(C)l
ST(C)l
1lx600MU
ST(C)l
2006 7x70MW GT(O) j3x70MWGT(O) 13x70MWGT(O) 13x70MWGT(O) 1lx600MW
lx6OOMW ST(C)|
0
QMW S
T(C)
2007 1x600MW ST(C) 1x600MW ST(C)j1x600MWST(C)llx600MWST(C)|1x600MWST(C)|
1x600MU
Gas---- - I-- - - -- - -I-- - - -- - -I-- - - -- - -I-- - - -- - -I -- - - - Note : Gas Turbinescommissioned

in 1988 are committed
itemsof plantwhichwere
assumedto be converted
to gas firingin otherprogrammes.
- 37 TABLE 4.6
ENERGYGENERATION
BY GAS FIRED PLANTS- SYSTEMB
I------
- -- - -- - -- - - -- - -- - --- -- --
IYear Energy
I
1
jj
Energy Generated by Gas Fired Plants
for Gas Prices
of
|Demanid|-----------------------------------------------------------------------------------------------
~(Gwh)
SI/MMBTU
|
-
S2/MMBTU__
[| GWh% of Tot.1
S3/MMBTU i
GWh% of Tot.1
GWh% of Tot.1
S4/MMBTU_
|
GWh% of Tot.1
5/MMBTU I
GWh% of Tot.1
|11988114754
|
11989115786 |
544
3.4
1 1926
12.2 | 1622
11S90116892
12437
14.4 | 2291
13.6
1 2247
|1991118074
1 7429
41.1 | 9457
52.3
11992119339 | 7268
37.6 | 8985
46.5
11993120693| 7538
36.4 19011
43.5
| 1054
11993122141 111101
50.1 | 8854
40.0
1777
8.0 |
11994123691112459
52.6
19510
40.1
1 1931
8.2 |
11995125350116774
66.2 112823
50.6
1 1805
7.1
|1996127124 115427
56.9
113158
48.5
1 1935
7.1
11997129023 119447
67.0
119921
68.6 | 1737
6.0 |
I11,98131054
122175
71.4
119411
62.5 | 1743
5.6 |
124446
73.6 124159
72.7 | 1612
4.9
12000135554 127392
77.0 126572
74.7
4.09
12001138043 132075
84.3
129374
77.2 |
12002140706 135364
86.9
131806
78.1 |
12003143555 138072
87.4 134440
79.1
12004146604 140972
87.9 136898
79.2
12005149867 144271
88.8
140535
81.3
12006153357 147857
89.7
145192
84.7 |
11999133228
.I
1439
721
10.3 |
13.3
5.1
458
2.7
36
0.1 I
112
0.3 |
1.9 |
1
I--
S6/MMBTU_|
GWh% of Tot.
38
TABLE 4.7

SYSTEM C
(All values in MMCFT)
---
ll--
Gas prices in S/MMBTU

--
Year
---
--
--
1
I
--
2
-
1988
37380
1989
40757
1990
44136
1991
45103
1992
49172
1993
53332
1994
58086
1995
60000
1996
64174
1997
6369
69774
1998 1 76668
1999 I 80059
2000
85713
2001
90895
2002
111491
20031 104165
200
1149109
2005
119932
2006 |132435
|2007- |138483
2012
--
3
-
36188
38987
41315
44288
47799
51428
54512
58674
62119
66761
71957
77849
82089
87729
95522
102222
--
4
-
--
5
----
-----
6
---
---
---
117941
127461
134603
36188
38987
41315
44288
47799
51428
54512
58674
62119
66761
71957
77849
82089
87729
95522
102222
0249
117941
127461
134603
753
1260
82
356
1561
2697
1123
2341
397
1383
3327
7544
2875
3655
10391
11131
12910
12746
13814
17579
1123
2341
397
1369
3327
7544
2875
3655
10391
11131
12910
12746
13814
17579
3327
7544
2875
3655
10391
11131
12910
12746
13814|
17579
68037
68037
4555
4075
3880
|Total|l
| Gas 2961420 2855719 2855719
|Demand|l
283712
276990
11
Average
Annuat
Valuel
Leastll
Cost
0
Programme
70829
114830-110249-110249-12910-
12910-
273130|
11
12910--
39 -
TABLE 4.8
Page 1 of 3
PLANTING PROGRAMMESFOR SYSTEM 'C'
Year
1988
(1)
(1)
(2)
S i
4 .
(2)
1x5OMW GT(G)
GT(G)
W
1x50MW
1989
1x5OMW GT(G) l1x5OMW GT(G)
1990
1x5OMVGT(G) 1x5OMW GT(G) 11x2001M ST(G) 1 1x200MWST(G)
1991 j1x200MWST(G) 1 1x200MW ST(G)
1
11992
1993 1x5OMW GT(G)
1994
W ST(G)
WO1x200M
1x50MW GT(G) | 1x50MWGT(G)
1995 1 1x200MW ST(G)
j1x200MWST(G)
1 WX200MW ST(G)
l1x20W
1996
2x50MW GT(G)
119976
1998
2x50MW GT(G)
MW GT(G)
ST(G)
1 1x200W
1x5OMWGT(G)
WO
ST(G)
x200MW ST(G)
2x50MW GT(G)
ST(G)
G1x200MW
1x5OMW GT(G)
2x50MW GT(G) 3x5OMW GT(G)

1x50MW GT(G) |WO
M ST(G)
|1X200MWST(G)
2000 5x5OMW GT(G) 3x5OW GT(G) 3x5OMW GT(G) 2x5OMW GT(G)
ST(G) llx200MWST(G) |
ST(G) l1x200MW
1lx200MW
2x5OMW GT(G) I1x200MWST(G) |1x200MWST(G)
ST(G)
2001 j1x200MW
1999
2002 1x5OMW GT(G)
1x5OMW GT(G)
3x5OMW GT(G)
2x5OMW GT(G)
2003 i 9x50MW GT(G) | 9x50MW GT(G) |8x5OMW GT(G) | 8x5OMWGT(G)

| 1x200MW ST(G) |1x200MUST(G)|
2004 |3x50MW GT(G) |3x50MW GT(G) |1x200MWST(G) |1x200MWST(G)
1x50MWGT(G) j 3x50MWGT(G) j 3x5OMWGT(G)
2005 | 1x5OMWGT(G)
I
W1X00W ST(G) |1X200MWST(G) I
|
1
| 2006 | 3x50MW GT(G) | x200MW ST(G) |1x200MWST(G) |1x200MWST(G)
2007 j1x200MWST(G) |1 x200MWST(G)
I-
-.-.
(1)
9x5OMU GT(G)
W ST(G)
3x200W
11x200MWST(G)
(2)
5x5OMW GT(G)
4X200MWST(G)
|1x200MWST(G)
-
- 40 -
TABLE 4.8
Page 2 of 3
PLANTING PROGRAMMESFOR SYSTEM 'C'
----- -- -- -- -- -- - -- -- -- -- Year
I-
P
|
I
R
5
(3)
1988
A
1
M
7
(3)
(4)
S |
(3)
1989 1 1x200MW ST(C) |1 x200MW ST(C) I1x5OMW GT(G)
1x50MW GT(G)
ST(C) 1 1x200MW ST(C)

W O1x200MW
1990
119911
1x50MW GT(G) |1 x200MWST(C) I
1992
1993 |1 x200MW ST(C) I

1x200MWST(C)
1994 1
1995
1x5OMW GT(G)
2x5OMW GT(G)
2x50MW GT(G)
W1x200MW
ST(C)
W1x200MW
ST(C)
ST(C) 1x200MW ST(C)

1996 |1x200MWST(C) I 1x50MWGT(G) |1x200MW
ST(C)
|1x200MW
O
1997
1x5OMWGT(G)
1x5OMW GT(G)
1999 |1x200MUST(C) |1 x200MWST(C) I3x5OMW GT(G)
j 3x5OMW GT(G)
19981
WW
GT(G) I1
2000 I1x200MWST(C) 1x50MWGT(G)

2x5OMW GT(G)
2x5OMW GT(G)
1x200MWST(O) 1x200MWST(O) 1x200MWST(C) 1x200MW ST(C)
O
ST(C) |1 x200MWST(C) |1x200MWST(O)
2001
|1x200MW
2002 |1x200MWST(C) I1x5OMW GT(G)
2x5OMW GT(G)
2x5OMW GT(G)
2003 | 7x50MW GT(G) | 5x50MW GT(G) | 8x5OMW GT(G) 8x5MW GT(G)

T
GT(G)j|1x200MWST(C)
2003
ST(C) jx200MW ST(C)
2004 j1x200MWST(C) |1x200MMW1
2005 | 3x5OMW GT(G)
2x5OMW GT(G) | 3x5OMW GT(G)
3x50MW GT(G) |
2006 j1x200MWST(C) 1 1x200MWST(C) 1 1x200MWST(C) 1x200MW ST(C)

2007 |lx200MWST(C) I1 x200MWST(C) |1x200MWST(C) |1x200MWST(C)
(3)
5x5OMW GT(G)
3x200MW ST(C)
1x2OOMW ST(O)
(4)
5x5OMW GT(G)
4x200MW ST(C)
- 41 -
TABLE 4.8
PLANTINGPROGRAMMES FOR SYSTEM IC'
Page 3 of 3
I --- -- - - -- - - - -- - - -- -IYr
P
R
O
G
R
A
M
M
E
S |
Year l----------------------------------------------------------9
I
10
I
11
1
12
1988
(5)
1
|
(6)
STC
| 1989 |1 x200MW ST(C) |1 x200MW ST(C) I1x5OMW GT(O)

1990
1x5OMW GT(O)
1 1x200MWST(C) 1 1x200MWST(C)
1 1991
1992
1x50MU GT(O) |1 x200MW ST(C)
| 1993 |1 x200MW ST(C) I

1994 |
1 lx200MW ST(C)
| 1996 |1 x200MWST(C)
1997 |
.1
I2x5OMW GT(O) | 2x5OMW GT(O)
1995 1 1x5OMW GT(O) I
|1998
(5)
|1x200MWST(C) |1x20OMWST(C)
1x50MW GT(O) |1x200MWST(C) lx200MW ST(C)

1 1x200MW
1 2x5OMW GT(0) |
ST(C) |
1x5OMW GT(O)
| 1999 |1 x200MWST(C) |1 x200MWST(C) I3x5OMW GT(O)
1x50MW GT(O)
3x50MW GT(O)
2000 11x200MWST(C)
x50MU GT(O)i 2x5OMW GT(O) 2x50MW GT(O)
|1x200MW ST(O) |1x200MWST(O) |lx200MWST(C) 1x200MW ST(C)
2001 |
1lx200MWST(C) 1x200MW ST(C) 1 1x200MWST(O)
2002 |1x200MWST(C) I1x5OMW GT(O)
2003 | 7x5OMW GT(O)
2x5OMW GT(O)
2x5OMW GT(O)
I 5x5OMW GT(O)
8x5OMW GT(O) 8x5OMW GT(O) |

|1x200MWST(C)|j
2004 1 1x200MWST(C) 1 1x200MWST(C) j1x200MWST(C) lx200MW ST(C)
2005 | 3x5OMW GT(O) I 2x5OMW GT(O)
3x50MW GT(O)
3x50MW GT(O)
2006 |1 x200MW ST(C) j1x200MWST(C) |1 x200MWST(C) I1x200MWST(C)

2007 |1 x200MW ST(C) |1 x200MWST(C) |1 x200MWST(C) I1x200MWST(C)
-(5)
5x50MU GT(O)
3x200MW ST(C)
1x200MW ST(O)
(6)
5x5OMW GT(O)
4x2OOMW ST(C)
- 42 TABLE 4.9
ENERGY GENERATIONBY GAS FIRED PLANTS - SYSTEM C
- -- -- - -- - -- -- - -- -- - -- -- - -- -
----I---
Energy Generatedby Gas Fired PLants for Gas Prices of

{YearEnergy
|Demandi----------------------------------------------------------------------------------------------I
$5/MMBTU
$4/MMBTU
$3/MMBTU
$2/MMBTU
$1/MMSTU I
|(GWh)I
I
$6/MMBTU
GWh X of Tot.1 GWh % of Tot.I GWh % of Tot.1 GWh % of Tot.1 GWh X of Tot.1 GWh % of Tot.
1198813817
100.0 | 3817
|3817
100.0 | 3817
100.0 |
55
1.4 |
92
2.3 |
0.1 |
1199014370
14370
100.0 J 4370
100.0 | 4370
1
100.0 i
119911
4676
| 4676
100.0 | 4676
100.0 |4676
100.0 |
26
0.6 |
1199215003 | 5003
100.0 | 5003
100.0 J 5003
100.0
114
2.3 J
1199315354
|5354
100.0
15354
100.0 | 5354
1
100.0 1
197
3.7
5728
119941
1 5728
100.0 1 5728
100.0 1 5728
100.0 1
82
1.4
119951
6129
|6129
100.0 | 6129
100.0
16129
100.0
171
100.0
119891 4084 | 4084
14084
100.0
14084
100.0
82
2.8 | 171
1.4
2.8 |
1199616558 1 6558
100.0
6558
100.0
6558
100.0
29
0.4
29
0.4
119971
7017
1 7017
100.0
7017
100.0
7017
100.0
I 101
1.4
I 101
1.4
1199817509
17509
100.0
7509
100.0
17509
100.0
1 243
3.2
1 243
3.2
8034 1 8034
119991
100.0
8034
100.0
8034
100.0 | 551
1200018597 | 8597
100.0 | 8597
100.0
8597
19198
100.0 | 9198
100.0 | 9198
|200119198
19842
I 9842
1 101
1 243
3.2
6.9 | 551
6.9 | 551
6.9
100.0 | 210
2.4 | 210
2.4
100.0 | 267
2.9 | 267
2.9 | 267
2.9
7.7!
759
7.7
7.7 1 813
7.7
943
8.4
2210
1.4
2.4
759
7.7
759
100.0 110531
100.0 1 813
7.7
100.0 111268
100.0 111268
100.0
1 943
8.4
1 813
1 943
12005112057112057
100.0 112057
100.0 112057
100.0
931
7.7 | 931
7.7 | 931
7.7
12006112901112901
100.0 12901
100.0 |12901
100.0 | 1009
7.8 | 1009
7.8 | 1009
7.8
100.0 113804
100.0 113804
100.0
9.3 | 1284
9.3
20021 9842 1 9842
100.0
2003110531 110531
100.0 110531
12004111268111268
2007113804 113804
I
l~~~- -
100.0
--------------------------------------------------------------------..............
100.0
1284
8.4
1284
I-
9.3
- -- ---
43 -
TABLE 4.10
COMPARISON
BETWEEN
ANNUALDISCOUNTED
AVERAGEGASCONSUMPTIONS
CALCULATED
IN NOVEMBER
1982 REPORTAND CURRENT
VALUES
(Current
| System
i
If
I
Report
1
~~~1
Gas Price
4
Prices)
in S/MMBTU
5
6
9.2
9.2
8.3
8.5
3.2
8.1
0.5
0.5
INovemberl 156.0
iCurrent
160.5
148.7
13.7
14.2
13.5
1.3
12.6
0.0
0.0
68.0
69.2
68.0
2.5
4.6
1.8
4.0
3.9
November
Current
iNovemberl
Current
Not
70.1
70.8
A---- l---- es -in BiLlon-Cub-c-Feet---r--n
Note : All
values in Billion
Cubic Feet per annum
l
7
3.3
0.4
0.7
0.7 |
0.3
0.3 |
GAS DEMAND CURVE FOR SYSTEM A

7,-
6-
5 m~~~~~~~~~~~~~~~
.'0
2-
3 -
2 -
__
0~~~~~~~~~~~~~~
_X
Average ainnual discounted consumption in Billion Cu Ft
10
UNDISCOUNTED GAS DEMAND CURVE

FOR SYSTEM A
7-
6 -
4 -
0 -
Z~~~~~~~~~
0.1
0.2
0.3
Total gas consumption in Trillion Cu Ft
0.4
ANNUAL GAS CONSUMPTION FOR LEAST COST

PROGRAMMES - SYSTEM A
22 2018-
>
16
14
-99
12
Fo
~10
~8
~~6
Yecr~~~~~~~~~~~~~~c
4
2
0
1988
1991
1994
1997
2000
2003
2006
Yeair
I
$I/MMBTU
$2/MMBTU
$3/mmBTU
S4/MMBTU
S5/MMBTU
$6/MMBTLU
GAS DEMANDCURVE FOR SYSTEM A

1990
7-
6 A
4
m
3
2
G;as consumption in Billion Cu Ft

1995
7-
6t
m~~~~~~~~~~~~~~~~
C,)
1~~~~~~~~~~~~~~~~~~~~~~~~~~~~P
2
o~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~(T
4
Gas consumption in Billion Cu Ft
.,Il,

2000
7-
5
6 -
0~~~~~~~~~~~~~~
10
12
GAS DEMANDCURVE FOR SYSTEM A

2005
7 -
5
5
4-
XN
c)
-~ ~ ~
~~I-
.'
2
0~~0
11
13
15
17
19
GAS DEMAND CURVE FOR SYSTEM B

7-
5,;;
4
~~~~~~~~~~~~~~m
co
1
0
20
40
60
80
100
120
Average annual discounted consumption in Billion Cu Ft
140
160
7-

FOR SYSTEM B
6 A
5A
[TI
(9~~~~~~~~
Totailgas consumption in Trillion Cu Ft

PROGRAMMES - SYSTEM B
450 400350 IC-)
300
5~~~~~~~~~~~~~~~
250
2001
0
0
V) 150
,
_2
100
50
01988
1991
1994
1997
2000
2003
2006
Year
*
51/MMBTU
S2/MMBTU
S3/MMBTU
$4/MMBTU
Ss/MMBTU
$6/MMBTU
GAS DEMANDCURVE FOR SYSTEM B

1990
7-
6 A
A)
3-I
12
16
20
24
7-

1995
+,,
~4 *Am
.'>
~~3 .
m
2~~~~~~~~~~~~~~
-n
-s0
20
40
60
80
100
120
7 -_
GAS DEMANDCURVE FOR SYSTEM B

2000
6 -1l
5 Al
m
4 -
c~~~~~~~~~~~~~~
.C~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~C
m
U@
37
|-
40
1-
80
II
120
160
200
240

2005
7 -
I-~~5
4 4
m
0n
00
100
200
300
400
GAS DEMAND CURVE FOR SYSTEM C

7 -
6-
5-
2m
U)
4PQ-~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~-
Vj)
20
40
60
Average annucl discounted consumption in Billion Cu Ft
80

FOR SYSTEM C
76 -
:D
I--
X_
co
2-
0.4
0.8
1.2
1.6
Total gas consumption in Trillion Cu Ft
2.4
2.8

PROGRAMMES - SYSTEM C
140 130 120 110
H
100
90 80 Ye:r
70 -
m
o~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~o
o50
0
~40302010
1988
1991
S1/mmBTu
4- $2/M?vOTO
1994
1997
2000
2003
2006
Year
U
$3/MME)TU
$4/mmBTu
$5/mmBTu
$6/M?BTU
7-

1990
6-
I-~~4
m~~~~~~~~~~~~~~~~
5
_
1-
0-~ ~
0
1'
10
-I
20
30
40

1995
7-
0
2-
20
40
60

2000
7 -
5
I--T
4
m
4P.
00
20
40
60
80
GAS DEMANDCURVE FOR SYSTEM C

2005
76-
5 - 1
1
I
u.
2 -~
~ ~ ~~~~~~~~~~~~~~~~~~~~~~~2
0 -
10
30
50
Gas consumption
70
in 13illion Cu Ft
90
110
COMPARISON BETWEEN NOVEMBER 1982 REPORT AND

CURRENT DEMAND CURVE - SYSTEM A
13 12 11 1
10
82
~
7
6
I-3
I_ii
O-~~~
Il
0~~
Annual discounted consumption in Billion Cu Ft

O
Current
(1988 $)
November 1982 Report
(1982 $)
(1988 $)

CURRENT DEMAND CURVE
SYSTEM B
13
-i
12
11
10
-T.
a)
20
406
010
121
016
2
(198
1 $)
o Current
(1988 $)
I92$)(98$
20
40
60
80
100
120
+
(1982 $)
140
160
(1988 $)

CURRENT DEMAND CURVE - SYSTEM C
-
13
12
11
10
4+
3
2
1
0-
0
0
Current
(1988 $)
I.
80
60
40
20
+
(1982 $)
(1988 $)
APPENDIXA
BASIC DATA AND ASSUMPTIONS
70
TABLE A.1
INHERITEDPLANT MIX
|GeneratingPLant Type
Steam
oil fired
Isteam- ;;ignite
fired
System
I---A
I
|
I|
Gas Turbine - distilLatefired

Diesel
Hydro
5x33MW
c (1)
1x 30MW
2x 75MW
1x 87MW
2x200MW
3x300MW
3x 75MW
3x 20MW
234MW (so)
----------------------------- ----------------------------------70MW (so)
34MW (so)
1269MW
Note:
(1) Effective inheritedpLant mix for System C changed
for each gas price scenario
71 -
TABLEA.2
ASSUMEDRETIREMENT
DATESFOR INHERITED
PLANT- SYSTEMB
Year
1itfired
Steam
I
Lignite
fired
Steam
Gas
Turbines
1989 1
34MW
19901 2x 75MW
199
Diesels
154MW
l x 87HWl
1992k
1993(
1994
3x 20MW
1995
1996
1997
1998
19991
2000 |x200MW
2001
1x300MW
2002 |x300MW
20031
2004 1x300MW
2005|
l
80MW
1x300MW
l-
1
l
72
TABLE A.3
COMMITTED
PLANT- SYSTEMB
Year- --
- - - - - - Ptant ---
- - - --
1989 |4x 20 MW
j|x 72MW
l_11x
71MW
GT
Hydro
Steam
(209 GWh)
Residual fuel oil.
1990
Hydro
Hydro
(200 GWh)
(150 GWh)
1x133MW
lx 38MW
i-- --
--------
I-
--
19911
1992 j1x300MW
1x 12MW
11x150MW
Hydra
Hydro
Steam
(806 GWh)
( 13 GWh)
Lignite
1993 l1x18oMW
1x 9MW
1x150MW
Hydro
Hydro
Steam
(406 GWh) I
( 9 GWh)
Lignite
--
--
--
--
--
TABLE A.4
ASSUMED PLANT CHARACTERISTICS

|Plant
Type
Unit
No
MW Capacity
NameSent
pLate
out
Max.
Avail
(X)
Average Variable
Heat
0& M
Rate
IkcalkWh
Steamoil
I
s
I
1
I$/MWh
Page 1 of 5
Fixed
0 & M
Total
Capital
Cost
IS x 1000 $ miLlionl
1
2+
33.0
33.0
30.9
30.9
87
87
2908
2908
1.00
1.00
5277
0
I
2+
40.0
40.0
37.5
37.5
87
87
2887
2887
0.95
0.95
2707
675
59.88
37.43
1
2+
60.0
60.0
56.4
56.41
87
871
2698
26981
0.95
0.95
3185
864
87
87
2625
2625
YC-3
Phased capital cost (X)

YC-2
YC-1
YC
ISpecific
I
YC+1
Capital |
Cost
I
S/kW
15.8
10.0
50.6
20.0
22.8
45.0
5.8
20.0
5.0
5.0
79.16
49.97
15.8
10.0
50.6
20.0
22.8
45.0
5.8
20.0
5.0
5.01
0.84
0.84
3549 | 112.74
1085
72.74
15.8
10.0
50.6
20.0
22.8
45.0
5.8
20.0
5.0 |
5.0
1199
774
2467 |
2467
0.80 |
0.80
4124 | 156.73
1242
96.38
15.8
50.6
20.0
22.8
45.0
5.8
20.0
5.0 |
5.0
1112 |
10.0
23621
2362
0.77|
4567
0.77
1407
194.48
119.55
15.8
10.0
50.6
20.0
22.8
45.0
5.8
20.0
5.0
5.0
1597
998
1403
886
1
2+|
100.0
100.0
94.0
94.0
1|
2+1
150.0
150.0
141.0
141.0
1
2+
200.0
200.0
188.0
188.0
85
85
1
2+1
300.0
300.0
282.0
282.01
85 |
851
2331
2331
0.73 |
0.73
5247
1717
265.84
163.45
15.8
10.0
50.6
20.0
22.8
45.0
5.8
20.0
5.0
5.01
1
2+
400.0
400.0
377.0
377.0
80
80
2310
2310
0.69
0.69
5901
2012
333.33
205.06
15.8
10.0
50.6
20.0
22.8
45.0
5.8
20.0
5.0
5.0
1
2+
500.0
500.0
472.0
472.0
80
80
2294
2294
0.66
0.66
6534 | 397.971
2294 1 244.82
15.8
10.0
50.6
20.0
22.8
45.0
5.8
20.0
5.0 |
5.0 1
843 |
519
II I 600.0
1+
2+ |600.0
ii
2+
-
567.0
567.0
80
80
2284
2284
0.63
0.63
7151
2565
15.8
10.0
50.6
20.0
22.8
45.0
5.8
20.0
5.0 i
5.0
812
499
-
87
87
I
-
I
-
460.32 I
283.14 I
-
684
1034
636
943
580
---
884
544
TABLE A.4
Page 2 of 5
|Ptant Type
Il
ll
Steam
coal
Unit
No
|
MW Capacity
i
NameSent
plate
out
l
Max.
Avail
(X)
1
2+
150.0
150.0
140.0
140.0
85
85
2664
2664
0.95
0.95
5156
1458
1
2+ |
200.0
200.0
187.0
187.0
83
83 I
2450
2450
0.90
0.90
5670
1654
1
2+
300.0
300.0
280.0
280.0
24171
2417
0.86
0.86
6489
2028
j1
2+1
400.0
400.0
375.01
375.0
78
78
2395
2395
0.82
0.82
500.0
500.0
469.0 |
469.0
78
78
2378
2378
0.80
0.80
600.0
600.0
564.01
564.0
.
I.
78
78
If
iredI
2+
1
2+
I---
I.
I
I
83
83
2367 1
2367 I
.- I.
.
0.771
0.77
7274
2381
8035
2718
I
I
-I
Total
Average |VariableI
Fixed
Capital
O &M
0
Heat
0 & N
Cost
Rate
$/MWh 1$ x 1000 1$ millioni
I~~~~~~~I
kcal/kWh
YC-3
Phased capital cost (%)

YC-1
YC
YC-2
Cost
$/kW I
1543
826
216.07
115.69
15.8
10.0
50.6
20.0
22.8
45.0
5.8
20.0
5.0
5.0
263.98 I
143.43
15.8
10.0
50.6
20.0
22.8
45.0
5.8
20.0
5.0
5.0
15.8
10.0
50.6
20.0
22.8
45.0
5.8
20.0
5.0
5.0
440.87
246.10
15.8
10.0
50.6
20.0
22.8
45.0
5.8
20.0
5.0
5.0
1176
656
523.67 |
293.72
15.8
10.0
50.6
20.0
22.8
45.0
5.8
20.0
5.0 |
5.0
1117
626
15.8
10.0
50.6
20.0
22.8
45.0
5.8
20.0
5.0
5.0
1070
602
354.78
196.20
87781 603.601
339.77
3044
.
I.
I.
|Specific
YC+1 I Capital I
II
1412
767
1267
701
TABLEA.4
ASSUMEDPLANTCHARACTERISTICS
II
IPlant Type
Unit
MW Capacity
~~~~No
j NameSent
pLate
out
2+
I I
20.0
J~~
-I-~~~~2+_l150.0
180
150.0 141.01
141.0_
Max. AverageiVariable
I Fixed
TotaL
Avail
Heat
0& N
0 & N Capitat
%
Rate
kctkW
k,/W
/MWhItx 1000ISmCsf"
to
-I
tLignite
Page 3 of 5
831
13
27731
831 27731
1.62
20251
1.081
12421
12421
i.08.1
YC-3
I-------------
Phasedcapitat cost (%)

Specific
YC-2
YC-1
YC
YC+1 Capitat
Cost
Cs
I--I~~~~-----$/kW
TABLE A.4
Page 4 of 5
|Ptant
Type
Comb. Cycle1
distillate/
jgasfired I
Unit
No
Max.
Avail
Average IVariable
Fixed
Total
Heat
0& M
O& M
0
Capital I
(X)
Rate
I
Cost
kcal/kWh
S/MWh 1$ x 1000 S million|
iSpecific I
Capital |
Cost I
$/kW
YC-3
Phased capital cost ()

YC-2
YC-1
YC
10.0
-
35.0
40.0
38.0
40.0
13.0
15.0
4.0 5.0 I
944
713
YC+1
2749
937
82.16
62.01
2.67 ;
2.67
2749
937
109.85
83.46
10.0
-
35.0
40.0
38.0
40.0
13.0
15.0
4.0
5.0
947
719 ;
2230 |
2230
2.28
2.28
3345
1251
120.38
92.04
10.0
-
35.0
40.0
38.0
40.0
13.0
15.0
4.0
5.0
830
635
80
80
2090
2090
2.09
2.09
3772
1517
155.35
119.73
10.0
-
35.0
40.0
38.0
40.0
13.0
15.0
4.0
5.0
765
590
801
801
20701
2070
2.08
2.08
44091
1953
211.38
167.83
10.0
-
35.0
40.0
38.0
40.0
13.0
15.0
4.0
5.0
80
80
2050
2050
- - I-
35.0
40.0
- - -
13.0
38.0
40.0
15.0
- - - .-.-- -
4.0
5.0
90.0
90.0
87.0
87.0 1
80
80
2250
2250
2.67
2.67
120.0
210.0
116.01
116.0
80
80
2240
2240
t
2+
150.0
150.0
145.0|
145.0
80
80
1
2+
210.0
210.0
203.0
203
11
300.0
300.0
291.0
291.0
2+
I
I
2+
MW Capacity
NameSent |
plate
out
1 2+1
1
2+
- --- - -
407.0
420.0
420.0
407.0
- - - -
2.07
2.07
- - -
10.0
5034
278.46
218.14
2417
- - - - I - - - I.
.
--
726
577
684
536
I
TABLE A.4
IPtantType
Unit
No
Gas Turbine
distillate/
1
2+ 1
Max. j Average IVariable Fixed

Total I
AvaiL j
Heat
0 &M
O & M I Capital
0
X)
Rate
100
Cost
kcal/Wh
}S/HWh
IS x 1000 IS milllionl
M Capacity
HW
NameSent
plate
out
15.0
15.0
15.0
15.0
82.5
82.5
4000
4000
1I
2+ |
30.5
30.5
30.0
30.0
82.5
82.5
3500
3500
3.51
3.51
i
1
50.5
50.5
50.01
50.0
82.5
82.5
3450
3450
2+1
{1 t |
l
2+
g
71.1
71.1
70.0
70.0
82.5
82.5
3300
3300
II
igasfired
1
-
I--
Page 5 of 5
--
--
4.59
4.59
I--
YC-3
Phased capital cost (X)

YC-2
YC-1
YC
ISpecific
YC+1 j CapitaL
c
Cost
/k
1272
65
8.27
7.52
0.0
0.0
10.0
0.0
62.0
70.0
25.0
25.0
3.0
5.0
1300
150
11.931
10.85
0.0
0.0
10.0
0.0
62.0
70.0
25.0
25.0
3.0
5.0
2.971
2.97
1536
257
18.421
16.75
0.0
0.0
10.0
0.0
62.0
70.0
25.0
25.0
3.0
5.0
2.70
2.70
1675
342
24.52
22.29
0.0
0.0
10.0
0.0
62.0
70.0
25.0
25.0
3.0
5.0
--
--
I--
551
501
398
362
368
335
350
318
-
78 -
TABLE A.5
Page 1 of 2
FUEL PRICE ASSUMPTIONS
I
CCrudeOiL
Coal
Lignite
Gas
Year I$/bbL(1)S/bbL(2) % change S/Te(1) S/Te(2) % change I$/MMkcaL
% change % change
1988
11.8
16.6
I
25.0
35.1
5.84
I
{ |
~~~~~~~-7.63
I
.0f
.0g
00
1989
10.9
15.3
6
25.0
35,1
0.00
5.90
1.00 I
0.00
1990
11.1
1991
15.6
1.83
16.8
7.59
1993
18.0
19.4
I
1994
1995
16.0
1996
1998
22.4
1999
2000
46.6
7 5
3.17
35.0
49.1
0.00
1.00
0.00
1.00
0.00
6.14
1.00
0.00
0.00
6.20
1.00 i
I
1.00
1.00
0.00
0.00
1.00
0.00
6.08
5
I
5 3
-0.58
6.26
48.8
3.17
44-0.55
24.9
3.1
48.0
26.2
1.00
6.02
5.33
3.17 1
18.7
|post 20001
Notes :
(1)
(2)
(3)
(4)
44.3
24.6
5.96
5.33
5.33
7
7.59 I
23.2
8.00
42.0
20.9
37.9
~~~~~~7.59
1
1992
27.0
3
2.00
6.32
6.39
65
-0.58
34.0
47.7
1.00
1985 DolLars
1988 DolLars
Lignite price in 1988 Dollars (WorldBank value)
Forecastsbased on World Bank estimates for coal and oiL
Lignite forecast based on increasingdifficulty in mining
1.00
6.58
1.0
0.00
0
0 0
- 79 TABLE A.5
Page 2 of 2
1988 DATUM FUEL PRICE ASSUMPTIONS
Values in 1988 S
-Fuel
-System
Basic cost Transport-TotaLl

~~~~S/MMkcat
S/1MMkcat
S/MMkcal
I--------I.-----------------------.----I
}
A/C Residual
Distillate
jCoal
B |Residual
Distillate
Coat
iLignite
I-
I
I
I
9.156
15.870
5.261
1.146
0.686
3.000
10.301
16.556
8.261
9.156
15.870
5.261
-
0.625
0.490
1.500
-
9.781 |
16.360 I
6.761 I
5.840
Assumptions:
(1) ResiduaL 75% of crude oiL price on heat content basis
(2) Distillate
130% of crude oil price on heat content basis
(3) Calorificvalues (on LCV basis) :
ResiduaL
9600 kcal/kg
Distillate
10200 kcal/kg
Coal
6667 kcal/kg
Gas
1000 BTU/scf
I---------------
-----OSL6
uealsPaJL; 1U Mw00M
W
1
Wealsp@J'i
1Ho mwEJ
- --------
- -----------------------------
------------
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III
lSOo
i
I iOSJOAUOOI
I 1e;o
- -----
SagmW091
|ukqJnl
0Z5
@dAjlueld
lNVld
3NIdIA SVS 01 NOIS13ANOO
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RECENT WORLD BANK TECHNICAL PAPERS (continued)

No. 85.
Ernst & Whinney, Proposalsfor Monitoring the Performanceof Electric Utilities
No. 86.
Munasinghe, Integrated National Energy Planning and Management: Methodology and Application
to Sri Lanka
No. 87.
Baxter, Slade, and Howell, Aid and Agricultural Extension: Evidence from the World Bank and Other
Donors
No. 88.
Vuylsteke, Techniquesof Privatization of State-Owned Enterprises, vol. I: Methods and

Implementation
No. 89.
Nankani, Techniquesof Privatization of State-Owned Enterprises, vol. 11:Selected Country Case

Studies
No. 90.
Candoy-Sekse, Techniques of Privatization of State-Owned Enterprises, vol. III: Inventory of Country

Experience and ReferenceMaterials
No. 91.
Reij, Mulder, and Begemann, Water Harvesting for Plant Production: A Comprehensive Review of
the Literature
No. 92.
The Petroleum Finance Company, Ltd., World Petroleum Markets: A Framework for Reliable
Projections
No. 93.
Batstone, Smith, and Wilson, The Safe Disposal of Hazardous Wastes: The Special Needs and
Problems of Developing Countries
No. 94.
Le Moigne, Barghouti, and Plusquellec, Technologicaland Institutional Innovation in Irrigation
No. 95.
Swanson and Wolde-Semait, Africa's Public Enterprise Sector and Evidence of Reforms
No. 96.
Razavi, The New Era of Petroleum Trading: Spot Oil, Spot-Related Contracts, and Futures Markets
No. 97.
Asia Technical Department and Europe, Middle East, and North Africa Technical Department,
Improving the Supply of Fertilizers to Developing Countries: A Summary of the World Bank's
Experience
No. 98.
Moreno and Fallen Bailey, Alternative Transport Fuels from Natural Gas
No. 99.
International Commission on Irrigation and Drainage, Planning the Management, Operation, and
Maintenance of Irrigation and Drainage Systems: A Guide for the Preparationof Strategies and
Manuals
No. 100.
Veldkamp, Recommended Practicesfor Testing Water-Pumping Windmills
No. 10-1.
van Meel and Smulders, Wind Pumping: A Handbook
No. 102.
Berg and Brems, A Casefor Promoting Breastfeedingin Projects to Limit Fertility
No. 103.
Banerjee, Shrubs in TropicalForest Ecosystems: Examples from India
No. 104.
Schware, The World Software Industry and Software Engineering: Opportunities and Constraints for
Newly Industrialized Economies
No. 105.
Pasha and McGarry, Rural Water Supply and Sanitation in Pakistan: Lessons from Experience
The World Bank

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Demand and Netback Values

RECENT WORLD BANK TECHNICAL PAPERS

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Armstrong-Wright and Thiriez, Bus Services:Reducing Costs, Raising Standards

Prevost, Corrosion Protection of Pipelines Conveying Water and Wastewater: Guidelines

Mahmood, Reservoir Sedimentation: Impact, Extent, and Mitigation

Jeffcoate and Saravanapavan,

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Noetstaller, Small-Scale Mining: A Review of the Issues

Noetstaller, Industrial Minerals: A Technical Review

Heyneman and Fagerlind, University Examinations and Standardized Testing: Principles,

Cemea, Involuntary Resettlement in Development Projects: Policy Guidelines in World

Barrett, Urban Transport in West Africa

The Reduction and Control of Unaccounted-for Water: Working

(List continues on the inside back cover)

Demand and Netback Values for Gas in Electricity

Industhy and Energy Series

Demand and Netback Values

Neil Pinto and John Besant-Jones

The World Bank

This paper updatesan analysisof relationships

Annualfuel costs for SystemsA and C.............................

The gas price/demand

for power use. It can thus be used

The Consultantshallassessthe demand for naturalgas in

Three prototypepower systemswill be optimisedusing

The gas pricesto be assumedwill be $1/MMBTU,

The rate of growthof demandfor electricity

The power systems'demandfor gas shall be calculated

A reporton the analysisshallbe completedby 30 June

For all powersystemsthereis a priceof gas belowwhich

As the priceof gas varies,the demandfor gas does not

The preciseshapeof the demand/price

- 4factorsthe most importantof which are the expected

Below the critical gas prices (see 1 above) the

The generalshapeof the demandcurve is not greatly

The effectof technicalchangesin the designof gas

gas firedgas turbine

gas firedgas turbine

gas firedgas turbine

In general for all three systems the candidateplants were

-8 requirementwould be calculatedusing a probabilisticapproach.

possiblehydro plantswere eliminatedby the assumptionthat there

Capitalcosts of generatingplants were assumedto have

Fixedoperationand maintenancecosts, and staffingcosts

- 12 lots increases(dueto increasesin fuel burn resultingfrom growth

existing300 MW oil firedsteam

committed80 MW distillatefiredGT to gas fired GT

The same conversionassumptionswere made in the November 1982

ANNUAL FUEL COSTS FOR SYSTEMS A AND C

ANNUAL FUEL COSTS FOR SYSTEM B

- 17 averageannual value as in Figure 4.1. As would be expected,the

By 1995 there is no potentialfor a changein merit orderover the

of new thermalpeakingplant.There is some potentialfor the

Gas pricesand discounted

- 20 gas consumptionfallsmarginallyto a levelof 144.3billioncubic

Gas oricesand undiscounted