Integrated Energy Planning - Energy and Power System Planning in Pakistan.

Integrated Energy Planning - Energy and Power System Planning in Pakistan.

Integrated Energy Planning and Policy (IEP) addresses sector debt by focusing less on stopgap measures such as unconditional bailouts, and more on endemic causes such as system losses and operational inefficiencies. Overwhelming evidence points to the absence of coordinated policy as a fundamental issue.  Energy of course is central to development and the well being of the society.

. IEP has two essential components: analysis that feeds the decision-making process and a policy- level institutional structure to facilitate sound decision making. IEP addresses short, medium, and long-term issues. The short-term is vital.

 Pakistan has good long-term prospects, but to get there it needs to navigate the troublesome short term.IEP integrates energy subsector plans and policies to support national objectives. It provides a range of policy scenarios tested for their impact on the economy. Above all, however, effective implementation of IEP requires a separate energy ministry with overarching responsibility for the sector and access to top policy levels of adding noncommercial/alternative energy skills to the planning unit of the Hydrocarbon Development Institute of Pakistan. Energy planning is fragmented, this has partly been addressed by formation of energy ministry, this, however, is in form only as a comprehensive plan has yet to be prepared. There are ongoing efforts to acquire tools for and revive integrated energy planning in Pakistan, this is imperative as without a comprehensive energy plan a optimized development of the energy sector is not possible and decision making is likely to result in costly mistakes and errors.

The following is recommended:  HDIP needs to be entrusted the additional responsibility of collecting non commercial energy data, for which they need to be provided with additional funds and trained manpower; henceforth energy plans should include non commercial energy; IEP modules be used for all forms of energy planning, energy sector decisions need to be verified by running the scenario on IEP models.

An integrated approach to energy sector planning and policy formulation is recommended.  Energy planning   is carried out and policies formulated largely on an ad hoc, crisis-driven, subsector basis. For instance, plans for the petroleum, electric power, or coal subsectors, and of other energy subsectors such as fuel wood and other renewable, are prepared largely independently of each other.  This has clearly being recognized in Pakistan where, finally, the government has established the Ministry of Energy  Even more harmful are the distortions introduced by preferential treatment accorded to commercial forms of energy over non-commercial energy, often with drastic consequences for the poor and, eventually, for the growth of the economy as a whole  In a nutshell, IEP harmonizes the policies and plans of the energy sector to meet national socioeconomic objectives, while ensuring close coordination and consistency between each of the energy subsectors. It is part and parcel of the overall economic planning process with which it is closely coordinated.

IEP develops a coherent set of energy policies in key areas such as: the energy requirements to fuel national growth while meeting environmental targets; the optimum mix of fuels; conservation measures; measures to diversify and increase energy security by reducing dependence on foreign sources; meeting the energy needs of the poor; saving foreign exchange; reducing the trade deficit; and raising sufficient revenues to finance continued sector development. Policymakers’ preoccupation with commercial energy as a vehicle for GDP growth and the consequent neglect of non-commercial energy has had a number of serious repercussions.

 Integrated Resource Planning (Power System Planning)

 Integrated resource plan is a roadmap that large utilities use to plan out generational acquisitions over five, 10, or 20 years (or more). Many utilities use integrated resource plans for coal, natural gas, and smart grid energy. IRPs examine foreseeable future resources with regard to transmission lines, substations, power plants, end users, and the utilities and operators responsible for taking care of the transmission and distribution of electricity.,

The IRP also addresses contributing factors that impact electricity supply and delivery, ranging from government regulations and expectations at both federal and state levels, to physical assets such as transmission lines or coal plants, to customer demand and other drivers.  .

 Utilities consider many criteria when creating the IRP. Common questions include:

·                     Will the customer base grow?

·                     What’s the demand?

·                     Do we have enough generation capability?

·                     What will we do in case of emergency, if a plant goes down, etc.?

Utilities invest a significant amount of time in putting integrated resource plans together. Depending on the state, they may create IRPs every other year, yearly, biannually, or even more frequently. Because of the research that goes into the energy planning process, IRPs   detail how utilities made their assumptions. Benefits of IRP re so great that frequently regulators/governments legislate or regulators make these a part of the rules of the game.. For a IRP process to be deemed successful it must include:  a meaningful stakeholders consultations; and oversight of the process by an agency responsible for utilities. . A successful IRP effort must include:

-                     A load forecast

-                     Resources and demand side management

-                     Supply options

-                     Fuel process

-                     Environmental costs and constraints

-                     Evaluation of existing resources

-                     Integrated analysis

-                     Time frame

-                     Uncertainty

-                     Valuing and selecting plans

-                     Action plan

-                     And documentation

With restructuring of the electric industry IRP rules in many areas were ignored, some areas have since then made an effort to update IRP rules making these a part of the new industry structure. IRP locates the lowest cost of at which a utility can deliver reliable energy services to all its customers  ISP differs from traditional tools in so far as it as capable of fairly evaluating and comparing the costs and benefits of both demand and supply side options. The result is an opportunity to achieve lower overall costs and maximize benefits of both supply and demand side options. In particular the inclusion of demand side options presents more possibilities of saving fuel and reducing negative environmental impacts that might be possible if only supply side options were considered. IRP results in lower costs IRP plans have horizon years of 10 -20 years and updates are required every 2-5 years.

IRPs are important for three reasons:

1. Utilities are making huge, multimillion-dollar investments in energy. They want to—and must—do their due diligence to ensure that their investments make sense and will be profitable. An integrated resource plan helps “prove” the value of an investment not only to the utility but also local and state governments, private backers, and the public.

2. An integrated resource plan provides transparency to consumers. It shows if a company is investing in green technology, fossil fuels, etc., and gives the public a way to comment on the strategy.

3. For interested vendors and companies, an integrated resource plan is an excellent way to identify relevant partnership opportunities. When an IRP is published, companies can review it to see what potential projects will be coming their way, identify projects they might like to become involved with, and more.

 Conclusions

Traditional planning suffered from the drawback that it was not comprehensive and did not include all aspects of the issues. With market liberalization it was (falsely) deemed that there is no need for any planning at the State of government level, the market would provide indicators and would drive investment accordingly. This was very soon proven incorrect. States, Regulators, Governments then mandated the preparation of short, medium and long term plans. The Integrated Energy and power planning resulted in better coordination. The integrated planning approach encompassed both supply and demand side issues and developed the interdependence of various factors on other factors. Errors made by decision making in the isolated mode are avoided.This coordination results in avoidance of error made when decisions are taken in an isolated mode.