GONITEC & ASG Cooperation (Technical & Economic Points)

28. Jan. 2014.

KERI (J. YOON jyyoon@keri.re.kr)

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<Contents>

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Preliminary Concept Design of GOBITEC & ASG Descriptions 2

Advantages and Present Status of on NEA-PSI

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Cost Implications : Preliminary Economic Analysis 4

Impacts of NRE and Interconnection Technology

5 Issues, Opinions and Suggestions on ASG

<Brief Summary on this presentation>

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This Presentation will intend to discuss about ….

1) Necessity for ASG including GOBITEC between NEA Countries

Advantages & Obstacles & Issues to be Overcomes 2) How to determine the Concept Design of GOBITEC & ASG …

Type & Capacity & Route & Economic Points(B/C Ratio) 3) Characteristics of Interconnection Technologies …

Impacts of HVAC & HVDC(CSC or VSC) and NRE resources on ASG 4) Interconnection Options & Cost Implications … Proposed route and overall estimated costs for ASG

Preliminary Economic Analysis & Cost Implications Comparison of WAEC and TSUC depending on Capacity Factor

<Relations between PSI & Related Issues>

■ Trade of GHG Diffusion ■ Positive for environment

Deregulation ■ Regulation and Incentive (ex : Green power)

■ Cheap Fuel cost ■ Refuse NRE, DSM,IRP ■ Negative for Environ

■ Enhancement interconnection■ ■ Positive for NRE

■ Competition, Market ■ Enhancement deregulation ■ Transmission Right

■ Free Market ■ Economic viewpoint ■ Enhancement interconnection

GHG/Environ

Interconnection

Reliability/PQ Economics

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<Benefits of Electricity Market Integration>

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<Backgrounds of ASG>

NEA Countries are island power systems until now : Cooperation is needed

Korean power system has many difficulties and challenges(options)

Very poor in natural resources and High increasing rate … Environmental protection and NIMBY phenomena Need to cooperate with DPRK and neighbouring Countries

Neighboring countries also have the necessity of power cooperation …

JAPAN : Fukushima Crisis and Need to cooperation MONGOLIA : Development of GOBITEC and ASG CHINA : High Increasing Rate and necessity for Power Import

ASG can be an alternative to ...

Overcome difficulties in power sector Utilize complementary characteristics between NEA countries

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<Present status of NEA PSI>

No inter-ties on NEA with the exception of …

Weak 220kV ties b/t Siberia and RFE

Weak 220kV ties b/t Siberia and Central Mongolia

Weak 110kV and 220kV ties b/t RFE and Northeast China

Weak ties b/t North and Northeast China

Potentials interconnecting power system in NEA region

RF – CH

RF – JP

RF – DPRK – ROK

ROK – JP with submarine cable

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<Present status>

Undersea cable(DC)

DPRK

Under discussion

CH

Under discussion

Undersea cable(DC)

Existing Tie Line

Future planning Tie Line

Weak Tie Line(110/220kV)

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<Forecasts of Power Supply in NEA>

Installed Capacity(MW) & Generation(TWh)

World Top(CHINA), 3(JAPAN) & 4(RUSSIA) & 8(KOREA) 6TH Power Supply/Demand Plan (KOREA)

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<Present Status of Power Industry in KOREA>

Hydro Anthracite

coal Bituminous

coal Oil Gas Nuclear Others

Non-utility in common use TOTAL

Capacity of Generating

(MW)

6,446 (7.5%)

1,125 (1.3%)

23,409 (27.3%)

3,446 (4.0%)

21,336 (24.9%)

20,716 (24.2%)

5,329 (6.2%)

3,901 (4.6%) 85,708

Generation (GWh)

7,652 (1.5%)

8,768 (1.7%)

190,562 (35.8%)

11,569 (2.2%)

116,195 (21.9%)

150,327 (28.3%)

22,407 (4.2%)

23,148 (4.4%) 530,628

(As of Dec. 2012)

High Load Density & Condensed Power System Unbalance of Supply/Demand in SEOUL Metropolitan Areas (Over 42% of Total Load) Transmission Congestion Problem Fault Current Problem … Power System Security & Stability Problem

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<Potential Routes of ASG Project>

This map is basically copied by the associated reference, but amended and direct length is added. *) “Tackling climate change ~~~ “

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<Preliminary Concept Design>

ENERGY HIGHWAY, ASG(Asian Super Grid)

GOBITEC & ASG for Cross-border trade

Transmission Length will be 1.2~1.3 Time of Direct Length

GOBITEC, Total Capacity will be a some portion of Technically Developable Potentials of Wind & Solar NRE in GOBITEC

Mongolia Potential of NRE according to US DOE Data Energy Potential : 2.6TW (Wind 1.1+Solar 1.5) 2600GW Total NRE Potential (Wind, Solar, Geothermal …) 2.6TW Capacity Average Wind energy density is 7MW/km2, Solar 66MW/km2

Estimated Average Solar generation potential of 5.4[kWh/m2/day] If GOBI desert with 1,300,000[km2] area is covered with PV cells, the total annual power production will record up to 13,261TWh this value will be about 66% portion of the worldwide

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<Conceptual Configurations on GOBITEC+ASG>

(Concept Design) GOBITEC/ASG system is composed of 4 parts ① Solar/Wind Farms for NRE Generation ② Collecting system from each Generation Sites to ASG ③ Cross-border transmission system (ASG) ④ Connecting system from ASG to Each Countries

<Ex) Concept Design for Solar & Wind Farms>

<Concept Design for Collecting System>

Total System Compositions GOBITEC is composed of so many Wind/Solar Farms … (SRCL/SRCS) Sub Region Collecting Line & Converter Station

Collecting the Electricity of Each WF/SF to Regional Station … (RCL/RCS) Regional Collecting Line & Converter Station (TCL/TCS) Total Collecting Line & C/S, (Maybe 1~5 C/S) ASG Trunk Line for CBT

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<Hierarchical System Configurations>

Hierarchical structures and basic spec.….

Capacity(GW) of total solar and wind generation system Number of total solar/wind farm and its unit standard capacity Number of SRCS and its unit capacity Number of RCS and its unit capacity Number of TCS and its unit capacity ex) 1(100GW) or 2(50GW)

Technical Spec. …

Applied technology spec. to collecting generated power to SLCS, LCS and TCS. ex) AC or DC[VSC or CSC Type] spec.

Technical type of ASG corridor system(Transmission station and line) and voltage(kV) ex) HVAC or HVDC (VSC-HVDC or CSC-HVDC) Multi-terminal system

Voltage and length of ASG transmission line

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<Basic Characteristics of NRE & Impacts on …>

System Disturbances due to NRE

NRE Sources have usually WEIBULL Distribution Characteristics Inherent characteristic of Low Power Supply Reliability PQ(Power Quality) Facilities need to be installed to enhance

Supply Reliability

<HVDC Type : CSC/VSC & BTB/PTP/MTDC>

<BTB HVDC Type>

<PTP HVDC Type>

<CSC HVDC C/S>

<VSC HVDC C/S>

MTDC VSC-HVDC, not HVAC, is the only Alternative for ASG BTB(No C/S), PTP(2 C/S), MTDC(Multi Terminal DC)

Conventional CSC(Current Sourced Converter), Weak Control Capability

New VSC(Voltage Sourced Converter), High Control, but Capacity Limitation

‘A’ area

‘B’ area

DC T/L

C/S

‘A’ area

‘B’ area

AC T/L

S/S S/S

AC T/L

C/S

C/S

<Sample of Estimated Costs on GOBITEC>

This is one of the chapter of ECS GOBITEC report, 2013 …

All Expenses/Costs should be given … To Calculate the Preliminary Economic Analysis … All of the fixed costs for GOBITEC and ASG is calculated …

(Sample) Preliminary case study was done by ECS in 2013 … Calculate WAEC(Weighted Average Electricity Charge) of Imported Countries. Derive TSUC(Total Supply Unit Cost) of GOBITEC plus ASG depending on Capacity Factor(Availability of Power Plants) (Economic Feasibility Analysis) Compare the difference between WAEC and TSUC

<Sample of Estimated Costs on GOBITEC>

Ex) Distribution Share(%) of Total Generation to Each Country

Ex) Basic Cost Data for GOBITEC Solar/Wind Energy …

These Data only Sample It should be amended in the future …

Ex) Annual FCR(Fixed Cost Ratio %) : CRF(Cost Recovery Factor)

(Annual Fixed Charged Cost[M$])

(TSUC) Annual Fixed Charged Cost divided by Sales Energy

(Annual Sales Energy[kWh])

(Annual Sales Energy Amount[TWh/Year]) = (Annual Generation Amount X (1 – A – B)

<TSUC : Total Supply Unit Cost[$/kWh])>

where, A : Annual Sales Energy Amount (TWh/Year )

B : Annual Fixed Charged Cost($) + Annual Variable Cost($)

(Annual Generation Amount[TWh/Year]) = (Average Power[MW] X 365day X 24hour X 10-6

(Average Power[MW] = (Capacity[MW] X (Weighted Average Availability[%])

<WAEC : Weighed Average Electricity Charge[$/kWh]>

(WAEC) Weighted Average Electricity Charges[$/kWh]

Weighted Average Electricity Charge considering distribution share(%) for each country

TSUC($/kWh), Total Supply Unit Cost by GONITEC plus ASG

WAEC($/kWh), Weighted Average Electricity Charges of importing countries.

Calculate the difference DC between WAEC & TSUC depending on CF(Capacity Factor), (DC > 0) : Commercially Beneficial Business

DC = (WAEC-TSUC)[$/kWh],

CF = (Total Generation Amounts kWh) / (Generation Capacity x 8760)

WAEC is constant value in specific year, but, TSUC will be decreased as the CF (Capacity Factor) increasing

(DC>0) : In case of WAEC is higher than TSUC

<Sample Analysis Results>

Assuming GOBITEC 100GW plants (Solar & Wind 50:50) WAEC=0.115~0.136[$/kWh] (CF=60%) DC=0.059 (+) Positive Beneficial Project (CF=20%) DC=-0.032 (-) Negative Non-Beneficial Project

<Sample Analysis Results>

Sample Results depending on CF : WAEC & DC was calculated …

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<Solutions to be determined topics for ASG>

Specific items to be studied (Preliminary studied)

Countries and locations (S/S) for GOBITEC/ASG

Determination of Capacity and Energy for CBT Overview of interconnection line route ? Interconnection Technology ? AC or DC or What type of DC Voltage grade(kV) and interconnection capacity(MW) ? Strength of each interconnected power system

Economic & Market viewpoints (Preliminary studied)

Free volume of electricity in future ?

Power exchange tariffs including transmission pricing ? Overall legal and management framework ?

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<Issues & Opinions for ASG>

Category Opinions Power exchange

model ★ Simple power exchange model ★ Develop guidelines for power exchange.

Overseas benchmarking

model

★ Review NORDEL, SAPP, and England‐France power exchanges. ★ Introduction of a new trade market due to market restructuring. ★ Organize a derivative product market in preparation of unstable pricing.

Financing

★ directly related to economic feasibility, political and diplomatic relationship, law/regulation and policies support. DPRK uncertainty requires participants’ government guarantee and international financial institutions’ participation. ★ Consider long term contract, project collateral, and risk management for sound finance enhancement.

Politics and energy security

★ DPRK nuclear is the main issue. Necessity to forecast DPRK’s political change by phase.

Obstacles and solutions

★ No issue is raised in legal aspect, but DPRK laws should be examined if power system interconnection passes through DPRK. Establish a NEA Energy Charter Treaty as a long term perspective.

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<Future prospect : Need to Detailed Study>

Need to detailed Technical & Economic Study on ASG System Study for HVDC interconnection Ex) Total LCC Comparison in case of with or without GOBITEC & ASG

in case of with or without GOBITEC and ASG

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<Suggestion : Detailed Economic Study Model>

Contents of Basic Data, Cost & Benefit Net Present Value for Cost and Benefit during Total Life Cycle Utilize B/C Ratio, IRR(Internal Rate of Return), PBP(Pay Back Period)

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<Conclusions>

In this presentation we all discuss about … ① Concept Design of GOBITEC & ASG

② Preliminary Technical and Economic Study on GOBITEC & ASG

Everybody in here want to know … ① Future Possible Scenarios of GOBITEC & ASG

② Free volume of GOBITEC Electricity Trade Market ③ How can we realize the GOBITEC/ASG Project

However, We have some barriers, But, we truly believe Global Energy Network is necessary in NEA countries…