Some Observations on the Practice of Capacity Expansion in the Electric Utility Industry

摘要

This report describes and contrasts certain average practice methods used by electric utilities for planning capacity additions. The scope of this task is narrowed to those engineering elements of capacity planning for which uncertainty plays a crucial role. The point of view is that of an individual utility, one which must determine a sequence of capacity additions over time that ensures adequate supply at a reasonable cost. The main elements of capacity planning are: (1) load forecast; (2) existing system; (3) generation reliability; (4) production simulation; (5) investment analysis; (6) financial analysis; and (7) judgmental evaluation. The typical sequence of events that couple these elements together can be described roughly, as follows: (a) A utility forecasts its expected load over the next T years. (b) By one means or another, a list of alternative expansion plans is determined. (c) Each of the alternatives in (b) is subjected to analyses of types (3), (4), and (5). (d) The alternative plan which minimizes the total cost, while ensuring an adequate level of reliability, is then further analyzed from a financial point of view. (e) The alternative, or set of alternatives, that are consistent with current and projected financial policies are subsequently subjected to a broad set of qualitative considerations. These include siting issues, regulatory concerns and environmental impacts. The ultimate choice of a capacity expansion alternative is then made considering both the economic and non-economic factors. (ERA citation 05:026001)