ENERGY SUPPLY MODELLING: THE CASE OF CYCLADES
Th. Goumas, Ar. Papasavvas, D.V. Papaconstantinou
Energy Policy Unit
Department of Electrical Engineering
National Technical University of Athens
42, 28th October Str., 106 82 Athens
1. INTRODUCTION
The Cyclades, a group of over thirty dispersed islands in the middle of the Aegean Sea can become a
case study for energy-driven regional development. High cost, low reliability and scarcity of energy
have significantly contributed to the underdevelopment of the region. There is a lack of local
conventional energy sources, but the potential of renewable energy sources, namely geothermal, wind
and solar is many times greater than the region’s energy needs.
The Energy Policy Unit has constructed an Energy Plan! for Cyclades up to the year 2000 concerning
the development of local economic resources in connection with programmes promoting the exploita-
tion of local energy potential. New energy investments, mainly in renewables and energy saving options
were examined in detail. For this reason, consistent alternative scenarios of energy supply, energy
demand and economic growth were developed and assessed through an integrated modelling system?
In this paper, the emphasis will be placed on the energy supply model.
On the’ other hand, the modelling effort is based upon a systemic approach of energy supply3, which
provides an integrated framework for system theory perception, systems analysis and construction of
models. The approach of the interrelations within the Energy Supply System (ESS) considers the
appropriate homeomorphies4 which are innate patterns of structure and offer a generalized possibility
of perception. The homeomorphies take into consideration the systemic hierarchy, the flows of energy,
money and power, the ESS environment, the information network and the feedback controls.
System Dynamics (SD) is used as a means of translating the systemic perception into graphics or
qualitative models? and concurrently to quantitative models by the help of available software
packages®, The qualitative representation of the Cyclades ESS is based upon relevant generic
structures}, The results of the model runs provide evaluations of economic impacts for the region.
Additionally, probabilistic simulation is carried out for the most significant uncertain parameters
concluding to confidence intervals of the mean values.
2, ENERGY SUPPLY SYSTEM: GENERAL CONCEPT
The analysis is organized in hierarchical levels in such a way that the lowest level contains appropriate
detail according to the analyst's judgment7:8, Each level is associated both with the aggregation or
408
disaggregation of the system’s structure and with the institutions concerned.’ Thus, the hierarchical
levels have a substantial and not a formal conception. For the case of Cyclades, it is estimated that
three hierarchical levels satisfy the analysis requirements.
The first, or upper hierarchical level represents the regional authorities concerning the specification of
the national energy policy within the region. The decisions are related with promotion of local
Tesources, sul tion of energy investments on new or renewable technologies and security problems
of energy supply. The discrimination is located among energy subsystems (electricity, oil products,
biomass, etc.), from which final or secondary energy forms derive and are fed by primary or secondary
energy forms. For example, the electricity subsystem consumes oil products and supplies electricity to
consumers,
The second hierarchical level represents the institutions which have undertaken the energy transform-
ation and production sectors, ie. the electric utility, the oil companies, etc. The decisions focus on the
satisfaction of energy demand under financial, environmental and other criteria, Alternative energy
technologies are assessed aiming at the most efficient and convenient operation. For Cyclades, three
subsystems are distinguished: electricity, oil products and other energies.
‘The third hierarchical level represents the concrete transformation units, like windgenerators, diesel
engines for electricity production, solar collectors, oil burners, etc. The main decisions are concen-
trated on the amelioration of the operation of each unit under the prevailing conditions. The analysis
detail comprises the energy flows among the transformation points, as well as the alterations of the
capacity stocks. The basic financial flows are represented, but the balances and the regulatory decisions
are incorporated in the higher levels.
INSTITUTIONS DECISIONS ANALYSIS
EXPLOITATION OF LOCAL RESOURGES sameteouemue
1 SHAKEN
REGIONAL sunsiorzaTion oF evenoy ivestaenrs | EMERey
LEVEL AUR Ahiee | SuommATION oF en SUESF Eres
INFORMATION conoens
SATISEAGTION OF RNENCY DEMAND
2 evency New InvEsTuEwrs —
LEVEL, ESE ies FIVANCIAL ENVIRONMENTAL IMPACTS FEERcooies
nronMATioN onoens
Power stations | AMetionaion oF THE oPERATION
3 ENERGY, RECULATIONS FOR LOAD ADJUSTMENTS. TRANSFORMATION
LEVEL | ERAESTORMATION | CrenaTiON SECURITY Nooee
EIGURE 1 THE SCHEME OF ENERGY SUPPLY
The communication between successive levels is achieved by information and order flows, which
generate the feedback loops%!0. These contribute to the control of the ESS’s behaviour, as it is
influenced by the uncertainties, which derive from the broader energy system (eg. prices, availability of
fuels) and the socioeconomic hypersystem to the ESS (eg. economic restrictions, national energy
409
policies). The feedback loops are associated with the major decision points. The latter ones are
elements of the feedback procedures aiming at the approach of the system’s operation objectives
(negative feedback), In general, the most significant feedbacks are integrated within more than one
hierarchical levels.
‘The scheme of Energy Supply presented above is shown in Figure 1.
3. THESYSTEM DYNAMICS APPROACH AND GENERIC STRUCTURES
The SD approach of ESS modelling lies under a generalized concept, which is based upon a two step
procedure.
1, The primary structural elements of the ESS are represented by the symbols of SD.
The types of SD rates and levels, which are compatible with the structural elements of the systemic
perception, are determined. Thus, a strong interconnection is created between the systems analysis and
the modelling approach. For the ESS, five types of material flows are distinguished, in addition to the
flows of information and orders which normally exist. Three of them are mainly used and concern:
- Energy flows, which are analysed at the third level, compose the overall energy network and
represent the energy forms (electricity, coal, oil products, etc.). Alternatively, exergy flows can be
employed.
- Capacity flows, which concern the new additions and retirements of energy technology capacities,
- Financial flows, concerning money flows at the in microeconomic level.
‘Two more types of flows are considered:
- Pollution flows, which represent the environmental pollutants deriving from the ESS operation.
- Employment flows, concerning the permanent and temporary employment.
The types of levels which are interrelated with the above flow rates and are compatible to the ESS
structure comprise:
- inventory levels, concerning the storage of primary, secondary and final energy forms and following
the classical example in SD.
- Financial levels and employment levels, are the typical ones used in the literature and not particular
to the ESS.
- Capacity levels, representing the installed capacities as they are already utilized in relevant
studies.12,13
- Transformation levels, concerning conversion, transmission and distribution of energy. These are
strictly associated with the already mentioned energy flow rates and correspond to the transform-
ation nodes on the energy chains. These latter represent the procedure of successive conversion
from primary to final form.
The utilization of transformation levels is rather innovative offers information about cumulative energy
losses which are translated to environmental pollution and energy conservation indicators. The relative
feedback loop closes by incorporating the social oppositions which act’ as constraints to given
development plans.
410
2. The generic structures used for model building, are based upon the above determination
of flow rates and levels. The identification of generic structures is quided by the objective judgement of
the analyst, but, follows the principles posed by Paich.14 In the case of ESS, the generic structures are
distinguished in a combined form for each hierarchical level, as defined in Chapter 2, and for each
substantial sector of system modelling. Such sectors are: primary energy supply, transformation of
energy forms, financial balances, tarification and investment procedures.
Thus, a small number of generic structure can be generally used. Their form is rather complicated and
too extensive to be presented in this paper. On the other hand, the main feedback loops and decision
functions existing in generic structures are compatible with the targets pursued at each hierarchical
level. Especially, for the Cyclades case the modelling specifications will be referred in detail.
4. THE MODELLING APPROACH OF THE CYCLADES ESS
The Cyclades region imports oil products which are directed either to local consumption or to
electricity production. Concerning the modelling of fuel oil, diesel oil, gasoline and LPG supplies,
inventory levels are used. The input energy flows represent fuel imports to the islands and the output
energy flows represent the quantities locally consumed. The inventory levels motivate new fuel orders
which are subject to delays approached by third order functions. Fuel transportation and distribution is
managed by private companies which are adequately subsidized, thus demand satisfaction is secured.
Generally, the oil products supply mode is rather simple concerning the operational and decision
functions, as they satisfy the part of demand not covered by eléctricity, traditional and renewable energy
forms. The decisions at the upper hierarchical level influence indirectly the dependence on oil
products, since the penetration rates of renewables are regulated.
The electricity supply modelling is more complicated, as each island or small groups of own their
independent electricity grid. Therefore, the possibilities for electricity production are assessed
separately for many quite similar cases and the most characteristic figures are thereafter summed up, so
that an immediate perception is obtained for the whole of the region. Two classes of islands are
distinguished, the grid-interconnected islands with the mainland electric system and the non-interco-
nnected ones. At present there are no interconnections by undersea cable, but this is a very attractive
perspective assessed by the model. Islands that will be interconnected to the mainland are naturally
expected to solve automatically the capacity expansion problem. On the other hand, diesel engine
capacity can be partially moved from interconnected to non-interconnected islands.
The general profile of electricity flows for each island, associated with the lower hierarchical level, is
presented in Figure 2. Diesel engine generators, burning either fuel oil or diesel oil according to each
island’s demand size, play the main role in the non-interconnected islands. On the contrary, they simple
remain as cold reserve on the interconnected islands. Wind generators. penetrate better in the
non-interconnected islands producing electricity at a cost competitive to the corresponding one of diesel
generators. However, the small size of local grids poses technical restrictions on the development
possibilities. For interconnected islands there are no such restrictions, but the profitability is doubttul,
since wind electricity must compete with electricity produced from lignite and fuel oil at major power
stations on the mainland. Thus, the criterion of wind energy penetration in interconnected islands is
associated with oil substitution rather than with comparative benefit. Significant high enthalpy
geothermal potential exists only at the island of Milos, but the process for equivalent electric capacity
au
identification is still in evolution. Two main options are examined: either the installed capacity will
cover only part of Milos demand, then a station of 2-10 MW is adequate, either capacity of over 20 MW
will be established and excess electricity will be transmitted to other areas. For the latter case, the cable
interconnection of Milos is a prerequisite. Last, the import of electricity from the mainland is
associated with the undersea cable interconnection. The possibility of exports concerns the extensive
exploitation of geothermal and wind energy potential.
BESET bias
FASB aaa E
; ae fe
econ PARRA ct a ed
‘ELecrauciTy 3
SURFE HR 8
m eee A
[neetaee""|} —S<—+| :
= Gon vote H
HR
-EIGURE 2 ENERGY FLOW DIAGRAM FOR ELECTRICITY SUPPLY
The decisions on electricity investment programmes are taken at the second hierarchical level, taking
into account the existing policies on local resources development, subsidization of energy investments
and increase of security. A microeconomic analysis for each investment option provides the
profitability ranges. Moreover, specific technical, environmental and technological problems are
considered together with the forecasts for energy demand and prices evolution. Therefore, the
investment schedules for wind, geothermal and interconnection investments are launched in a dynamic
process, which comprises both discrete and continuous steps. However, the related decision for diesel
engine development follows, as it should safeguard demand coverage. The decision function is rather
complicated including information for the alternative investment programmes. In Figure 3, the
influence diagram for the diesel engine installation process is presented. Two main feedback loops are
activated towards the determination of new installations. The interior positive loop concerns the
process of estimating the future requirements of new capacity, whereas the exterior negative loop
indicates appropriate regulations considering the prevailing current conditions of reliability. The
decision function for new capacity requirements takes into account the installed capacity, the demand
forecasts, the foreseen installation of alternative capacities (wind, geothermal, cable) and the transfer of
diesel engines due to cable interconnections. Naturally, this decision is influenced by the uncertainty of
future events. A reserve margin defined within a given interval of values safeguards reliability in the
dynamic evolution of the electricity system. Postponement or acceleration of orders is pursued, if the
initially calculated new capacity requirements are proved overestimated or underestimated, by a certain
margin.
A12
~¥
ne EER LT ion
ol RS REY
ron RAEMAR Ton
-EIGURE3 —_—INFLUENCE DIAGRAM FOR DIESEL ENGINE INVESTMENTS
Other feedbacks of minor importance concerning the retirement rate and the maintenance programme
are also taken into account but will not be presented here. At the upper hierarchical level, three
feedback loops ensure the three mentioned policies.
5. SCENARIOS AND RESULTS
The effect of uncertainty is studied both by sensitivity analysis and by scenario construction. Three
main scenarios treating different options of electricity supply were run and evaluated:
- the SI (Short Interconnection) scenario anticipates the interconnection of four islands till 1992,
which correspond to about half of the region electricity consumption, a geothermal power station
2X2 MW for the local demand, penetration of windgenerators up to the technical limits till 2000 for
the non-interconnected islands and only a small penetration for the interconnected islands.
- The LI (Long Interconnection) scenario anticipates intensive exploitation of geothermal based
electricity (2X60 MW) and extended interconnection investments covering 85% of present regional
electricity consumption, whereas the aeolic programme is reduced.
- the HA (High Aeolic) scenario anticipates short interconnection, geothermal development 2+10
MW for local consumption and extensive promotion of about 35 MW wind energy exploitation.
The model can support both deterministic and probabilistic sensitivity analysis, Variables that include
uncertainty and could be approached by probabilistic curves are: energy demand by energy form, fuel
prices, capacity retirement, wind energy investments by individuals and other variables of minor
importance.
Detailed and comparative presentation of the three scenario results is included in Vol. 3 of the Energy
Plan!. In this paper, only the most characteristic results will be presented. In fact, none of the three
scenarios ensures energy independence for Cyclades, as energy imports from the mainland sound
indispensable. As shown in Figure 4, the increase of imports is significant in SI, whereas LI displays
lower dependency, because of intensive geothermal development. HA displays a range at around the
413.
present situation. It is evident that the energy supply alternative options are considered to take place
after 1990. Average annual energy demand growth is expected to range from 3% to 4% within
1986-2000.
THR
(Thousands)
e586 67 Ge 62 00 01 of 93 04 5 06 OF 98 oo 2000
FIGURE 4 EXPECTED ANNUAL ENERGY IMPORTS FROM THE MAINLAND
Figure 5 presents the evolution of annual energy cost (KDr/TJ) in constant 1986 prices for the national
economy, The major decrease occurs in LI, amounting to -30% in 2000 in comparison to the present
figure. HA displays a little higher costs than SI, respectively -10% in 2000, due to the significant
investments of windgenerators. If these investments stop, the cost of HA is expected to fall rapidly.
Generally, the involvement of renewables in the Cyclades ESS improves more or less the energy
economics.
kDr/TL
(Thousands)
FIGURE 5 MEAN COST PER CONSUMED ENERGY UNIT IN CONSTANT DR86
Tolerance intervals and confidence levels were defined for the mean values of the variables most
influenced by uncertainty, like the reserve margin. Satisfactory tolerance intervals were achieved for
confidence levels 80% and 95% following the simplest method!5, namely the repeating random number
process. Practically, 25-30 runs of the model under probabilistic simulation proved adequate.
6.
414
CONCLUDING REMARKS
In brief, the utilization of SD in a generalized and systemic approach of energy supply problems sounds
attractive and facilitates relevant model construction. The identified homeomorphies and generic
structures within ESS are specified and translated, through the SD tools, to qualitative and quantitative
representations. The case of Cyclades ESS, which is subject to very complicated future perspectives, is
modelled adequately and with clarity, thus confirming the potential applicability of the approach.
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