Presentation_of_the_updated_Least_Cost_Energy_Plan,_Scientific_Research_Institute_of_Energy,_March_2017.pptx

March 2017 Support to National and Regional Energy Planning and Capacity Building at the Scientific Research Institute of Energy

Updates to 2015 Least-Cost Generation Plan Grant Agreement No. AID-111-G-13-00002

LCGP, 2016

In addition to LCGP 2015 (120 scenarios), two studies including 130 additional scenarios, have been performed Study 1 Investigation of the different scenarios to cover the domestic electricity demand, including SMR options Study 2 Investigation of the necessity for the introduction of a new 234 MW CCGT into the power sector in frame of the implementation of 8%, 20% and 30% EE measures.

Common Main Macroeconomic and Technical Data GDP growth rates are as follows

Updated and Reference Russian Prices for Natural Gas Import

Gas price growth rates have been taken from the previous report of the Least Cost Generation Plan based on the IEA forecasts. The new 150 $/1000 m3 gas price was applied in and the gas price growth rates given in the aforesaid report were preserved.

Common Main Macroeconomic and Technical Data Electricity-Gas Swap Levels

Efficiency of 234 MW CCGT Unit was decreased from its nominal value (53%) to 49% taking into account the altitude, climatic conditions, etc*. The same was done for Hrazdan-5 Unit reducing it to 41 %.

367 million US$ return of investment for Hrazdan-5 Unit at 9% internal rate of return in 20 year payback period and 39.5 million US$ annual payments.

Installed capacity cost for 1 kW of SMR has been taken from NuScale Power database (http://www.nuscalepower.com/) provided by USAID.

The data on Solar Photovoltaic and Wind Plants were updated. Specific investment cost for Solar PV is 1000 $/kW and 1150 $/kW for Wind farms.

* - Cooling systems for TPPs are not able to operate with a rated capacity under such conditions (USAD Final Report: Armenia Least-Cost Energy Development Plan)

Scenario Options Considered Scenarios

Energy Efficiency

SWAP

Flexible after 2027

Fixed after 2027

W/O EE

EE target of 8%

EE target of 20%

EE target of 30%

HPP

With and w/o Meghri

With and w/o Shnokh

With and w/o Loriberd

SMR

1x200

3x200

2x200

Renewables

Solar PV - up to

70 & 110 MW

Wind Farms - up to 150 & 250 MW

Flexible

Fixed construction of one Unit

New CCGT-234

New Small HPPs generation are decrease by 12%

Study 1: Investigation of the different scenarios to cover the domestic electricity demand, including SMR options

Nuclear technologies Renewables technologies

Study 1: Investigation of the different scenarios to cover the domestic electricity demand

Study 2 has been performed to cover the Domestic Demand using the new data on Renewables and Small Modular Reactors (SMR) The following preconditions have been accepted:

Revised development of renewables data:

Up to 70 MW of Solar PV capacities from 2021, Wind Farms – up to 150 MW from 2027, Geothermal – 30 MW from 2024, and New Small HPPs – up to 130 MW from 2021. It has been taken into consideration that electricity generation from small HPPs will slightly decrease by 12% due to the reduction of water resources as a result of global warming, as well as because of more stringent environmental requirements on water use for electricity generation Study 1: Investigation of the different scenarios to cover the domestic electricity demand

Due to delay contract signing the capacity of Meghri HPP isn't considered.

Growth of energy efficiency measures by 8%, Existing NPP unit continues its operation until 2027 after which it is replaced by 200 MW SMR unit(s) Introduction of new thermal generation capacities into the power system has been studied in consideration of interstate agreements and conditions The volumes of initial domestic demand corrected based on 1.27% of consumption reduction in 2016 compared to 2015 Study 1: Investigation of the different scenarios to cover the domestic electricity demand

Scenario 1 Shnokh and Loriberd HPPs are not build.

Hrazdan-5 unit doesn’t produce electricity after 2018 (lifetime up to 2040).

Existing 220 MW Yerevan CCGT unit operates in underloaded mode till 2027, and after that it doesn’t produce at all (lifetime up to 2040).

3x200 MW SMRs will be introduced into the system in 2027 and will solve the internal consumption problem.

Around 200-730 million kWh of surplus electricity occurs in 2021-2033, which must be exported to the neighboring countries or will result in the reduction of the electricity generation in new NPP. All other power plants are renewables, which production must be obligatory fully utilized by the power system according to RA Laws.

There is no necessity to construct a new 234 MW CCGT, while the GoA has signed a contract with “RENCO” group to construct one 234 MW CCGT unit in Yerevan TPP site.

Study 1: Investigation of the different scenarios to cover the domestic electricity demand

Scenario 2 Shnokh and Loriberd HPPs aren’t build.

Hrazdan-5 unit doesn’t produce electricity after 2018 (lifetime up to 2040).

Existing 220 MW Yerevan CCGT unit operates in underloaded mode till 2027, and after that it generates in its full capacity (lifetime up to 2040) 2x200 MW SMR units will be introduced into the system it 2027 and will solve the internal consumption problem.

About 0.5-0.1 billion kWh of electricity shortage appears in the system which can be overcome by the underloaded operation of Hrazdan 5 Unit or through the import of the needed electricity amount from Georgia if it is more advisable There is no necessity to construct a new 234 MW CCGT unit to cover the domestic consumption.

Study 1: Investigation of the different scenarios to cover the domestic electricity demand

Scenario 3 Shnokh and Loriberd HPPs are exploited from 2024 Hrazdan-5 unit doesn’t produce electricity after 2018 (lifetime up to 2040).

Existing 220 MW Yerevan CCGT unit operates in underloaded mode till 2027, and after that it doesn’t produce electricity at all (lifetime up to 2040) 3x200 MW SMR units will be introduced into the system in 2027 and will solve the internal consumption problem.

About 0.25-1.2 billion kWh of surplus electricity appears in the system after 2024 which needs to be exported to the neighbor countries

Study 1: Investigation of the different scenarios to cover the domestic electricity demand

Case 3.1 Shnokh HPP is exploited in 2024 Loriberd HPP isn’t build Hrazdan-5 unit doesn’t produce electricity after 2018 (lifetime up to 2040).

Existing 220 MW Yerevan CCGT unit operates in underloaded mode till 2027, and after that it doesn’t produce electricity at all (lifetime up to 2040) 3x200 MW SMR units will be introduced into the system in 2027 and will solve the internal consumption problem.

About 0.45-1.0 billion kWh of surplus electricity appears in the system after 2024 which needs to be exported to the neighbor countries

Study 1: Investigation of the different scenarios to cover the domestic electricity demand

Scenario 4 Shnokh and Loriberd HPPs are exploited in 2024.

Hrazdan-5 unit doesn’t produce electricity after 2018 (lifetime up to 2040).

Existing 220 MW Yerevan CCGT unit operates in underloaded mode till 2027, and after that it operates in its full capacity (lifetime up to 2040) 1x200 MW SMR unit will be introduced into the system in 2027 and will solve the internal consumption problem.

Up to 0.8 billion kWh of surplus electricity occurs in the system by 2027 which needs to be exported. After 2027, the system is caused by up to 1.0 billion kWh of electricity shortage. The shortage can be overcome by the underloaded operation of Hrazdan 5 Unit or through the import of the needed electricity amount from Georgia if it is more advisable.

Study 1: Investigation of the different scenarios to cover the domestic electricity demand

Case 4.1 Shnokh HPP is exploited in 2024.

Loriberd HPP isn’t build.

Hrazdan-5 unit doesn’t produce electricity after 2018 (lifetime up to 2040).

Existing 220 MW Yerevan CCGT unit operates in underloaded mode till 2027, and after that it operates in its full capacity (lifetime up to 2040) 1x200 MW SMR unit will be introduced into the system at 2027 and will solve the internal consumption problem.

Up to 0.6 billion kWh of surplus electricity appears in the system by 2027 which needs to be exported, and after 2027, the system is caused by up to 1.2 billion kWh of electricity shortage. The shortage can be overcome by the underloaded operation of Hrazdan 5 Unit or through the import of the needed electricity amount from Georgia if it is more advisable.

Study 1: Investigation of the different scenarios to cover the domestic electricity demand

Total investments for the whole planning period in scenarios High level of investments in Scenarios 1, 3 & 3.1 is due to the construction of 3x200 MW SMR units.

It is expected to build 2x200 MW and 1x200 MW SMR units in Scenario 2 and in Scenarios 4 & 4.1, respectively.

Decision on the unit(s) construction should be made after the analyzes of the regional integration options.

Study 1: Investigation of the different scenarios to cover the domestic electricity demand

Expenditures on generation for the whole planning period in scenarios High level of expenditures in Scenarios 1, 3 & 3.1 is due to the construction of 3x200 MW SMRs In other scenarios it is expected to construct SMR with capacity of 1x200 MW in total

Study 1: Investigation of the different scenarios to cover the domestic electricity demand

Average weighted electricity generation costs in the scenarios for the whole planning period The lowest 46.61 $/MWh generation cost in Scenario 1 is associated with no operation of TPPs after the construction of New 3x200 MW SMRs

Study 1: Investigation of the different scenarios to cover the domestic electricity demand

From 2027 doesn’t

From 2027 doesn’t produce <1010 until 2027, From 2027 doesn’t

From 2027- 1638

Conclusions to Study 1:

Depending on the construction of different size SMRs (1x200, 2x200 or 3x200 MW) the existing thermal units are operated at under-loaded mode (Yerevan CCGT) or do not operate at all (Hrazdan 5).

In case if Loriberd HPP and/or Shnokh HPP are/is not constructed and only 1x200 MW of SMR is launched then there will be 1-1.2 billion kWh of electricity shortage. In this case, there will be needed some import from Georgia or generation from Hrazdan 5 Unit. Choice of the option to overcome the shortage will depend on the economic competitiveness between the import prices/conditions and generation cost of Hrazdan 5 Unit.

There is no necessity to build new thermal capacities to cover the domestic demand in case of the development of renewables (solar, wind, geothermal).

Study 1: Investigation of the different scenarios to cover the domestic electricity demand

Study 2: Investigation of the necessity for the introduction of a new 234 MW CCGT into the power sector in frame of the implementation of 8%, 20% and 30% EE measures

Nuclear technologies Renewables technologies

Study 2: Investigation of the necessity for the introduction of a new 234 MW CCGT into the power sector in frame of the implementation of 8%, 20% and 30% EE measures *- at the stage of technical development level in 2015

The following preconditions have been accepted:

Introduction of Solar Photovoltaic Plants into the system is fixed after 2018 with access capacity of up to 110 MW in coming years.

Construction of Wind Farms is scheduled to be since 2021 with access capacity of up to 250 MW in coming years.

5 new scenarios were studied for investigation of the necessity for the introduction of a new 234 MW CCGT in consideration of the sub-scenarios for 8%, 20% and 30% energy saving cases.

Scenario ID

Study 2: Investigation of the necessity for the introduction of a new 234 MW CCGT into the power sector in frame of the implementation of 8%, 20% and 30% EE measures

Scenario 1. The following options have been considered:

Construction of one new 234 MW CCGT* is fixed Fixed SWAP after 2027

Study 2: Investigation of the necessity for the introduction of a new 234 MW CCGT into the power sector in frame of the implementation of 8%, 20% and 30% EE measures *- after the completion of the project GoA has signed contract with RENCO to construct one 234 MW CCGT unit in Yerevan TPP site

Study 2: Investigation of the necessity for the introduction of a new 234 MW CCGT into the power sector in frame of the implementation of 8%, 20% and 30% EE measures Implementation of energy efficiency measures leads to the growth of domestic electricity consumption and generation by power plants increase as a result. Meantime, calculations show that consumption of other energy carriers drops. Due to this, the specified level of energy savings in the whole energy system is ensured.

Study 2: Investigation of the necessity for the introduction of a new 234 MW CCGT into the power sector in frame of the implementation of 8%, 20% and 30% EE measures

Correlation between electricity production and energy system costs Correlation between total system cost and energy independence level Implementation of energy efficient technologies improves the independence of the entire energy system. Realization of 30% energy efficient technologies approximately doubles the total system cost against the 20% of energy efficiency.

Scenario 2. The following options have been considered:

Flexible construction of the new 234 MW CCGT Fixed SWAP after 2027 Study 2: Investigation of the necessity for the introduction of a new 234 MW CCGT into the power sector in frame of the implementation of 8%, 20% and 30% EE measures

Study 2: Investigation of the necessity for the introduction of a new 234 MW CCGT into the power sector in frame of the implementation of 8%, 20% and 30% EE measures Implementation of energy efficiency measures leads to the growth of domestic electricity consumption and generation by power plants increase as a result. Meantime, calculations show that consumption of other energy carriers drops. Due to this, the specified level of energy savings in the whole energy system is ensured.

Study 2: Investigation of the necessity for the introduction of a new 234 MW CCGT into the power sector in frame of the implementation of 8%, 20% and 30% EE measures and energy system costs

Implementation of energy efficient technologies improves the independence of the entire energy system. Realization of 30% energy efficient technologies approximately doubles the total system cost against the 20% of energy efficiency.

Scenario 3. The following options have been considered:

Flexible construction of the new 234 MW CCGT Flexible SWAP after 2027 Study 2: Investigation of the necessity for the introduction of a new 234 MW CCGT into the power sector in frame of the implementation of 8%, 20% and 30% EE measures

Study 2: Investigation of the necessity for the introduction of a new 234 MW CCGT into the power sector in frame of the implementation of 8%, 20% and 30% EE measures Implementation of energy efficiency measures leads to the growth of domestic electricity consumption and generation by power plants increase as a result. Meantime, calculations show that consumption of other energy carriers drops. Due to this, the specified level of energy savings in the whole energy system is ensured.

Study 2: Investigation of the necessity for the introduction of a new 234 MW CCGT into the power sector in frame of the implementation of 8%, 20% and 30% EE measures and energy system costs

Implementation of energy efficient technologies improves the independence of the entire energy system. Realization of 30% energy efficient technologies approximately doubles the total system cost against the 20% of energy efficiency.

Scenario 4. The following options have been considered:

Flexible construction of the new 234 MW CCGT Flexible SWAP after 2027 Study 2: Investigation of the necessity for the introduction of a new 234 MW CCGT into the power sector in frame of the implementation of 8%, 20% and 30% EE measures

Study 2: Investigation of the necessity for the introduction of a new 234 MW CCGT into the power sector in frame of the implementation of 8%, 20% and 30% EE measures Implementation of energy efficiency measures lead to the growth of domestic electricity consumption and generation by power plants increase as a result. Meantime, calculations show that consumption of other energy carriers drops. Due to this, the specified level of energy savings in the whole energy system is ensured.

Study 2: Investigation of the necessity for the introduction of a new 234 MW CCGT into the power sector in frame of the implementation of 8%, 20% and 30% EE measures and energy system costs

Implementation of energy efficient technologies improves the independence of the entire energy system. Realization of 30% energy efficient technologies approximately doubles the total system cost against the 20% of energy efficiency.

Scenario 5. The following options have been considered:

Flexible construction of the new 234 MW CCGT Flexible SWAP after 2027.

Meghri HPP is not constructed.

Study 2: Investigation of the necessity for the introduction of a new 234 MW CCGT into the power sector in frame of the implementation of 8%, 20% and 30% EE measures

Study 2: Investigation of the necessity for the introduction of a new 234 MW CCGT into the power sector in frame of the implementation of 8%, 20% and 30% EE measures

Conclusions to Study 2 New nuclear SMR units with 3x200 MW of installed capacities is commissioned in 2027 to cover the electricity exports obligations.

Commissioning of the Solar PV plants and Wind farms are economically feasible considering the new data for renewables.

Least cost option is the case with flexible both CCGT & swap. Any fixed option will increase the system generation cost and electricity generation cost due to the necessity of additional investments in construction of new CCGT(s).

Fixed implementation of 20% and 30% energy efficiency measures will drastically increase the total cost of the whole energy system by around 235% and 340% (against the 8% EE), respectively, due to the necessity to implement more and more expensive technologies in the demand side to achieve the targets, as well as more electricity generation from high-costed thermal units and additionally constructed CCGTs for this purpose will be needed.

Consideration of the new (lower) gas price results in the change of LCGP options making them a little bit more attractive and competitive.

Study 2: Investigation of the necessity for the introduction of a new 234 MW CCGT into the power sector in frame of the implementation of 8%, 20% and 30% EE measures

GENERAL CONCLUSIONS

Studies show that at least 1x200 MW SMR is needed to be built to only cover the domestic electricity consumption. Allocation necessity of the SMRs with bigger capacities (2x200 & 3x200 MW) depends on the regional cooperation opportunities and conditions as well as on full operation need of the existing Thermal units.

Commissioning of the Solar PV plants and Wind farms are economically feasible considering the new data on renewables. Electricity generation from small HPPs will decrease by 12% by the end of planning period due to the reduction of water resources as a result of global warming, as well as because of more stringent environmental requirements on water use for electricity generation.

Fixed implementation of 20% and 30% energy efficiency measures will drastically increase the total cost of the whole energy system by around 235% and 340% (against the 8% EE), respectively, due to the necessity to implement more and more expensive technologies in the demand side to achieve the targets, as well as more electricity generation from high-costed thermal units and additionally constructed CCGTs will be needed for this purpose .

There is no necessity to construct new thermal capacities to cover the domestic demand in case of the development of renewables (solar, wind, geothermal). Need for a new 234 MW CCGT construction arises only depending on the level of regional cooperation and energy efficiency.

The last developments in the system after the fulfilment of the current LCGP update makes to review the updated LCGP, particularly:

A contract has been signed between the GoA and “RENCO” group according to which “RENCO” group will build the new 234 MW Yerevan CCGT. Financing will be supported by the private investments and the project cost amounts to 285 million US$. Construction will last 26 months and will be completed in the second half of 2019.

RA Public Services Regulatory Commission adopted №310N decree on November 16, 2016, according to which natural or legal persons can build up to 150 kW Solar PV plants without a license to cover the own electricity needs and the fixed price for the electricity supplied by the 1 MW Solar PV plants will be 42.645 AMD/kWh excluding VAT.

Government steps is undergo towards the market liberalization.

New developments occur in regional cooperation aspects (e.g. construction of power transmission lines, new mechanisms for the electricity export and import with Georgia etc.)

GENERAL CONCLUSIONS

image1.png image2.png image3.png image4.png image5.emf image6.png image7.png image8.png image9.emf image10.png image11.png image12.png image13.emf image14.png image15.png image16.png image17.emf image18.png image19.png image20.png image21.emf