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S -X~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~S- _ A-' ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~iSPI~I,"SW ~~~~ 1 I -, w~~~~~~~~~~~~~~~~~~~~~~~AA - - "A A~~~~~~~~~~il SEYCHELLES ELECTRIC POWER SYSTEM EFFICIENCY STUDY AUGUST, 1984 ABBREVIATIONS GWH gigawatt hour km kilometer kV kilovolt kW kilowatt kWh kilowatt hour LRMC long run marginal cost MVAR megavolt amperes of reactive power MW megawatt toe jnne of oil equivalent TOR terms of reference ACRONYMS COS Government of Seychelles SEC Seychelles Electricity Corporation CURRENCY EQUIVALENTS I US dollar 6.6 Seychelles rupees (SR) TABLE OF CONTENTS Page SUMMARY. .................... 000 440040444400404444 400400 i r.* BAcKGRouND ..................... 0*.................... 1 Country Situation................................., 1 Energy Demand......................,............... 1 Electric Power Sector ........................... 1 Long-Run Marginal Costs3................... 404444440 3 I'. FINDINGS AND RECOMMENDATIONS ............................. 4 Generation Losses...............................4..404....4 Mahe 4.................................. ............ . 4 Praslin System ..... 4400440000444044000400000 404400400 4 Transmission/Distribution Losses.-- ............... 000000 5 Technical Losses............ ............044404440 5 Non-Technical L........... 44044404................ 00040 5 Reactive Power in the 'ahe System..................... 6 Recommendations ....................................................... 7 Diesel Generation Operation and Maintenance............. 7 Recommnendations . . ............... 040004 44400.0..............4004......... 7 Electricity Tariffs8...... ................. oooooo......... 8 Recommendations ..... 04 ................................ 9 Next Steps. 40 0040400400044.44444.4004040.400040044404ll11 ANNEXES 1. TOR - Efficiency Improvement in the Distribution Sytem..... 12 2. TOR - Efficiency Improvements in Diesel Power Plant Operation & Maintenance...... 14 3. TOR - Electricity Tariff Study.... 26 4. Note on the Calculation of the Long-Run Xarginal Cost of Electrici;y Supply (LRMC) ... 30 FIGURE SEC Tariffs and LRNC for Large Consumers 10 SUMY 1. This report is based on the findings of a mission financed under the joint UNDP/World Bank Energy Sector Management Assistance Program (ESMAP) which visited the Seychelles during March 19-30, 1984. The mission was organized in response to a request by the Government of Seychelles (GOS) for technical assistance identified in the joint UNDP/World Bank Energy Assessment Report Seychelles: Issues and Options in the Energy Sector (January, 1984). The Assessment Report noted significant scope for improving the efficiency of the electricity system and recommended the following projects: (a) a power factor improvement program; (b) a diesel power plant maintenance program; (c) a training program for supervisors and operators of diesel generating equipment. 2. The purpose of the m. .ssion was to briefly review the efficiency of the power system and prepare terms of reference for energy savings projects to be financed by bilateral and/or multilateral donors. The mission visited all generating plants and selected sites in the distri- bution system, held discussions with managers and operators and reviewed statistical informacion prepared by SEC in order to assess: (a) the magnitude and source of energy losses in the system; (b) operating and maintenance procedures for diesel generation; (c) the adequacy of the existing tariff structure and the need for a study to recommend improvements. 3. The major findings and recommendations of the mission may be summarized briefly as follows: (a) Generation Losses. At the generation level, there is substan- tial scope for increasing efficiency through a system-wide program of preventive maintenance, standardized plant operating procedures and training in diesel generator operation. On an individual plant basis, the mission recommends a detailed audit of the Praslin Power Station to investigate and correct the station's apparent high use of electricity (18% of gross electricity generation), and a study of the feasibility of using waste heat for heating fuel oil used in the Mahe Power Station to reduce station use of electricity. terms of reference for efficiency in diesel power plant operation are found in Annex 2. The total cost of the technical assistance is estimated at US$300,000. - ii - (b) Distribution Losses. The mission found a tack of reliable data on losses in specific parts of the distribution network, a significant share of unexplained or "non-technical" losses, and a Low power factor in the Mahe distribution system (0.85) at peak load which, if corrected through capacitor installation, could result in lower distribution losses. The mission recommends a technical assistance package to help SEC improve efficiency in its distribution syscem, including (a) more accurate calculations of distribution losses through the use of a micro- computer and a software package specifically tailored for network analy- sis, and (b) measures to improve energy efficiency in the distribution system, i.e., changes in design standards, power factor improvement through capacitor installation and administrative regulations, etc. Terms of reference for this assistance are found in Annex 1. The total cost of this project is estimated at US$150,000, including funds for microcomputer hardware/software and capacitors. Cc) Tariffs. The mission compared electricity tariffs with estimated long-run marginal costs of electricity supply (LR'fC) and found the LRMC of supplying small domestic consumers to be nearly double the tariff they pay. On the contrary, large efficient consumers with high load factors pay a rate which is much higher than the LR.'4C of servicing them. The mission proposes a tariff study to establish a demand/cost related tariff structure. Details on the current tariff structure, some preliminary observations on possible changes, and terms of reference for a tariff study are found in Annex 3. The total cost of the tariff study is estimated at US$70,000, including metering equipmer.;. Next Steps 4. Based on the above findings, the mission recommends a total technical assistance package of US$520,000 to improve the efficiency of the Seychelles electricity system, including consulting services and equipment. The terms of reference for the three projects identified are given in Annexes 1, 2 and 3. The componen.s, duration and cost of each project are summarized below: rable 2.S: TECHNICAL ASSISTANCE FOR POWER SYSTEM EFF ICIENCY IMPROVEMENTS Consulting Services Equipment rotal Project Map-monrhs Cost Type Cost Cost (USS) (USS) (USS) Efficiency Improvements in the Distribution System 2.0 30,000 120,000 150,000 Efficiency Improvements in D;esel Power Plant Ooeration and Maintenance 214, 300,000 300,000 Electricity Tariff Study 4.0 60,000 10,000 70,000 Totai 27.0 390,000 130,000 520,000 I. BACKGROUND Country Situation 1.1 The .Republic of Seychelles includes 100 islands off the coast of East Africa with a total land area of 400 square kilometers and a population of 65,000. About 88% of the population live on the island of Mahe. The Seychelles' economy is very small, open and highly dependent on tourism from Western Europe. During 1976-79, the country's real GDP increased on average by about 10 innually. However, between 1979 and 1982, GDP declined by about 11%, due in large measure to a reduction in tourism. At the same time, prices for major export products (copra and fish) also declined. The subsequent drop in merchandise exporcs and tourism receipts, coupled with imports amounting to nearly three-quarters of CDP, resulted in an increase in the trade deficit from SR 420 million in 1979 to SR 500 million in 1982 (current prices). The Government of Seychelles (GOS) now has a strategy to increase tourist activity and fish exports in order to stimulate economic growth and improve its trade balance. Energy Demand 1.2 Imported petroleum products account for more than 90% of total energy consumption in Seychelles, the rest of wbich is fuelwood and small amounts of other biomass. Total inland demand for petroleum products increased from 17,962 tonnes of oil equivalent (toe) in 1975 to 27,773 toe in 1979, or at an average annual rate of 11.5%. However, growth between 1979 and 1982 was only marginal, about 343 toe. During 1976-79, the cost of petroleum imports grew rapidly, from SR 54 million to SR 130 million, and despite the decline in tourism and the lower growth of petroleum imports since 1979, the cost of oil remained nearly unchanged in 1982, at SR 129 million. In 1982, the cost of these imports far exceeded total merchandise exports, amounting to 42% of combined tourism and merchandise export earnings. GOS is very concerned about the growing burden of these costs on the country's narrow export base. There appears to be significant scope for reducing these costs through fuel substitu- tion and conservation measures in various se?ctors, and through pooling the procurement of petroLeum products with other countries. Electric Power Sector 1.3 Electricity is generated and sold by the Seychelles Electricitv Corporation (SEC), a parastatat company created in 1980. Current eLec- tricity supply covers two islands, Mahe and Praslin, which accounts for 95% of the country's population. Nearly two-thirds of aLl househoLds in Seychelles are connected to electric power supplies. Mahe has two power stations with a total installed capacity of 17.4 MW. Peak demand cur- rently is 9.3 MW and the firm capacity of the system (9.0 MW) is inade- quate for the demand level. Praslin, which includes about 7% of the Seychelles' population, has a total installed capacity of 2.1 MW, a peak demand of about 400 kW, and an annual energy use of 1.4 CWh. -2- 1.4 Electricity sales increased rapidly during 1976-79, by about 14% per year, but this rate recently dc_lined to about 2% because of lower economic growth. Table 1.1 summarizes power generation and sales data for the period 1976-82. Currently, commerce and industry (mostly hotels) account for the largest share of electricity sales (54%), followed by the domestic sector (31%), and government/street lighting (15%). In 1982, total power generation amounted to 52.2 CWh, of which 45.4 GWh were sold and the remainder taken up by losses in generation, transmission and distribution and non-technical losses. Table 1.1: SEC - POWER GENERATION ANO SALES, 1976-82 Average Annual Growth Rate ,976 1974 1982 1976-79 1979-82 (GWh) (1) (GWh) ( () (GWh) (percent) Generation 34.5 48.3 52.2 1 1,9 2.6 TotaI Sales 28.9 100.0 42.8 100.0 454 100.0 14,0 2.0 Domestic 8.1 28,0 12.8 30,0 !4.1 31.0 16.5 3.3 Connerce & Industry 17.3 59.9 23.5 55,0 24.5 a/ 54.0 10.7 1,4 Govt. and Street Lighting 3.5 12.1 6.4 15.0 6.8 3/ 15.0 22.9 2.0 a/ Mission estimates. Source: SEC 1.5 The power sector accounts for the largest share of petroLeum demand (44%) and consumed 12,306 toe in 1982. Prior to 1982, all elec- tric power was generated by diesel engines operating on light gas oil but since then much of the equipment has been modified to use fueL oil, a substitution which is estimated to save SEC about SR 2 million (US$300,000) per year in financial terms. 1.6 The technicaL characteristics of Mahe transmission and distri- bution system are as folLows: (a) 14 km of 33 kV lines; (b) 120 km of 11 kV lines and cables; (c) 170 km of low voltage lines; (d) transformer capacity of 30 MVA from 33 kV to 11 kV; and (e) transformer capacity of 34 !4VA from 11 kV to tow voltage, in 300 substations. -3- 1.7 The current electricity load forecast for the Seychelles is shown in Table 1.2, Maximum demand in Mahe is expected to increase from 9.3 MW in 1982 to 16.1 MW in 1995, with corresponding increases in elec- tricity generated from 50.8 GWh to 84.4 CWh. On Praslin, La Digue and the other islands, maximum demand is projected to increase from 0.4 WW to 0.9 MW, with a concurrent rise in electricity generation from 1.4 GWh to 4.5 GWM. Table 1.2: ELECTRIC POWER LOAD FORECAST ---------------Mahe System--------------- Praslin, La Digue Base Case Scenario High Growth Scenario and Other Islands (MW) (CWh) (MW) (GWh) (OW) (GWh) 1982 9.3 50.8 9.3 50.8 0.3 1.4 1986 11.1 58.3 11.8 62.1 0.6 3.0 1990 13.1 68.7 14.7 77.2 0.7 3.5 1995 16.1 84.4 19.3 101.4 0.9 4.5 3! These projections do not include possible siting of a BBC relay station in 1987/88 which would require about 2-3 MW of power. Source: Mission estimates based on SEC data. Long-Run Marginal Costs 1.8 The long-run marginal cost (LRMC) of electricity may be defined as the present value of the economic cost of supplying an incremental unit of electricity demand in a given power system. In this report, it is used as a tool for analyzing the level and structure of electricity tariffs. The LRMC is estimated as a two-part cost: (a) an incremental capacity cost, which corresponds to the minimum capital expenditure to maintain reliable service; and (b) an incremental energy cost, which is the operating cost of the unit best suited to meet additional energy demand. These costs may be summarized for the Seychelles as follows: (a) capacity cost of SR 1,000 (US$151) per kW annually at the generation level; SR 1,100 (US$167) per kW annually at the 11 kV level; and an energy cost of SR 0.58/kWh (US$0.09/kWh). Background information on the calculations of the LRMC is provided in Annex 4. -4- II. FINDINGS AND RBECOMMENDATIONS Generation Losses Mahe System 2.1 Statistical, data for the Mahe power stations indicate the thermal efficiency of Station A (2.4 MW) to be about 32% with a 30% load factor and that of Station a (15 MW) to be 33.2% with a load factor of 65%. Although these efficiencies are within an acceptable range for the type of equipment used, the mission finds that improvements in mainte- nance and operating procedures could result in significant increases in thermal efficiency. For example, the mission's review of the maintenance schedule for the generating units indicates that intervals between over- hauls often have been much longer than those stipulated by the manufac- turer, often due to capacity constraints, especially for the Station's 5 MW unit. This finding was also confirmed in discussions with SEC staff. In addition, judging from the existing skill levels of plant operators, current operating procedures and discussions with SEC staff, diesel units are not always running at optimal load. The mission believes that better plant maintenance and the training of operators to understand the value of running the generacing units in an optimal way could significantly improve thermal efficiency. Also, energy use in Station B is 6.6% of electricity generated, compared to 2.7% for Station A. The high figure for Station B results from the predominant use of fuel oil (75-80%), which, though overall less expensive than diesel oil, must be preheated and treated in a separator, a process which requires additional energy. Praslin System 2.2 At the Praslin Station, there are three units of 0.67 MW, each of which has a thermal efficiency of about 29%. This lower efficiency figure is more due to its low load factor (0.28) than maintenance or operating procedures and thermal efficiency should improve with a growing load. All units operate on diesel oil but station losses are extremely high -- nearly 18% of generation. A major contributing factor to the large share of losses is the station's low load factor, which, given a fixed level of auxiliary equipment required for the station's operation, results in a larger proportion of station use than if the load were higher. The mission also noted that some of the buildings at the plant were highly air-conditioned. However, the mission estimates that, even if the present load factor were doubled and 50,000 kWh were deducted for air-conditioning, station losses would still be on the order of 8.5% -- a level higher than the fuel oil-based plant in Mahe and triple that of Station A. Therefore, the mission and SEC have agreed that a detailed analysis of the major loads within the power station should be made to determine the causes of this excessive energy consumption. Terms of reference for a detailed audit of station use in Praslin are included in Annex 2. Transmission/Distribution Losses Technical Losses 2.3 SEC's calculations of technical losses for the main distribu- tion system (1983) amount to 3.1 GWh. The mission studied the available data and arrived at losses of 3.6 CWh. Table 2.1 shows a breakdown of the mission's calculation of these losses. However, a much more thorough analysis is required for planning purposes and for this more data on the loads in various parts of the network is needed. SEC has begun to gather more loaa information with recently acquired metering equipment. Both the mission and SEC staff agreed that a microcomputer with software for network monitoring would greatly assist SEC in more accurately deter- mining the magnitude and cause of the losses in each part of the system. Table 2.1: COMPOSITION OF DISTRIBUTION LOSSES IN THE MAHE SYSTEM Demand Losses Energy losses (kW) (% of peak Load) (GWh) (%) a/ Transformer Iron Losses 120 1.2 1.1 2.0 Transformer Load Losses 100 1.1 0.4 0.8 33 and 11 kV Line Losses 340 3.6 1.2 2.3 Low Voltage Losses 280 3.0 1.0 1.9 Total 840 8.9 3.6 7.0 a/ Based on share of energy sent out, i.e., excluding generation and station losses. Source: Mission estimates. Non-Technical Losses 2,4 The mission's review of the technical losses in the SEC system revealed some "unexplained losses" which result from the difference between energy sent Out and available information on technical losses. Its technical l.;s calculations of 3.6 GWh for Mahe and 0.1 GWh for PrasLin compared with the energy production and sales figures (December 1982 to November 1983) results in an unexplained loss of 1.7 GWh for Mahe and .060 GWh for Praslin, or about 3% and 5% of total electricity sent out by each system, respectively. -6- Table 2.2: ELECTRICITY SENT OUT AND SALES: DECEMBER 1982 TO NOVEMBER 1983 Mahe Praslin ('000 kWh) Energy Sent Out 51,496 1,352 Sales 46,209 1,190 Difference 5,287 162 Estimated Technical Losses 3,600 100 Unexplained Residual 1,687 62 2.5 These unexplained losses could result from: (a) uncertainties in loss calculation; (b) consumers connected to the electricity system but not necessarily registered in the billing system; (c) meter tamper- ing; or (d) defective metering equipment or calibration. Reactive Power in the Mahe Svstem 2.6 The power factor 1/ at peak load (February and March) for the Mahe system is about 0.85, with maximum reactive demand of 4.9 megavolt amperes of reactive power (MVAR). 2/ During low demand periods (June, July and night time), the reactive power in the system is significantly lower, about 2.0 MVAR. There is little available information on exactly how this reactive power is distributed within the network but most prob- ably it comes from cold stores, the brewery and offices with air-condi- tioners. The majority of these installations are located in the Victoria area. Other significant sources are hotels, which are high consumers of electricity, and overhead transmission lines and transformers. The installation of static and/or switched capacitors in the discribution system to boost the power factor during peak load could result in sub- stantial energy savings. In a number of countries, ESMAP has found investments in capacitors are likely to have quick payback periods (1-2 1/ The power factor is the ratio of the active to the apparenc power and therefore will depend on the amount of reactive power presenc in the system. The objective of power factor correction is to reduce reactive power in the system, which tends to lower voltage levels and increase losses; it therefore is important that the power factor be as close to unity as possible withouc causing excessive voltage in the system. 2/ The power factor in the Praslin system is 0.98. -7- years). 3/ The mission's preliminary review indicaces that the Seychelles could also benefit from such investments but the details on the types of capacitors required (switched and/or unswitched), their number and location need to be worked out once more information -becomes available about reactive loads and losses in various parts of the system. Recommendations 2.7 The mission recommends a technical assistance package to (a) determine technical losses in various parts of the distribution system, using a specially designed computer program; (b) identify the major reactive power loads; (c) evaluate the potential of various energy saving measures including capacitor installation, changes in the distri- bution system's construction practices and design of administrative regu- lstions to control the power factor; and (d) assess the magnitude and causes of non-technical losses and recommend measures to reduce them. Annex 1 provides terms of reference for this assistance, which will require a total of US$150,000 for two man-months of consultant work, computer hardware/software and capacitors. Diesel Generator Operation and Maintenance 2.8 The mission visited power stations on Mahe and Praslin and held discussions with SEC management and operating staff in order to evaluate the maintenance system, operating procedures and skill levels of super- visory and operating staff. The mission found that most of the main- tenance work is not systematic and, as mentioned earlier, the period between generator overhauls often is longer than that recommended by the manufacturer, sometimes due to capacity constraints. In Station 8, for example, the maintenance work is based on checklists drawn up by the maintenance staff stating what has to be done, but *_here are no proce- dural guidelines. The staff have to consult the engine book, which is a time-consuming process, and there is no control mechanism to ensure that the work on the cnecklist is actually carried out. As for skill levels, many of the staff lack training in basic electricity theory, load manage- ment and diesel plant operation which makes it difficult for operators to make the most efficient use of generating equipment to meet demand. Reccmmendations 2.9 The mission recommends a comprehensive, documented preventive maintenance plan for diesel generators combined with standardized iperating instructions and a training program for shift operatcrs and supervisors to improve the efficiency of generating facilities. After 3/ Ethiopia, Kenya, Panama, Sri Lanka, Sudan, etc. -8- observations of the physical plant and discussions with SEC staff, the mission and SEC agreed on a program tailored specifically to the needs of the SEC power system. This program would include: (a) the design and implementation of a comprehensive preventive maintenance program and specific plant operating instructions. (See Annex 2 for a sample maintenance card, time schedule, reporting system, and operating instructions); (b) the preparation of standardized operating procedures for the diesel units which would be displayed prominently in the station house; (c) a training course in Mahe for shift supervisors, operators and maintenance staff covering basic electricity, combustion engine design and operation, and load management and maintenance; and (d) consulting services to evaluate the potential for using waste heat to heat fuel oil in the Mahe Station, and audit the high amount of station use in the Praslin Station. Terms of Reference for these tasks are attached in Annex 2. The benefits expected from this program are: (e) increased availability of generating equipment; (f) improved efficiency of generating units; (g) fewer breakdowns and electricity outages; (h) extended life of present generating equipment and thus fewer expenditures for spare parts and investment in new generating capacity; (i) reduced maintenance costs over the long-term; (j) more productive use of available maintenance staff; and (k) better Load management and more efficient use of available capacity. Electricity Tariffs 2.10 The mission reviewed the current tariff structure for electri- city in order to prepare terms of reference for a power tariff study. The study should propose a tariff which reflects, as much as possible, the economic cost of meeting electricity demand, subject to any con- straints such as specific revenue requirements or Government programs for providing subsidies to particular categories of consumers. The mission -9- focussed its review on two areas: (a) brief review of the current cariff. compared with estimates of the LRMC for various consumers; and (b) preli- minary suggestions on how to approach the revision of tariffs based on demand related costs. 2.11 The mission noted, for example, that more than half of all domestic consumers use an average of only 60 kWh per month and that the cost of supplying electricity to them is nearly double the tariff they pay. At the same time, of the large consumers, those which have high load factors(and therefore operate more efficiently) pay a rate which is much higher than the LRMC of supply (See Figure, page 10). The mission and GOS have agreed, therefore, that a small study should be carried out to establish a demand/cost related tariff structure to assist GOS in the economic pricing of electricity. Recommendations 2.12 The mission has made some preliminary recommendations for demand/cost related tariff changes. These include: (a) for small consumers up to 100 amps, a two-part tariff consist- ing of a fixed monthly charge and an energy charge; (b) for large consumers, a fixed monthly charge, an energy charge, and a demand charge. For small consumers, the fixed monthly charge would incLude non-energy charges related to electricity generation and distribution (capital costs plus operating/maintenance costs) as well as specific consumer-related costs i.e., for connection and metering. The level of the non-energy cost should be proportional to the demand in each principal part of the system. Furthermore, these consumers would also pay an energy-related charge which includes the cost of supply, losses and a safety margin. 2.13 For large consumers, a three-part tariff may be appropriate since a number of them are already mecered for both energy use and de- mand. The demand charge would be based on the maximum demand registered every month and include charges related to capital costs and operating! maintenance costs of the system. The fixed monthly charge for these consumers would include consumer-related costs such as metering, connec- tion, and administration. The energy charge would include costs of supply (including losses and a safety margin). 2.14 The mission noted that 60% of all consumers in the SEC system are in the 20 amp demand category--the smallest trip switch available at the present time. However, these customers consume an average of only 60 kWh per month which could be met just as well with a much smaller trip switch. Therefore the mission recommends that the tariff study explore the feasibility of installing smaller trip switches. - 10 - SEC Tarff versus LRMC for Large Consumers cost Per month (SR) 400000 Leoen lood FavleoM _ _ _SEC TonU 0.9 300.000 1.000 O, 0. so 1C0 200 300 400 kW 131 1.2 '1. 1.0 091 08 a7- 0.6- 0 0.2 0.6 0.9 Loal Fcc?or wofc Saroc-2!219 - 11 - Next Steps 2.15 Based on the above findings, the mission recommends a total technical assistance package of USS520,000 to improve the efficiency of the Seychelles electricity system, including consulting services and equipment. The terms of reference for the three projects iaentified are given in Annexes 1, 2 and 3. The components, duration and cost of each project are summarized below: Table 2.5: TECHNICAL ASSiSTANCE FOR °OWER SYSTEM EFFICIENCY IMPROVEMENTS Consultinq Services Eacuioment 0oiaI Project Man-months Cost Type Cost Cost (USS) (USS) (USS) Efficiency ImorovemenTs in the Capacitors 100,000 Distribution System 2.0 30,000 microcompu- ter and software 20,000 Subtotal 2.0 30,000 !20,000 150,000 Efficiency Imorovements in Diesel Power Plant Operation and Maintenance: 1, Praslin Plant Audit 0.5 7,500 2. Feasibility of Waste Heat Use for Heating Fuel Oil in the Mahe Plant 0.5 7,500 3. Design of Plant Operating Instructions 3.0 45,000 4. Design of a Preventive Maintenance Program 11.0 165,000 5. Training Program 6.0 75,000 Subtotal 21.0 300,000 300,000 Electricity Tariff Study 4.0 60.000 Metering EquiP. to,ooo Subtotal 4.0 60,000 10,000 70,000 Total 27.0 390,000 '30,000 :20,000 Annex 1 Page I of 2 -12- TERMS OF REFERENCE EFFICIENCY IMPROVEMENT IN THE FLECTRICITY DISTRIBUTION SYSTEM Objective 1. This project is designed to reduce losses in the Mahe distri- bution system and includes consulting services to assist the Seychelles Electricity Corporation (SEC) staff in establishing procedures for deter- mining the location anid magnitude of losses in the various parts of the distribution system and evaluate the potential of several energy savings measures. It also includes the provision of a microcomputer and an appropriate software package for network analysis as well as funds for installing capacitors as determined by a detailed network analysis. Scope of Work 2. Consulti._g Services. About two man-months of consulting ser- vices (specialist in distribution network analysis) will be required to establish power network parameters and a monitoring system. Prior to beginning work in the Seychelles, the consultant will assist the SEC in selecting and installing the appropriate microcomputer and software to be used in SEC headquarters. The consultant will calculate load flows and voltage levels in order to identify losses in various parts of the system as well as identify the major sources of reactive power. Then, the con- sultant will evaluate the energy savings potential of the following measures: (a) installation of capacitors in the Mahe distribution system, (selection of size, location, type, etc.); (b) design of administrative regulations to manage che sys:em's power factor, such as controls on imported equipment uncor- rected for reactive power (i.e., air conditioning units, fluorescent lights, etc.) and inclusion of a power factor clause in the tariff structure to encourage power factor correction; (c) changes in the construction methods of the distribution system including the use of larger conductors, higher voltage Levels, selection of optimal transformer sites and their locations, the use of high efficiency transformers, transformer load manage- ment, etc.; (d) evaluation of the magnitude and causes of non-technical losses (after technical losses have been more clearly defined) includ- ing review of the billing system and the effective operation of existing metering equipment. Annex 1 Page 2 of 2 -13- Equipment 3. Microcomputer. A microcomputer and software package would be used for network analyses, evaluation of rehabilitation and extension programs, data recording and reliability assessment of the power system. Calculations would include loss levels, voltage levels, currents, active/ reactive loads, fault currents and relay settings. A microcomputer could also be used in other areas of operations and maintenance such as regis- tration of technical data (i.e., fuel consumption, oil temperature, pressure, etc.) for analyzing generating efficiency. 4. Capacitors. The consultants will provide a more detailed ana- lysis of losses in various parts of the distribution network, the number of capacitors required, their types (switched vs. static), location, implementation schedule and an analysis of the costs/benefits of instal- ling them. The mission has estimated US$100,000 for the purchase and installation of capacitors based on its brief review of the likely needs. Cost 4. The total cost of this project is estimated at $150,000, dis- aggregated as follows: US$ Consulting Services (2 man-months) 30,000 Microcomputer and Software 20,000 Capacitors lO0t,00 Total 150,000 Annex 2 Page 1 of 2 TERMS OF REFERENCE EFFICIENCY IMPROVEMENTS IN DIESEL POWER PLANT OPERATION AND MAINTENANCE Objective 1. This project includes consulting services and a training pro- gram to help the Seychelles Electricity Corporation staff increas_ the efficiency of energy use in generation through better operation and main- tenance procedures. Its specific tasks will be to: (a) improve plant operations through (i) an audit of the high station use in the Praslin power station, (ii) an evaLuation of the potential for using waste heat instead of electricity to heat fuel oil in the Mahe power plants, and (iii) the design and implementation of specific plant instructions for the optimal operation of diesel generating units; (b) design and implement a preventive maintenance program adapted to local conditions; and (c) conduct a training course in Mahe for shift supervision, operators and related maintenance staff. Plant Operations 2. There are two parts to this component. The first consists of consulting services to evaluate the high station use of electricity in Praslin and potential efficiency improvements, i.e. shutting down fans and pumps when not required, checking for air leaks, etc; in addition, the consultant should examine the feasibility of using waste heat rather than electricity to heat fuel oil for the Mahe power stations. This will involve about one man-month of consultant time. The second part consists of consulting services to develop detailed operating instructions to improve the efficiency of operating procedures for power plants in Mahe and Praslin. Sample operating procedures are found in Attachment 1. Consulting services to prepare such instructions will amount to nearly 3.0 man-months. Maintenance Program 3. The maintenance component of the project will draw up detailed guidelines for preventive maintenance in power stations A and P on Mahe and in the Praslin Power Station. Detailed information on generators and auxiliary equipment to be covered under the maintenance program is given in Attachment 2. Establishing the maintenance program will require about 11 man-months of consultant services. The maintenance guidelines will include: (a) a maintenance card which gives detailed descriptions of how to perform specific maintenance tasks on power generating units and auxiliary equipment; (b) a description of the maintenance time schedule, -15- Annex 2 Page 2 of 2 which will state when and where each specific maintenance activity should take place; and (c) a description of the maintenance report which will be used as a basis for developing the guidelines. Examples of these items are provided as Attachment 3. Training Program 4. The participants would number about 40, divided into several groups, and training would take place in the Seychelles. The training would run for three weelks and have to be conducted in three sessions, since the sessions would require full time staff participation and some staff must be available to operate the power plants. The project will cover the following areas: (a) basic information about electricity; (b) basic information about combustion engines in general; (c) specific information regarding the diesel engines installed and their auxiliary equipment; (d) optimal operating procedures (load management); and (e) maintenance requirements. The participants will represent different skill levels but it is still recommended that all participants take part in the entire course. The participating staff will include shift supervisors, operators, and selected maintenance staff. A proposed syllabus of the course is given in Attachment 4. A total of 6.0 man-months would be required for this effort. Project Cost S. The total cost of the project would amount to US$300,000 allocated as follows: Component US$ Praslin Power Plant Audit 7,500 Mahe Power Plant - Feasibility of Waste Heat Recovery for Fuel Oil Heating 7,500 Design of Plant Operating Instructions 45,000 Design of a Preventative Maintenance Program 165,000 Training Program for Diesel Power Plant Operation 75,000 Total 300,000 D IIESEL (iENElRA tOI1 SETS| -. ,_- 'u,|4 10 U 1"' _ _ t.,,_s,_,,,,, th $t"ttlVeNt t__ *h_ fi6¢ " _ **"* D_ts . ail ' _4s _ $v_i~1 .t* cet--- -. 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SEYCi4ELLES POWER EFFICIENICY AUDIT i3ASIC DATA ON DIESEL GENERAIING EQUIPMENT ENGINE SPECIFICATIONS a/ YtARS SIAIION UNII St.RVIC tngintf No. MW kV W4m Fuel Auxiliary Equipment )15 LSS I6C%5Ccb1352-8 1.00 6.6 1,000 light fuel oil Oil storage fecillties A 2 I) iRS 8Z64C2610420 0.46 6.6 750 lighit fuel oil Engine mounted diesel control panel 3 16 tHS 86680219024 0.46 6.6 750 Light fuel oil Central control panel switch gear 4 16 tRS 8G680)2200244 0.46 6.6 750 Light fuel oil Starting oil compressor 1) (electrically driven) Starting air compressor dieuel driven t1 12 i8 major Inline con. 6528.1 2.50 11.0 500 tigist fuel oil for Oil storage facilities 2 12 k8 mdjor inline cogi. 6528.1 2.50 11.0 500 starting and shut- Two starting air comprebbot% (oil - 3 8 k8 major inline con. 6528.1 2.50 11.0 500 ting dowitn; heavy driven) 4 6 KS moajor inliine con. 6528.1 2.50 11.0 500 fuel for normdl One starting air comprussor (eIccIti- 5 3 kV 12 major ink 2 vec type. 2.50 11.0 500 running. catly driven) con. 6822-2 Preheating equipment tor heavy luul oil Separator for heavy tuel oil Portdble separator for lube oil Direct control panel for eech egignle switchgear (it kV) Ir lb Ia, I S Si 8 con. 15628 0.670 11.0 150 lighit fuel oil Oil stordge facilities Z 3 SL 8 con 13628 0.670 11.0 750 Starting air compressor (electricdily 3 3 SL 8 con 13628 0.670 11.0 750 driven) Stdrilng air compressor (oil driven) Direct-control panel for each engine Central Control Pdnel Switch gear (11 kV) d/ tn9ine. tndutfdctured by Mirrlees B3lackstone, I.td, (England) with brushless dlternatot-s mianufatctured by Brush Electrical Machiie, Inc. Jt 3 Annex 2 -18 - Attacbment 3 Page 1 of 6 SABPLE MAINTENANCE CARD 1. CLEANING AND CRECKING OF PISTON 2. CHECKING OF CRANC BEARING CLEARMNCE 3. REPLACING OF PISTON PIN BEARING 1. CLEANING AND CHECKING OF PISTON Remove the cylinder head as described under instruction No. 85-1 "CYLINDER HEAD". Dismantlinq 1.1 Screw an M 12 eyebolt into piston top, pull rope through eyebolt and hang it Note: If eyebolt cannot be screwed in, clean tap hole with the use of 00.142 the cleaning tool. 034 kyo 5 1.2 Cautiously pull piston while l_._-_2 guiding the connecting rod by hand to avert damage to the crankpin and the cylinder liner. 1.3 Piston rings should only be removed by use of the piston ring expander (034.035) to avoid over-stressing of rings. 1.4 Remove lock ring and push out piston pin while lifting the connecting rod to reduce the binding, force. Withdraw connec- ting rod from piston. 1 Piston 2 Piston ring 1.5 Clean piston, do not scratch 3 Piston pin or roughen the surface. Flush oil 4 Lock ring spaces and blow out with an air 5 Connecting rod hose. S Marking (Conrol side) 1.6 Take measurements of piston, piston rings and piston pin clearance, Fig. 4 replace parts as necessary. Table of clearances is to be found on page 4. Note: Dismantling of a composite piston should only be carried out by one of our service stations or in the piston manufacturer's works. SPARE PARTS 1 set of piston rings (5) per cylinder No. .......... - 19 - Annex2 Attachment 3 Page 2 of 6 SAMPLE MAINTEMANCE CARD Assembling 1.7 Insert connecting rod into piston so far that bore holes in piston and rod are in alignment, oil piston pin and insert it. Fit lock ring which must enter its groove. Note: The open end of the connecting rod foot should be facing in the direction of the marking S (control side) of the piston. 1.8 Fit piston rings in the correct order, with the ring gaps staggered. Ring Order: 1st Ring, chromium plated, angle joint, rising on the right or plasma ring 2nd Ring, chromium plated, angle cut, rising on the left 3rd Ring, step-joint ring 4th and 5th Ring, oil-scraper rings Note: Rings should onlv be fitted by use of the ring expander (034.035). 3 to(3 1.9 Inspect top of liner flange for carbon 4 deposits. Remove deposits, if any. 1.10 Clean ring compressor, check it for damage and oil it on the inside. Place ring compressor over the piston ring \ set in about mid-position and tighthen it until the piston rings are compressed to the inner diameter of the cylinder Fig. 5 liner. 1.11 Oil liner running surface and piston liberally and cautiously lower piston into the liner, by use of the lifting gear, until the connecting rod seats on the protecting band on the crankpin if necessary turn crankshaft accordingly. The letter "S" (control side) on the piston, i.e. the open side of the crank bearing must be facing the control side. 1.12 Install crank bearing, instruction No B5-2. 1.13 Screw o1lt eyebolt and remove piston ring compressor. 1.14 Mount cylinder head, instruction no BS-1. -20- Annex 2 Attachment 3 Page 3 of 6 SAMPLE MAINTENANCE CARD 2. CHECKING OF CRANK BEARING CLEARANCE Remove the crankcase covers and measure the crank bearing clearance by means of a feeler gauge. Bearing clearance: 0.10-0.20 (Max. 0.27) 3. REPLACING OF PISTON PIN BEARING In case the clearance between the piston pin and its bearing is found excessive i.e. more than 0.20 mm or the bearing is found scored it has to be renewed. Dismantling 3.1 The bearing is extracted by means of the extractor (M.030.067) attached as illustrated by tightening the hexagon nut, size 19. X , Note: If it is a tight fit, slit -1: . 'I bush by sawing to remove the tension. A siit depth from -- - the inner diameter of the M.030057 bush to a distance of 2 mm 3l 057 from the outside diameter will be sufficient. On no account must the bore hole in the connecting rod be damaged! Fig. 6 SPARE PART One Piston Pin Bearing per cylinder No. ........ Assembling 3.2 Clean bore hole in connecting rod and the outside of the bearing bush, remove any burrs or damage. 3.3 Freeze piston pin bush with liquid air (-1940 C) or liquid nitrogen (-195.80 C) to approximately -100° C or heat connecting rod to +1200 C. 3.4 Take frozen bush from freezing vessel with suitable hooks. Caution! Use thick gloves. Danger of freezing! 3.5 Insert bush into connecting rod so that lubricating oil passages are in alignment and the projection is the same on both sides. 3.6 When connecting rod and bearing bush have reached normal temperature (approximately 200 C), take measurements of bearing bush and enter them in the Engine Record. Note: it is recommended that this work be carried out bv one of our service stations. _W - YMM 7I.,M Qs Wi..S Xp S; mtt 6_tj't' -21 - Annex 2 Attachment 3 Page 4 of 6 SAMPLE MAINTENANCE CARD TABLE OF CLEARANCES: Dimen- Clearance sions When new max. A 115 0*13 .0,090 l G 0 > > 9 1~~ ~ ~~~,2 X S ;, o0 0,11X,192 o,z 44 .o,a cs 3,6 Cts8 3 .0,040 O 03,5 J%,aa 0 E 0, 5-0,v9 1,2 Fan F 104 .', 0 6~~~~~~~~~~~~~~.iS 195 i -0,029 H . 0,135-0,423 0,27 I 195 .013 A Sl,1 02 a 0,160-0,19Z 0,40 c s_0:G1 .. -0,022 C _ o ,08'00 2 E . ~~~~0,090-0,122 0,40 - ~.0,013 - 3 0E I0,25 C: '1 ~~~~C,CZ03-0,068 0,1is IJ 02-32,02 j 1,34,15 3,03 ~ ~ ~ Riq1 Znd ~~ ~~ unld 3 -22 - Annex 2 Attachment 3 Page 5 of 6 SAMPLE MAINENANCE REPORT NOTES TO BE TRANSFERED TO ENGINE HISTORY BOOK ENGINE Type of work Oate |iign Ir Lt1MAIED AltENUER MUNIli DUURlti W,litri PrM-wORK IS istit 1 R -PLANNED IOIAt ENGINE RUNNtNU ItOURS Wll£N PM-WORK IS DOtE TIME PARSIE UIHE X/ CURRENT IOIAL ENGINE RUNNINb HDURS WHEN PM-WORK IS iOMPPICE BE MADE AS A 'BLACK BAD IPLANNED MAINtENANWE FREQUEWCY jTM CEU SOL EST P~LANNED) MAINTENANCE 'ONI ENGINE No E5 __ -_ MAINTENANCE CARD PM 500 1000 1500 2000 2SOt 3000 3500 4000 4500 5000 5500) 6000 6S00 7000 7500 8000 8500 9000 9500 10000 to Cleanmml It heckeng of pistoa -HA'E SPAE FOR IN ICAlE (IIN -DICAT WHEN __t_ _. _. . . _ _ Al .N N1ENA ILBE ___ _A tOAN l NAHRE ISON - - jtr _ _ ,- _Ai-- -- LNI CA OQr rt tiltS WAaIIM 14I1N MAINtNIANtI C 111'i. (illt , tINE e*Ef Ifirttif SISII1Ul tt tw * 4I'aAItis IUI.I tiHtN Watt$ AN (IVLkAIt S ailltaUlt ',JtlWIJl, t(i0lel N4 ItIAI tNNI6NI tUtitittH, tilsutslr. I'tt IfNt.lNI Atilt WEEk tt' Witt( -24- Annex 2 Attachment 4 Page 1 of 2 PROPOSED SYLLABUS FOR TRAINING SEC STAFFING DIESEL GENERATOR OPERATION AND MAINTENANCE tl) Basic Electricity (a) Definitions and relations between electrical units (b) Electricity generating theory (c) Alternating and direct current (d) Three-phase syscem (e) Measuring methods (f) Pilot circuits (g) Measuring circuits (h) Function of basic electrical equiment including current trans- formers, voltage transformers, contractors and auxiliary relays, overload relays, voltage and frequency relays, etc. (2) Combustion Engines (a) Basic engine types - the heat cycle - constant volume or constant pressure - the mechanical cycle - four stroke - two stroke - single-acting or double-acting - piston type or piston rod and crosshead (b) Cooling methods (c) Cylinder adjustment (d) Valve adjustment (e) Methods of firing (f) Different types of fuels (g) Methods of injection (h) High, medium and low speed types (i) Auxiliary equipment (3) Diesel Engines in Seychelles Overall description with references to the points covered above under combustion engines. Description of the functions of following main components: bed plate, frame, crankshaft, connecting rods, pistons, cylinder heads, etc. Additional information on the following systems: - speed control system - lubricating system - fuel oil system and preheating system - starting air system - cooling water system - turbo-charger - electrical equipment including DCP, CCP and the switchgear. -25- Annex 2 Attachment 4 Page 2 of 2 (4) Efficient Generator Operation (a) Load management, including sharing and load forecasting; (b) Analysis of engine data and its impact on the operating efficiency of the unit; (c) Use of the computer for collection, storage and analysis of engine data; (d) Use of the computer for load prediction. (5) Maintenance Theoretical and practical information regarding the main components (crankshaft, connecting rods, pistons, cylinder heads, etc.). -26- Annex 3 Page 1 of 4 TERMS OF REFERENCE ELECTRICITY TARIFF STUDY Objective 1. The objective of the stutdy is to design a tariff structure which reflects as closely as possible the costs to the economy of meeting the demand for electricity in the Seychelles, subject to other important so^io-economic considerations such as the revenue requirements of the utility, subsidization of poor consumers, etc. These terms of reference review the current tariff structure and recommend guidelines for imple- menting the tariff study. Profile of the Current Tariff System 2. Rate Structure. The current rate structure distinguishes between small consumers (domestic) and large consumers (commerce, indus- try, offices, etc.) The small consumers pay a minimum fee of SR 10 and then SR 1.26 (US$.19) per kWh for the first 50 kWh each month. For the larger consumers, a declining block tariff is in effect. Each month, for the first 500 kWh used, they pay SR 1.44 (US$.22), which declines to SR 1.31 (US$.20) per kWh for the next 500 kWh and to SR 1.26/kWh for elec- tricity use above 1,000 kWh. 3. LRMC. The mission made a preliminary analysis of the long-run marginal cost of electricity supply for various categories of consumers and compared it with the current tariff structure. This analysis is dis- cussed in paras. 2.20 to 2.23. 4. Connection. When first connected to the system, the consumer pays a connection fee of SR 25 (US$6) and a deposit which depends on the size of trip switch ordered, available in the following amp sizes: 20, 40, 60 or 100. For a 20 amp switch, which is used by most of the consumers, there is a deposit of SR 100 (US$15). A number of large consumers receive demand meters. 5. Price Level Variations. Adjustments to the tariff for fuel costs are made automatically but the authority to increase tariffs must come from the Government. The current oil price paid by SEC includes a duty which corresponds to SR 0.30 (US$.045) per kWh. 6. Payment Procedures. Consumers receive monthly electricity bills. The time period for payment is 15 days, plus an additional 7 days before a consumer is put on a list for disconnection. 7. The following is an overview of electricity use by domestic consumers according to size of trip switch: 20 amps: There are 6,150 consumers in this category with an average consumption of 60 kWh per month. This leveL of demand -27- Annex 3 Page 2 of 4 includes use of lighting, a refrigerator, a fan and an iron. The peak demand of this category is estimated at between 0.2 - 0.3 kW. 40 amps: There are 3,200 consumers with an average consumption of 200 kWh per month. Their demand level includes the same appliances as a 20 amp consumer plus a cooker. Peak demand of this category has been estimated at 1.3 - 1.6 kW. 60 amps: There are 70 consumers with an average consumption of 1,500 kWh per month. These have the same appliances as the 40 amp group plus an air-conditioner. The peak demand in this category has been estimated at 5-5.5 kW. Scope of Work 8. Analysis of Cost Structure. The relevant costs are the incre- mental economic costs of electricity supply to the economy. Strictly speaking, therefore, shadow prices (for capital, labor and foreign ex- change) rather than actual prices to the utility should be used in measuring costs, and any taxes or subsidies excluded. For the appropriate shadow prices to use, the study team must rely on guidance from the Government. If these are not available, the actual prices of inputs (corrected for taxes and subsidies) should be used. It is suggested that the opportunity cost of capital for discounting future costs be taken at 12Z. 9. The first step would be to analyze the marginal costs of gen- erating, transmitcing and distributing electricity at different places, times and voltage levels to different consumers over the period to 1986- 87, the horizon of the current investment plan. This would require attention to the daily and seasonal variations in forecasting system demand for various consumer categories. Much of the required information for this purpose may have to be specially collected e.g., by taking substation readings, by inquiring about shift-working, seasonal work patterns, etc. and by statistical analysis of available load curves. The basis for the estimates of marginal costs would be the development pro- gram for the period to 1986-87 and any additional projects for expansion. 10. For time periods when demand does not come up against the sys- tem capacity constraint (allowing for the reserve margins set to maintain security of supply), marginal costs would be simply marginal running costs taking account of losses at the -different voltage levels. The relevant losses are incremental losses. 11. During periods when an increase in generation would bring the system up against the security constraint, the marginal cost of meeting demand would be the addition to all system costs resulting from adding to generation capacity or transmission and distribution in order to provide the increased supply with an unchanged probability of failure. -28- Annex 3 Page 3 of 4 12. Analysis of Existing Tariffs. The existing tariff structure and rates should be examined and compared with the structure of marginal costs of supply derived from the foregoing analysis. A preliminary ana- lysis already has been made by the mission, which points out significant discrepancies between the LRMC and tariff rates of specific consumer groups. Large differences between the LRMC and tariffs charged may be an indication that the existing system is giving the wrong price signals to consumers. Examination of the existing system should pay particular attention to the type of metering equipment in use and the quality of meter maintenance, as well as administration requirements, etc., since this would provide some guidance to the types of tariff structure that would be feasible. 13. New Tariff Proposals. Collection and analysis of the above information should make it possible to develop a first set of proposals for changing the existing tariff system. The mission made several pre- liminary analyses which should help the study team to tailor the tariff study guidelines to specific aspects of the SEC system. These are as follows: (a) The SEC tariffs should be more in line with the LRMC of ser- vicing different categories of consumers and, in order co analyze these costs, better data are needed on consumer Load curves. This data should not be difficult to gather given the small number of SEC consumers (10,000). In fact, SEC already has begun to monitor some consumers with a recently purchased metering device. (b) Future changes in the tariff structure for this small system should be as simple as possible to meet energy demand manage- ment and cost recovery objectives, i.e., a two or three-part tariff charge. For consumers with a trip switch under 100 amps, a two-part tariff should be considered -- a fixed monthly charge and an energy charge. The fixed monthly fee should include a non-energy charge related to electricity generation and distribution (capital costs plus operating and maintenance costs) as well as certain consumer related costs (i.e., connec- tion and metering). The level of the non-energy cost should be proportional to demand by each specific consumer category on each principal part of the system. In addition to the fixed charge, there also should be an energy related charge which includes the cost of supply, losses and a safety margin. (c) For larger consumers, some of whom already are metered for both energy use and demand, a three-part charge should be con- sidered. The fixed monthly charge would reflect the same types of costs mentioned above for smaller consumers, but should be considerably larger due to more expensive metering, connection, etc. The energy charge also would reflect the costs mentioned above for small consumers. In addition to the fixed monthiy charge and energy charges, a demand charge would be included, based on maximum demand registered, every monch. rts value -29- Annex 3 . Page 4 of 4 should be proportional to che consumer's use of each major part of the system. In addition, some consideration should be given to the feasibility of time-of-day metering for some categories of large consumers. (d) Some provision in the tariff setting framework should be made for automatic adjustment due to fuel price increases, to enable SEC management to better control and forecast the Corporation's development. (e) Nearly 60% of all customers in the SEC system are small consumers in the 20 amp category -- the smallest trip switch available at present. However, these customers consume an average of only 60 kWh per month and it is estimated that the electricity needs of many consumers in this category could be met with a 5-10 amp trip switch. The feasibility of converting these consumers to a smaller amp category should be evaluated. Cost 14. The tariff study would include four man-months of consultant expertise consisting of an economist, a power engineer, and a financial analyst at a total cost of US$60,000. An additional US$10,000 is esti- mated for metering equipment, making a total of US$70,000. *z~;bb-igN*2| s|i b§%is33-a - z4:,wrsb4z ................ 5.Er%........... '%fD2VKI4sUS1ZJvpUYfgX - 30 - Annex 4 NOTE ON THE CALCULATION OF THE LONG-RUN MARGINAL COST OF ELECTRICITY SUPPLY (LRMC) Capacity Costs 1. Geileration Level. The marginal cost of installing new generat- ing capacity was based on the cost of insta1ing a 5 MW diesel unit scheduled to begin operation in 1986-87. There are no further generation investments planned at present. The cost of the five MW diesel unit, in- cluding a step-up transformer, is estimated at SR 20 million (US$3 mil- lion). Based on this cost, the mission has calculated the LRMC at the generation level using the following assumptions: (a) availability factor of 0.85; (b) interest of 2(4 during the construction period; (c) depreciation over 15 years; (d) a 12% annual rate of discount; and (e) maintenance and operating costs equal to 3% of the total cost. Therefore, the annual cost per kW of capacity amounts to: 103 kW/MW x SR 20 millUon x 1.2 ( 0.12 + 0.03) 5 MW x 0.85 (1-1.12) '15 This results in an annualized cost of SR 1,000 (US$151) per kW. 2. Distribution Level. Calculations at the distribution level were based on the installation of 11 kV linese Since it is assumed that most of the new loads are to be installed close to the generating station in Victoria, M4ahe, the marginal 11 kV network is comparatively short, about 6 km. This investment is based on the installation of 600 kW at SR 700/kW. Assuming a 15-year depreciation period, operation and main- tenance costs equal to 2% of the total cost, and a 12% discount rate, the annualized distribution level capacity investment is about SR 1,100 (US$165). Energy Costs 3. The marginal energy cost per kWh at the generation and the 11 kV level were calculated to be fairly close. For the purpose of the LRMC calculation in this paper, a figure of SR 0.58/kWh (US$0.09) is used for energy costs system-wide. , ,Cm z- jz" V AM Ali -W '14p -1 NU -W -ky -,t - 1 .1, - g g, lt;o j7 %_ j Nj wg vr uLl A 5W, NO'J, F!k .R. ik 4 Al"I xt -io - -i;- C a., 4 'M V, X, .4 gt W l fle,4-A, I 'Al 441,;l q.6 k FW 1-4v -s li-W NNI I CNA, fk & IMP -p, -Ir It U- :t ;V:. T 0- 4-- N,4 Vg I'T vs 31.  " .1 ', . 11 - 4 . ,k 'p%7- 4 A Aq xll;r, 71-sl`l 6 RA Ao Y4 (Za,7 1; 0-21 7) V_ VO Z W AO% .31 4-