Energy Management : Technological, Environmental and Economical
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ENERGY MANAGEMENT: TECHNOLOGICAL, ENVIRONMENTAL AND ECONOMICAL FACTORS INFLUENCING THE OPERATING REGIME AT MAJUBA POWER STATION by LAURENCE CORNELIUS GREYVENSTEIN for the degree MAGISTER INGENERIAE in ENGINEERING MANAGEMENT at the RAND AFRIKAANS UNIVERSITY SUPERVISOR: PROF. L PRETORIUS NOVEMBER 1997 2 "It is not so very difficult to predict the future. It is only pointless ....What is always far more important are fundamental changes that happened though no one predicted them or could have possibly have predicted them." Peter Drucker CONTENTS Chapter Topic Page i. Opsomming 4 ii Abstract 6 iii Definitions 8 1 Introduction 9 Technology for energy management 14 Economic forces in energy management 32 Energy management and the environment 47 Recommendations 56 A Case study 60 Conclusion 74 References 77 4 i. OPSOMMING Suid Afrika staan vandag voor groot uitdagings rakende ekonomiese groei. In 'n verslag waarin vyftig lande se ekonomiese en politieke mededingingheid gemeet is, behaal Suid Afrika die sewe en veertigste posisie. Die land se grootste speler in die energiebedryf het besluit om hierdie uitdaaging die hoof te bied, met die visie "om die wereld se goedkoopste elektrisiteit to verskaf vir groei en vooruitgang". Kragstasies in Eskom ding mee teen mekaar om elektrisiteit aan die netwerk te verkoop. Majuba kragstasie is huidiglik die duurste elektrisiteitsvoorsiener in die Suid Afrikaanse netwerk. Die bestuur en personeel van Majuba is genoodsaak om vindingryke strategied aan die dag te le om oorlewing in hierdie kompeteerende mark te verseker. Dit is nie nodig om in 'n kristalbal te staar om te besef dat streng wetgewing binnekort ingestel sal word om atmosferiese besoedeling te bekamp. Die huidige elektrifiserings projekte sal die laspatroon van daaglikse energiegebruik beinvloed. Arbeidskoste en inflasie het skerp gestyg die afgelope tyd en verdere stygings is te verwagte. Dit is noodsaaklik om te weet wat die invloed wat al hierdie faktore op die Suid Afrikaanse kragindustrie sal he. Majuba moet instaat wees om hierdie veranderinge te identifiseer en aksieplanne in pick he om al die geleenthede wat in hierdie uitdagings le te benut. Hierdie werk ondersoek die tipes aanlegte wat volgens literatuur gebruik word om die daaglikse energie aanvraag te bevredig. Dit word dan vergelyk met die tipe aanlegte wat in Suid Afrika gebruik word. Dit lei tot die gevolgtrekking dat die geinstalleerde aanlegte in Suid Afrika the behoorlik toegerus is om effektief die daaglikse las patroon te bevredig the. 5 `n Gevalle studie word gedoen op Majuba kragstasie wat sedert Desember 1996 in 'n twee skof opset bedryf word. Dit behels dat 'n eenheid aangeskakel word om teen die oggend piek aanvraag op vol wag to wees en dan weer na die aand piek afgeskakel word. Dit word ook getoon dat die soon bedryf winsgewend is vir 'n relatief duur kragontwikkeling aanleg. 6 ii. ABSTRACT In a country that ranks forty seventh on a list of fifty countries in a world competitive survey economic growth should be a high priority in South Africa. The main player in South Africa's energy industry took up the gauntlet and is moving to economic growth with the vision 'to provide the world's cheapest electricity for growth and prosperity." Competition was introduced among the electricity producers by a process called trading and brokering. Majuba power station, the most expensive electricity producer on the South African grid, was left out in the cold. Management of Majuba is challenged to derive resourceful strategies to ensure sustained profitability. These strategies will require a study into world trends to enable them to be more competitive. Crystal ball gazing is not needed to know that major restrictions on pollution of the atmosphere by industry will be curbed by stringent legislation. The current electrification programme in South Africa is bound to impact the shape of the daily load curve. Labour cost and the rate of inflation have been increasing and can be expected to keep on rising in the foreseeable future. It is important to know what macro effect these factors will have on the South African power industry. Majuba must be able to identify the changes lurking on the horizon and have contingency plans in place to meet these challenges. In this work different types of plant needed to meet the daily load demand are researched from literature. It is then compared to the types of plant installed in South Africa. This leads to the conclusion that the installed plant in South Africa is not sufficient to meet the daily demand effectively. 7 A case study is done on Majuba Power Station that has been operating in a two shifting mode since December 1996. This means that the units is started every day to be on full load in time for morning peak and then shut down after evening peak. It is also shown that this mode of operation is proffitable for a relatively expensive power generator. 8 DEFINITIONS Load Factor This is a term that describes the percentage of the time that a particular electricity generating unit will produce energy. It is calculated from the total time producing Availability In a time period usually a year, a unit is able to produce electricity. The percentage of time the unit produces electricity is the availibility. A unit will be unable to produce electricity for planned maintenance periods and periods of unplanned break downs. These periods will decrease the availibility. Reliability The reliability of a unit depends on the reliability of all its components. Reliability is an indication of the time a unit can run without a failure that would result in a load loss and therefore inversely proportional to failure rate. Thermal efficiency The fuel used in electricity generation has a certain energy value or calorific value. The thermal efficiency is the ratio of energy produced from the fuel to the energy supplied by the fuel. Supply side Every electric utility has a mix of electricity generating units. These units are dispatched to meet the energy demand. All the units in a power system is reffered to as the supply side. Demand side Electricity is supplied to a wide range of consumers. These include domestic, commercial and industrial consumers. Combined they are reffered to as the demand side. Utility A single company that owns a number of power generating facilities in an electrical system is called an utility. Power plant A single electricity generating facility is a power plant. Power plants can consist of more than one electricity generating units. 9 CHAPTER 1 . INTRODUCTION 1.1 Background Modern man depends on energy. As technology evolves the need for energy increases dramatically. It is known that energy consumption increased exponentially after the Second World War. This increase in demand creates forces for more reliable and economical energy supply. The power industry is not only affected by the economic climate, but can also play a roll to influence it. A competitiveness survey conducted by IMD, Lusanne on forty six countries [1] shows that South Africa is currently ranked at forty four. This ranking did not change much since 1993, when South Africa was ranked at forty three. The ranking is determined by comparing 244 criteria in eight categories which are internationalisation, domestic economy, government, finance, infrastructure, management, science and technology and people. Two reasons can be singled out for the level of competitiveness not improving. These are science and technology and finance. The South African science and technology ranking dropped from 29 in 1993 to 40 in 1997. The finance ranking dropped from 23 to 36 in the same period. A significant improvement was seen in the government category where the ranking improved from 43 in 1993 to 34 in 1997, due to the first democratic elections held in 1994. It can be derived that the efforts of the South African government does concentrate on the development of technology and improvement of the economy. Herein lies a challenge for business and industry. 10 1.2 Eskom's contribution to economic growth Eskom, South Africa's major energy supplier, takes a step towards addressing this need through the vision: "To supply the world's lowest cost electricity for growth and prosperity " [2]. The commitment of management to this vision puts the management and personnel of Eskom power stations under a constant pressure to achieve their goals. A corporate philosophy of trading and brokering was introduced in 1996. This system is used to determine which units will be called upon to export electricity to the national grid. Every power station enters a bid for a specific generating unit to produce energy at a certain price for a certain period of the day. The number of generating units required to meet the forecasted demand is determined. The prices in the bid will determine which generating units will be called up to generate energy for the following day. Power stations with a lower production cost will be preferred for loading and the more expensive units will only be used when the demand for electricity is high and when the cheaper generating units are unavailable. 1.3 Majuba' situation Majuba Power Station is the last coal fired, six pack power station in Eskom's current expansion plan. It is situated near Volksrust in the south of Mpumulanga. Construction at the Majuba site started in September 1983. After many deferments, Unit 1 went on commercial load on 1 April 1996. An additional unit is scheduled to go on commercial load every April until unit six in 2001 [3]. Majuba is one of South Africa's largest capital 1 1 projects to date, at an estimated cost-to-completion of R12,5-billion [4]. The production cost of Majuba Power Station is almost three times higher than the current cheapest station on the national grid.