Power System

Planning Technologies
and Applications:
Concepts, Solutions,
and Management
Fawwaz Elkarmi
Amman University, Jordan

Nazih Abu-Shikhah
Amman University, Jordan
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Library of Congress Cataloging-in-Publication Data

Elkarmi, Fawwaz, 1950-
Power system planning technologies and applications: concepts, solutions and management / by Fawwaz Elkarmi and
Nazih AbuShikhah.
p. cm.
Includes bibliographical references and index.
Summary: “This book focuses on the technical planning of power systems, taking into account technological evolutions in
equipment as well as the economic, financial, and societal factors that drive supply and demand and have implications for
technical planning at the micro level”--Provided by publisher.
ISBN 978-1-4666-0173-4 (hardcover) -- ISBN 978-1-4666-0174-1 (ebook) -- ISBN 978-1-4666-0175-8 (print & perpetual
access) 1. Electric power systems--Management. I. AbuShikhah, Nazih, 1957- II. Title.
TK3001.E46 2012
333.79--dc23
2011048061

British Cataloguing in Publication Data

A Cataloguing in Publication record for this book is available from the British Library.

All work contributed to this book is new, previously-unpublished material. The views expressed in this book are those of the
authors, but not necessarily of the publisher.
Table of Contents

Foreword..............................................................................................................................................xiii

Preface.................................................................................................................................................. xiv

Chapter 1
Power System Planning Process Objectives............................................................................................ 1
Introduction...................................................................................................................................... 1
Power System Composition............................................................................................................. 2
The Planning Process....................................................................................................................... 5
Power System Planning................................................................................................................... 8
Summary........................................................................................................................................ 10

Chapter 2
Factors Affecting the Future of Power Supply Industry........................................................................ 13
Introduction .................................................................................................................................. 13
Electricity Supply Industry Reform............................................................................................... 15
Deregulation of Markets................................................................................................................ 16
Public Private Partnership Models................................................................................................. 17
Environmental Considerations....................................................................................................... 18
Other Considerations Affecting the Power Industry Reform......................................................... 20
Case Study..................................................................................................................................... 23
Summary........................................................................................................................................ 26

Chapter 3
Planning Criteria.................................................................................................................................... 27
Introduction.................................................................................................................................... 27
Planning Expansion ...................................................................................................................... 28
Power System Stability Concerns.................................................................................................. 31
Modeling and Performance Indicators ......................................................................................... 33
Power Quality (PQ) Considerations.............................................................................................. 37
Uncertainty Constraints and Risk Analysis Planning.................................................................... 40
Case Study: Generation Expansion Planning................................................................................ 41
Summary . ..................................................................................................................................... 43
Chapter 4
Load Research........................................................................................................................................ 47
Introduction.................................................................................................................................... 47
Load Research Methodology......................................................................................................... 49
Sampling Design............................................................................................................................ 49
Use of Load Research Results....................................................................................................... 51
Driving Factors............................................................................................................................. 52
Load Modeling............................................................................................................................... 53
Case Study..................................................................................................................................... 55
Summary........................................................................................................................................ 56

Chapter 5
Electricity Load Forecasting.................................................................................................................. 61
Introduction.................................................................................................................................... 61
Classification Electrical Load Forecasting.................................................................................... 63
Forecasting Perspectives................................................................................................................ 65
Forecasting Driving Factors.......................................................................................................... 66
Forecasting Time Frames............................................................................................................... 75
Case Study..................................................................................................................................... 77
Summary........................................................................................................................................ 77

Chapter 6
Energy Efficiency................................................................................................................................... 82
Introduction.................................................................................................................................... 82
Energy Efficiency Impact on Electricity Consumption................................................................. 84
Appliance Efficiency..................................................................................................................... 84
Building Efficiency........................................................................................................................ 85
Improving Energy Efficiency......................................................................................................... 88
Incentives Mechanisms to Effect EE............................................................................................. 91
Case Study..................................................................................................................................... 91
Summary........................................................................................................................................ 94

Chapter 7
Demand Side Management.................................................................................................................... 99
Introduction.................................................................................................................................... 99
Concepts and Characteristics of Demand Side Management (DSM) . ....................................... 100
Alternatives of DSM . ................................................................................................................. 102
Benefits of DSM ......................................................................................................................... 102
Implementation of DSM ............................................................................................................. 103
Evaluation of DSM Alternatives . ............................................................................................... 104
Case Study................................................................................................................................... 105
Summary...................................................................................................................................... 105
Chapter 8
Renewable Energy Technologies......................................................................................................... 121
Introduction.................................................................................................................................. 121
RE and Electric Power................................................................................................................. 124
Green Energy and Sustainable Energy Generation .................................................................... 127
Site Specificity ............................................................................................................................ 131
RE Pricing.................................................................................................................................... 134
Production Economics................................................................................................................. 135
Environmental Impacts................................................................................................................ 136
Promoting of RE.......................................................................................................................... 138
Summary . ................................................................................................................................... 139

Chapter 9
System Expansion Studies................................................................................................................... 143
Introduction.................................................................................................................................. 143
Generation Expansion.................................................................................................................. 144
Transmission and Distribution Expansion................................................................................... 145
Cost Considerations and Expansion Obligations......................................................................... 146
Regulatory Incentives.................................................................................................................. 146
Case Study................................................................................................................................... 147
Summary...................................................................................................................................... 154

Chapter 10
Integrated Resource Planning.............................................................................................................. 156
Introduction ................................................................................................................................ 156
Concept and Rationale................................................................................................................. 157
Supply and Demand Side Interaction ......................................................................................... 158
Uncertainty and Cost Implications............................................................................................. 161
Benefits of IRP............................................................................................................................. 162
Case Study................................................................................................................................... 164
Summary...................................................................................................................................... 167

Chapter 11
Interconnected Systems....................................................................................................................... 171
Introduction ................................................................................................................................ 171
AC and HVDC Interconnection................................................................................................... 172
Benefits of Interconnection.......................................................................................................... 178
Interconnection: Technical Factors ............................................................................................. 179
Economic and Financial Impacts................................................................................................. 182
Environmental Concerns............................................................................................................. 186
Social Impacts.............................................................................................................................. 186
Legal Aspects . ............................................................................................................................ 187
Political Aspect............................................................................................................................ 188
Summary...................................................................................................................................... 188
Chapter 12
Financing of Power Projects................................................................................................................ 191
Introduction.................................................................................................................................. 191
Economic Feasibility of Projects................................................................................................. 193
Factors Influencing Investment in Power Systems...................................................................... 194
Financial vs. Economic Analyses................................................................................................ 196
Financial Analysis Tools.............................................................................................................. 199
Major Factors Influencing Financing........................................................................................... 200
Financing Requirements.............................................................................................................. 204
Public Private Partnership (PPP)................................................................................................. 206
Summary...................................................................................................................................... 210

Chapter 13
Tariff Studies........................................................................................................................................ 213
Introduction ................................................................................................................................ 213
Tariff Calculation Models............................................................................................................ 215
Social Tariff Impacts . ................................................................................................................. 221
Cost-Reflective Tariff................................................................................................................... 222
Regulations and Tariffs................................................................................................................ 222
Case Study: Electricity Tariffs in Jordan (ERC, 2005)................................................................ 224
Net Paid Up Capital: JEPCO Prior to 2011................................................................................. 227
Summary...................................................................................................................................... 231

Chapter 14
Planning Tools...................................................................................................................................... 236
Introduction.................................................................................................................................. 236
Data Collection............................................................................................................................ 237
Group Thinking............................................................................................................................ 240
Decision Support Analysis........................................................................................................... 241
Decision Aiding Tools................................................................................................................. 245
Strategic Planning........................................................................................................................ 249
Summary...................................................................................................................................... 257

Compilation of References................................................................................................................ 261

About the Contributors..................................................................................................................... 272

Index.................................................................................................................................................... 275
Detailed Table of Contents

Foreword . ...........................................................................................................................................xiii

Preface . ............................................................................................................................................... xiv

Chapter 1
Power System Planning Process Objectives............................................................................................ 1
This chapter aims at providing the basic background and foundation to the whole power system planning
process covered in this book. It helps in setting the stage for a clearer and better understanding of the
ensuing chapters. This is needed in the case of all readers, but it is especially important for readers who
are not from the power industry such as regulators, policy makers, or legislators. Moreover, the planning
process itself is also introduced in this chapter. This is particularly helpful for practicing engineers and
other readers who might not be familiar with such issues. Finally, power system planning is introduced
in this chapter to emphasize specific functions used in this context, especially those that are different
than general planning functions.

Chapter 2
Factors Affecting the Future of Power Supply Industry........................................................................ 13
In the past two or three decades, several developments took place in the power supply industry. These
developments formed influencing factors that have a bearing on the power supply industry structure and
future evolution. It is very helpful before embarking on the planning of the power system to attempt to
identify such factors and understand how they might affect the future plans, design, composition, and
operational aspects of the power system.
In many countries the power supply industry has been transformed by means of reforms, deregulation
of markets, and public-private partnerships into new setups and hierarchies. The understanding of these
trends is essential to follow up the future structure and organization of the power systems.
Environmental considerations and consequences of power system operation have a great deal of influ-
ence on future plans. Other internal and external factors include market entry of new power system
technologies, efficiency improvements of system components, and introduction of new or renewable
energy sources.
The understanding of all factors that might influence the planning process directly and indirectly is a
prerequisite to guaranteeing a realistic outcome. This understanding provides the guiding principles and
outer boundaries of the concepts and thinking process involved in power system planning.
Chapter 3
Planning Criteria.................................................................................................................................... 27
Planning criteria, in general, constitute a set of decision parameters or design variables with which the
planner controls the planning scenarios. These criteria are similar to guiding principles and limitations
placed on the scenarios for the purpose of narrowing down the selection process. Usually these criteria
are defined and set by consensus after careful studies and analyses. Previous practices and experiences
shape and form such planning criteria. However, they need to be revised every now and then in order to
reflect changes in the power system, demand structures, and degree of acceptable risk.
Moreover, planning criteria represent boundary conditions that serve to eliminate unfeasible solutions
and keep only the feasible ones. Therefore, they are needed in expansion studies of power systems to
guarantee that the scenarios selected are all acceptable by the planners. Close coordination and continuous
dialogue among power companies (generation, transmission, and distribution) are strongly recommended
for proper planning in order to meet consumers’ demands and satisfaction.
Usually planning criteria are set by management, although some input from planners is needed. Knowl-
edge of such criteria—and how they are calculated—provides planners with good practices and enhances
the planning process.

Chapter 4
Load Research........................................................................................................................................ 47
Load research results provide a valuable input to decision makers in the electricity companies prior
to embarking on any plan, project, or program that touches on the supply of power or power quality
to consumers. The information not only covers technical matters, but also covers socioeconomic and
market information.
With the information collected through load research, electricity companies will be aware and hopefully
knowledgeable in the composition and trends of consumer demands. This essential knowledge will be
the basis for pricing electricity properly and fairly. Moreover, this information forms a good basis for
predicting future demand. Therefore, new expansions, enforcements, and extensions will be affected to
cater to future demand.
Load research data is also useful in the operation and performance of the power system. This informa-
tion will help system operators to take appropriate actions, in cases of emergency, or in normal cases
without adversely affecting the system or customer satisfaction and comfort.
In a load research study the objective is to formulate the load curves of all consumer categories. The
daily load curve is an essential building block for achieving this objective. With information, the power
system planner can perform many important activities and functions within the planning process.

Chapter 5
Electricity Load Forecasting.................................................................................................................. 61
Forecasting is the backbone of any planning process in all fields of interest. It has a great impact on future
decisions and this is reflected as profits or losses to the institute. This chapter aims to provide the plan-
ning engineer with sufficient knowledge and background of the different scopes of forecasting methods,
in general, and when applied to power system field, in particular. Various load and energy forecasting
models and theoretical techniques are discussed from different perspectives, time frames, and levels.
The mission of any electrical utility/company that operates the power system is to match load with
electric energy supply, in addition to meeting the expected peak load of the power system. Electrical
load forecasting provides input to the rational planning of future resources.
A focus on a practical implemented case study presents an added value for the better appreciation of
this topic.

Chapter 6
Energy Efficiency................................................................................................................................... 82
Energy efficiency involves activities that affect and encourage a drastic change in electricity consumption
by end-users. It also involves the design and manufacture of energy efficient appliances and systems.
Energy efficiency aims at achieving the following goals: 1) buildings are constructed to have efficient
use of energy, 2) appliances are designed and designated as energy efficient, and 3) behavioral changes
to electricity end-users. If all stakeholders shoulder their responsibility then energy efficiency will
achieve its goals.
Energy efficiency reduces consumer bills, cost to utilities, and cost to the national economy. It also
reduces environmental pollution, prolongs the time needed to consume energy resources, and increases
the security of supply.
Energy efficiency is affected through electrical appliances and buildings. In the first category manufac-
turers compete to produce energy efficient appliances. In the latter architects and engineers compete to
build energy efficient homes, schools, shops, malls, etc. A third element is needed to affect energy effi-
ciency. This is that the consumer must be aware of the issue and at the same time willing and motivated
to participate in energy efficiency activities.

Chapter 7
Demand Side Management.................................................................................................................... 99
Demand Side Management (DSM) is a term used to describe the activities and ensuing programs that
attempt to affect changes in consumer behavior leading to a reduction in electricity consumption. DSM
comprises any activity or program that is designed within the wider energy efficiency function. The
participants in any DSM program are carefully selected such that their collective response to the pro-
gram results in energy saving or shift in timing of load demand. Therefore, the objective of any DSM
program could be peak load saving or simply shifting in its timing from the peak load period to other
off-peak periods.
The implementation of DSM programs is likely to introduce improvement in the efficiency of power
systems, reduce financial burdens on utilities to build new energy facilities, improve the environmental
situation, and lower the cost of delivered energy to consumers; thus lowering O&M costs as well as
consumer bills, enhance system reliability by reducing power shortages and power cuts, improve the
national economy by improving the value added of the electricity sector, and increase job creation and
new business ventures.
Chapter 8
Renewable Energy Technologies......................................................................................................... 121
This chapter presents different types of renewable and/or sustainable energy resources. It discusses their
impact on the globe in terms of economy, pricing, and environment.
Renewable Energy (RE) resources have some special features and attributes that differ from conventional
energy resources. Conventional energy resources, however, put some constraints on the application or
usage of RE. Such limitations include: site specificity, small size of power output, and current marginal
feasibility. The environmental benefits of RE resources favor them over conventional resources.
The role of RE resources in the electricity industry is explained from present and future perspectives.
The promotion strategies and methods of utilizing these resources are outlined. Such promotion is a
very important issue that must be adopted by all countries. This will lead to encouraging investments in
this promising area, and will result in huge long-term benefits for countries, institutes, and individuals.

Chapter 9
System Expansion Studies................................................................................................................... 143
Expansion studies in generation and transmission are discussed. These are needed to match future de-
mand with future available capacity. Several issues are to be considered including costs, site location,
technology used, plant size, etc.
The cost factors governing these expansions are presented, while taking into consideration the environ-
mental and legal impacts. In some situations governmental intervention is needed to encourage expan-
sions. This is usually associated with the provision of regulatory incentives that support investment in
the recommended fields of expansion. Some systems may require expansion in the generation side,
while transmission expansion is inevitable for other systems. In some cases expansion is to be made in
both generation and transmission.
The current situation becomes more complicated as the de-regulated models are adopted. So, the power
system utility responsibility is split among several companies, and each of them is responsible to plan
the expansion of its component or subcomponent. Furthermore, strong coordination and continuous
dialogue among all parties is needed.
A case study serves in making the picture clearer to the reader. This case study covers an expansion in
the generation area of a real life electric power system.

Chapter 10
Integrated Resource Planning.............................................................................................................. 156
Integrated Resource Planning (IRP) is an economic planning process which, if implemented correctly,
selects a plan with the lowest practical cost at which a utility can deliver reliable energy services to its
customers. The ultimate objective of this planning process is to formulate a plan having a mix of energy
resources, but at the same time minimizing the total financial outlays spent in order to maximize the
energy service benefits gained. IRP can be described as an approach through which the future demand for
electricity services, during any given planning period, is met with a combination of least-cost of supply
and demand side efficiency options, while incorporating issues such as security of supply, environmental
protection, national economy, and other country-specific goals.
IRP can provide a vehicle to test and put into force regulatory policies and actions. Environmental ex-
ternalities, risk reduction, improving continuity of service, market distortions, and lack of inexpensive
financing are all included in the IRP process. Policies are usually translated to fiscal or monetary measures
through licensing procedures, tariff design, environmental penalties, renewable energy encouragement
acts, and additional taxes or levies. This would certainly provide demand side options with some ad-
vantage over the conventional ones.

Chapter 11
Interconnected Systems....................................................................................................................... 171
In power system industry the aim is to provide the customers with secure, reliable, and low cost electric
power. For isolated systems these objectives may be difficult to achieve. If two power systems are kept
isolated (not interconnected), then the reserve margin of each system will be high in order to cater for
probable outages. This implies that electricity cost will be higher for each individual system. In contrast,
the interconnection of power systems will serve in reducing reserve margin and reduce electricity costs
in both systems. Practically, obstacles do exist and hinder the implementation of interconnection.
Power systems operate on either AC (50 Hz), or AC (60 Hz). Interconnection can be implemented based
on an AC/AC or AC/DC basis. Technical, economical, and environmental considerations must be in-
vestigated to establish the best interconnection configuration. Moreover, the social, legal, and political
impacts are of potential importance and must be considered.

Chapter 12
Financing of Power Projects................................................................................................................ 191
Economy and finance represent major factors in the planning process. For power system planning, the
investments are very huge in amount (billions of dollars). In this free market era, almost all governments
are trying to reduce budgetary expenses. This results in governments divorcing themselves from being
involved in such huge investments. The economy of scale forces governments to rely on the private
sector. However, as the profit is the driving force for the private sector, incentives must be set clear, and
regulations must be flexible enough to encourage the Public-Private Partnership (PPP), which comprises
many financing schemes. These may be attractive to the private sector and, hence, enable the financing
of such projects. This chapter discusses issues related to economic feasibility and financing factors that
govern investment in the power industry. Different PPP schemes are discussed in further details and their
potential contribution and roles in the future of the power industry are pinpointed.

Chapter 13
Tariff Studies........................................................................................................................................ 213
Electricity pricing is based on achieving a set of objectives defined as follows: 1) to guarantee efficient
allocation of national economic resources; 2) encouraging the adoption of certain EE measures; 3) fair
return on the utility’s investments; 4) fair allocation of costs among the various consumers; and 5) sim-
plicity and convenience in implementation.
Electricity tariff, in general, needs to reflect the true cost of supply in order to ensure maintaining an
adequate level of security of supply and the financial viability of the electricity sector including private
and public entities. The true cost of supply needs to be determined accurately by an independent body.
This is the role of the regulatory agency responsible for setting the tariff, taking into consideration the
welfare of all stakeholders.
Chapter 14
Planning Tools...................................................................................................................................... 236
Planning is very important for the success of any project or business. Various tools need to be implemented
in conducting the functions comprising the planning process. These tools aid the decision making process
and minimize the risks involved in the selection of the way to control the project under consideration
or running the business.
In this chapter, various categories of planning tools are discussed and explained. These tools are proposed
to be applied at the different stages of the project. They are applicable to the strategic planning stage
and for the monitoring and evaluation stages. As the planning process is dynamic in nature, it is highly
recommended to apply different tools at different phases of the project.

Compilation of References ............................................................................................................... 261

About the Contributors .................................................................................................................... 272

Index.................................................................................................................................................... 275
 xiii

Foreword

This is a comprehensive and well written book that practically covers all aspects relating to electrical
power systems analysis and planning. It is also a badly needed book. With the proliferation of informa-
tion systems and computers, the interests of students and researchers were, over the last few years, di-
verted from the study of electrical power systems into those new, novel, and rapidly developing tech-
nologies. It also led to almost neglecting to develop and add to the literature of electrical power systems
either at the university or research institutions level.
The world is rapidly electrifying. Electricity is gradually replacing many other forms of energy and
labor. Worldwide growth of electricity demand almost matches global economic growth and is one and
a half times the growth of primary energy use. This is a trend that is continuing, and by the middle of
this century, the majority of human energy needs will be served by electricity as the major energy car-
rier. Correspondingly, understanding the planning and investment process of electrical power systems
is mandatory for the efficient and sustainable development of almost every economy. This book helps
in achieving this purpose.
I must congratulate the authors for writing such a timely and thorough book, which is going to serve
the needs of energy planners as well as graduate students. I am sure that it will be a well received and
welcome addition to the literature on electrical power systems and hope that it will eventually be peri-
odically updated by the authors.

Hisham Khatib
Global Energy Award Laureate

Hisham Khatib is past-Chairman of the Jordan Electricity Regulatory Commission, Honorary Vice Chairman of the World
Energy Council. He is an engineer and economist on energy technology, energy security, and local and global environmental
issues related to energy and development. Over the last many years, Dr. Khatib was a Minister in the Government of Jordan
in many positions—planning, water, and energy. In 1998, he was awarded the “Medal of Achievement” of the Institution of
Electrical Engineers in the UK. In the World Energy Congress in Rome 2007, Dr. Khatib was awarded the highly prestigious
“Global Energy Award” by the World Energy Council. He is a Life Fellow of the IEEE.
xiv

Preface

This book covers a very important topic in the field of power system engineering science and best prac-
tices. It aims at providing the reader with a deep insight of the fields involved in the power system
planning process comprehensively. Moreover, this book blends the theoretical and practical aspects of
power system planning.
Energy is considered one of the most important inputs for the social and economic development of
nations. It is indeed vital for better life and higher levels of comfort and welfare. Energy provides fuel
for life and for prosperity of nations. Therefore, it is sometimes used as a basis to differentiate between
countries that “do” and countries that “don’t” have it as a proxy for strength of economy or political
influence. Energy sources comprise conventional and renewable. The conventional resources are not
only limited in quantities, but they are responsible for environmental pollution. On the other hand, re-
newable energy resources are environmentally benign, but unfortunately still not cost-effective as much
as the conventional ones.
The total world primary energy supply for 2010, as per the IEA and OECD sources, was over 12,000
mtoe (million tons oil equivalent). This is expected to increase to 14,500 mtoe by year 2020. If the value
of one ton of oil (at current prices of US$ 100 per barrel) is equivalent to US$ 750 then the value of the
amount of oil equivalent in 2010 was almost US$ 9 trillion. This figure indicates the importance of energy
in the overall world economy as its value equals about 12% of world Gross Domestic Product (GDP).
On the other hand, electricity production worldwide reached about 18,700 TWh (terra watt-hours) in
2010 according to IEA sources. If this is considered being worth 4-5 US cents per kWh, then the total
value would be almost one trillion dollars. This again is a very large figure indicating the importance
of the electricity sector to world economy. Therefore, any increase in efficiency of use or exploitation
of more efficient technologies would mean large savings. On the other hand, the future does not seem
to have good news as prices keep increasing and other problems related to energy and power get com-
plicated. This would be reflected negatively on all economic sectors as well as on the level of comfort
and entertainment of people.
The power sub-sector represents an essential part of the energy sector in any economy. It is unique in
the sense that it is a commodity and a service at the same time. Electricity operates all sorts of machines
and appliances that fill our homes, schools, stores, offices, and even streets. It has strongly penetrated
all markets and applications. It strongly competes with all other forms of energy and surpasses them in
being a clean source. Furthermore, electricity does not need any storage or waiting time to be served as
it is an “instantaneous” service. The precise knowledge of future evolution of power systems will help
greatly in planning the development activities correctly and exactly; thus avoiding under-or over-planning
of future supply. The planning process is a combination of science and foresight. It needs special skills
and demands knowledge of other disciplines.
 xv

The need to compile and organize power system planning methodologies that are based on both
theoretical and practical knowledge is very much in place. Every power company has its own method-
ologies and planning practices. However, they might not be presented and elaborated in one document.
Moreover, since these methodologies vary in extent, level of sophistication, accuracy, need for data,
it is very prudent to attempt to come up with a book that covers all aspects of power system planning.
This book was conceived and written over the past two years, and it represents the output of several
years of experience in power system planning followed by several years of teaching university students
power system operation, control and planning. The two sides; theoretical and practical, hopefully com-
bine to yield the best combination with the most benefit to readers and scholars. The authors have a
combined work experience of over 50 years; half of which in the planning process of the power industry.
The authors also depended heavily on research work conducted at the university with the cooperation or
assistance from ex-colleagues at the electricity companies. The combination of this body of knowledge
is an important element in enhancing the value of the book.
The book is self-contained and thorough and suits the needs and is of great benefit to different cat-
egories including: a) academia where it is proposed to be taught over two semesters for undergraduates,
or in one semester postgraduate course, b) professional engineers in the area of electricity planning, c)
practical trainees attending training programs or specialized workshops, and d) regulators, policy and
decision makers in the power industry.
Very few existing books, not more than the number of the fingers of one hand, deal specifically with
power system planning. Few other books cover topics related to power system planning. Investigating
the contents and coverage of the books that deal directly and specifically with power system planning
reveals that they deal only with the process of expansion of the system and the related mathematical
and analytic tools related to this core function. In other words, they concentrate on the science of power
system planning. They do not cover as much the art and the good practices that have evolved within the
power industry. Moreover, the relationships and interactions between the planning and other business
functions within the power industry or energy sector at large are not covered in the existing books.
The contents of the book are diverse and cover topics that tackle various practices and functions
needed for proper planning of the power system. Each chapter could stand on its own as a subject for
training course or as a special topic. Moreover, the sequence and order of chapters is well suited within
the actual functions of power system planning.
This book is organized into 14 chapters. Each chapter is independent with a standard structure start-
ing with chapter objectives, an introduction, case study, summary, and references, in addition to other
specific sections.
The book starts, in Chapter 1, with the definition of the power system and its components. Then it
discusses the planning process in general and planning of power systems in particular, and tackles dif-
ferent aspects related to this process. This introductory chapter provides the reader with a background
about the components and various functions of the power system. It also discusses the tasks and activities
included in the planning process. The chapter provides a clear layout of the interrelationships among the
various functions of the planning process representing the various chapters of the book. Current issues
related to power system planning are also investigated. These issues give the reader clear ideas of the
scope of their application and effects on modern power system planning.
xvi

Chapter 2 is dedicated to regulatory and market constraints. This is an essential chapter in power
system planning especially in light of the new trends of privatization and market deregulation. It also
covers the environmental considerations, which occupy an important part in the shaping of future al-
ternatives and related decisions. These topics discussed chapter 2 form essential issues and constraints
affecting the future evolution of power systems directly and indirectly.
This is followed by Chapter 3, which is devoted to the planning criteria. It is the core of the planning
effort as it forms the boundaries and refines the selection process. Planning criteria constitute the general
framework and guidelines that govern the planning of power systems.
Load research is discussed in Chapter 4. This activity is responsible for data collection and com-
pilation. Without such data no proper planning can be done. Load research is considered the heart of
intelligence of the planning of power systems as it attempts to identify the characteristics and nature of
consumption of the various consumers. The information generated by this activity is used as input for
many other planning activities and functions.
Chapters 3, 4, and 14 comprise the preparation stage of the planning of power systems. In reality,
Chapters 3 and 4 are the actual preparation steps needed for the planning, while chapter 14 is a general
presentation of planning tools that might be needed in the process.
Chapter 5 deals with forecasting future energy and electrical loads. This activity attempts to foresee
the future of system demand. Forecasting is considered by many as the core of the planning process. It
is considered as the first step in the assessment and evaluation phase. It involves many tools and meth-
odologies that need to be implemented. The outcome of the preparation stage is used as input for this
essential activity.
Chapter 6 discusses energy efficiency methods and techniques. It is a very important activity for
power companies as it decreases demand of consumers and, therefore, reduces future investments needed
for new plants.
Similarly, demand side management is another activity that attempts to effect consumer behavior
and habits in order to reduce future demand. This is dealt with in Chapter 7.
Renewable energy technologies are addressed in Chapter 8. All options to generate electricity from
renewable energy sources are presented in this chapter with some special features of such alternatives.
Chapter 9 discusses the expansion planning studies. In this chapter the different concepts and meth-
odologies are discussed. This analysis includes when to add a certain plant, in what site, size, technology
used, and impact on system performance. Naturally, the plants here mean generation, transmission, and
distribution.
All generation options including conventional, new, renewable, energy efficiency, and demand side
management when taken together the planning is called Integrated Resource Planning (IRP). In other
words, if supply and demand sides are considered in the future expansion of the power system it is then
called integrated resource planning. This important topic is included in Chapter 10.
Chapter 11 presents the topic of system interconnections with other systems. Currently there is almost
no power system that is not interconnected to other systems in the world. Therefore, interconnection has
become a standard in today’s power system planning, operation and control.
Investment will be needed to cater for system expansion and enhancing interconnection with other
systems. Even performance improvement, update of outdated equipment, and improving customer sat-
isfaction all need investments too. This is discussed in chapter 12, which is followed by tariff studies in
chapter 13. Tariffs are designed to recover the costs of the electricity company plus some reasonable return
on investment. On the other hand, electricity tariffs are very influential in all walks of life and business.
 xvii

Finally, Chapter 14 presents a thorough discussion of all planning tools used in all phases and ac-
tivities of the planning process. These include data collection, group thinking, decision support, and
strategic planning tools.
The authors are deeply indebted to Amman Ahhliya University for the support offered in reviewing
the book. Due gratitude and appreciation are directed to Dr. Hisham Khatib for his kind words in writ-
ing the forward of this book. The authors also express their gratitude to all individuals who participated
in publishing this book.
Finally, the authors have acted in good will in all aspects of the writing of this book to benefit the
readers and intend no harm whatsoever. Positive and constructive comments and criticisms are also
invited that will serve in enhancing the quality of this book.

Fawwaz Elkarmi
Amman University, Jordan

Nazih Abu-Shikhah
Amman University, Jordan
 1

Chapter 1
Power System Planning Process

ABSTRACT
This chapter aims at providing the basic background and foundation to the whole power system plan-
ning process covered in this book. It helps in setting the stage for a clearer and better understanding of
the ensuing chapters. This is needed in the case of all readers, but it is especially important for readers
who are not from the power industry such as regulators, policy makers, or legislators. Moreover, the
planning process itself is also introduced in this chapter. This is particularly helpful for practicing en-
gineers and other readers who might not be familiar with such issues. Finally, power system planning
is introduced in this chapter to emphasize specific functions used in this context, especially those that
are different than general planning functions.

INTRODUCTION linkages of the various functions of the planning

This chapter is intended to be an introduction to
power system planning, which is the title of the
book. This chapter will give a broad idea about
power systems and the components comprising
them. It will also present the various planning
functions in general and the specific issues used
in planning of power systems. We believe that for
novice readers this will be a good introductory
chapter, however, for readers who have experience
with power systems, Chapter 1 can be skipped. It
is understood that this chapter provides a broad
definition of the components of the power system
as well as the planning process.
Readers familiar and knowledgeable in power
systems can catch the general flow and inter-
process. On the other hand, unfamiliar readers
can refer to Figure 1. This figure shows the inter-
relation between the book chapters resulting in
better, simpler and clearer flow of information
and better understanding.
As can be seen from Figure 1, the whole
power system planning can be divided into three
phases; 1) preparation, 2) assessment and evalu-
ation, and 3) implementation. Chapter 2 presents
the major factors that affect and influence the
future of power industry. These factors constitute
constraints and determinants that affect the three
phases almost equally since they are responsible
for shaping and changing the future of power
systems. The rest of the book chapters fall in one
of the three phases, starting with the power system

DOI: 10.4018/978-1-4666-0173-4.ch001

Copyright © 2012, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.

Figure 1. The future of power system industry
planning criteria that are presented in Chapter 3,
which is followed by presenting the load research
in Chapter 4. Both chapters constitute the prepa-
ration stage for the power system planning process.
Chapter 4 is considered as the input for Chapter
6 (energy efficiency), Chapter 7 (demand side
management), and Chapter 5 (load forecasting).
It should be clear that both Chapters 3 and 4 feed
Chapter 5 that represents the backbone for any
planning process. In this chapter, load forecasting
is presented. This function opens the door to the
reader to investigate ways to meet the expected
loads by means of renewable energy generation
(Chapter 8), or through the system expansion
(Chapter 9), or by means of interconnection
(Chapter 10). Any or all of these choices can be
selected and integrated through integrated resource
planning (Chapter 11). Such integration takes into
consideration both supply and demand alterna-
tives. Financial factors (Chapter12) will affect the
final selection for the system expansion alterna-
tives and will lead to defining the appropriate
tariff (Chapter 13) and electricity pricing. This
results in achieving the objectives of supply con-
tinuity and economy. Finally, the planning process
as a whole is only possible when proper tools are
2
Power System Planning Process
used (Chapter 14) which are used throughout the
whole planning process.
We recommend that readers who are familiar
with power system components and power system
planning issues are advised to start reading chapter
3 directly unless they are willing to browse through
the remainder of this chapter.
POWER SYSTEM COMPOSITION
The power system is divided into three main
components: 1) generation, 2) transmission and
interconnection, and 3) distribution. This division
is based on assets or equipment, and not neces-
sarily on ownership of such assets. The three
components are somewhat different in the way of
operation and management. While the generation
component is concerned with the issue of power
supply and delivery to the network, the transmis-
sion component is directly involved in transferring
power from generators to distribution companies.
In addition to this the transmission component is
in charge of the exchange of power from other
power systems through system interconnections.
In fact it is in many models responsible for the
Power System Planning Process
overall system operation. Finally the distribu-
tion component is quite different in that it deals
with delivery of power to final consumers. These
consumers can reach millions in number in large
systems. Usually the division between transmis-
sion and distribution is based on voltage level, i.e.
all high, extra high, and ultra high voltage levels
are considered transmission while medium and
low voltage levels distribution.
Figure 2 shows the basic structure of the
power system.
Planning of power systems involves at the
outset detailed knowledge of the characteristics
of the components of the system, the consumption
of users, socio-economic issues related to the
electricity market and much more (Willis, 2004).
This means that information needed is not only
huge but is wide in scope and covers several
domains. Therefore planners should have techni-
cal, economical, financial, and business knowl-
edge. The update of such information is an ongo-
ing concern. Usually data bases are created and
software packages are also utilized.
The processing of the data collected is another
major task in the planning process of power sys-
Figure 2. Basic structure of power system
tems depending on the time frame of the plan. If
the time frame is short then it is called operational
planning. If it is medium or long it is called ex-
pansion planning. Sometimes the objective of the
planning process, in certain instances, is to attempt
to solve certain problems or system constraints.
Planners must know current technological
evolutions in new equipment and devices. The
differences among certain types and brands of
products must also be known in order to dif-
ferentiate among the various alternatives. This
information is used in formulating certain tech-
nical solutions or performance improvements to
the power system. This body of knowledge is
important in the evaluations that will follow in
the planning process.
Studies and analyses follow in the planning
process. These aim at finding best solutions or
performance indicators. Benchmarking is some-
times used to set targets of performance indica-
tors. Past trends, if acceptable, are also used as
indicators. Through studies and analyses it can be
determined how far from the target the system is
and how it can reach the target. This represents the
monitoring and verification functions of the plan.