Abstruct:

In security of supply and economics, Power system planning and operation in a developing country like
Bangladesh can often achieve significant achievements through a planned investment. Bangladesh can
reduce its production costs by 63% through more efficient dispatch; reduce production costs by 77% by
using an additional gas quota and should have invested in in power import and base load gas/coal rather
than expensive solar PV projects.
Introduction:
A careful scrutiny of power system operations and investment requirements is needed before adopting
large scale variable renewable generation. A robust dispatch optimization model could save the country
more than billion dollar annually reducing its cost of generation to half. The addition of large scale solar
and wind generation without having a proper dispatch and frequency control scheme can worse the
system security issue. Solar programs still remain expensive than new gas development, coal and power
import. The article is motivated to write about some of these operational and investment issues to
highlight how decisions for these can be prioritized.
Methodology:
Four methods such as i) basic fuel-constrained dispatch optimization mode; ii) an extended version of the
optimization to consider co-optimization of ancillary services, iii) analysis on investment decisions and
iv)capacity expansion decisions can be described in brief here.
Description of the Dispatch Model Used:
For the analysis of our basic dispatch optimization model we can use,(1) Z = g,t Pg,t. Cg. Dt+ r,t Ur,t. Dt.
VoLL (2) gr Pg,t Fr,r,t+ Fr,r,t+Ur,t=Demandr,t (3) Pg,t. HRg. DtGasLimit g{ST,CCGT},t. Eq.1
represents a comparison between generation costs and the cost of unserved energy.Eq.2 represents the
regional demand for the half hour and Eq.3 is the systemwide gas limit. There are typically several classes
of spinning reserve from fast (e.g., 6 s) to slow (e.g., several minutes). The faster reserves are naturally
more critical and for the same reason in greater demand that tend to raise their prices sharply at times of
tight demand-supply condition.
Co-Optimization of Ancillary Services:
In the field of co-optimization of ancillary services, some studies are done here. Such as, Considered the
spinning reserve to just one class namely the most restrictive 6 s reserve; Assumed a 45 slope for both
joint ramping and joint capacity constraints, which is somewhat relaxed condition at least for some units
that may be more ramp constrained; Used level of Power where the unit is allowed to provide any
Spinning Reserve of zero; Used Spinning Reserve Max values from similar units in other countries which
restricted to zero for the two coal units; require a local spinning reserve in East and west regions of the
country for assuming a system wide spinning reserve requirement. There are simple, but important,
changes to co-optimize ancillary services that could be paramount to system security (and arguably would
have averted a major grid failure that occurred on November 1, 2014).
Discussion on Ancillary Service Prices:
Ancillary service prices are now matters of discussion. The impact of binding ancillary services constraint
that are symptomatic of tight-demand supply balance in real-life power systems, especially for developing
countries. Adding variable renewable energy can make a tight demand-supply situation even more
challenging. In Bangladesh, system demand-supply balance is tight during peak hours every day. Any
additional spinning reserve requirement caused by solar/wind would require expensive diesel/fuel oil
generators to be committed to provide the fast reserve (both incremental and decremental). Since the cost

of diesel/fuel oil is typically 1015 times that of domestic gas based generation any addition to ancillary
services over and above what would be required to meet wind/solar variability would be at a premium.
Capacity Expansion Decisions:
As a final step, the new capacity investment decisions are added to the model so that new investments in
both non-renewable and renewable/solar investment decisions can be analyzed in the short to medium
term.
Implementation of the Model for Bangladesh:
There are some suggested inputs for the implementation of the model of Bangladesh. Such as compare the
actual and optimal dispatch. In 2014, the average gas allocation was around 919 mmcfd which has been
used a constraint, although the analysis also explored expanded gas availability scenarios to show the
benefits of additional gas. Because of the relatively high/expensive SR the analysis considers lower
standards starting or 185MW of fast SR. Solar availability on an hourly basis is available from NASA
which is analyzed through NREL's SAM model. Here raises a significant question on the value of 500
MW of solar capacity in the country that for 6 months (May-Oct) which include the peak demand
(summer) months would yield in the worst case less than 10% capacity factor. Although inclusion of DHI
which is relevant for solar PV projects would improve effective energy yield, capacity factors of actual
solar PV installations in West Bengal with similar solar profile are crosschecked. Some new investment
options are considered include Coal at Taka 168,000/KW; CCGT at Taka 96,000/KW; OCGT at Taka
40,000/KW, Solar programs at different costs; Power import at Taka 6.10/kW h, allowing for near
doubling of costs from Taka 3.1/kW h as power generation cost rises in India. It is however the cheapest
of all the options and involves least upfront investment.
Discussion of Results:
Results of these implementation can be now discussed. Generation from units with costs in excess of 5
Taka/kW h in Actual represents less than a quarter of total generation but accounts for Taka 141 billion or
77% of the total dispatch costs. Average generation cost in Actual is Tk 3.98 (~5c/kW h) compared to
Taka 0.96/kW h (~1.2c/kW h) in Optimal. Gas in Bangladesh is heavily subsidized and therefore the cost
of generation reported here represents a significant degree of underestimate. Nevertheless, even at its
opportunity cost, domestic onshore gas is significantly cheaper than diesel/fuel oil and therefore a
substantial part of the gains from an optimized dispatch reflects a true economic benefit that can be
realized from adopting a proper dispatch optimization software. The gas consumption corresponding to
the Optimal scenario is 1161 mmcfd compared to 919 mmcfd consumed for the Actual dispatch. The suboptimality in dispatch even accounting for limited gas supply cost the country Taka 113 billion or USD
1.4 billion in a single year. Increasing gas supply marginally to 1000 mmcfd helps to reduce system costs
sharply down to Taka 52 billion. Dispatch efficiency enhancement and gas allocation policies should
consider the significant cost reduction benefits. NLDC Bangladesh currently does not follow any spinning
reserve policy. Given the tight demand-supply condition, fast reserve service, can be at a premium during
peak period especially considering the limited set of plants in an ageing fleet of steam turbines that can
provide the service. System cost escalate rapidly,aas the SR requirement crosses 3% of demand. It is
evident that the system needs some form of investment to provide fast reserve. Considering the increase
in cost with higher reserve requirement, almost any form of new investment including new OCGT or even
a pump-storage project will prove economic. That said, there are cheaper alternatives such as interruptible
load and demand response that should be explored. Again, an expensive solar program to supplant for
limited gas may prove to be highly expensive at Taka 150.7 billion pa. Coal is the second best solution
that is selected if solar is not included into the mix, that can bring down the annual cost to Taka 130.7
billion even under a gas constrained , i.e., a cost reduction of Taka 20 billion or USD 250 million pa. But

it will in crease CO2 price. An increased availability of gas implies far less oil/diesel based generation and
hence much lower overall cost for both scenarios(Existing gas generation with solar and without solar
43TWh).
Important Findings:
Bangladesh has limited generation capacity and even more limited domestic natural gas supply. The
dispatch protocols are manual resulting in unnecessarily relying on very expensive fuel oil and diesel
based generators. Improving the dispatch procedure is to allocate SR and having a process to compensate
the generators that provide this service. Such services are paramount to system security as a major
blackout in November 2014 amply demonstrated. Long term planning is essential for the technical and
financial health of the system. Coal are the best field for the investment. Solar program proposed in
2011/12 to develop 500 MW solar PV capacity in the short-term is a questionable proposition. The three
points also highlight an acute need to be judicious about the selection of site, technology, timing of
investment, and the requirement of flexibility imposed on the system. Old fashion turbine should be
changed in to more efficient and flexible gas generation. The most popular renewable source in
Bangladesh is Solar which may benefit from the more flexible gas-based generation system. The
geographical location of solar grid should be selected carefully so that transmission line can easily cope
with that. The changes and modification is needed in to the generation and transmission system as well as
operational practices around dispatch optimization and frequency control need to be placed before placing
large-scale renewable can be integrated to the grid. This will help Bangldesh to get benefits from these
technologies.