Stochastic-based production costing model. (c2010)

Abstract

The Lebanese Electric Power System (LEPS) suffers from technical and financial deficiencies that required the development of a policy paper to rescue the power sector from the current drastic situation to a new sustainable, reliable, and efficient delivery of electricity. The plan includes ten strategic initiatives and 42 action steps that are integrated and correlated to cover the sector’s infrastructure, supply/demand, and the legal aspects. This ambitious but realistic policy was prepared after a review of all previous studies, and in collaboration of all concerned parties, whether internal or external, constitutional and political, and was approved consensually by the Council Of Ministers on June 21, 2010. It is proposed that the implementation of the energy policy will result in a solid power sector with sufficient generation capacity, reliable transmission and distribution networks, and efficient delivery of electricity to cope with the overall socio-economic development of Lebanon. The policy targets a gradual implementation of the initiatives in the short and medium terms totaling 4870 M$ (Government in Lebanon up to 1550 M$, the private sector contribution of 2320 M$, and the international donor community up to 1000 M$), and an additional amount of 1650 M$ in the long term. The full implementation of all the strategic initiatives in this policy will reduce the total losses from 4.4 Billion $ in 2010 to zero in 2014 where 24/24 hours of service is provided, and the possibility of profit making as of 2015; while it will reach 9.5 Billion $ in 2015 if no action is taken. This thesis uses the Load Modification Technique (LMT) as a stochastic tool to assess the impact of implementing the initiatives of the proposed energy policy on energy production, overall cost, technical and commercial losses, reliability and customer service. New modeling capabilities of the traditional LMT method are proposed in this thesis for off-peak energy dispatch. The proposed LMT technique is used to establish a technical and financial baseline of the LEPS against which the full implementation of the energy policy is compared and the resulting tariff is calculated. Selected scenarios are also presented to show the technical and financial impact of individual projects on the system.