Mauritius Energy Sector Reimbursable Advisory Services

155 Pages·2015·2.05 MB·English

by  Gustavo Voll

Report No: ACS13923
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Republic of Mauritius

Mauritius Energy Sector
Reimbursable Advisory Services

Assessment of electricity demand forecast and
generation expansion plan with focus

on the 2015–2017 period

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May, 2015
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GEE01
AFRICA
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Table of Contents
Part I. BACKGROUND AND OBJECTIVES 1
Part II. EXECUTIVE SUMMARY 3
Part III. ASSESSMENT OF DEMAND FORECASTS 17
1 Initial electricity demand forecasts 18
1.1 Forecasts of electricity sales 18
1.2 Forecasts of energy sent out 22
1.3 Forecasts of peak demand 23
2 Comparison with recent forecasts from CEB 25
3 Sensitized electricity demand forecasts 29
4 Conclusions and recommendations 32
Part IV. ASSESSMENT OF SUPPLY AND DEMAND BALANCE 34
5 Assessment of supply to peak demand 34
5.1 Input data and assumptions 35
5.1.1 Current installed generation capacity 35
5.1.2 Programmed retirements and termination of contracts 39
5.1.3 Programmed capacity additions and redevelopment of generating units 40
5.1.4 Contribution of hydro plants to supply of peak demand 43
5.1.5 Scheduled maintenance of generation fleet 44
5.2 Methodology 46
5.3 Assessment of supply to peak demand under currently programmed additions
and retirements to the generation system 49
5.3.1 Results of the quantitative assessment 49
5.3.2 Summary of recommendations for the short and long terms 51
5.4 Recommendations for the short term (2015–2017) 52
5.4.1 Detailed short-term recommendations 53
5.4.2 Simulation of implementation of recommendations for the short term 58
5.5 Recommendations for the long term (2018–2022) 61
5.5.1 Detailed long-term recommendations 62
5.5.2 Simulation of implementation of the long-term recommendations 67
6 Conclusions and recommendations 69
6.1 Ensuring the adequacy of the supply to peak power demand in the short term
69
6.2 Firm capacity additions in the long term 71
Part V. RECOMMENDATIONS TO STRENGTHEN CAPACITIES TO
UNDERTAKE POWER SECTOR EXPANSION PLANNING 75
7 Methodologies and procedures for power system planning 75
8 Institutional aspects and planning of the power sector 78
REFERENCES 84
ABBREVIATIONS AND ACRONYMS 86
Annex I. ASSESSMENT OF GENERATION PLAN DEVELOPED AND
EVALUATED WITH THE WASP PACKAGE BY MAURITIAN
INSTITUTIONS 88
9 Assessment of generation plan DEVELOPED and evaluated with WASP 88
9.1 Factual observations 88
9.2 Conclusions and recommendations 92
Annex II. DETAILED SIMULATIONS OF SUPPLY TO PEAK DEMAND 98
10 Detailed results of simulations of section 5.3.1 98
10.1 Initial set of demand projections 98
10.1.1 Low demand scenario 98
10.1.2 Base demand scenario 101
10.1.3 High demand scenario 104
10.2 Sensitized set of demand projections 107
10.2.1 Low demand scenario 107
10.2.2 Base demand scenario 110
10.2.3 High demand scenario 113
11 Detailed results of simulations of section 5.4.1 116
11.1 Initial set of demand projections 116
11.1.1 Low demand scenario 116
11.1.2 Base demand scenario 119
11.1.3 High demand scenario 122
11.2 Sensitized set of demand projections 125
11.2.1 Low demand scenario 125
11.2.2 Base demand scenario 128
11.2.3 High demand scenario 131
12 Detailed results of simulations of section 5.5.1 134
12.1 Initial set of demand projections 134
12.1.1 Low demand scenario 134
12.1.2 Base demand scenario 137
12.1.3 High demand scenario 140
12.2 Sensitized set of demand projections 143
12.2.1 Low demand scenario 143
12.2.2 Base demand scenario 146
12.2.3 High demand scenario 149
TECHNICAL ASSISTANCE TO GOVERNMENT OF MAURITIUS IN THE ENERGY SECTOR
PART I. BACKGROUND AND OBJECTIVES
The Republic of Mauritius is an island nation in the Indian Ocean. It comprises the main island
of Mauritius and the island of Rodrigues, the outer islands of Agaléga, and the archipelago of
Saint Brandon.
In the Republic of Mauritius, the Ministry of Public Utilities is responsible for the power sector
(as well as the water and wastewater sectors) and for the design and implementation of energy
policy.
The Ministry oversees the power utility, the Central Electricity Board (CEB), which is
statutorily responsible for the control and development of electricity supply. CEB, which is also
a generator and supplier of electricity, currently acts as the electricity regulator. The Electricity
Act of 1939 (amended in 1991), the Electricity Regulations of 1939, and the Central Electricity
Board Act (1964) comprise the legislative framework for the electricity sector and CEB’s
operations. According to the 1964 act [1], CEB is empowered to “prepare and carry out
development schemes with the objective of promoting, coordinating and improving the
generation, transmission, distribution and sale of electricity throughout Mauritius as required.”
The governmental policy for the power sector seeks to encourage a greater use of sources other
than oil for the generation of electricity, through the optimization of the use of local and
renewable energy sources. It also seeks to encourage proper management in energy
utilization—the Government of Mauritius (GoM) is joining efforts with private and public
institutions to achieve energy savings and implement energy efficiency practices.
CEB is currently able to meet peak electricity demand in the Republic of Mauritius. However,
the increase in demand, coupled with possible delays in the implementation of new projects and
the aging of the existing generation plants, have posed concerns regarding CEB’s ability to
meet electricity demand reliably in the next few years. Depending on the combination of the
load growth and materialization of delays, the security of supply may be at risk already in the
short term. A supply shortage would trigger the need to install new capacity on an emergency
basis.
Taking this into account, the GoM requested technical assistance from the World Bank (WB),
comprising an independent evaluation of electricity demand forecasts and the assessment of the
existing power generation system and the plans for its expansion. For the execution of these
assessments, the period 2015–2017 is emphasized, because this mid-term horizon presents
particular challenges to the maintenance of adequate generation supply in Mauritius, as will be
seen further in this document. Yet, the analysis also includes the years until 2022—a horizon
compatible with CEB’s Integrated Electricity Plan 2013–2022 [IEP] [2], though with less detail
on the interval between 2018 and 2022.
This document consists of the preliminary report of the activities carried by the WB team, and
is organized as follows:
 Following this introduction, the executive summary in Part II presents the main
findings and recommendations arising from the work.
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TECHNICAL ASSISTANCE TO GOVERNMENT OF MAURITIUS IN THE ENERGY SECTOR
 The evaluation of electricity demand forecasts for the island of Mauritius is presented
in Part III, which also contains recommendations for improving the process of demand
forecasting and the use of the demand projections in the planning activity.
 Part IV deals with the assessment of the generation system in the island of Mauritius,
presenting recommendations on how to proceed with addressing the identified
difficulties in meeting demand with the currently existing and planned generation
systems.
 Recommendations for strengthening the capacity of Mauritian institutions to undertake
power sector planning, including methodological and institutional aspects, are
presented in Part V.
 Bibliographical references and technical annexes follow Part V.
 After the delivery of the initial version of this report, the WB team received and was
requested to analyze the outcomes of planning studies conducted by CEB, in which
generation expansion plans were prepared and evaluated with help of the Wien
Automatic System Planning (WASP) Package. Annex I presents an assessment of the
results and the technical procedures adopted for these planning studies.
 Annex II contains detailed results referring to simulations of supply to peak demand.

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PART II. EXECUTIVE SUMMARY
The objective of this document is to assess the ability of the generation system in the island of
Mauritius to meet the demand for electricity, and to recommend measures to ensure the
adequacy of supply in this island in the short and long terms. The recommendations refer both
to actions to be taken by Mauritian institutions to improve the security of electricity supply in
the short and long terms, and to actions to strengthen the capacity of these institutions to
undertake power sector planning.
In short, the key recommendations of this report are:
(1) Due to time constraints, ensuring security of supply in the short term (2015-2017)
requires measures not involving capacity additions.
These measures refer to enhancing the operation of the existing system, fast tracking
generation projects already in the pipeline, and extending the operation either of
existing generation assets that are scheduled for decommissioning or of independent
power producers (IPPs) whose contract is scheduled for termination.
The efforts to implement these measures, which are detailed in section 5.4 of the report,
ought to be initiated as soon as possible.
(2) In the long term, new capacity generation additions (i.e., those not referring to projects
already under consideration or implementation) are needed already in 2018.
Given the typical times required to incorporate new capacity, avoiding supply shortages
in 2018 requires actions from Mauritian institutions in the very short term, to be
completed by January 2016. The procurement process for the incorporation of new
generation capacity should be initiated in January 2016 at the latest.
The time available between June 2015 and January 2016 would allow for some
adjustments of the generation capacity expansion alternative for 2018. By
implementing in 2015 the recommendations presented in this report on improvement of
the methodologies and procedures for power system planning, the Mauritian
institutions will be able to optimize the amount of new generation capacity actually
needed and the related timing.
If no improved planning methods and procedures are implemented in Mauritius before
January 2016, it is recommended to proceed with the procurement of gas turbines (to
run initially on diesel) in the amount the currently applied planning methodology
indicates is needed (2 × 36 megawatts [MW]), since no other formal and consolidated
assessment methodology will be available to support expansion planning decisions.
(3) For the period between 2019 and 2022, the recommended firm capacity additions are
those indicated in Table ES 1.1. The determination of the exact technology
corresponding to those capacity additions should be the result of detailed planning
efforts, which need to be executed under consideration of the recommendations of this
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report on how to strengthen the capacity of Mauritian institutions to undertake planning
for power sector expansion.
Table ES 1.1 – Capacity additions recommended for Mauritius in the long term: 2019–2022
Year 2019 2020 2021 2022
Capacity additions [MW] 90.0 - 45.0 45.0
Accumulated capacity additions [MW] 90.0 90.0 135.0 180.0
(4) Strengthening the capacity of Mauritian institutions to plan for power sector expansion
involves institutional and methodological aspects.
From an institutional point of view, the most critical recommendation is to embrace
public consultation mechanisms as part of decision-making processes for the expansion
of the power sector. The WB team believes formal public consultation is the right
approach to address, in a realistic and transparent manner, environmental and socially
sensitive issues related to the power sector, as well as concerns about diversification
and security of supply. A proper public consultation process conducted in all stages by
the Government of Mauritius will make it possible to define the options for expansion
of the power sector actually available for the country in terms of primary resources
(imported fossil fuels, renewables) for power generation, environmental, and other
conditions to be met for their effective use.
It is of utmost importance that policies on the mix of domestic and imported energy
resources and the diversification and security of supply, as well as environmental
constraints and other requirements deriving from social acceptability, are considered
for the definition of scenarios for expansion at the planning stage, and that the costs of
meeting those policies, constraints, and requirements for each scenario are realistically
assessed by planners. Public consultation processes on those scenarios will make it
possible to define those actually viable for Mauritius, as well as to inform the society
on the related implementation costs for the country. For this reason, the WB team
believes starting this process should be seen as an immediate priority in Mauritius.
(5) From a methodological standpoint, it is recommended that Mauritian institutions
conclude as soon as possible—ideally before the end of 2015—the implementation of
a program to consolidate the modernization of methodologies, procedures, and
computational tools used for power system planning in the country. This modernization
process has already been initiated, and there is an ongoing initiative with the
International Atomic Energy Agency (IAEA). This report contains specific
recommendations on how to strengthen and consolidate the modernization program.
The current planning methodologies seem to point toward significant capacity
additions in coming years. Thus, assessing these requirements with the help of modern
methodologies and procedures can significantly impact the costs and reliability of
supply in Mauritius.
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TECHNICAL ASSISTANCE TO GOVERNMENT OF MAURITIUS IN THE ENERGY SECTOR
In the context set by the preceding key recommendations on the way forward, a more detailed
description of the main findings and recommendations of this report is presented in the
following sections of this executive summary.
Generating electricity demand forecasts for the island of Mauritius
Forecasts of the demand for electricity (energy consumption and peak load) are an essential
input for the assessment of the adequacy of a generation system. For this reason, the WB team
generated such forecasts for the island of Mauritius for the period 2015–2022. For this task, the
team adopted a top-down econometric approach, projecting demand for the island as a function
of the expected growth in gross domestic product (GDP) in the Republic of Mauritius. Demand
projections were generated:
 For three scenarios of GDP growth: low growth, the base case, and high growth.
 For two sets of assumptions on how energy efficiency and energy savings programs,
as well as structural changes in the Mauritian economy and energy consumption habits,
may impact the demand for electricity in the long term. This resulted in two sets of
projections: the initial set (not taking into consideration any relevant effects of these
phenomena), and the sensitized set (in which these phenomena result in lower growth
of demand for electricity in the long term, after 2018).
The peak power demands determined for these two sets of projections and three growth
scenarios are indicated in Figure ES 1.1. The procedure utilized for generating the sensitized
set of projections was based on the reproduction of the behavior of recent demand projections
made available by CEB [6], in which it is considered that energy efficiency and energy savings
programs, as well as structural changes in the Mauritian economy and energy consumption
habits, affect the demand for electricity significantly in the long term.
750 750
700 700
]W650 Initial projections ]W650 Sensitized projections
M M
[ d600 [ d600
n n
a a
m550 m550
e e
d d
re500 re500
w w
op450 op450
k k
ae400 ae400
P P
350 350
300 300
9 0 1 2 3 4 5 6 7 8 9 0 1 2 9 0 1 2 3 4 5 6 7 8 9 0 1 2
0 1 1 1 1 1 1 1 1 1 1 2 2 2 0 1 1 1 1 1 1 1 1 1 1 2 2 2
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2
Historical peak demand [MW] Historical peak demand [MW]
Projected peak power demand [MW] Low scenario Projected peak power demand [MW] Low scenario
Projected peak power demand [MW] Base case Projected peak power demand [MW] Base case
Projected peak power demand [MW] High scenario Projected peak power demand [MW] High scenario

Figure ES 1.1 – Peak power demand projections for the island of Mauritius: 2004–2022
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The process of constructing these electricity demand projections, as well as comparing the
projections with those generated by CEB, led to the following conclusions and
recommendations:
 The bottom-up, end-use procedure adopted by CEB resulted in projections for the base
case scenario that are consistent with the projections developed by the WB team for
the short term (2015-2017). The procedure adopted by CEB for generating the base
case projections for this horizon—in which the effects of energy efficiency and energy
savings programs, as well as of structural changes in the economy and the electricity
consumption habits of Mauritius, are not expected to strongly affect demand
forecasts—is deemed as adequate by the WB team.
 The recent projections by CEB [6] obtained for the low growth and the high growth
scenarios for the period 2015–2017 were respectively above and below those generated
by the WB team for the low growth and the high growth scenarios. The difference was
significant for the low growth scenario, and less so for the high growth one.
The WB team had access to a document developed by CEB [9], which served as the
support material for a presentation before National Energy Commission (NEC), in
which the peak supply simulations and analyses are conducted exclusively for the base
case demand forecast scenario. This alone cannot be considered as evidence that the
low growth and high growth scenarios developed in the IEP 2013–2022 have not been
used for the planning activity. However, the WB team stresses the need to define
credible demand projection scenarios that are actually used by decision makers to
develop robust expansion plans.
 As for the demand projections for the period 2018–2022, the intrinsic income-
consumption elasticities embedded in the recent projections by CEB [6] are rather low
(hovering around 0.7). While the WB team understands that this may be the result of
energy efficiency and energy savings programs that are expected to be developed in
the future, as well as of expected structural changes to the economy and the electricity
consumption habits in the Republic of Mauritius, these low values deserve particular
attention. Establishing the socioeconomic conditions that allow attaining such low
elasticities in a country with a developing economy, even when the growth of this
economy is heavily based on the services sector, is a challenging task.
Therefore, the WB team recommends that the evolution of the structural changes and
the energy efficiency and energy savings programs that are expected to allow attaining
such low elasticity values be continuously monitored, and that demand forecasts be
periodically adjusted based on the results of this monitoring. Furthermore, the WB team
recommends that long-term strategies for expanding the supply side of the power
system (generation, transmission, and distribution systems) be flexible enough to allow
for rapid response to any failure in achieving the expected effects of future structural
changes in the economy and energy consumption habits.
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