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ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM
PURPOSE
The World Bank/LJDP/Bllateral Aid Energy Sector Management Assistance Program (ESNAP)
was launched in 1983 to complement the Energy Assessment Program which had been established
three years earlier. The Assessment Program was designed to Identify "he most serious energy
problems facing some 70 developing countries and to propose remedial action. ESMAP was
conceived, In part, as a preinvestment facility to help Implement recommendations made during
the course of assessment. Today ESMAP is carrying out preinvestment and prefeasibility
activitles in about 60 countries and is providing a wide range of Institutional and policy
advice. The program plays a significant role in the overall International effort to provide
technical assistance to the energy sector of developing countries, It attempts to strengthen
the Impact of bilateral and multilateral resources and private sector Investment, The
findings and recommendations emerging from ESMAP country activities provide governments,
donors, and potential Investors with the information needed to identify economically and
environmentally sound energy projects and to accelerate their preparation and
implementation. ESMAP's polIcy and research work analyzing cross-country trends and Issues in
specific energy subsectors make an important contribution In highlighting critical problems
and suggesting sc:utions,
ESMAP's operational activities are managed by three units within the Energy Strategy
Management and Assessment Division of the Industry and Energy Department at the World Bank.
- The Energy Efficiency and Strategy Unit engages In energy assessments addressing
institutional, financial, and policy Issues, design of sector strategies, the
strengthening of energy sector enterprises and sector management, the defining of
investment programs, efficiency Improvements in energy supply, and energy use,
training and research.
- The Household and Renewable Energy Unit addresses technical, economic, financial,
institutional and policy issues In the areas of energy use by urban and rural
households and small Industries, and Includes traditional and modern fuel supplies,
prefeasibility studies, pilot activities, technology assessments, seminars and
workshops, and policy and research work.
- The Natural Gas Cavelopment Unit addresses gas Issues and promotes the development
and use of natural gas in developing countries through preinvestment work,
formulating natural gas development and related environmental strategies, and
research.
FUNDING
The ESMAP Program Is a major international effort supported by the World Bank, the
United Nations Development Programme, and Bilateral Aid from a number of countrles Including
Australia, Belgium, Canada, Denmark, Finland, France, Iceland, Ireland, Italy, Japan, the
Netherlands, New Zealand, Norway, Portugal, Sweden, Switzerland, the United Kingdom, and the
United States.
FURTHER INFORMATION
For further information or copies of the completed ESMAP reports listed at the end
of this document, contact:
Energy Strategy Management OR Division for Global and Interregional
and Assessment Division Programmes
Industry and Energy Department United Nations Development Programme
The World Bank One United Nations Plaza
1818 H Street N,W. New York, NY 10017.. .. . - . . - ^As .- .1. .~....
TUNISIA
INTERFUEL SUBSTITUTION STUDY
MAY 1990
JOINT REPORT
Energy Efficiency and Strategy UnitIndustry and Energy Department
andEMENA
Country Department IIWorld Bank
Washington, D.C. 20433
Secretariat d'Etat a l'Energie et aux MinesAgence de Maitrise de 1'Energie
andSociet6 Tunisienne de 1'Electricit6 et du Gaz
Tunis, Tunisia
FOREWORD
This report is the result of a study conducted in October 1988by the Joint UNDP/World Bank Energy Sector Management Assistance Program(RSMAP) and the Tunisian government.
The study was conducted by a working group selected by theTunisian government, under the supervision of and with the assistance ofMr. Abderazzak Ferroukhi (Senior Energy Planner, EMENA, CountryDepartment II, World Bank), Noureddine Berrah (Task Manager, ESMAP),Jean-Marie Chevalier (Consultant, ESMAP), and Thomas E. Houston(Consultant, ESMAP).
The working group representing the Tunisian governmentconsisted of: Messrs. Ahmed Ounali (AME), N. Meddeb (AME), N. Osman(AME), M. Majdoub (AME), Labben (ETAP), A. Khalifa (DGI), H. Turki(STEC), M. Aissa (STEG), C. Chakroun (STEG), and Mies. F. Bargaoui (STEG)et N. Hamrouni (DGE).
Ms. Rym Bembli (AME) typed and prepared the interim report, andMrs. Jacqueline Klopner (ESMAP) was responsible for putting the reportinto its final form.
The members of the working group and the representatives of theWorld Bank and of the Joint World Bank/UNDP ESMAP program wish to thankall those who participated in the meeting dedicated to discussion of theinterim report for their comments and suggestions which -ontributedgreatly to improving the report, and for the time they gave subsequentlyto revision and discussion of the final version. The list ofparticipants appears on the next page.
larticipants at July 19, 1989 Meeting to Discuss Study Findings
The purpose of this meeting, which was chaired by the Secretaryof State for Energy and Mines of the Ministry of National Economy, was todiscuss the findings of the study of the possibilities for interfuelsubstitution in the electricity and industry sectors made in the contextof a World Bank/UNDP/ESMAP program.
The following persons took part in the meeting:
Messrs. M. Lahiani General Manager for Energy MENH. Benzarti MENA. Khalifa MENZ. Nouri MENT. Alaya MENT. Ennaifer General Manager for Projects MPH. Mahjoub Planning Directorate MPM. Ben Abdallah President and General Manager AMEA. Abid AMEM. Majdoub AMEN. Osman AMEN. Meddeb AMET. Hadj Ali President and General Manager STEGM. Aissa STEGK. Rekik President and General Manager SOTUGAT-
SERGAZA. Kesraoui President and General Manager ETAPM. Boussen President and General Manager STIRM. Mouelhi President and General Manager SNDPN. Kammoun President and General Manager ANPE
The consultant group was represented by:
Messrs. A. Ferrouhki Sr. Energy Planner World BankN. Berrah Economist ESMAP/World BankJ. M. Chevalier Consultant ESMAP
ACROMS
AME Agence de Maitrise de l'Energie (Energy Management Agency)ANPE Agence Nationale de Protection de l'Environnement (National
Agency for Environmental Protection)CAT Ciments Artificiels TunisiensCIF Cost plus insurance plus freightCIOK Ciments Industriela d'Oum Kelil (Oum El Khelil Cement Plant)CJO Cimenterie de Jebel Ouest (Jebel West Cement Plant)CPB Cimenteries Portland de BizertaDGE Direction Generale de l'Energie (Directorate General for Energy)DGI Direction G6n6rale de l'Industrie (Directorate General for
Industry)ETAP Entreprise Tunisienne d'Activites Petrolieres (Tunisian
Enterprise for Petroleum Activities)FOB Free on boardGDP gross domestic productIAA Industries agricoles et alimentaires (agriculture and food
industries)IAEA International Atomic Energy AgencyIGCC Integrated Gasification/Combined-Cycle Power PlantsIMCCV Industrie des materiaux de construction, ceramique et verrerie
(building materials, ceramics and glass industry)IME Industries mecaniques et 4lectriques (mechanical and electrical
industries)ITHC Industrie textile, habillement et cuir (textile, clothing and
leather industry)MAED Model for Analysis of Energy DemandMEN Minist4re de l'Economie Nationale (Ministry for the National
Economy)MP Ministere du Plan (Ministry of Planning)ONPT Office National des Ports Tunisiens (Tunisian National Ports
Office)OPEC Organization of Petroleum Exporting CountriesSICC Societe des Industries Cimentieres du Centre (Central Tunisia
Cement Industries Company)SNDP Societe Nationale de Distribution Petrolie're (National Petroleum
Distribution Company)STEG Societe Tunisienne de l'Electricite et du Gaz (Tunisian
Electricity and Gas Corporation)STIR Societe Tunisienne des Industries de Raffinage (National
Refineries Company)WASP Wien Automatic System Power Planning (model for analysis of
energy demand)
ABBRIVIATIONS
bbl barrelktoe thousand tons of oil equivalentLPC liquefied petroleum gasMt million tonsMtoe million tons of oil equivalentt tontoe tons of oil equivalent
ENMGY mESAES
CWH gigawwat hourkcal kilocalorieskV kilowattkVh kilowatt hourmBtu million British thermal unitsMV megawattT'h terawatt hour
CURRENCY EQUIVALENTS
Currency Unit - Tunisian Dinar (TD)
Official Exchange Rate a/
1 US$ = 0.8265 TD
a/ Rate nrevailing in October 1988, at the time of the mission's visit.
Fiscal Year
January 1 to December 31
TABLE 0F CONTENTS
EXECUTIVE SUMMARY ................................. . i
I. INTRODUCTION .................
II. THE ENERGY SITUATION IN TUNISIAN........... 3Organization of the Energy Sectorc... 3Retrospective Analysis of Energy Balance .........,.... 3
III. STUDY METHODOLOGY AND PRICE SCENARIOS .................... 16Objectives and Methodology 16International Energy Marketsr.k et.s...... .......... 17Price Scenariose .. 20
IV. ANALYSIS OF DEMAND.................. 26Overall Demand for Energy .......... o.............. *; . 26Results of the Survey on Energy Demand in Industry..... 29Substitution Potential................... e* .......... 32
V. SUPPLY AND SUBSTITUTION OPTIONSI...N.S...... 34Study of Substitution Possibilities in theElectricity S e c t o r 34
Substitution Possibilities in the Cement Plants.***.#*s 46Substitution Possibilities in Other Industriesri.es0... 49Choice of a Substitution Strategy.o.c..o.e..ce..o. ..e. 51
VI. IMPLEMENTATION OF A SUBSTITUTION ST kTATEGYG.Y........... 53Environmental Problems*.......... .... c53
Future Availability of Coal and Logistic Constraints... 55Future Availability of Natural Gas and Security of
Supply..y S.0.. *eoeoeoeooe@*.@oc~.~* .............. see. 57Prices--Taxation... .. , .. oo ....... ev .. 59Pricing of Gas: Incentives for Conversion............. 60Institutional Problems........ .0.... .. e... 61Recommendations for Implementation of the Strategy....e 63
ANNEXES
1 Organization of the Energy Sector in Tunisia**...,**..* 652 Production of Primary Energy and Crude, 1970-1987......... 673 The World Market for Coal................................. 694 Energy Demand in the Industrial Sector (Findings of
the AME Survey) ............. ...................... see. 755 Optimization of Equipment for Electricity Generation--
Base Case Data and Results....................... e. 776 Optimization of Equipment for Electricity Generation--
Technical and Economic Data ......................... 807 Costs of Conversion of the Cement Plants a n ts.......... 108
8 Costs of Transport of Coal by the Tunisian NationalRailroad Company (SNCFT) .................... . . ......... 110
9 Engineering Works Required to Prepare La Goulette andBizerta to Receive CoaL................ ............ .... 112
10 Experience with Use of Coal in Morocco and Portugal....... 113
TABLES
2.1 Summary National Energy Balance, 198?.................... 52.2 Final Energy Consumption in Industry, 1981-1987.......... 92.3 Electricity Balance, 1962-87. ........................... 102.4 STEG Generating Facilities in 1991.......................* 112.5 Availability and Price of Heavy Fuel Oil and Natural
Ga s 198387 ......... . . * ... ................ . .... ....... 133.1 Fuel Prices--"Continuing Competition" Scenario........... 233.2 Fuel Prices--"Tight Market" Scenario....e................ 244.1 Possible Development of Demand for Primary Energy
in ............................................. . 294.2 Energy Consumption of 60 Industrial Establishments,
4.3 Results of the AME Survey................................ 314.4 Substitution Potential, 1988 and 2001o................... 335.1 Size and Type of Sets Adopted in Optimization Study...... 365.2 Technical and Economic Characteristics of the New
375.3 Main Cnaracteristics of Optimum Solution "High
Demand/Continuing Competition" ....................... *.. 395.4 Main Characteristics of Optimum Solution "High
Demand/Tight Market........................... ........ .. 405.5 Main Charactiristics of Optimum Solution "Low
Demand/Continuing Competition" .s., 425.6 Main Characteristics of Optimum Solution "Low
Demand/Tight Market................. .......... ......... . 435.7 Main Characteristics of Cement Plants in Service in 1987.. 465.8 Basic Hypotheses for Study of Substitution in the
Cement Plns.............................485.9 Results of Analysis of Substitution Possibilities
in the Cement Plants....................... ....... ..... 495.10 Examples of Conversion Costs in the Regions Served by Gas 50
FIGURES
1 Organization Chart of Tunisia's Energy Sector............. 42 Changing Fuel-Consumption Pattern in Electric Power
Generation. ... . . . . . . . . . . . . . . . . . . . .e. . ........ 123 Toward an Energy Deficit ........................ ....... 15
MAPS
IBRD 22227 Tunisia's Natural Gas Distribution NetworkIBRD 22228 Tunisia's Electricity Distribution Network
EXCUTIVE gUMMABY
1. This report is the result of a study conducted under the JointWorld Bank/UNDP Energy Sector Management Assistance Program (ESMAP),designed to contribute to the formulation of an energy strategy forTunisia. The study complements preparatory work on the diversificationof energy supply and the rationalization of energy consumption inTunisia.
2. The study was carried out by a working group coordinated by theTunisian Energy Management Agency (Agence de Maitrise de l'Energie -AME). The working group included representatives of the relevant energysector organizations: the Directorate General for Energy (DGE) of theState Secretariat for Energy and Mines; the Tunisian Electricity and GasCorporation (Societ6 Tunisienne d'Electricitb et du Gaz - STEG), and theTunisian Enterprise for Petroleum Activities (Entreprise Tunisienned'Activites Petrolieres - ETAP). The Directorate General for Industry(DCI) of che Ministry of Economy was associated with all work involvingthe industrial sector. The National Agency for Environmental Protection(Agence Nationale de Protection de 1'Environnement - ANPE) was informedand consulted about issues related to the environment.
3. ESMAP provided technical assistance and methodological supportto the group during the most important phases of the study; provided thedata-processing facilities needed for running the energy projection andpower investment optimization models; and enabled three members of thegroup to visit Morocco and Portugal to study experiences with interfuelsubstitution, particularly the use of coal.
4. The study had two main objectives: to estimate the potentialfor interfuel substitution in the electricity generation and industrialsectors by identifying the existing or to-be-built installations thatmight use gas or coal instead of petroleum products, and to evaluate thevarious energy supply options, taking into consideration economic,technical, infrastructural and institutional constraints.
5. This summary follows the organization adopted by the workinggroup for its report:
(a) An outline of the problem and of the energy situation inTunisia (Chapters I and II);
(b) Study methodology and price scenarios (Chapter III);
(c) Analysis of demand (Chapter IV);
(d) Supply and substitution options (Chapter V); and
(e) Recommendations for implementation of a substitution strategy(Chapter VI).
- ii -
The Energy Situation in Tunisia
6. The energy situation in Tunisia is characterized by limiteddomestic resources, stagnation in the production of hydrocarbons andsustained growth in energy consumption, despite efforts in recent yearsto conserve energy and rationalize its use.
7. Recoverable hydrocarbon reserves are limited; however, Tunisiahas significant geological potential and the possibility of newdiscoveries should not be overlooked, especially for natural gas:
(a) as of January 1, 1989, almost 70% of the oil reserves, or 100Mt, were recovered and the recoverable oil reserves remainingwere about 42 Mt, representing 8 to 9 years' production at thecurrent level (of 5 Mt/year);
(b) reserves of associated gas, under production since 1986, arealmost totally exhausted. Gas discoveries in recent years,notably in the Gulf of Gabes, are promising, but theirpotential is still uncertain. Recoverable reserves from themain field, Miskar, are about 30 billion m3, and th.ose fromFranig, whose development is under study, are about 4 billionm3. Technically, production from Miskar is no longer aproblem, but the economic viability of the Miskar field isstill under study;
(c) in addition to these national resources, there are royalties onthe gas carried through the trans-Mediterranean gas pipeline,which supplies Algerian gas to Italy. At present, maximumadditional resources are about 600 million m? per annum.
8. From 1970 to 1980 production of primary energy grew moderatelyat an annual rate ei 3.7%. Since 1980 there has been no further growthand even a slight decline, due mainly to the saturation and decline ofthe oil fields in production.
9. Table 1 shows that the growth in the consumption of bothprimary and final energy has slowed since the beginning of the decade.
- iii -
Table 1; GROWTH IN ENERGY CONSUMPTIO*N, 1970-1987
1970 1980 1987
Consumption of primary energy
('000 toe) 979 3,085 3,935
Annual rate of growth (%) 12 3.5
Final energy consumption
Q000 toe) (843)a/ 2,658 3,659
Annual rate of growth (%) 12 4.8
Source: AME.
a/ Estimate.
Despite a definite slowdown in the growth rate, due in part to efforts torationalize energy consumption, supported by a policy aimed at aligningdomestic energy prices with international prices, the growth in energyconsumption is still significant (5% p.a. at the final level and 3.5%p.a. at the primary level). The difference between the two rates ofgrowth indicates that efforts have been made to conserve energy at theenergy transformation stage.
10. Growth in electricity consumption has slowed since thebeginning of the 1980s, with an annual rate of about 7.5% compared to therate of slightly over 11% that was maintained for almost two decades.
1I. Between 1980 and 1987 the pattern of final energy consumptionshowed a slight drop in the consumption of oil products in favor ofelectricity and natural gas (Table 2).
Table 2: PATTERN OF FINAL ENERGY CONSikPTIUN, 1980 and 1987
1980 1987
Share of oil products in energy
'afnsuwption (%) 73 64
Share of electricity In final energy
consumption (1) 23 29
Share of gas in 'intS energy consumption (%) 3 7
Source: AME,
- iv -
12. At the primary energy level, the market penetration of gasvaries according to the demand for gas in the electricity sector, whichabsorbed 83% of the gas consumed in the domestic market between 1983 and1988. Ninety percent of STEG's demand for fuel originates from steam-generating facilities that are equipped to burn either fuel oil or gas.This allows flexibility of supply, depending on the prices of these twofuels on the international market. Since the beginning of the 1980s theshare of natural gas in the annual demand for primary energy has variedbetween 15% and 30%.
13. Between 1980 and 1987 energy imports (oil and natural gas) grewfrom 1.2 to 1.8 Mtoe, while oil exports dropped from 4.3 to 3.4 Mtoe.The net energy balance dropped from 3.1 to 1.5 Mtoe, an annual decline ofabout 10%. Current data indicate that this trend will become more markedand Tunisia will likely become a net energy importer during the firsthalf if the next decade, even with minimal growth in demand and sustainedenergy management and conservation efforts.
Study Methodology and Energy Price Movement Scenarios
14. The study methodology is organized around six key components:
(a) construction of two contrasting scenarios for the movement ofoil, fuel oil, natural gas and coal prices over the studyperiod (1991-2020);
(b) a forecast of overall demand using an analytical model todetermine long-term energy demand;
(c) an assessment of the potential for interfuel substitution, tothe year 2000, in the electricity generation and industrialsectors, based on:
(i) an estimation of the power generation capacity, eitheralready installed or to be installed, for which interruelsubstitution is possible; and
(ii) a survey of the possibilities for substitution in theindustrial sector;
(d) evaluation of the various investment and supply options toidentify solutions that would minimize the net presentdiscounted operating and capital costs, using the WASP (WienAutomatic System Power Planning) model for the electricitysector and a conventional cost/benefit analysis for theindustrial sector;
(e) sensitivity and risk analyses to confirm the soundness of theinvestment strategies proposed for power sector development,
taking into consideration the uncertainties regarding demandgrowth, energy prices, environmental constraints, equipmentavailability and cost; and
(f) recommendations for the selection and implementation of asubstitution strategy.
15. Since any interfuel substitution strategy will depend on thefuture movement of energy prices, the working group, with technicalassistance from two international experts:
(a) examined closely the principal characteristics of internationalenergy markets and the trends that can be deduced therefrom;and
(b) constructed two contrasting price movement scenarios for oil,fuel oil, natural gas and coal, based on the principle that theeconomic costs of fuel are equal to their CIF import costs plusthe costs of distribution to the final consumer. Thesescenarios -- "continuing competition" and "tight market" -- arenot so much price predictions as projections of a range ofpossible price movements;
(i) the "continuing competition" scenario is characterized bya moderate increase in oil prices, to around US$ 22/bblin 2000 and to US$ 30/bbl in 2010. Between 2010 and2020, two assumptions are considered: continuation ofthe trend observed between 1990 and 2010 andstabilization of prices at the level reached in 2010;
(ii) the "tight market" scenario is characterized by a muchmore rapid, even extreme, increase in oil prices toaround US$ 30/bbl in 2000 and to US$ 40/bbl in 2010.Between 2010 and 2020, the same assumptions wereconsidered as in the first scenario: continuation of thetrend observed between 1990 and 2010 and stabilization ofprices at the level reached in 2010.
Some of the price movements considered exaggerate the possible changes toshow the effects of a large increase in gas prices on the competitivenessof gas in relation to coal. Almost all recent studies forecast pricemovements between now and 2000 that are closer to the "continuingcompetition" scenario, although they do not exclude the possibility ofbrief periods of tension in the market.
- vi -
16. Table 3 summarizes the results of the two scenarios retained.
Table 3; ALTERNATIVE FUEL PRICE *VEMENT SCENARIOS, 1990-2020(in 1988 US dollars/toe)
#'Continuing competition" "Tight market"1990 2000 2020 1990 2000 2020
Oil 118 162 221 140 221 294Fuel oil 89 122 166 105 166 221Gas 88 121 165 104 166 220Coal 83 88 104 86 104 119
Source: Study team.
In the base cases, for both scenarios, parity of fuel and gas prices atthe level of the final consumer was retained in accordance with the"netback" principle. During the sensitivity analysis, introduction of anenvironmental premium consisting of increasing the price of gas by 1OZ atthe level of the final consumer as of 1995 was tested. This premiumtends to reflect a not improbable situation in which environmentalconstraints in Western Europe would put natural gas at a premium overfuel oil, due to its specific advantages.
17. Since Tunisia's gas potential is sizeable, though not largeenough to allow exports of gas, if local fields were developed, theeconomic cost of the gas would equal the long-term marginal cost, andthus would be lower than the opportunity cost of the alternative fuel,which in this case is fuel oil.
Demand Analysis
18. Th, long-term forecast of final energy consumption by fuel typewas made using the MAED model (Model for Analysis of Energy Demand).After numerous simulations, only one growth alternative was retained.The hypothesis adopted by the working group is based on:
(a) success of the policy of structural adjustment currently beingimplemented by Government, aimed at sustained GNP annual growthof 5.5% up to the year 2000 and of 6.5% thereafter; and
(b) continuation of the policy of rationalization and control ofenergy consumption, supported by a policy of aligning priceswith the economic costs of supply.
- vii -
19. Given the importance of the electricity sector in interfuelsubstitution, the results of the global methodology were compared withSTEG's medium- and long-term analytical projections of electricityconsumption. Two alternatives were adopted for the evolution ofelectricity consumption:
(a) 4.4% annual growth from 1989 to 1996 and 4% thereafter (low-growth hypothesis), and
(b) 6.8% annual growth from 1989 to 1996 and 5.3% thereafter (high-growth hypothesis).
The group found that for both cases the market penetration of electricitywas compatible with the development of final energy consumption.
20. The results obtained are summarized in Table 4.
Table 4: SCENARIOS FOR EVOLUTION OF ENERGY DEMAND THROUGH 2021(Mtoe)
1986 2001 2021
Final energy demand,excluding electricity 2.5 4.6 9.8
Electricity demand a/. Low hypothesis 0.9 1.8 3.8. High hypothesis 0.9 2.4 6.7
Final demand. Low hypothesis 3.4 6.4 13.6. High hypothesis 3.4 7.0 16.5
Primary energy. Low hypothesis 3.9 7.1 15.4. High hypothesis 3.9 7.8 18.6
Elasticity. Low hypothesis 1 0.77 0.60. High hypothesis 1 0.88 0.68
Source: Study team.
a/ Converted to equivalent energy production.
- viii -
21. Table 5 illustrates the estimated interfuel substitutionpotential for 1988 and 2001. Estimates were based on sector-by-sectoranalysis of final energy demand, an estimate of likely demand forelectric power in the case of rapid growth, and the findings of a surveyof large industrial energy consumers conducted by the Energy ManagementAgency (AME).
Table 5; INTERFUEL SUBSTITUTION POTENTIAL, 1988 AND 2001
('000 toe)
1988 2001
Electricity sector 900 2100
Cement plants 160 160
industry excluding cement plants 140 290Total 1200 2550
Source: Study team.
This substitution potential consists of the demand that can be satisfiedby any of the three fuels under consideration: natural gas, coal, orpetroleum products. The main possibilities for substitution are in theelectricity sector (75% in 1988 and 82% in 2001), followed by the cementindustry (13% in 1988 and 6% in 2001).
Supply and Substitution Options
22. Supply and substitution options were studied for theelectricity sector, the cement irdustry and for other industries. Themain emphasis was on the first two groups because of their high interfuelsubstitution potential.
Analysis of substitution options in the electricity sector
23. Optimization was carried out for eight base cases by means ofpermutations of the two sets of demand projections (high, low), the twoenergy price scenarios (continuing competition, tight market), and thetwo hypotheses on requirements for coal use (with and without desulfuri-zation). The analysis was completed by:
(a) studying the sensitivity of the solutions obtained tovariations in those parameters deemed significant; and
(b) evaluating the economic risks or losses that would be incurredshould technical and/or economic conditions differ from theassumptions used in the solution adopted; and
- ix -
(c) determining which price premium of gas over coal would ensurethe competitiveness of coal as of 1996, i.e., eliminate thecombined-cycle units from the optimum solutions.
24. The technical and economic characteristics of the unitsproposed for the electricity generation sector during the period underconsideration are summarizec in Table 6.
Table 6: TECHNICAL AND ECONOMIC CHARACTERISTICS OF THE GENERATING
UNITS CONSIDERED
Investment Specific
Costs Consumption Availability
TM 1988/kW) (kcal/kWh) (M)
300 MW coal-fired steam
turbine (CH30) 832 a/ 2390 76
300 MW fuel oil-fired steam
turbine (FU3O) 621 2344 76
300 MW combined-cycle unit
(CC30) 535 2143 89
100 NW gas turbine
(TGIO) 350 3000 88
Source: Study team estimates.
a/ This value is for use of coal without desulfurization. With
desulfurization, the cost per kilowatt used would be TD 1109/kW.
It should be noted that:
(a) the working group discussed at length the technical parametersadopted for optimization, which were based on documentaryresearch and international comparisons, particularly withparameters for several developing countries:
(i) the 44% efficiency for the combined-cycle unit can beconsidered low since even in developing countries thereare units in service with efficiencies of 45 to 48%, whilethe efficiencies announced for the new generation ofcombined-cycle units range from 50 to 55%;
(ii) the availability of the combined-cycle unit is 20% higherthan that of the coal-fired unit although some available
statistics show it as being as much as 25-30% higher. Themaximum availability observed for the coal-fired unitsvaries from 70 to 75%, whereas combined-cycle unitsinstalled in the mid-1970s have attained availabilities of90% during 10 years of operation. The most recentgeneration of machines, installed nearly five years ago,have achieved 95% availability, even under difficultoperating conditions;
(b) the capital costs adopted for the analysis are the same or evenslightly lower for coal, and 15% higher for combined-cycleunits, than average costs observed in the United States andEurope.
25. A discount rate of 8% was applied in the optimizations. Thisis the rate generally used in planning studies in Tunisia. In each caseconsidered, sensitivity analyses were made using rates of 10% and 12%,the rates the World Bank deems most appropriate for Tunisia.
26. It must be emphasized that the goal of the analysis is not tomake decisions about power system development for the next 30 years butto study the long-term economic consequences for the electricitygeneration sector of several different energy supply options. Itsprincipal objective is to define the long-term strategic choices thatshould guide immediate investment decisions.
27. Table 7 lists the equipment that would need to be installed foreach of the optimum solutions obtained in the base cases (withoutdesulfurization) (For further details, see Tables 5.3 to 5.6).
- xi -
Table 7S EQUIPMENT NEEDS FOR OPTIMUM SOLUTIONS IN HIGH DEMAND AND LOW DEMANDSCENARIOS
(without Desulfurization)
High demand Low demand
continuing tight continuing tightcompetition market competition market
1. Units to be installed
150-MW fuel-fired stem turbinestill 2000 2 91 2 a/ 2 a/ 2 a/after 2000 0 0 0 0
300-MW coal-fired steam turbines* til 2000 0 1 0 0* after 2000 1 14 6 9
300-MW combined cycle unitstill 2000 3 2 2 2after 2000 9 0 2 0
100-1 gas turbinestill 2000 1 a/ 1a/ 1 a/ I a/
* after 2000 3 3 0 0
2. Discounted total expenditures(million TD) 3392 3851 2422 2880
3. Aggregate Investments(non-discounted) (million TM) 2805 4440 2410 2838
Source: Study results,
a/ Investment decisions made by STEG from 1992 to 1995 imposed to the model during theoptimization but reconsidered In the sensitivity analysis (see para 27c).
Table 7 shows that:
(a) even if coal were used without desulfurization and at aninvestment cost equivalent to that for industrializedcountries, before the year 2000 it would be competitive only inthe extreme case of high demand and a tight market. Even inthis case, only one 300-MW coal-fired steam unit is to beinstalled before 2000 (in 1998).
- xii -
(b) a minimum of two to three combined-cycle units will need to beinstalled at the beginning of the period according to thetechnical and econcmic conditions envisaged which, in certaincases, are unfavorable to gas;
(c) the number of combined-cycle units to be installed before theyear 2000 should be increased by at least a 300-MWcombined-cycle unit if STEG is able to reconsider the two 150-MW steam turbines already decided upon; an optimization withoutconstraints over the complete period under study showed thatthe least-cost solution, in the case of high demand/-continuing competition, would be to install four 300-MWcombined-cycle units before the year 2000 and delayintroduction of the first coal-fired steam unit to the year2002. If this solution were adopted, the total discountedexpenditures would be reduced by about 3.5%.
(d) stricter environmental protection standards (desulfurizationimposed) reduce the competitiveness of coal. The number ofcoal-fired steam units decreases in all solutions and, in thecase of a tight market, the first units are not put intoservice before 2003 or 2004; in the case of continuingcompetition on the energy market, they are not put into serviceuntil after 2010.
28. Sensitivity analyses carried out on the various parametersconfirm the competitiveness of the combined-cycle units before the year2000s even in the case where the price of gas rises much more rapidly inreal terms than the price of coal during the next three decades; 3.75%p.a. compared to 1.09% p.a. The conclusions of the analyses are that:
(a) a higher discount rate (10 to 12%) increases thecompetitiveness of the combined-cycle units without causing anyfundamental changes in the solutions obtained in the eightcases studied; in general the number of coal-fired steamturbines is reduced by one or two units and their installationis set back one to three years.
(b) a 15 to 20% higher cost per installed kW for coal-fired steamturbines does not affect any of the optimum solutions;
(c) inclusion of a 10% "environmental premium" in the price of gasfrom 1995 has practically no effect on the optimum solutions inall the cases considered; and
(d) a lower availability of the combined-cycle units, 84% and 76%(as for the coal-fired steam turbines), instead of 89%, wouldnot affect the competitiveness of the combined-cycle unitsbefore 2000.
- xiii -
29. A strategy based on installation of combined-cycle units before2000 is risk-averse for two reasons:
(a) uncertainties regarding the movement of energy prices do notaffect the competitiveness of combined-cycle units before 2000,even in the most extreme cases;
(b) the extreme flexibility of the combined-cycle units (due totheir modular design, they can be installed in three 100-MWtranches), will increase the system's load-following capabilityand adaptation to differentiated growth in electricity demand;and
(c) short and recurrent interruptions in the supply of natural gasdue to failures in the distribution network, or an interruptionof 4 years (1996 to 1999) while Miskar and/or Franig isdeveloped (contractual problems), and use of gas oil for thecombined-cycle units during these periods does not modify theoptimum solutions, and particularly has no effect oninstallation of the combined-cycle units before the yeax 2000.
30. In addition to the sensitivity and risk analyses, analysis wasmade to determine what price premium of gas over coal from 1996 to 2020would eliminate the combined-cycle units from all the optimumsolutions. This premium can be considered as the actual differencebetween the two indexed prices or the difference between the two averageprices during the period. The results obtained show that this premium issentive to the economic and technical assumptions and ranges from TD 70to 110/toe; e.g., US$ 85 to 130/toe or US$ 2 to 3/mBtu. It should benoted that from 1975 to 1986 the premium of gas over coal was about US$68/toe or US$ 1.6/mBtu.
Analysis of Substitution Options in the Industrial Sector
31. An analysis of substitution options in the industrial sectorwas made by:
(a) assessing the economic and financial consequences of conversionof existing cement plants to gas and to coal; and
(b) examining studies made by STEC in the context of promoting theuse of natural gas by other industrial users.
32. Since cement production capacity exceeds demand in Tunisia, noexpansion of capacity is envisioned, and one of the six existing cementplants is expected to be shut down shortly. The results obtained confirmthe decisions STEG has already taken regarding conversion to naturalgas. Of the five cement plants under consideration, two -- Gabes and OumKelil -- have already been converted to gas while three -- Bizerte, JebelOust and Enfidha -- run on fuel oil. Case-by-case economic and financialanalyses have shown that:
- xiv -
(a) for the Enfidha and Jebel Oust plants, conversion to gas iseconomically and financiaily more advantageous than conversionto coal. The Jebel Oust plant will be converted to gas beforethe end of 1989. In the least favorable case, the internalrate of return on conversion to gas is 44%, and the paybacktime two years; and
(b) for the Bizerte plant, conversion to gas cannot be justified atpresent because of very high infrastructure costs. Conversionto coal is a slightly better proposition, with an internal rateof return of about 25% and a positive discounted cash flowunder favorable conditions (existence of a STEC electric powerstation and of a coal port at Bizerte, 8% discount rate).However, conversion to coal is still too risky since thediscounted cash flows of the operation would be negative underunfavorable conditions (no STEC power station or coal port, 12%discount rate).
33. As regards the other industries, the AME survey showed thatnearly all manufacturers were considering converting to natural gasbecause of its qualities, ease of use, and availability. Financialcalculations made by STEG for the regions supplied with gas reveel thatthe payback time required for investments made to connect the plants tothe natural gas distribution network is generally from two to 16months. These calculations suggest that substitution of natural gas forfuel oil is economically attractive since there is little pricedistortion in the energy sector, and the cost of converting industrialequipment from fuel oil to gas is low, generally much less than the costof connection to the network.
Choice and Formulation of a Substitution Strategy
34. The main conclusions of the technical and economic analysisare:
(a) present consumption of substitutable energy is about 1.2million toe, almost 30% of primary energy consumption.Considering the high demand scenario for electricity, it shouldreach 2.5 million toe in the year 2000, and would still beabout 30% of primary energy consumption. Eighty percent ofthis substitution potential is in the electricity generationsector;
(b) for the industrial sector, particularly for two of the threecement plants still operating on fuel oil, it is preferablefrom both the economic and the financial viewpoint to replacefuel oil with gas;
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(c) in the electricity generation sector, under all anticipatedtechnical and economic conditions, combined-cycle units andcoal-fired steam turbines are preferable to fAel-oil-firedsteam turbines. The long-term relative competitiveness of thecombined-cycle units and coal-fired steam turbines depends onthe future movement of coal and gas prices, and on theenvironmental protection standards adopted by the TunisianGovernment. But these uncertainties in no way affect medium-term investment decisions since in all demand and pricesituations anticipated, two to three 300-MW combined-cycleunits will have to be installed before the year 2000 (and eventhree to four units before 1996 if the investment decisionsalready taken by STEG can be reconsidered).
35. For the medium term, a substitution strategy is recommendedthat would hold energy supply costs to a minimum while preserving theflexibility needed to cope with uncertainties regarding demand and energyprice movements. This substitution strategy is based on three components:
(a) promotion of natural gas for industrial use and, in particular,conversion of the cement plants (except Bizerte) to natural gaswhile retaining the possibility of using fuel oil;
(b) installation of 300-MW combined-cycle units to satisfy growthin demand for electricity up to the year 2000;
(c) a prefeasibility study for construction of a coal power stationon a new site. The study would include:
(i) comparison of installation of conventional coal-firedsteam units with use of the new technology linking acoal-gasification module with a combined-cycle unit; 1/
(ii) a precise assessment of the environmental impact of coaluse; and
(iii) determination of the infrastructure necessary for thesupply of coal, particularly the port facilities.
36. This strategy does not foreclose other fuel use options in thefuture, since it would allow the energy system to adapt, without extracost, to future demand and energy price configurations, becauset
1/ This technolo6y (IGCC: Integrated GasificLtion/Combined-Cycle PowerPlants) links a coal-gasification module to a combined-cycle unit; a120-MW unit has been in operation in Coolwater, Californiasincel984. Many experts believe it will reach the commercializationstage toward the mid-1990s.
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(a) the modular design of the combined-cycle units permits betteradaptation of supply to demand and brings additional economicbenefits that were not taken into account during theoptimization exercise;
(b) the country will be better prepared for the introduction ofcoal after the year 2000 (if the development of the energymarket makes it prove to be compecitive vis a vis natural gas)and technological improvements will be incorporated that permitmore efficient and cleanoe use of coal without extra economiccosts.
37. In addition, this strategy will:
(a) reduce the amount of capital needed for the development ofelectricity generation by at least 15% compared to the amountneeded if fuel-oil-fired steam turbines were used and by nearly35Z compared to the amount needed if coal-fired turbines wereused;
(b) safeguard the country's independence in the energy sphere andthe flexibility of the system, up to the year 2000, since:
(i)if Franig and/or Miskar are developed, total gasconsumption from 1995 to 2005 or 2010 can be met by domesticproduction and the royalties from the trans-Mediterranean gaspipeline, even in cases of high demand;
(ii)in the most pessimistic case, assuming that Franig andMiskar are not developed and royalties do not increase, importsto satisfy demand to the year 2000 would not exceed 1.5 to 2billion m3 if the dual-fired steam units and possibly thecement plants also are converted to fuel oil; and finally
(c) keep the negative impact on the environment to a minimumbecause the use of gas is not only economically justified, butit will also reduce S02, C02 and NOx emissions.
38. To encourage the substitution of natural gas for petroleumproducts in the medium term, and of natural gas and/or coal for petroleumproducts in the longer term, it will be necessary to:
(a) implement the policies recommended by the Tunisian Government,which promote:
(i) greater transparency and clear management rules andprocedures to improve the efficiency of the enterprisesand eliminate extra costs; and
(ii) elimination of remaining price distortions, by aligningthe prices of the various forms of energy with economiccosts;
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(b) launch an information campaign targeting industrial clients inthe areas supplied by the natural gas system, emphasizing theeconomic and financial benefits and the reduced air pollutionthat can be gained from switching from fuel oil to gas:
(c) avoid distortion of prices for the various forms of energythrough fiscal measures. If the Government finds incentivemeasures in support of an adequate price policy appropriate, itwould be more advisable to grant tax rebates and/or facilitatefinancing, to encourage manufacturers to invest in conversion,than to apply preferential tariffs that are not economicallyjustified;
(d) ensure greater market penetration for natural gas, by:
(i) promoting the best possible use of the existinginfrastructure by the offer of interruptible supplycontracts to large industrial consumers to encourage themto retain the possibility of using heavy fuel oil afterconversion;
(ii) studying the ntcessary infrastructure, including storagefacilities, to ensure security of supply at a levelacceptable to consumers;
(iii) negotiating supply contracts which would ensure thecompetitiveness of natural gas with other forms ofenergy, specifically coal;
(iv) studying the institutional problems posed by rapiddevelopment of gas, even though Tunisian authorities donot plan to restructure the energy sector in the nearfuture. In the short term, STEG should strengthen itsgas department through increased funding, accountingtransparency, increased management autonomy, a commercialpolicy for natural gas that is independent of, and evencompetitive with the commercial policy for electricity,etc.; and finally
(v) considering the combined-cycle option in the reassessmentof the Miskar field and/or Franig and encouragingexploration in order to increase the natural gaspotential;
(e) carry out a prefeasibility study of a coal-fired powergeneration station at a new site, in the event that thedevelopment of the energy market justifies the introduction ofcoal after the year 2000; and
- xviii -
(f) study and issue national environmental protection regulations,particularly standards for atmospheric emissions: particulates,02, S02 and NOx. Adoption of such standards should beconsidered a prerequisite for inclusion of coal-fired plants inthe electricity generation system.
I. INF1ODUCTION
1.1 In 1988, Tunisia's consumption of primary energy was estimatedat 4 million toe, almost exclusively from hydrocarbons, including 2.9Mtoe of petroleum products and 1.03 Mtoe of natural gas. Although thecountry has been a net energy exporter since 1967, Tunisia's domesticproduction of hydrocarbons is today virtually static, while primaryenergy demand is rising by 4% annually. 2/
1.2 Without new discoveries, Tunisia will become a net energyimporter in the course of the next decade, even if sustained efforts aremade to conserve energy and rationalize consumption. In thecircumstances, the key questions are: How can Tunisia mobilize itsdomestic resources, existing or potential, and to what extent might itbenefit from importing alternative sources of energy (coal or naturalgas) that are considered more economically advantageous than petroleumproducts?
1.3 Primary energy consumption will rise to 7 Mtoe by the end ofthe century. However, 64% of demand is estimated to be nonsubstitutable;the remaining 2.5 Mtoe (36% of demand) represents substitutable demand,which can be covered with petroleum products, natural gas or coal.
1.4 Systematic examination and economic evaluation of the energysubstitution potential in the industrial and electricity sectors led toproposal of a strategy of substituting natural gas for petroleum productsover the medium term (up to the year 2000) and substituting natural gasand/or coal for petroleum products, depending on energy price movements,over the longer term.
1.5 The study that led to the above conclusions was conducted by aworking group set up by the Government of Tunisia and consisting ofrepresentatives of Agence de Maitrise de l'Energie (AME), SocieteTunisienne de l'Electricite et du Gaz (STEG), Entreprise Tunisienne desActivit6s Petrolieres (ETAP), the Directorate General of Energy, and theDirectorate General of Industry. The group's mandate was to examinesubstitution possibilities in the industrial and electric power sectorsand to identify the key requirements for instituting or accelerating thenecessary structural modifications.
1.6 The approach chosen by the working group, with assistance fromESMAP, was the follouing:
2/ In this report energy consumption is always intended as commercialconsumption.
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(a) evaluation of substitution potential in the industrial andelectric power sectors -- that is, identification of plant,existing or to be installed, that would be capable of utilizingnatural gas or coal instead of petroleum products;
(b) formulation of two contrasting scenarios based on the possibleevolution of international energy prices, so as to provide themeans for estimating the risks inherent in decisions onsubstitution or nonsubstitution;
(c) economic evaluation of each of the possible options to identifythe least-cost interfuel substitution strategy, and sensitivityand risk analysis to ensure its robustness;
(d) review of other strategic factors important to implementationof the strategy, such as independence, security of supply,flexibility, and protection of the environment.
1.7 This general approach was built around the following fivepoints, which also serve as the main chapter headings for this report:
(a) the energy situation in Tunisia (Chapter II);
(b) methodology of the study and presentation of th} pricescenarios (Chapter III);
(c) analysis of demand and substitution potential (Chapter IV);
(d) supply and substitution options (Chapter V);
(e) implementation of a substitution strategy (Chapter VI).
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II. TH9R ENEGY SITUATION IN TUNISIA
Organization of the Energy Sector
2.1 One feature of the energy picture in Tunisia is the markedpreponderance of the public sector.
2.2 The State Secretariat for Energy and Mines consists of theOffice of the Secretary and a central administrative complex. Itsupervises the statutory bodies and the enterprises belonging to theenergy sector, in particular:
(a) Entreprise Tunisienne des Activit&s petrolieres (ETAP);
(b) Societe Tunisienne de l'Electricite et du Gaz (STEG);
(c) Agence de Maitrise de l'Energie (AME);
(d) Soci6t6 Tunisienne des Industries de Raffinage (STIR);
(e) Soci6t6 Nationale de Distribution Petroliere (SNDP).
2.3 In addition to the public-sector entities, there are a numberof private corporations, mostly engaged in hydrocarbon exploration,production, transportation and distribution.
2.4 The general structure of the energy sector in Tunisia is shownin the accompanying organization chart (Figure 1), while more detailedparticulars are given in Annex 1.
Retrospective Analysis of Energy Balance
2.5 The energy situation in Tunisia is marked by limited domesticresources, stagnation in the production of hydrocarbons, and sustainedgrowth in consumption.
1987 Energy Balance (Table 2.1)
2.6 Domestic primary energy production fell by 4% between 1986 and1987, from 5,857 to 5,614 ktoe, owing mainly to a 5% drop in crude oiloutput and stagnation in gas production. Electricity generation rose by8% between 1986 and 1987, from 4,202 to 4,549 GWh.
Figure 1: ORGANIZATION CHART OF TUNISIA'S ENERGY SECTOR
Gov't. GovernmentSector Industrial and commercial activity Agency Department
Exploration Import Export D Sand of oil of oil Refining Transport Distribution I E
Production - STIR - STIR R C.- ETAP (exchange) (exchange) E DIRECTORATE E
O - ETAP - SOTRAPIL - SNDP T OF C OI Foreign Import - STIR A A HYDROCARBON T FL Companies of oil Export - CIN Foreign P 0
products of oil Companies R S- ETAP products A T
- ETAP T A_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ E r
_ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~EProduction Importation Transport Distribution D G
I E FG - SITEP - ETAP International - STEG R N 0A - TTPC E E RS C R
National T E A E- STEG O L L N
S R E E._ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ___ __ _ _ _ _ _ T A C 0 R
E E T T G F GL G E R A YE I SM EC Production Transport Distribution O C A N AT - STEG F I A N E NR - Independent - STEG - STEG T N A R 0C Producers (Monopoly) (Monopoly) Y D G GC E Y MI E M T N E NY E N I
R T NENERGY A ¢ 6
iMANAGE KNT Energy Management and Conservation N Y
E
Source: Study team.
Table 2,1; SUMMARY NATIONAL ENERGY BALANCE, 1987(ktoe)
Natural Crude Hydro Total Electricity Petroleum Coke Total 87/86Gas Oil Power Products
1. Primary energy output 476 5112 27 5615 5615 -4.1%
2. Imports 1165 422 1587 1076 70 2733 20.9%of which royalties 487 487 487
(A) Gross total available 1641 5534 27 7202 0 1076 70 8348 2.8%
3. Exports -343 -3790 -4133 -1 -465 0 -4599
4. Variation in inventory a/ 0 -86 -86 0 305 0 219
(8) Total available 1298 1658 27 2983 -1 916 70 3968 7.5%
5. Crude oil refining 1658 1658 -1598 60
6. Gas output b/ 153 153 -75 78
7. Electricity generation c/ 927 27 954 -847 69 176
(C) Energy sector consumption 1080 1658 27 2765 -847 -1604 0 314
8. Non-energy consumption 70 70 140
9. Energy consumption(final uses) d/ 218 0 0 218 846 2450 0 3514 5.3%
1D) Total primaryenergy demand 1298 1658 27 2983 -1 916 70 3968 2.5%
Source: AME.
a/ Including statistical differences.b/ Gas consumed in producing manufactured gas and LPG + losses.cl Net generation less losses (not including private genoration).d/ For gas, including consumption of manufactured gas.
- 6 -
2.7 Total primary energy consumption rose from 3,871 ktoe in 1986to 3,968 ktoe in 1987, or at a rate of 2.5%, while final energyconsumption rose from 3,338 ktoe in 1986 to 3,514 ktoe in 1987, or at arate of 5.8%. This disparity in growth rates reflects continuedefficiency gains in the country's energy system.
2.8 The 1987 energy balance shows that between 1986 and 1987:
(a) imports of natural gas tripled;
(b) crude exports declined by 8%;
(c) imports of refined products declined by 25%.
These shifts are explained to a large extent by the substitution ofnatural gaL for fuel oil at those STEG plants with dual-firingcapacity. This move to natural gas has doubled the consumption ofnatural gas in electric power generation. The proportion of fuel oilused for this purpose dropped from 51% to 7%, while that of gas rose from49Z to 93%.
2.9 The situation is different, howevet, for final consumption,where:
(a) consumption of natural gas remained static between 1986 (211ktoe) and 1987 (213 ktoe);
(b) consumption of oil products rose by 5.6%, from 2,321 ktoe in1986 to 2,450 ktoe in 1987;
(c) consumption of electri-city rose by 8%, from 3,276 GWh in 1986to 3,541 GWh in 1987.
Domestic resources limited over short term
2.10 Tunisia has no coal deposits and its hydro potential isminimal. For the moment, its recoverable oil and natural gas reservesappear to be limited, but the country still has significant geologicalpotential and the possibility of new discoveries of oil and natural gasshould not be overlooked.
2.11 Oil production began in 1966, at El Borma, with an annualoutput of approximately 600,000 t. The following year, Tunisia became anet energy exporter, achieving an output of 2.2 Mt. After some 10 fields(of varying importance), were brought into production, output reached itsmaximum level of 5.6 Mt in 1980. Today, it is stabilized at about 5 Mt(Annex 2: Oil Production, by Field).
2.12 As recoverable reserves total approximately 42 Mt, this levelof production can be maintained for 8 to 9 years.
2.13 Gas production: The recovery of associated gas at El Borma,which was begun in 1972 to supply the Gabes irdustrial area, wasTunisia's first venture in substituting natural gas for petroleumproducts. Since 1978, output from this domestic operation has beenaugmented by purchases of gas from the Algerian sector of the El Bormafie'd.
2.14 The penetration of natural gas on the domestic market begananew in 1983 when part of the trans-Mediterranean pipeline, which conveysAlgerian gas to Italy, was laid through Tunisia. A transmission anddistribution network built to carry Algerian gas (royalties + purchases)supplies the Tunis, Sousse, Monastir, Kasserine, Tajerouine and Korbaareas (see map at the end of this report).
2.15 Besides the gas reserves it is now exploiting, Tunisia alsopossesses the natural gas fields discovered in recent years. Developmentof four of these (Ezzaouia, Gremda, Mahres, Echouech) has been decided,and studies and appraisals are underway for some of the others (Miskar,El Bibane, Sabria, Franig, etc.).
2.16 The potential afforded by these discoveries is still not fullyknown. Proven reserves in the Miskar field amount to 30 billion m ,while the probable figure is about 50 billion m3.
2.17 From the technical viewpoint, solutions have been found to theproblems posed by the development of Miskar (nitrogen desaturation,decarbonization, desulfurization). However, the size of the investmentrequired (for the development proposals studied) and the fall in gasprices on the international market mean that the economic viability ofthe project is not assured. Two possibilities are being considered:
(a) study of a sequential development plan in two phases tominimize the initial investments;
(b) a supplementary assessment of the field to determine the volumeof its proven reserves more accurately.
Stagnation in primary energy production
2.18 Primary energy production, which rose in 1987 to 5.6 Mtoe,consists of oil (5.1 Mtoe), natural gas (0.475 Mtoe) and hydro power(0.027 Mtoe).
2.19 Between 1970 and 1980, output rose by a steady 3.7% annually(Annex 2) as six new oil fields -- Ashtart among them -- were broughtinto production. Since 1980, total output has stagnated, or evendeclined slightly, mainly because of the exhaustion of El Borma and thelack of significant discoveries.
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Slackening of primary energy consumption
2.20 Tunisia's primary energy consumption rose fourfold between 1970and 1987, from 1 to 4 Mtoe, an average annual rate of increase of 8.5%.In 1970, oil accounted for 99% of consumption, and natural gas and hydropower together for 1% or less. In 1987, petroleum products accounted forno more than 66% of total consumption, while natural gas reached a levelof 34%, and hydro power remained negligible (Annex 2).
2.21 However, it should be noted that the rate of growth of energyconsumption slackened, since the 1980-87 growth rate was 4% as against12% for 1970-80. Also, the structure of energy consumption changedsignificantly as natural gas came into more extensive use, particularlyfor electricity generation.
Slackening of growth of final consumption
2.22 Final energy consumption increased from 2.6 Mtoe in 1980 toroughly 3.6 Mtoe in 1987, an average annual rate of increase of 4.7%, asagainst about 12% for 1970-1980.
2.23 Between 1980 and 1987, the pattern of consumption changed: theproportion of oil products fell from 73Z to 64%, while that of gas rosefrom 3% to 7%, and that of electricity from 23% to 29%.
2.24 In 1987, the distribution of final consumption, by sector, wasas follows:
Sector Ktoe Proportion
Industry 1,500 41%Transportation 989 27%Residential 512 14%Tertiary 439 12%Agriculture 219 6%
Total 3,659 100%
Industry, with its 41% share of the total figure, is therefore theleading energy consumer.
Energy consumption in industry: beginnings of substitution of naturalgas for fuel oil
2.25 The growth in energy demand from the industrial sector meritsparticular attention, given its large share of total consumption,especially of petroleum products.
2.26 In 1980, final energy consumption figures in this sector were:petroleum produLcs, 63%; electric power, 30%; and natural gas, 7%. By
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1987, these figures were 55%, 31X and 13%, respectively. The 1980s saw amarked increase in volume (+43%), distributed unevenly as follows: oilproducts, +26%; electric power, +50%; and natural gas, +71%. Therelative decline in consumption of oil products and the increase in theconsumption of natural gas can be explained in large part by thesubstitution of natural gas for fuel oil in certain industries9particularly the building materials industry. At the Oum Kelil cementplant, for instance, the changeover from fuel oil to natural gasincreased annual gas consumption from 32.5 ktoe in 1984 to 63.74 ktoe in1985.
Table 2.2: FINAL ENERGY CONSUMPTION IN INDUSTRY(in Ktoe)
1980 1981 1982 1983 1984 1965 1986 1987
Oil products 662 709 630 749 746 768 732 834Electricity 314 324 324 369 393 395 443 473Natural gas 73 77 95 109 146 189 210 198
TOTAL 1049 1110 1031 1227 1285 1352 1385 1505
Source: 1980-85, AME data base.1986-87, DGE/AME.
Increase in Electricity Generation and Consumption (+ 7.5% per year)
2.27 Total electricity consumption rose rapidly over the period1962-87 at an average nnual rate of 11%. Although this growth hasslackened somewhat since 1980, it is still strong, and an average annualrate of growth of 7.5% was maintained during the period 1982-87 (Table2.3).
2.28 The share of domestic consumption generated privately -- mainlythrough heat recovery in certain industries -- has fallen over the lastfive years from 15% to 12% of total electricity consumption.
2.29 Consumption of electric power supplied by STEG, the only sourceconsidered in this substitution study, has followed the same pattern asgeneral power consumption, although at slightly higher average rates,namely 11.2% from 1962 to 1987 and 8.3% from 1982 to 1987.
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Table 2.3: ELECTRICITY BALANCE, 1962-87
1962 1972 1982 1987
1. Domestic output (GWh): 341 1013 3174 4549(a) STEG 288 869 2738 4016(b) Private generators 53 144 436 533
2. Domestic consumption(GWH): 300 882 2792 4031
(a) Supplied by STEG 247 737 2374 3544(b) Generated privately 53 145 418 487
3. STEG network losses:(a) In GWh t1(a) - ?(a)i 41 132 409 514(b) As % of supply 16.6 17.9 17.2 14.5
4. Peak capacity (MW) --- 175 545 710
5. Load factor (%) --- 56.7 57.3 64.6
Source: STEG.
2.30 Installed capacity increased from 273 MW ir. 1972 to 1,179 MW in1988, in three stages:
(a) installation of thermal steam-generating capacity (30-MW units)(La Goulette, Ghannouch);
(b) installation of gas turbines, particularly in the south, usinggas from El Borma, and gas oil;
(c) return to thermal steam-generating capacity (150-MW units)(Sousse, Rad6s).
A detailed inventory of generating plant is given in Table 2.4.
All steam generating sets are equipped to burn heavy fuel oil or gas,except those at La Goulette, which burn oil only. This type of plantstructure has made possible the steeply increased use of natural gas inthe generating sector and allowed great flexibility in choosing betweenfuel oil and gas as their prices fluctuated on the international market(Figure 2).
- 11 -
Table 2.4; STEG GENERATING FACILITIES IN 1991
Max I mumdevelopable
Facillty Set Year put Net Installed capacity Firinginto service capacity (MN) (MW) Agent
1. Stgam .arbines (ST)
Goulette 2 STI 1965 28 22 Fuel oilST2 1965 28 22 Fuel oilST3 1968 28 22 Fuel oilST4 1968 28 22 Fuel oil
Ghatunouch STI 1972 30 28 Fuel oil/gasST2 1972 30 28 Fuel oil/gas
Sousse STI 1980 150 140 Fuel oil/gasST2 1980 150 140 Fuel oil/gas
Rad4s STI 1985 160 130 Fuel ohi/gasST2 1985 160 ISO Fuel oil/gas
Total steam 790 724
2. Gas Turbines COT)
Ghannouch GTI 1971 is 15 GasGT2 1973 22 20 GasGt3 1973 22 20 GasGT4 1983 34 30 Gas
souchesa GTI 1917 31 25 GasG72 1977 31 25 Gas
Tunis Sud GTI 1975 22 20 GasT2 1975 22 20 Gas
-T3 1978 22 20 GasStax Gil 1977 22 20 Gas oil
072 1977 22 20 Gas oilM. Bourgulba GTI 1978 22 20 Gas oil
G72 1978 22 20 Gas oilMetlaoul TI 1978 22 20 Gas oilKorba GT1 1978 22 20 Gas
OT2 1984 34 30 GasKasserlne TI 1984 34 30 Gas
GT2 1984 34 30 GasRobbaas GTI 1984 34 30 Gas oll
Total oas 489 435
3. Hydro plants
Nabour 1 1956 6.5 Hydro power2 1956 6.5 Hydra power
El Aroussia 1 195G 4.9 Hydro powerFarnana 1 1958 9.7 Hydra powerKesseb 1 1969 0.7 Hydra powerSidi Salem 1 1983 36.0 Hydra power
Total hydro 64.3 20
GRAND TOTAL 1343.3 1179
Source: STEG.
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Figure 2 CHANGING FUEL-CONSUM4PTION PATTERN IN ELECTRICPOWER GENERATION
70- 60-- ~~Heav y Fuel Oil_60 Fa
50
40- e a
30-
20 El Borma Gas,
10--
70 75 ao a5 8Year
t230
1000__Gas Oil Z
Boo . i EZ
kt 600 __eavy________1_X_____Xep
200Y70 75 so 85 as
Year
- 13 -
Supply Conditions and Probable Energy Deficit
2.31 Oil supplies. Tunisia's own crude oil output is marketed byETAP; part of it is exported and the rest goes to the refinery atBizerte. Should domestic output shrink, export sales would automaticallybe cut back, while the volume going to STIR would remain constant for thesame refinery capacity (1.5 Mtoe). In the near future, however, thiscapacity is expected to be increased to 3 million t/a.
2.32 Petroleum products (LPG, kerosene, bitumen, gas oil, fuel oil)are imported by ETAP. Since 1983, fuel oil imports have fluctuatedsignificantly from year to year (Table 2.5). To a large extent, thesefluctuations are explained by STEG's arbitrage between fuel and gas totake advantage of the lower: import price.
Table 2.5: AVAILABILITY AND PRICE OF HEAVY FUEL OIL AND NATURAL GAS1983-87)
1983 1984 1985 1986 1987Avai labi I it1es
Haavy fuel oil (000 t) 1190 1015 861 1190 772ETAP imports 600 425 275 562 130STIR production 590 590 586 628 642
Natural gas (106 m3) 526 857 1043 964 1462Production 412 400 373 374 321Royalties 114 331 432 408 541
Imports --- 126 238 182 600
CIF prices (USS/to.)Fuel oil 165.7 177.5 1SO 71 98Algerian gas 155.7 142.5 138.6 96 78
Source: ETAP.
2.33 The distribution companies and SNDP have insufficient storagecapacity, since only one month's sales can be covered, whereas theregulations require coverage of two months' sales.
2.34 Natural gas supplies. The decline in domestic natural gasoutput tends to increase imports of Algerian gas in addition to gas-transit royalties. They were further added to in 1987 because of thesubstitution process discussed earlier.
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2.35 Cumulative natural gas consumption over the period 1983-87 roseto 2.25 Mtoe, with 83% of this volume being used in electricitygeneration, 11% by industry, 4% by households, and 2% by the hotel trade.
2.36 Tunisia's royalty entitlement for the trans-Mediterraneanpipeline is fixed at 5.25% of i3olume carried up to 12.4 billion in /year,at 6% of the next 2 billion m , and at 6.75% of any additional volume.Tunisia's transit royalties on the 12.36 billion m3 of the SNAM-SONATRACHcontract amount to 0.55 Mtoe/year.
2,37 In order to take advantage of favorable international energyprices, Tunisia has also increased its purchases of Algerian gas, whichrose from 126 million m3 in 1984 to 600 million m3 in 1987. The currentthree-year purchase contract expires in December 1989. The price of thegas is indexed to a basket of crudes. Gas use at power generatingstations produced savings of IS$ 13 million in 1987. Had the Enfidha(SICC) and Jebel Oust (CJO) cement plants also used gas, this figurewould have been US$ 15 million.
2.38 Probable energy deficit. Between 1980 and 1987, Tunisia'senergy imports (oil and natural gas) rose from 1.2 to 1.8 Mtoe, while itsexports fell from 4.3 to 3.4 Mtoe. The energy balance was thus reducedfrom 3.1 to 1.5 Mtoe, a decline of 10% a year.
2.39 Comparison of output and consumption projections carried out bythe study team (Figure 3) shows that unless substantial hydrocarbondeposits are discovered, Tunisia will become a net energy importer atsome point in the 1990s, despite its significant energy management andconservation efforts.
Figure 3. TOWARD AN EMERGY DEFICIT
8000
7000 aSHigh Case |
~~~~~~~~~~~~~~~~~/ 1
Primary Energy Output/ |
\ X , ~~~~~~Low Case
M4tep foooX /
4000 !
f g ~Prlmnry Energy Consumptioll
3000 T
l~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Primar Energ Outpu
- 16 -
III. STUDY METHODOLOGY AND PRICE SCENARIOS
Objectives and Methodology
3.1 The likelihood of energy dependence on other countries leadsTunisia to reconsider its supply structure, based primarily on petroleumproducts, and examine the economic desirability of switching to otherimported sources of energv, namely coal and natural gas.
3.2 This perspective of energy dependence arises in an inter-national economic climate characterized by instability and uncertaintyregarding future prices for energy as well as exchange and interestrates. Other major uncertainties involve the economic impact of newenergy technology and the exact nature of environmental constraints thatmay arise by the end of the century.
3.3 In such a context, the conventional approach to decision-makingbased on projections and optimizations is called into question both forcountries and for businesses. Rather than projecting price movements, itbecomes preferable to explore a range of possible future developments byconstructing scenarios, and then to establish flexible and adaptablestrategies that do not mortgage the future.
3.4 In this spirit, the study methodology is organized around sixkey components:
(a) construction of two contrasted scenarios for the movement ofoil, fuel oil, natural gas and coal prices over the studyperiod (1991-2020);
(b) a forecast of overall demand using an analytical model todetermine long-term energy demand;
(c) an assessment of the potential for interfuel substitution, tothe year 2000, in the electricity generation and industrialsectors, based on:
(i) an estimation of the power generation capacity, eitheralready installed or to be installed, for which interfuelsubstitution is possible; and
(ii) a survey of the possibilities for substitution in theindustrial sector;
(d) evaluation of the various investment and supply options toidentify solutions that would minimize the discounted operatingand capital costs, using the WASP (Wien Automatic System PowerPlanning) model for the electricity sector and a conventionalcost/benefit analysis for the industrial sector;
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(e) sensitivity and risk analyses to confirm the robustness of theinvestment strategies proposed for power sector development,taking into consideration the uncertainties regarding demandgrowth, energy prices, environmental constraints, equipmentavailability and cost; and
(f) recommendations for the selection and implementation of asubstitution strategy.
International Energy Markets
3.5 The conditions for energy supply in Tunisia must be examined inrelation to the international energy markets and possible changes inthem.
3.6 A study of worldwide consumption of primary energy shows thatthe three major energy sources are oil (38%), coal (30X) and natural gas(20%). This predominance of fossil fuels will continue over the next 20years, given the slowdown of nuclear programs and sluggish development ofrenewable energy sources. By the end of the century, fossil fuels willstill account for more than 85% of primary energy consumption and forvirtually all world energy exports. The breakdown between oil, naturalgas and coal is more difficult to predict. It will be determined to aconsiderable degree by how environmental constraints affect theirindividual competitiveness.
Energy markets
3.7 Oil markets. Until 1986, the world price for crude oil waslargely determined by the official OPEC price.
3.8 Today, the international market for crude oil has split intomany interconnected markets that trade in both crude and petroleumproducts. These make up some 25% of the global market, compared with 12%in 1973. Sales of crude and petroleum products take place on a spot,contract or barter basis. In addition to these physical transactionsthere are also paper oil transactions on the futures markets.
3.9 The growing complexity of the system will clearly exacerbatethe instability of prices and uncertainties over how they may change.However, the market has become much more sensitive to the real conditionsof competition. As a whole, the measures taken since the oil shocks,particularly in the industrial countries, have caused more opportunitiesfor substitution, and new areas for interfuel competition. Theindustrial process heat market and that formed by thermal plants areinteresting examples, both characterized by greater technical flexibilityand consequently greater price elasticity. The advent of the "netback"principle on oil markets shows that this is a buyer's market where the
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final price for the product competes with the price for its substitute.A large number of oil transactions, whether involving crude or oilproducts, are based on market-related price formulas.
3.10 Natural gas markets. Natural gas markets first developedlocally around known fields. Natural gas faces a majcr handicap as thetransportation cost for gas is some six times greater than for oil, foran equivalent amount of energy.
3.11 Nevertheless, since the 1960s continental and transcontinentalexports have increased, rising from 40 billion m3 exported in 1970 to262 billion m3 in 1988, about 13% of world production (whereas 30% of theworld production of crude oil is exported).
3.12 The world market for natural gas is today split into threeseparate markets:
(a) the North American market, including the United States andCanada. Gas accounts for some 23% of the energy consumed in theUnited States, and commands a fairly low price. With nationalproduction falling sharply, the United States will be forced toincrease imports from Canada, Mexico, Venezuela and Algeria.Note that exports of Algerian gas to the United States resumedin 1988. This is the only example of communication between thethree markets.
(b) the Asian market, with high prices, where gas is used in urbanareas for heating, industry and the production ofelectricity. In Japan, the major importer in the zone, naturalgas accounts for only about 8% of primary consumption. Mainexporters are Indonesia, Malaysia and Brunei.
(c) the Western European market, with intermediate prices, wheregas accounts for about 18-20% of the energy consumed. The mainsuppliers are the USSR, Norway and Algeria.
As with oil, natural gas prices are increasingly determined by netbackformulas that reflect the real competition on the final market.
3.13 Coal markets. The first and second oil shocks enabled coal toemerge as one of the most competitive fuels for electricity generationand in the cement industry.
3.14 Exports of steam coal have grown rapidly, from 25 million tonsin 1970 to 176 million tons in 1987. About 70% is for electricitygeneration and 20% for cement manufacture. The main importers are WestEurope and Japan.
3.15 In the late 1970s and early 1980s, new exporters aggressivelyentered the market, which is characterized by intensive competition andsurplus supply. The main exporters are Australia, South Africa, theUnited States and Poland.
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3.16 A large proportion of the international trade in coal takes theform of long-term contracts. Prices are determined by the interplay ofsupply and demarn; they reflect long-term marginal costs. Spot prices,which are more volatile, apply only to a minute fraction of world trade.
3.17 The breakdown of coal prices is complex. For Australian coalused in France in 1989 the structure is as follows:
USS/t
Mine-gate price 25Mine-port transportation and port charges 13Maritime transportation 13
Price CIF Europe 51Handling and processing fees 9Transportation by train to the user 13
Final price delivered to user 73
3.18 Logistics thus account for 65% of the price of coal deliveredto a large consumer. At each point along the chain, there are majoreconomies of scale (ship size, port infrastructure, volumes negotiatedand processed). In the case of Tunisia, if there is no port capable ofaccommodating 70,000-ton ships, the coal must go through an intermediaryin the form of a large European importer in order to profit from theeconomies of scale. This means the CIF price in Tunisia will be higherthan the European CIF price.
Market Prospects
3.19 A number of uncertainties surround the prospects for theinternational energy markets:
(a) macro- and microeconomic uncertainties regarding growth ratesand the resulting elasticities, prices and their stability,real direct and indirect costs of the various sources ofenergy, volume of known reserves and new discoveries;
(b) technological uncertainties regarding the reliability andavailability of new energy technology;
(c) geopolitical uncertainties regarding the stability of some ofthe major export areas.
3.20 Beyond these uncertainties, several trends should be noted. Atthe global level, it does not appear that a physical shortage of energyis to be feared over the next 20 years; the ratio of reserves to annualproduction is 45 years for oil, 59 years for natural gas and three
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centuries for coal. With respect to market conditions, differenttendencies can be seen for oil, gas and coal.
3.21 Oil. On the oil market, equilibrium between supply and demanddepends on several factors. For demand, in the developed countries mostenergy conservation investments have been made; demand growth is thusdirectly related to world economic growth and the strictness ofenvironmental constraints. For supply, very large discoveries would haveto be made to reverse the trend of decreasing non-OPEC production, whichwould normally lead to a gradual increase in supply from OPEC, thesupplier of last resort.
3.22 Over the short run, anything is possible: price war,continuing volatility, partial price agreement. Over the longer term,OPEC's market power can be expected to return, although to a limitedextent. The development of new technologies for using coal shouldeventually mean a ceiling for both oil and natural gas prices.
3.23 Natural gas. Numerous gas fields are "awaiting development,"including those already in production but which could produce more (USSR,Algeria, Mexico and Canada) and known fields that will be developed whenthere is sufficient demand (Iran, Qatar, Norway and Canada). Developmentof gas therefore depends on demand and price in a netback logic; theprice of gas delivered to the final consumer must be able to compete withthe fuel it displaces (fuel oil or coal, electricity). This dynamic ofdemand can also mean that a given gas, when leaving a given country, hasdifferent prices determined in relation to the substitution potentialagainst which it is valued (as is the case for Algerian gas sold inFrance and the United States).
3.24 Coal. Development of exports also depends on demand and pricecompetitiveness. Nevertheless, for steam coal the structure of supplyfor export seems to reflect a floor price and a ceiling price. The floorprice -- about US$ 25/t FOB (in 1988 dollars) -- reflects the productioncost of the lowest-cost mines (South Africa); below such a price, thereare no exports. The ceiling price is about US$ 60/t FOB, reflecting thecost of the large North American mines, which are capable of sustainedresponse to a very considerable demand. There are many operators andpotential vendors between the low-cost and high-cost mines, and marketcartelization does not seem likely, especially since the newcomers areacting very aggressively.
Price Scenarios
3.25 Price scenarios can be developed from an analysis ofinternational markets. For the time frame of the study, they trace pricechanges which are in no way construed to be projections, but which seekto determine the possible limits within which future prices may fall.The risks to which Tunisia is exposed by making energy choices against an
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uncertain future can then be measured. The prices, CIF Tunisia, areinternational prices; they are increased by the costs of supply to yieldthe opportunity costs used in the economic evaluation of the alternativesconsidered in the study.
3.26 Two price scenarios -- continuing competition and tight market-- were constructed and used by the working group for oil, fuel oil,natural gas and coal.
3.27 In both scenarios, movements in the price of fuel oil arelinked to movements in the price of crude oil, whereas movements in theprice of natural gas are linked to those in the price of fuel oil.
3.28 The price of fuel oil swings widely over the short run. Forthe period of the study, the task force has nevertheless assumed that thelong-term trends can be reflected by a fuel oil price equal to 75% of thecrude price. This trend, observed for several years now, has been usedin both scenarios.
3.29 The economic price for natural gas is, in the case of Tunisia,equal to the Algerian border price; it was aligned with that of fuel oilfor the period under study using the netback principle. In point offact, in the case of Tunisia, imported natural gas competes directly withimported fuel oil, whether for industrial use or for electricitygeneration, especially since much generating equipment is already of thedual-fuel type. Sensitivity analyses were made from 1995 forward using a10% premium on the price of natural gas in relation to the price of fueloil. The advisability of such a premium, which makes the deliveredplantgate price of gas higher than that of fuel oil, is debatable, and itwas discussed by the working group. The premium tends to reflect a notimprobable situation in which environmental constraints in Western Europewould put natural gas at a premium over fuel oil, due to its specificadvantages.
3.30 Movements in coal prices are based in both scenarios on thelogic of the sector with reference to the existence of floor and ceilingprices. The calculation of prices CIF Tunisia assumed that ships ofeconomic size (70-100,000 t) could not be accommodated by Tunisianports. Coal imports by Tunisia would therefore require transshipment ina European port, thus involving additional freight costs for Tunisia.These are estimated in both scenarios throughout the period at US$ 5(1988 dollars)/t. This add-on cost is included in the price CIF Tunisia.
"Continuing Competition" Scenario
3.31 This scenario is close to the medium-term projections currently'being made at the international level, in particular by the World Bank.In this scenario, competition is intense both between the producers of asingle energy source (OPEC, non-OPEC, exporters of coal and gas) andbetween the sources of energy themselves, i.e. intra- and inter-energycompetition.
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3.32 The price of oil remains at its 1988 level until about 1992,reflecting keen competition among the main producers and difficulties inreaching an agreed price. The price would reach US$ 30 (1988dollars)/barrel in 2010, i.e., a real increase of some 2.5% per yearbetween 1988 and 2010.(see Tables 3.1 and 3.2). Over the longer term,between 2010 and 2020, two price movement assumptions are considered:continuation of the trend observed for 1990-2010, and stabilization ofhydrocarbon prices at the level reached in 2010.
3.33 In this case, the demand for coal remains moderate and theintensity of competition helps keep the increase in prices in real termsto less than 1% until 2005 and 1.5% thereafter. The ceiling price of US$79 (1988 dollars)/t is not reached until 2020.
"Tight Market" Scenario
3.34 In this scenario, energy prices are subject to strong upwardpressures. Agreement is quickly reached within OPEC for pricing crudeoil at US$ 19 (1988 dollars)/barrel in 1990. The increase in demanddirected to OPEC gradually encourages the member states to maintain pricediscipline and this is reflected by an increase in real terms of 4.2% peryear up to 2010. The price of oil thus reaches US$ 30 (1988dollars)/barrel in the year 2000. Over the longer term, between 2010 and2020, two price movement assumptions are considered: continuation of thetrend observed for 1990-2010, and stabilization of hydrocarbon prices atthe level reached in 2010.
3.35 Regarding coal, the shutdown of nuclear programs and favoraolegrowth prospects lead to heavier demand, which serves as an incentive forthe major exporting areas. Prices rise annually at 2.4%, reaching US$ 79(1988 dollars)/t in 2005. This ceiling price is maintained beyond 2005.
Price differentials for gas and coal
3.36 The price movements in the two scenarios are given in Tables3.1 and 3.2. Ths gap between fuel oil and steam coal tends to widenduring the 1990s, although not to the extent reached in 1980.
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Table 3.1: FUEL PRICES "CONTINUING COMPETITION" SCENARIO
Exchange Rate TM/USS during the first half of 1988
January February March April May June July Average
.7930 .8124 .8103 .8117 .8244 .85'nq .8831 .8265
Fuel prices (in 1988 dollars/toe delivered to the plan-s)
1988 1990 1995 2000 2005 2010
Crude oil 118.21 118.21 126.21 162.21 184.21 221.21
Heavy fuel oil 89.21 89.21 95.21 122.21 138.21 166.21
Coal 82.57 82.57 84.22 87.52 95.92 104.32
Natural gas 88.36 88.36 94.36 121.36 137.36 165.36
Price of fuel (in 1988 dinars/toe delivered to the plants)
Crude oll 97.71 97.71 104.32 134.07 152.26 182.84
Heavy fuel oil 73.74 73.74 78.70 101.01 114.24 137.38
Coal 68.25 68.25 69.61 72.34 79.29 86.23
Natural gas 73.04 73.04 78.00 100.31 113.54 136.68
Price of fuel (delivered to the plants)
Crude oil
(US$/barrel" 16.12 16.12 17.21 22.12 25.12 30.17
Heavy fuel oil
(USS/barrel) 13.40 13.40 14.30 18.36 20.76 24.96
Coal (USS/t) 55.05 55.05 56.15 58.35 63.95 69.55
Natural gas
(US$/mBtu) 2.10 2.10 2.24 2.88 3.26 3.93
Average prices during the period under study (In the event that the trend continues after 2010)
Average for 1991-2020 Average for 1996-2020
TD/toe USS/toe US$/mBtu TO/toe USS/toe USS/mBtu
Coal 81.27 98.20 2.26 83.32 100.81 2.32
Natural gas 123.46 149.37 3.44 131.87 159.54 3.67
Differential (gas/coal)
Average for the
period 42.29 51.17 1.18 48.54 58.73 1.35
Start of period (1990) 4.78 5,79 0.13
End of period (2010 99.50 120.38 2.77
Source: Siudy team estimates.
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Table 3,2: FUEL PRICES "TIGHT MARKET" SCENARIO
Exchange Rate TM/USS during the first half of 1988
January February March April May June July Average.7930 .8124 .8103 .8117 .8244 .8509 .8831 .8265
Fuel prices (in 1988 dollars/toe delivered to the plants)
1988 1990 1995 2000 2005 2010
Crude oil 118.21 140.21 177.21 221.21 258.21 294.21Heavy fuel oil 89.21 105.21 133.21 166.21 194.21 221.21Coal 82.57 85.87 94.27 104.32 119.32 119.32Natural gas 88.36 104.36 132.36 165.36 193.36 220.36
Price of fuel (in 1988 dinars/toe delivered to the plants)
Crude oil 97.71 115.89 146.47 182.84 213.42 243.18Heavy fuel oil 73.74 86.96 110.10 137.38 160.52 182.84Coal 68.25 70.98 77.92 86.23 98.63 98.63Natural gas 73.04 86.26 109.40 136.68 159.82 182.14
Price of fuel (delivered to the plants)
Crude oil(USS/barrel) 16.12 19.12 24.17 30.17 35.22 40.13
Heavy fuel oil(USS/barrel) 13.40 15.80 20.01 24.96 29.17 33.23
Coal (USS/t) 55.05 57.25 62.85 69.55 79.55 79.55Natural gas(USS/mBtu) 2.10 2.48 3.14 3.93 4.59 5.24
Average prices during the period under study (in the event that the trend continues after 2010)
Avetage for 1991-2020 Average for 1996-2020MO/toe US$/toe US$/mBtu TD/toe USS/toe USS/mBtu
Coal 89.95 108.82 2.50 93.11 112.65 2.59Natural gas 159.78 193.31 4.45 172.03 208.14 4.79Differential(gas/coal)Average for theperiod 69.83 84.49 1.94 78.92 95.49 2.20
Start of period (1990) 15.28 18.49 0.43End of period (2020) 137.95 166.90 3.84
Source: Study team estimates.
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3.37 At the beginning of the period under study, the premium of thegas price over the fuel oil price is US$ 24 and US$ 56 (1988 dollhrs)/toein each of the two scenarios. In 2010, the premium for the two scenariosis respectively US$ 60 and US$ 100 (1988 dollars)/toe, which seemsunlikely, but shows the effects of a sizeable rise in the price of gas.
3.38 On the basis of these two contrasting scenarios, whichexaggerate the possible changes, the competitiveness of natural gas inrelation to coal is further examined by actually creating a thirdscenario that links the price movements for gas and coal. This scenarioaligns the growth of gas in real terms (as of 1995) with that of coal --which is much more moderate in both scenarios. This formula, which wasintroduced in 1988 into certain European natural gas supply contracts,guarantees competitiveness for electricity generation based on naturalgas (combined-cycle units), in relation to a coal-burning plant.Moreover, a development of tnis sort would be consistent with thehypothesis which assumes that tile ceiling price for coal would eventuallyinduce a ceiling price for oil and natural gas.
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IV. ANALYSIS OF DEMAND
4.1 The analysis focused on the foreseeable development of overalldemand for energy and was supplemented by analytical projections ofelectricity consumption.
4.2 The working group coordinated the sectoral studies to ensureconsistent findings and precise estimates of the potential forsubstitution in industry and electricity generation.
Overall Demand for Energy
4.3 To project the overall long-term demand for energy (to the year2021) the MAED model 3/ was used to simulate several possible scenariosbased on assumptions regarding:
(a) the rate and structure of economic growth;
(b) the level and rate of consumption managzment.
4.4 Among these simulations, the working group used a single growthalternative for energy demand based on:
(a) the success of the policy of structural adjustment currentlybeing implemented by the Government, aimed at sustainedeconomic growth; and
(b) continuation of the policy of rationalization of energyconsumption, supported by a price policy aimed at aligningprices with the economic costs of supply.
4.5 The overall assumptions taken into consideration are:
(a) Demographics. Continuation of the trend observed during thelast 15 years. The Tunisian population will reach 10.8 millionin 2001, an annual average increase of 2.5%, and the number ofhouseholds will be 2.2 million in 2001 and 3.5 million in 2021.
(b) Economic growth. Growth of about 5.5% between 1986 and 2001and 6.5% between 2002 and 2021, i.e., 6% throughout theprojection period. The structure of growth by sector will not
3/ MAED: Model for Analysis of Energy Demand, a simplified version ofthe MEDEE model. The MAED model was acquired in Tunisia under acooperative program with the International Atomic Energy Agency(IAEA).
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change significantly in relation to the current situation. Itwill center on the development of branches of activity wherevalue added is high and that provide numerous jobs and consumelittle energy. This scenario is consistent with an objectiveof full employment for new job seekers to the year 2001 toavoid increased unemployment. Beyond that year, it was assumedthat this trend would continue.
(c) Energy Management. The energy scenario is based upon anestimate of the energy savings potential, in volume and kind.Two types of actions are considered:
(i) actions requiring only small investments, with a paybackperiod of from two to four years;
(ii) actions with a payback period of from four to six years.
4.6 The first type of actions are to improve the existing situation(insulation, optimal management, etc.), the second are related to themanufacturing processes. It is assumed that the new projects wouldprofit from worldwide technological progress and thus be more energyefficient, and that the national energy management program begun at thestart of the Seventh Plan, which aims at savings of some 10X by 1991,will be achieved. 4/ In the current study, it is assumed that the energymanagement program will continue at the present rate and use the sametype of approach, i.e., actions with a payback period of less than fouryears.
4.7 This energy conservation policy requires cost-based pricing.In the past, Tunisia's price policy tended to be fairly independent ofinternational prices, giving priority to balancing the budget and topreferential price systems (for farmers and the poor). Recently,however, pricing based on economic costs has been used to bring domesticprices more into line with international prices, although the recentdecline in the latter was not fully reflected in domestic prices.
4.8 For electricity, the MAED model projections were supplementedby sectoral projections of electricity demand, yielding the followingresults:
(a) over the medium run (1988-1996): low penetration ofelectricity would correspond to growth of 4.4% per year andstrong penetration to growth of 6.8% per year;
4/ The Seventh Plan sets a target of 4.7Z p.a. growth in energyconsumption.
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(b) over the longer run (1996-2021), weak penetration wouldcorrnspond to an average annual increase of 4% and atrongpenetration to an increase of 5.3%.
4.9 The findings presented in Table 4.1 show that on the basis ofthe two cases (higk and low) for electricity penetration, the totaldemand for primary energy in Tunisia would be between 7.1 and 7.8 Mtoe in2001, (twice that in 1986), and between 15.4 and 18.6 Mtoe in 2021 if inboth cases, energy management efforts are maintained at the currentlevel; otherwise, the demand would be increased by about 0.6 Mtoe in2001, or 8% of consumption.
4.10 Overall energy intensity would fall from 0.97 toe/TD 1000 (1980values) in 1986 to 0.84 in 2001 and 0.5 toe/TD 1000 in 2021, while theelasticity for energy consumption in relation to GDP would decline fromabout 1 at the start of the 1986-1991 period to 0.7 in 2000 and less thin0.7 in 2021. These results are greater due to energy savings efforts forthermal energy uses, with about 8% in savings expected, than for motorfuel, with expected savings of 4.5%.
4.11 The total demand for nonelectric energy would rise from 2.5Mtoe in 1986 to 4.5 Mtoe in 2001 and 9.8 Mtoe in 2021, an average annualincrease of 4% throughout the period.
4.12 In 2001 subctitutahle fuels (fuel oil and gas) would accountfor 2.3 4toe, 51% of the final demand for nonelectric energy. Hydrc-carbons would accourt for 2.1 Mtoe, 48% of final demand. Renewablesources, in particular solar energy, would account for 1% in that year.In 2021, substitutable fuels will represent only 47% of the total demand(4.6 Mtoe), as against 50% for motor fuels (4.9 Mtoe) and 3% for otherforms of ensrgy.
Demand for Electric Energy
4.13 The penetration of electricity is 25% throughout the period inthe first alternative, and 31% in 2001 and 36% in 2021 in the second.Electricity consumption would rise from 3,530 GWh in 1987 to 5,500 GWh in1996, in the event of low penietration, an increase of about 5.2% peryear, and 6,400/GWh per year in 1996 in the event of high penetration, anincrease of about 6.8% per year. Two alternatives projected from themedium run were used for the period from 1996 to 2021. They aredifferentiated by average growth rate: in electricity conoumption: 4%for low penetration and 5.3% for high penetration. Consumption would beat about 6.3 'Wh in 2001 and 13.9 TWh in 2021 in the event of lowpenetration, and 8A3 TWh in 2001 and 23.7 TWh in 2021 in the event ofhigh penetration.
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Table 4.1: POSSIBLE DEVELOPMENT OF DEMAND FOR PRIMARY ENERGY IN TUNISIA
Mtoe 1986 1991 1996 2001 2021
I. Final demand
Non-electric energy 2.5 3.0 3.6 4.6 9.8
II. Final demand
Electric energy
a. low penetration 0.9 1.2 1.5 1.8 3.8b. high penetration 0.9 1.3 1.8 2.4 6.7
III. Final femand
Total energy
a, low penetration 3.4 4.2 5.1 6.3 13,6b. high penetration 3.4 4.3 5.4 6.9 16,5
IV, Total demand for
primary energy
a. low penetration 3.9 4.7 5.8 7.1 15.4b. high penetration 3.9 4.8 6.1 7.8 18,6
VI Elasticity
a, low penetration 0.95 0.75 0.60 0.60bn high penetration 1.05 0.86 0.73 0.68
Source: Study team estimates,
Results of the Survey on Energy Demand in Industry
4.14 In 1988, the AME conducted an industrial survey on energyconsumption ar.d the behavior of manufacturers regarding substitution.The survey was made among a sample of 95 industrial consumers,representing all establishments consuming more than 2,000 toe per year.These account for 80X of energy consumption in all branches of Tunisianindustry, i.e.:
- building materials, ceramics and glassworks (IMCCV)- mines- mechanical and electrical industries (IME)- textile, garment and leather industries (ITHC)- energy- chemical industries- miscellaneous industries.
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4.15 From the 95 establishments surveyed, 60 responses werecollected and analyzed, a response rate of aibout 63%. The first resultsdealt with consumption in industry by form of energy and industrialbranch, and actual ar.d planned substitutions.
Table 4.2: ENERGY CONSUMPTION 01 60 INDUSTRIAL ESTABLISHMENTS, 1987
Fuels Petroleum products Natural Gas Electricity Total
Industrial '000 '000 '000 '000
Branch toe % toe % toe % toe $
Chemical 64.3 10.97 15.7 2.68 21.5 3.66 101.5 17.87Energy 31.0 5.29 - - 0.02 0,01 31.0 5.29Misc. - - -IAA 11.5 1.97 - - 6.6 1.12 18.1 3.09Cement plants 115.0 19.60 46.0 7.80 64.0 10.80 225.0 38.40Other IMCCV 83.0 14.10 10.2 1.80 23.2 4.0 116.4 19.90IME 64.3 10.97 - - 3.1 0.53 67.4 11.51ITHC 11.5 1.97 - - 10.7 1.83 22.2 3.80
Mines 2.3 0.40 1.8 0.30 4.1 0.70
TOTAL 382.9 65.27 a/ 71.9 12.28 130.9 22.35 585.8 100.00
Source: AME survey.
a/ Of which 53.98% for heavy fuel (316,263 toe).
4.16 The main conclusions of the survey are as follows:
(a) The building materials, ceramics and glassworks branch (IMCCV)is the largest energy consumer, with 58% of the total (Table4.2 and Annex 4).
(b) Fuel oil is by far the leading form of energy consumed,accounting for 326,263 toe, more than half of totalconsumption.
(c) Energy is one of the major factors in the production costs ofseveral industrial branches, particularly building materials,where energy expenditures can reach 40% of total productioncosts. In other branches, such as food and textiles, energyaccounts for a negligible share of total production costs, butaffects profitability (Annex 4: Share of Energy Expendituresin Turnover).
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(d) Of the 60 establishments that responded to the survey, 12 havealready changed fuels, 3 did not provide any information and 45did not make any substitutions (see Table 4.3). Virtually allof those who had changed fuels had opted for natural gas. Thesector making the most substitutions is construction materials,at 50%, followed by the agricultural and food industries (IAA)with 16%, then the chemical industries, mechanical andeiectrical industries (IME) and miscellaneous industries, eachat 8%. Of the 45 businesses that had not made any energysubstitutions, 30 plan to convert to natural gas.
(e) Table 4.3 presents the main data from the survey onsubstitution. It can be seen from the table that 87% of the"voluntary" substitution potential is concentrated in thebuilding materials industry.
Table 4.3: RESULTS OF THE AME SURVEY
Industrial Number of Number of Number of Number of Potentialbranch establish- responses substitu- planned substitu-
ments collected tions substitu- tions fromsurveyed already tions the 60 ques-
made tionnaires(toe)
Cement plants 6 3 1 2 110,000Other IMCCV 44 26 5 15 53,000Chemical 16 11 1 2 3,000industryIAA 14 8 2 3 4,500IME 6 6 1 3 3,000ITHC 4 4 0 3 11,500Mines 2 1 1 1 1,000Misc. 3 1 1 1 1,000
TOTAL 95 60 12 30 187,000
Source: AME survey.
(f) For the choice of substitute fuel, the survey showed two typesof behavior:
(i) large manufacturers: the fuel price appears to be a keyfactor in the user's decisions, given the level ofconsump-tion and the share of the energy component in thecost price of the final product;
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(ii) small and medium manufacturers: the nonquantifiableadvantages associated with the convenience of natural gas(cleanliness, no storage required, reliable supply) play apreponderant role in the user's decisions.
Substitution Potential
Industry -- 0.3 Mtoe in 1988 and 0.45 Mtoe in 2001
4.17 In view of actual and planned substitutions, the surveyfindings can be used to estimate the overall substitution potential in1988 and 2001. Because of their high levels of energy consumption, thecement plants must be considered separately from the rest of industry.
4.18 Of the six cement plants in Tunisia (one of which is to be shutdown shortly), two use natural gas (Gabes and CIOK) and would be unlikelyto consider switching. The substitution potential thus comes from thethree other plants that use fuel oil (Bizerta, CJO and SICC), which couldconvert either to coal or to natural gas. The substitution potential forthese three plants can be estimated at 160,000 toe/year, and would beunchanged in 2001 to the extent that no new facilities are planned.
4.19 For the rest of industry, an extrapolation based on the AMEsurvey shows the substitution potential to be 140,000 toe in 1987 and290,000 toe in 2001 for installations with the capacity to choose eitheroil products, natural gas or coal.
4.20 The other fuels (coke, other oil products, etc.) were notconsidered because they are relatively unimportant from the standpoint ofsubstitution potential. Electricity consumption was not consideredbecause electricity is used in industry only for very specific thermalprocesses (processing of metals) and for lighting.
Electricity Generation -- 0.9 Mtoe in 1988 and 2.1 Mtoe in 2001
4.21 From the standpoint of substitution, the STEG generation systemconsists of two types of units: those that use only a single type offuel (gas oil, natural gas, fuel oil) and those that can use either fueloil or natural gas (Rades, Sousse and Ghannouch). Technically, Radescould also use coal. In 1988, STEG's fuel demand broke down into 100,000toe for single-fuel units and 900,000 toe for dual-fuel units (fuel oilor natural gas).
4.22 By 2001, in the high electricity penetration alternative,installed capacity would give rise to a demand from single-fuels units of700,000 toe and a demand of 2,100,000 toe from dual or three-fuel units.
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Overall Potential -- 1.2 Mtoe in 1988 and 2.55 Mtoe in 2001
4.23 The overall substitution potential is given in Table 4.4. Thetable indicates that the electricity sector and cement industry accountfor the largest share of present and projected consumption, i.e., 75% and13% respectively in 1987 and 82% and 6% in 2001.
Table 4.4: SUBSTITUTION POTENTIAL (ktoe)
1988 2001
Total consumption ofprimary energy 4,000 7,100 to 7,800
ElectricitySingle-fuel demand 100 700 c/Substitutable demand 900 a/ 2,100 c/
IndustryTotal energy consumption 1,500 2,900Substitutable demand 300 d! 450 d/of which cement plants 160 b/ 160 b/
Scurce: AME survey and mission team estimates.
a/ Rades, Sousse, Ghannouch.b/ Bizerte cement plant, SICC and CJO.c/ High electricity penetration alternatives.d/ Based on the AME survey and extrapolation,
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V. SUPPLY AND SUBSTITUTION OPTIONS
5.1 Based on the substitution potential revealed in the survey, thestudy concentrated on:
(a) the electricity sector -- the long-term development of thegeneration system;
(b) the cement plants -- assessment of the economic and financialbenefits of substituting natural gas or coal for fuel oil; and
(c) the rest of the industrial sector -- consideration of thefindings of STEG studies of the benefits of connection to thegas system for industrial clients.
Study of Substitution Possibilities in the Electricity Sector
5.2 The study cf substitution in the electricity sector is linkedto the study of the long-term development of the sector's generationequipment, taking into consideration equipment proven elsewhere but newin Tunisia, such as coal-fired steam turbines or combined-cycle units.
5.3 The study of the long-term development of the generation systemwas carried out with the aid of the ELECTRIC model, the microcomputerversion of the WASP III model. This program enables the economicallyoptimal expansion plan to be found for a power generating system over aperiod of up to thirty years, within constraints given by the user. Ituses probabilistic estimation of production cost, amount of energy notserved, and reliability, together with the dynamic methods ofoptimization for comparing the cost of alternative system expansionpolicies, and identifies the solution that minimizes the discounted totalcosts.
5.4 Eight base cases were studied by means of permutation of twodemand levels (high and low), two energy price scenarios (continuingcompetition and tight market) and two hypotheses regarding coal use (withand without desulfurization). They were then completed with sensitivitystudies of the optimum solutions to the major parameters and assessmentof the economic and technical risks entailed should events occur thatwere not taken into account in the study and/or that are different fromthe base hypotheses considered.
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Technical and Economic Hypotheses
5.5 The choice of the technical and economic base hypotheses to betaken into account in the optimization is of primary importance becausethe hypotheses selected determine the quality and reliability of thestudy results. The consistency of the set of hypotheses adopted is farmore determining for the strategy choices than are the numerical values,which are always open to question.
5.6 Planning period: 1991-2020. The group adopted a period of 30years (1991-2020) in order to make the economic appraisal meaningful andto take into consideration effects induced over the long term by theequipment, which has a lifetime of from 20 to 30 years. However, it isimportant to note that the long-term strategy is not to be considered asa fixed "plan" but as a background against which medium-term decisionscan be made.
5.7 Existing equipment and equipment already selected. In 1991 themaximum developable power will be 1,179 MW, broken down as follows:
- 10 steam turbines representing 724 MU;- 19 gas turbines totaling 435 MW;- 1 hydroelectric complex with an average power of 20 MW.
Fifty-four percent of this maximum power is made up of dual or three-fuelunits (Rad6s and Sousse), which together account for 90% of Tunisianelectricity generation. 5/
5.8 To establish the timetable for withdrawal of the existingequipment from service, a lifetime of 20 years was assumed for the gasturbines and 30 years for the steam turbines. As a result, between nowand 2015 all the existing equipment will be decommissioned. By the endof the period only the hydroelectric complex will still be in service.
5.9 Between 1992 and 1995 the equipment that STEG has alreadydecided on (one 100-MW gas turbine in 1992 and two 150-MW steam turbinesin 1994 and 1995) have been incorporated into the base solution.Replacement of the steam turbines with a 300-MW combined-cycle unit wasexamined during the sensitivity studies.
5.10 Generating facilities considered in the study. The sizesadopted are representative of the different ranges presently available onthe market and compatible with the size of the Tunisian system, viz. 100MW for the gas turbines, 150 and 300 MW for the steam and combined-cycle
5/ Use of coal in Rades and Sousse, while theoretically possible,remains hypothetical owing to the additional investments required inthe power stations, the inadequacy of the port facilities and/orenvironmental constraints.
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units, and 600 MW for the steam and nuclear units. One 600-MW combined-cycle unit was also included in the study, but this is more a combinationof two 300-MW units on one site to keep capital costs down than a largersize.
Table 5.1: SIZE AND TYPE OF SETS ADOPTED IN OPTIMIZATION STUDY
SizeType 100 150 300 600
Nuclear - - - NV60
Thermal, oil-fired units - FU15 FU30 FU60Thermal, coal-fired units - CH15 CH30 CH60Combined-cycle units - CCis CC30 CC60Gas turbine TG1O - - -
Source: Study team,
Note that STEG is considering developing small-scale hydroelectric plantsin the long term. However, since their total power is small comparedwith the existing or planned facilities, these plants were disregarded inthe present study.
5.11 The capital and operating costs of the different types ofequipment are presented in Table 5.2. These data were obtained from themost recent studies available for the 300-MW larger units andcombined-cycle units and from manufacturers' bids for the 150-MW steamturbine and the gas turbines.
5.12 The investment costs considered seem slightly underestimatedfor coal, however, since they are equivalent to or slightly below thecosts observed in the United States and Europe. Costs 10% to 15% higherare examined in the sensitivity analyses.
5.13 The technical characteristics taken into account for thecombined-cycle units were discussed at length with the working group andwith sector executives during the discussions of the interim report. Thebase values adopted can be considered unfavorable for the combined-cycleunits for the following reasons:
(a) the efficiency adopted is 44% whereas the combined-cycle unitsin service have efficiencies of 45% to 48%, even in developingcountries, and the efficiencies announced for the newgeneration range from 50 to 55%;
Table 5.2: TECHNICAL AND ECONOMIC CHARACTERISTICS OF THE NEW EQUIPMENT
Type of Capital Cost Specific consumption Fuel cost Operating cost AnnualUnit TD/kW kcal/kWh TD/106 kcal b/ (TD/kW/month) Availability
Local curr. F. Exch. Total Base Av. Increase Local curr. F. Exch. (%)
NU60 475 1424 1899 2643 2360 0 285.5 2.18 68CH60 231 429 660 a/ 2370 2240 0 685.2 1.71 70FU60 172 321 493 2319 2200 0 747.0 1.56 71CC60 127 298 425 1968 1684 0 740.0 1.71 89 ICH30 291 541 832 a/ 2415 2290 0 685.2 1.87 76 wFU30 217 404 621 2367 2250 0 747.0 1.71 76CC30 1io0 375 535 2012 1706 0 740.0 1.71 89CHi5 367 681 1048 a/ 2704 2443 0 685.2 2.03 82FU15 274 509 783 2650 2400 0 747.0 1.87 83CC15 202 473 675 2190 1655 0 740.0 1.87 89TGIO 87 263 350 3200 2200 0 740.0 0.94 88
Source: Study team.
a/ These values are for use of coal without desulfurization. With desulfurization, the cost per installed kW becomes TD1800AkW for 15041W units, TD 1109AkW for 300-MW and TD 8801kW for 600-MW units.
b/ Cost for "continuing competition" scenario (1991).
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(b) the 89% availability for the combined-cycle units is 20% abovethat of the coal-fired units, whereas some available statisticsshow it as being about 25-30% higher. Availabilities of 84%and 76% were considered in the sensitivity analyses to complywith the concern expressed by some Tunisian counterparts aboutthe reliability of the combined-cycle technology.
5.14 The fuel price scenarios were presented in Chapter III.
5.15 Technical constraints. The technical constraints considered inthe optimization study relate essentially to the size of the largest unitin the system, the revolving reserve and the quality of service at thelevel of production:
(a) a new stage is introduced in the system only when the size ofthe unit is below or equal to 20% of the peak load;
(b) the revolving reserve is equal to 80% of the size of thelargest unit in operation;
(c) the service quality constraint is imposed in this study by themaximum accepted failure value, i.e., a cumulative loss of loadtime of 48 hours/year, after maintenance.
These constraints were set taking into account the operating conditionsof the interconnection with Algeria.
5.16 Discount rate. The discount rate used in the optimizationstudy is 8%, which is the rate generally used in planning studies inTunisia. In each case considered, sensitivity studies were run withrates .of 10% and 12%, which the World Bank considers more appropriate forTunisia.
Study Results
5.17 The development of the sector's generating system was studiedby seeking the optimum solution in the event that any of the followingeight situations should materialize: high demand/continuing competition;high demand/tight market; low demand/continuing competition, and lowdemand/tight market for the two coal use hypotheses, i.e., with andwithout desulfurization. Sensitivity and risk analyses were then run totest the robustness of the solutions and select a strategy fordevelopment of the energy system that would reduce the risk with respectto future uncertainties to a minimum. The main characteristics of thesolutions obtained in each case are presented below. A detaileddescription of each solution is given in Annex 6.
5.18 High demand/continuing competition. In the case of using coalwithout desulfurization, the optimum solution consists in installing5,200 MW distributed as follows:
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- 1 x 600-MW combined-cycle unit (in fact, 2 x 300-MW);- 12 x 300-MW combined-cycle units;- 1 x 300-MW coal-fired steam turbine (in 2020);- 2 x 150-MW oil/gas-fired steam turbines (imposed before 1996)- 4 x 100-MW gas turbines (one of which is imposed in 1993).
This solution uses only combined-cycle units, dominated by 300-MW unitswhich constitute the bulk of the power to be installed as of 1996. The300-MW coal-fired steam turbine would not be brought in until 2020. Themain characteristics of this solution are presented in Table 5.3.
Table 5,3: MAIN CHARACTERISTICS OF OPTIMUM SOLUTIONHIGH DEMAND/CONTINUING COCPETITION
(without desulfurization)
Year 1991 2000 2010 2020
1. Firm demand (MW) 920 1600 2740 44402. Installed power (MW) 1208 2142 3164 52643. Reserve (%) 31.3 33.9 15.5 18.64. Failure after
maintenance (hours/year) 82 19 45 305. Investments (106 TD88)
e Annual 46.5 87.2 73.3 n.s. a/e Cumulative (non discounted) - 878.0 1753.8 2805.3
6. Annual fuel consumption(103 toe) 1603 1966 3119 5121of which:a Gas (Mm3) 481 1301 3128 5379. Coal (Mt) - - - 0.2
. Substitutable fuel oil (Mt) 1.1 0.8 0.3 0.1
. Gas oil 75.0 2.3 --
Source: Study team estimates,
a/ ns,.: not significant.
5.19 The total investment over the period is 2.88 billion 1988dinars (TD88), nearly 100 million TD88 per year on average. A maximuminvestment of 172 million TD88 would be required in 2013, representing0.65% of GDP at that date.
5.20 Total fuel consumption in the period is about 80 million toe,nearly 84% of which is natural gas. Total natural gas consumption overthe period ranges between 60 and 80 billion m3, depending on the fuelused in the dual-fired steam units. Annual consumption is about 1.2billion m3 in 2000 and 4.8 billion m3 in 2020, if fuel oil is used in thedual-fired steam units.
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5.21 The stabilization of the gas price, between 2010 and 2020, atits 2010 level (US$ 3.93/mBtu) increases the competitiveness of gas overcoal throughout the study period.
5.22 In this case, desulfurization only strengthens thecompetitiveness of the combined-cycle units compared with the coal-firedsteam units, even over the very long term, since even the 300-MW coal-fired steam unit to be installed in 2020, in the case of use of coalwithout desulfurization, is replaced by a combined-cycle 300-MW unit.
5.23 High demand/tight market. The optimum solution, using coalwithout desulfurization, is installation of 5,800 MW distributed asfollows:
- 15 x 300-MW coal-fired steam turbines (first unit in 1998);- 2 x 300-MW combined-cycle units (at start of period);- 2 x 150-MW fuel oil/gas turbines (imposed before 1996);- 4 x 100-MW gas turbines (one of which is imposed in 1993).
In this solution, two of the three 300-MW units installed between 1996and 2000 are combined-cycle but the 300-MW coal-fired steam units formthe bulk of the capacity to be installed after 2000. The maincharacteristics of the solution are shown in Table 5.4.
Table 5.4: MAIN CHARACTERISTICS OF OPTIMUM SOLUTIONHIGH DEMAND/TIGHT MARWET(without desulfurization)
Year 1991 2000 2010 2020
1. Firm demand (MW) 920 1600 2740 40402. InstaIIed power (MW) 1208 2142 3764 58643. Reserve (%) 31.3 33.9 37.4 32.14. Failure after
maintenance (hours/year) 82 37 31 39S. Investments (106 TD&8)
. Annual 46.5 140.6 140.6 n.s. a/Cumulative - 1288.1 2975.5 4440.2
6. Annual fuel consumption(103 toe) 1588 2048 3576 5990of which:I Gas (Mm3) 470 879 391 218I Coal (Mt) - 0.6 4.7 8,60. Substitutable fuel oil (Mt) 1.I 0.9 0.07 0.03.Gas oil 53 3.5 -
Source: Study team estimates.
a/ n.s.: not significant.
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5.24 The total investment over the period is 4.5 billion TD88, i.e.nearly 156 million TD88 per year on average and a peak of 227 millionTD88 in 2002, 2008 and 2012, representing 0.77% of GDP at the last date.
5.25 Total fuel consumption over the period is about 95 million toe,nearly 70% of this being coal, 15% gas and 15Z fuel oil (a large part ofthe latter being substitutable). Total coal consumption over the periodis 100 million tons, with annual consumption of 0.6 million tons in 2000and 8.6 million tons in 2020. Gas consumption levels off at 791 millionm3 in 2000 and declines thereafter.
5.26 Even in the case of stabilization of the price of gas at its2010 level (US$ 5.24/mBtu), coal remains competitive over gas after the year 2000. In this case, a combined-cycle option after the year 2000would increase the total discounted expenses by 4.7%, compared to theoptimum solution. In this scenario, coal units would be totally excludedfrom the optimum solution only if the gas price were stabilized at the2002 level (about US$ 4/mBtu).
5.27 Should environmental standards adopted by Tunisia imposedesulfurization on coal-fired power stations, the optimum solution wouldbe:
- 4 x 300-MW combined-cycle units;- 13 x 300-MW coal-fired steam turbines (as of 2004);- 2 x 150-MW fuel oil/gas turbines (imposed before 1996);- 3 x 100-MW gas turbines (of which one imposed in 1993).
5.28 The discounted expenditures over the period would increase byalmost 4% and the introduction of coal would be set back to 2004.
5.29 Low demand/continuing competition. In this case, meeting thedemand at least cost would require installation of 3,400 MW, distributedas follows:
- 4 x 300-MW combined cycle-units;- 6 x 300-MW coal-fired steam turbines (first unit in 2010);- 2 x 150-MW fuel oil/gas turbines (imposed before 1996);- 1 x 100-MW gas turbine (imposed in 1993).
The combined-cycle units will have to be installed between 1996 and 2006and the coal-fired steam units between 2010 and 2020. The maincharacteristics of the solution are given in Table 5.5.
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Table 5.5: MAIN CHIACTERISTiCS OF OPTIMUM SOLUTION
LOW DEMAND/CONTINUING COMPETITiON
Year 1991 2000 2010 2020
1. Firm demand (MW) 830 1220 1790 2580
2. Installed power (MW) 1208 1842 2264 3464
3. Reserve (%) 45.50 51,00 26.50 34.4
4. Failure after
maintenance (hours/year) 23 7 48 33
5. Investmnts (106 TD88)
* Annual 46.5 35.30 63.8 n.s. a/
C Cumulative - 630.30 1444.2 2409.6
6, Annual fuel consttmption
(103 toe): 1390 1525 2124 3328
of which:
Gas (Mm3) 333 7.70 14.2 9.5
Cc-el (Mt) - - 0.6 3.5
. Substituvab'e fuel oil (Mt) 1.1 0.8 0.3 0.7
Gas olf 21.9 1.2 -
Source: Study team estimates,
_/ n,s,: not significant.
5.30 The total investment over the period is 2.43 billion TD88, i.e.nearly 84 million TD88 per year on average and a peak of 222 million TD88in 2013, representing 0.76% of GDP in thac year.
5.31 Total fuel consumption over the period is about 60.5 milliontoe, nearly 45% being natural gas, 29% substitutable fuel oil and nearly25% coal.
5.32 In case of stabilization of the price of gas at its 2010 level(US$ 3.93/mBtu), gas would be as competitive as coal after 2010.Replacement of the 300-MW coal-fired units with 300-MW combined-cycleunits, in the optimum solution, would decrease the total discountedexpenses by 0.2%.
5.33 Should Tunisia adopt environmentel protection rules that imposedesulfurization on the coal-fired power stations, the optimum solutionwould become:
- 5 x 300-MW combined cycle-units;- 4 x 300-MW coal-fired steam turbines (as of 2013);- 2 x 150-MW Fuel oil/gas turbines (imposed before 1996);- 2 x 100-MW gas turbine (imposed in 1993).
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5.34 The introduction of coal is set back three years (W013 insteadof 2010) and the total discounted costs over the period would be some 1%higher.
5.35 Low demand/Tight market. In this case, the optimum solution isinstallation of 3,700 MW distributed as follows:
- 2 x 300-MW combined cycle-units;- 9 x 300-MW coal-fired steam turbines (first unit in 2003);- 2 x 150-MW fuel oil/gas turbines (imposed before 1996);- 1 x 100-MW gas turbine (imposed in 1993).
The combined-cvcle units arte to be installed at the start of the periodin 1997 and 1999 and the coal-fired steam turbines as of 2003. The maincharacteristics of this solution are shown in Table 5.6.
Table 5.6: MAIN C'iARACTERISTICS OF OPTIMUM SOLUTIONLOW DEMAMD/TIGHT MARKET
Year 1991 2000 2010 2020
1. Firm demand (MN) 830 1220 1790 25802. Installed power (MW) 1208 1842 2564 37643. Reserve (%) 45,5 51.0 43.2 45.94. Failure after
maintenance (hours/year) 23 7 28 195. investments (106 TDM8)
. Annual 46.2 82.1 136.9 n.s. a/
. Cumulative - 700.8 1836.0 2837.56. Annual fuel consumption
(103 too): 1390 1525 2288 5829of which:. Gas (143) 338 856 621 2918. CoaI (Mt) - - 2.3 4.75
Substitutable fuel oil (Mt) 1.1 0.8 0,2 0.04.Gas ol 21.9 1.2 - -
Source: Study team estimates.
a/ n.s.: not significant.
5.36 The total investment over the period is 2.86 billion TD88, alittle over 89 million TD88 per year on average with a maximum of 191million TD88 in 2012, representing 0.77% of GDP in that year.
5.37 Total fuel consumption over the period is about 65.4 milliontoe.
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5.38 The stabilization of the price of gas at its 2010 level (US$5.24/mBtu) does not affect the competitiveness of coal after 2003.Coal-fired units would be completely excluded from the optimum solutiononly if the price of gas stabilized at US$ 4.5/mBtu, its 2005 level inthe case of a tight energy market.
5.39 If desulfurization is required, the optimum solution would beinstallation of:
- 2 x 300-MW combined-cycle units;- 8 x 300-Mw coal-fired steam turbines (as of 2003);- 2 x 150-MW fuel oil/gas turbines (imposed before 1996);- 2 x 100-MW gas turbines (of which one imposed in 1993).
The introduction of coal would not be set back in this case and thediscounted total cost would increase Jy less than 3%.
Sensitivity and Risk Analysis
5.40 The optimizations were carried out for a differentiated butpredicated set of assumptions for the planning parameters, particularlydemand and energy prices. The selection of a strategy that minimizeseconomic losses (or regrets) in the medium and long term requires:
(a) testing the robustness of the optimum solution in case ofvariation of the main parameters and data in relation to theassumed hypotheses; and
(b) analyzing the risk inherent in medium-term equipment investmentdecisions by evaluating the economic losses (or regrets)induced by events that were not taken into account in the basehypotheses for the study or by a strategy implemented in atechnical and/or economic environment different from thatanticipated by the decisionmaker at the time the choice wasmade.
5.41 Sensitivity analysis: the robustness of the optimum solutionswas tested against variations of the discount rate, the investment costof the coal-fired generation units and the availability of the combined-cycle units:
(a) a higher discount rate, 10 or 12%, increases thecompetitiveness of the combined-cycle units, withoutdramatically changing the optimum solutions; the coal-firedunits are introduced in the system expansion one to three yearslater and one to two units are replaced with combined-cycleunits;
(b) a 15% increase in the investment cost of the coal-fired unitsdoes not affect the optimum solutions;
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(c) a 10% (environmental) premium of the price of gas over theprice of fuel as of 1995, in both energy price scenariosstudied, does not affect the optimum solution, in all the casesconsidered; and
(d) a lower availability of the combined-cycle units, 84 and 76%(equivalent to the coal-fired units) instead of the 89%considered in the base case, does not affect thecompetitiveness of the combined-cycle units installed beforethe year 2000.
5.42 Risk analysis. Risk analyses are usually carried out toidentify a medium-term investment strategy that will adapt to differenteconomic and technical environments with minimum extra discountedexpenses - economic losses or regrets. The strategy based oninstallation of combined-cycle units to cope with the demand till theyear 2000 is risk-free for two reasons:
(a) uncertainties regarding the movement of energy prices do notaffect the competitiveness of combined-cycle units before theyear 2000, even in the most extreme cases;
(b) the flexibility of the ccmbined cycle units (they can beinstalled in three 100-MW tranches) increases the system'sload-following capability and allows for adaptation to thedevelopment of demand.
5.43 The risk analysis was extended to unexpected events such aslnterruption of gas supply during short-term and recurrent periods(technical failures), or for a long period, allowing the development oflocal gas fields (contractual problems). It showed that the substitutionof gas oil for natural gas during these periods does not affect theoptimum solutions, and particularly the competitiv_zness of the combinedcycle before the year 2000.
Gas Premium Over Coal
5.44 The sensitivity studies and risk analyses were complemented bythe evaluation of what premium of gas over coal from 1996 to 2020 wouldremove the combined cycle-units from all the optimum solutions. Thispremium can be considered as the actual difference between the twoindexed prices or the difference of the two average prices during theperiod. The results obtained, in different cases, show that the premiumis sensitive to the economic and technical assumptions and ranges from TD70 to 110/toe, e.g., US$ 85 to 130/toe or US$ 2 to 3/nBtu. Note that thepremium of gas over coal from 1975 to 1986 was about US$ 68/toe or 1.6US$/mBtu.
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Substitution Possibilities in the Cement Plants
5.45 Tunisia's cement plants are relatively recent (Table 5.7). Withthe erection of four new cement plants since 1977, the Tunisian cementindustry has developed rapidly, though activity has slowed downconsiderably since 1984. As it presently has surplus capacity, nosignificant new construction or expansion is envisaged at this time.
Table 5.7: MAIN CHARACTERISTICS OF THE CEMENT PLANTS IN SERVICE IN 1987
Date taken Process Nominal Fuel Total energy ClinkerInto service and fuel clinker consumption consumption production
Plant capacity (000 toe) (000 toe) 000 toe)
CAT 1934: F1.F2 W: Fuel oil a/ 400 60.1 74.7 395(Tunis) 1954: F3
1968:F4
CPa 1958:FI D:Fuel oil b/ 780 56.3 71.6 508(Bizerte) 1978:F2
SCG 1977 D:Gas 660 57.9 73.4 593(Gab6s) El Borma
CIOK 1980 D:Algerlan 900 51.7 72.2 576(Le Kef) gas
SICC 1983 D:Algerion 900 54.3 81.4 646(Enfidha)
CJO 1983 D:Fuel oil 900 57.2 82.1 586(JebeIOust)
Total 4,540 337.5 455.4 3,304
Source: Study team,
a/ W: Wet processb/ D: Dry process
5.46 In 1987 the energy consumption of the Tunisian cement plantswas 455,000 toe, 33Z of the industrial sector's total consumption. Inall cases, fuel costs account for a large part of operating costs. Twoof the plants use natural gas:
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(a) The Gabes cement works can operate only on natural gas fortechnical reasons. The quarry is the most difficult and mostheterogeneous of all Tunisian quarries; the present processdoes not tolerate a raw meal sulfur content of more than 0.4%SO (equivalent to 0.16% S); higher sulfur contents causeproblems that lead to kiln shutdowns.
(b) The Oum Kelil plant was converted from fuel oil to gas in 1984when STEG installed a primary pressure-reduction station (cost:TD 123,000) and repaired the distribution system linking theprimary pressure-reduction station to the three secondarystations, which had become corroded since it was installed in1977-78 (cost: TD 52,000). The energy gain achieved by theconversion is of the order of 60 therms per ton of clinker.Conversion to coal is out of the question because of the unit'sgeographic location and the investments already made inconversion to gas.
The other four cement plants operate on fuel oil but the opportunity forconversion to coal or natural gas exists only for Bizerte (CPB), Enfidha(SICC) and Jebel Oust (CJO) because present plans are to decommission theTunis plant (CAT).
5.47 The desirability of switching to coal or natural gas wasstudied for each of the two fuels in two cases, favorable andunfavorable, using the basic assumptions shown in Table 5.8. Detaileddata are provided in Annex 7.
It should be noted that:
(a) the coal conversion costs used were estimated on th^ basis of afeasibility study made by Canadian consultants in 1984 forconversion of the Bizerte cement plant to coal, and updated bymore recent data gathered by the working group;
(b) the costs of conversion of Bizerte and SICC to natural gas takeinto consideration:
(i) the cost of bringing the gas in from the nearest mainline: 85 km for Bizerte and 3 km for SICC;
(ii) the cost of connecting the client to the system isestimated at TD 80,000 for Bizerte and TD 120,000 forSICC; and
(iii) the cost of conversion: TD 235,000 for Bizerte and TD280,000 for SICC;
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Table 5.8: BASIC HYPOTHESES FOR STUDY OF SUBSTITUTION IN THE CEMENT PLANTS
Favorable Case Unfavorable Case
- Conversion cost: US; 17.75/t - Conversion cost: US$ 20/t
Coal - High demand scenario fuel price - Low demand scenario fuel price
- Infrastructure and transport cost - Infrastructure and transport cost
shared with STEG not shared with STEG
- Discount rate 8% - Discount rate 12%
- Conversion cost: - Conversion cost:
see (b) and (c) below see (b) and (c) below
Gas - High fuel demand scenario - Low fuel demand scenario
with fuel oil price with gas price 10% above
equal to gas price fuel oil price as of 1995
- Discount rate 8% - Discount rate 12%
Source: Study team estimates.
(c) connection of Jebel Oust to the system has already been
completed at a total cost of TD 1,140,000. These costs were
taken into account in the study of the desirability of
conversion, to confirm the choice made by STEG. From the
economic standpoint, since these are sunk costs they should not
be included in the expenditures to be considered when studying
the desirability of substitution. The Jebel Oust plant was
designed from the start to operate on fuel oil and gas;
(d) after consulting with the cement plant operators, the working
group adopted a reduction of 8% in total energy consumption in
the event of conversion to natural gas.
5.48 The results of the cost-benefit study presented in Table 5.9
show that:
(a) in the case of the Bizerte cement plant, conversion is not
clearly advantageous since the wiscounted net cash flow over
the period is only positive if all the favorable conditions are
combined; however, many of them are uncertain, especially for
coal. In present conditions, conversion would entail a risk of
economic losses that would not be readily acceptable. In
addition, the financial analysis indicates a payback time,
after taxes, of from three to four years, in the favorable
case, without imposition of coal, whereas the international
norm is about two years;
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(b) for SICC and CJO, gas is unquestionably the most competitiveenergy source in all the cases studied. The economic resultsare supported by the financial analysis, which indicates apayback time of a few months.
Table 5.9: RESULTS OF ANALYSIS OF SUBSTITUTION POSSIBILITIES IN THE CEMENT PLANTS
Favorable Case Unfavorable Case
Coal IRR - 25% IRR - 11%
Blzerte Discounted net cash flow: TM 31,703 Discounted net cash flow: TD -1,625
Gas IRR - 15% IRR - 4%Discounted net cash flow: TD 4,526 Discounted net cash flow: TD -3,776
Coal IRR - 23% IRR - 10%
sICC Discounted net cash flow: TM 32,891 Discounted net cash flow: TO -4,500
Gas IRR - 200% IRR - 187%Discounted net cash flow: TD 11,843 Discounted net cash flow: TD 2,772
Coal IRR - 23% IRR - 10%
cJo Discounted net cash flow: TD 32,420 Discounted net cash flow: TD -4,250
Gas IRR - 86% IRR - 53%
Discounted net cash flow: TO 10,622 Discounted net cash flow: TO 1,414
Source: Study team estimates.
A sensitivity study of the results of the cost of conversion to naturalgas was made for SICC and CJO. The findings show that even if theconversion cost were to increase 30-50% the IRR remains unchanged forSICC and equal to 44X in the worst case for CJO, with a payback time oftwo years.
Substitution Possibilities in Other Industries
5.49 Outside of the cement plants, the scope for substitution inindustry has been estimated at 140,000 toe in 1988 and 290,000 toe in2001. Almost all the firms that responded to the questionnaire use fueloil and nearly two thirds are considering conversion to natural gas, forreasons of convenience (no storage involved, clean, available) much morethan on economic grounds, though the lower operating costs are cited.These firms, which are of modest size, generally did not consider thecoal option.
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5.50 The financial calculations made by STEG for connectingindustrial clients in the regions where gas is available show that thepayback times for the connection investment are less than one year in 75%of the cases studied and always less than 18 months (Table 5.10). Thesecalculations indicate an economically attractive potential forsubstitution of gas for other fuels since price distortion is not verysignificant in the energy sector and the cost of converting industrialequipment from fuel oil to gas is quite low and much less than the costof connection to the system.
Table 5.10: EXAMPLES OF CONVERSION COSTS IN THE REGIONS SERVED BY GAS
Re3jlon Industrial Industries Consumption Cost (TD) Payback Distributionzones toe/year incl. time Network in
taxes (months) meters
Tunis Bir Kasale Confort 1,017 4,817 2Siter 7,198 68,555 16Stibols 580 5,740 1 3,000Sotumetal 1,007 2,461 3SofomecaSotac Biscuits 282 7,745 16B. Sedrine 83 14,719 11Sotebi 265 4,397 1Maves 22 1,918 6 800Mecaflex 36 2,121 11Pasta 167 10,761 18B. Zazia Brickworks
BirM'Chergua CJO 70,000 1,140,000
Nabeul Kharraz Brickworks 210 51,971 2Tunisian Brickworks 6,026 1,908 4,500
Sousse Sidi Bou All Tunisie Lait 427,000 7,000Kalaa Sghira Zarrouk Brickworks 607,230
Sousse AMS 1,041 51,953 3Sud STIAI 230 17,363 5 5,000
Sahel Ksar Hellal SItex 4,009 128,848Teboulba El Most. Bayoudh
Brickworks 11,124 358,161 30,000
Source: STEG/DGZ
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Choice of a Substitution Strategy
5.51 Results of the studies indicate that:
(a) for electricity generation, the combined-cycle units and coal-fired steam turbines are preferable to fuel oil-fired steamturbines in all the technical and economic scenariosenvisioned. In the medium term, prior to 2000, the combined-cycle units are the most competitive units for powergeneration, even if an efficiency and availability consideredas below the levels achieved by units in operation is coupledwith a rapid rise in natural gas prices in real terms. In thelonger term, the relative competitiveness of natural gas andcoal will depend on future movements of coal and gas prices, onthe one hand, and environmental protection requirements on theother. Note *,hat, under the technical and economic conditionsexpected by most experts today, combined-cycle units willremain competitive for electricity generation, even in the longterm;
(b) for the industrial sector, and more particularly for two of thethree cement plants still operating on fuel oil, it would beeconomically and financially advantageous to switch to gas.
5.52 For the medium term, a substitution strategy is recommendedthat would hold the cost of energy supply to a minimum while preservingthe necessary flexibility to enable the system to cope with theuncertainties regarding demand and future energy price movements. Thissubstitution strategy is based on three components:
(a) promotion of natural gas for industrial use and moreparticularly conversion of the cement plants, other thanBizerte, to gas while retaining the possibility of using fueloil;
(b) installation of 300-MW combined-cycle units to meet the growthin electricity demand up to 2000;
(c) carrying out a prefeasibility study for construction of a coal-fired power station on a new site, including:
(i) comparison of installation of conventional coal-firedsteam units with the new integrated gasification/combined-cycle technology; 6/
6/ This Integrated Gasification/Combined Cycle (IGCC) technology uses acoal-gasification module in association with a combined-cycle unit;a 120-MW unit has been in service since 1984 at Coolwater,California. Many experts think that it will reach the stage ofcommercialization toward the mid-1990s.
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(ii) a precise assessment of the environmental impoact ofusing coal, and
(iii) determination of the infrastructure necessary for coalsupply.
5.53 This strategy would not mortgage the future and will enable theenergy system to adapt itself, without extra costs, to the future shapeof energy demand and price movements, because:
(a) the modular design of the combined-cycle units increases thesystem's load-following capability and therefore permits betteradaptation of supply to demand. It produces additionaleconomic benefits that were not taken into account in theoptimization exercise;
(b) the country will be better prepared for the introduction ofcoal after the year 2000, if it proves to be warranted by thedevelopment of the energy market, and technologicalimprovements will be incorporated that permit more efficientand cleaner use of coal without additional economic costs.
5.54 In the medium term, use of combined-cycle units will reduce thecapital requirements for electricity generation development by at least15% compared with fuel oil-fired steam turbines and by nearly 35%compared with coal-fired turbines.
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VI. IMPLENINTATION OF A SUBSTITUTION STRATEGY
6.1 The substitution options were examined in the preceding chapterfrom a purely economic viewpoint, without taking into accountinfrastructural and institutional constraints.
6.2 On the basis of the conclusions arrived at, the implementationof a true substitution strategy requires that more qualitative factors betaken into consideration, including:
(a) the environmertal problems connected with implementation of theproposed strategy;
(b) future availability of coal and logistic constraints;
(c) future availability of natural gas and security of supply;
(d) price and taxation issues; and
(e) institutional problems.
Environmental Problems
6.3 Tunisia is becoming increasingly concerned about environmentalquestions, both at the national level to improve the quality of life forits people and in the international sphere to strengthen cooperation andseek solutions to global environmeqtal problems.
6.4 A study carried out by the World Bank has pointed out somedisturbing problems, especially in the Sfax and Gabes industrial zones.These are due essentially to a laissez-faire attitude in the past and theabsence of a proper institutional framework. The environmentalprotection rules are incomplete, general, and heterogeneous. The powersof the supervisory bodies overlap and their responsibilities are poorlydefined. The World Bank's report recommends transferring all theenvironmental protection powers, among others, to the recentlyestablished National Environmental Protection Agency (Agence Nationale deProtection de l'Environnement -- ANPE).
6.5 The overall opinion of STEG's activities is positive althoughthere are no statistical data available on the quality of the air in theareas surrounding STEG plants or any record of harm caused by S02emissions due to the burning of high-sulfur fuels. During discussionswith the ANPE it was emphasized that atfospheric pollution does notappear to be a major problem in Tunisia, at least at the present time.
6.6 The proposed substitution policy should improve the situation,because it will not only ensure the supply of energy to the finalconsumer at least cost, but will also keep the medium-term impact on the
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environment to a minimum and allow better preparation for the possibleintroduction of coal, since:
(a) substitution of gas for high-sulfur fuel oil in industry willmake it possible to reduce C02 emissions by nearly 35% and tolargely eliminate S02 emissions;
(b) introduction of combined-cycle units in the generation systemwill improve the system's overall efficiency and mimimize theenvironmental impact, as:
(i) in the least favorable case (use of fuel oil in the dual-fired units), S02 emissions will only increase by 20-30%between now and the year 2000, whereas demand will growby 50-75%; it is poss1ble that the S02 emissions couldeven be completely eliminated if the price of gas remainscompetitive with that of fuel oil; and
(ii) between now and the year 2000, C02 emissions will bereduced by around 3-5% as a result of the betterefficiency of the combined-cycle units, and by 16-33% asa result of minimum or maximum use of natural gas;
(c) ANPE recognizes that there are no air quality rules orregulations concerning particulate or S02 emissions at localand national level. It considers that such norms andregulations should be implemented as soon as possible and thatinstallation of coal-fired generation units withoutdesulfurization is unlikely. The proposed strategy willaccordingly make it possible to:
(i) study the problems inherent in the use of coal moreefficiently and set up the necessary regulations andsupervisory structures; and
(ii) move directly, for economic reasons and/or to diversifysupply, to a new technology that links a coal-gasification module with a combined-cycle unit forelectricity generation, at a cost that is in any event nohigher than for coal-fired steam turbines, and with abenefit of distinctly reducing the negative impact on theenvironment.
6.7 It is accordingly recommended that:
(a) national environmental protection and safety regulationscovering all aspects of production, generation, transportation,storage, processing and use of energy be studied and put intoeffect. Obviously, rules and standards designed for othercountries or regions cannot be taken over without first beingadapted to Tunisia's specific conditions;
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(b) the environmental protection concerns be integrated into theplanning and decision-making process in the energy field by:
ti) giving priority, at least in the initial phase, toprojects that reduce the environmental impact to aminimum, without additional cost; and
(ii) including environmental impact evaluation studies inmajor energy projects.
Future Availability of Coal and Logistic Constraints
6.8 The volume of world coal resources and the highly competitivenature of the supply would appear to indicate that physical supply ofcoal should not be any significant problem. However, it must beemphasized that the coal industry is socially very vulnerable: strikescan occur in the mines or in the transport or port handling stages,disrupting supplies and affecting prices. A storage policy shouldtherefore be implemented to ensure an acceptable level of security ofsupply in the event coal were to be used.
6.9 The working group examined the supply requirements for coal.The coal-use simulations for the power stations and cement plants tookthe full spectrum of costs into account: purchase price, transport to aTunisian port, cost of haulage to site, storage and modification ofcombustion equipment. The coal option would require large-scaleinvestments in rail and port infrastructure (Annexes 8 and 9).
6.10 A port is needed that can take large coal carriers, if at allpossible (significant economies of scale). The port must have theappropriate equipment for unlG4ding ard utoring the coal and forwardingit to where it is to be used.
6.11 Construction of a coal port is a prerequisite for bringing coalinto Tunisia. Three sites have been considered: Rades, Bizerte andSkhira.
Rades
6.12 STEG already had the technical possibility of using coal forthe last units installed in Rades. Switching to coal would entail: (a)modification of the Djerissa wharf, equipping a port location for 1000t/h operations (the ONPT estimates that this would cost 10.3 million TD--see Annex 9; and (b) putting in a 2.5-km conveyor and setting up astorage and preparation area. A Canadian consultant group estimated thet6tal cost of receiving, storage and forwarding the coal to be about 35million 1984 Tunisian dinars, equivalent to about 45 million 1988 dinars.
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6.13 According to STEG, a desulfurizer (FGD) cannot be installedbecause there is no room for one, but the height of the stack andinstallation of a dust collector would be sufficient for "co,iventional"compliance with the environmental protection requirements.
6.14 The possibility of using coal in Rad4s is still highlytheoretical, however, since social and political considerations wouldmake it difficult to implement in view of the urbanization of the area(development of the banks of the Lake of Tunis).
Bizerte
6.15 STEG has studied two possible port sites for supplying coal topower stations built near Bizerte:
(a) Menzel Abderrahman. This site is near an unused militarywharf. Tt is large enough to accommodate a 1,200-MW facilityand clinker storage. Ships of 30,000 t can be handled at themiiitary wharf, but dredging works costing TD 3 million wouldbe needed to handle 50,000-t ships. If the military wharf wasnot used, a new one would have to be built at an estimated costof TD 6 million for 30,000-t ships and TD 11 million for50,000-t ships (need for dredging).
(b) Menzel Bourguiba. The present wharf is used for unloadingccke. Dredging works estimated at TD 2 million would make itpossible to take 30,000-t ships, the largest that could beaccommodated. The coal would be moved to the power station bya 3.5-km conveyor. A new wharf could be built specifically forthe power station. The cost of the civil works is estimated atTD 5 million for handling 30,000 t ships and TD 13 million forhandling 50,000 t ships.
The first site seems the most attractive for both economic andenvironmental reasons. If the port were to be bui1-: there, the Bizertecement plant could be supplied from it. The proximity of an air forcebase might, however, make this a questionable location for a powerstation.
Skhira
6.16 Skhira is an oil terminal whose activity is declining rapidlyowing to the exhaustion of the El Borma field to which it is linked.Ships of 80,000 t could possibly be accommodated. The port is notmanaged by the Tunisian National Office of Ports (ONPT).
6.17 This site is therefore the one to which no political and/orsocial constraints apply. It would offer the economic advantage of beingable to take larger ships; however, no appraisal of the cost ofdeveloping it has yet been made. It would be desirable for such a studyto be started as soon as possible since the cost of developing a port is
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a very important factor for the economic justification of using coal. Uptill now this point has only been partially incorporated into thesimulation exercises.
6.18 It is recommended that all these problems be included in aprefeasibility study for a coal-powered electricity generation station ata site near Skhira and/or Bizerte.This study would assess:
(a) the options that are technologically feasible;
(b) the necessary investment and infrastructure; and
(c) the environmental impact, with a view to preparing the countryfor the introduction of coal as of the year 2000, if this wouldbe justified economically and/or for diversification of energysupply sources.
Future Availability of Natural Gas and Security of Supply
6.19 The future availability of natural gas and reliability ofsupply constitute a major question for Tunisia, particularly if thecountry proceeds with a deliberate policy of developing the market forgas and introducing combined-cycle units.
6.20 This problem includes the following elements:
(a) the future scale of domestic natural gas production;
(b) the long-term availability of Algerian natural gas andreliability of supply, taking Tunisia's position into account;and
(c) the determination of the purchase price and conditionsgoverning supply.
Domestic natural gas production
6.21 Domestic natural gas production is declining with the fallingproduction of the El Borma field (associated gas), which raises thequestion of future supply for the Cabes region, a matter currently understudy by STEG.
6.22 Exploration work done over the past ten years has not led toany noteworthy discoveries apart from the Miskar field in the Gulf ofGabes, which is presently being re-evaluated after having been abandonedby the foreign partner, and Franig, whose development is being studied.Existence of a Large potential market could warrant development of Franigin the medium term and Miskar in the longer term, if technical solutions
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are found to reduce the capital cost and ensure the economic return onthe project. Note that gas consumption by the year 2000, of about 2 to2.5 billion m3 in the proposed strategy, is equivalent to the anticipatedannual production from Miskar plus the trans-Mediterranean gas pipelineroyalties at their present level (12 billion m3).
Imports and Security of Supply
6.23 Gas imports should not raise any particular problems becauseAlgeria has considerable gas resources and good prospects for furtherdiscoveries. Moreover, in view of the reduction in its oil exports,Algeria has powerful incentives to increase its exports and sign newsales contracts. Its price policy presently explicitly includes thenetback principle. In addition, with respect to Algeria, Tunisia is inan exceptional position upstream of a major market. The volumes of gastransiting Tunisia, and the royalties receivable, can be expected toincrease with:
(a) the increase negotiated in the SNAM-SONATRACH contract;
(b) possible Algerian gas exports to Yugoslavia and/or Greece; and
(c) the planned construction of a gas pipeline between Algeria andLibya.
6.24 The proposed strategy would not adversely impact theflexibility of the existing system, particularly since the largeindustrial consumers would maintain their dual-fuel equipment. Optingfor combined-cycle facilities would therefore only very graduallyintroduce a certain rigidity that would ultimately lead to importation of1.5-2 billion m3 of gas by the year 2000 in the event that Franig andMiskar are not developed, and gas exports from Algeria to Italy via thetrans-Mediterranean pipeline remain at the current level (12 billionm3). However, this rigidity is relative since the combined-cycle unitscan use light oil products and may be able to use heavy products too, bythe year 2000, if improvements currently under study materialize. Theeconomic losses resulting from substitution of the more costly light oilproducts for a four-year period (1996-1999) do not adversely affect theeconomic return on the proposed strategy.
6.25 For new purchases, Tunisia has a choice between two courses ofaction:
(a) continuing the present policy of short (three-year) contracts,which would mean that in the event of domestic production, thiscould swiftly be brought into the system, and
(b) negotiating specific contracts for the combined-cycle units.Some European countries (Belgium, the Netherlands) that haveopted for combined-cycle facilities have recently concludedlong-term contracts with Norway in which the price of the gas
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is indexed to that of coal, thus ensuring the competitivenessof gas-fired generation.
6.26 Although there appear to be no problems of maintaining securityof natural gas supply, it is recommended that:
(a) for supply to Gabes, supply from the North be favored becauseit promotes gas development and increases gas consumption andtherefore improves the return on investment. In the mediumterm, a supply loop can be envisaged, for better security ofsupply, if neither Miskar nor Franig is developed;
(b) oil product storage be maintained at least at the levelrequired by existing regulations and the possibilities for gasstorage be studied;
(c) the large industrial consumers be encouraged to retain thecapacity to use fuel oil by offering them interruptiblecontracts; and finally
(d) the energy system retain the capability for using oil productsin the event that gas supplies are interrupted.
Prices - Taxation
6.27 In the past Tunisia has tended to apply a price policy highlyindependent of international prices. In particular, the government hassought to maximize tax receipts, for purely budgetary reasons, whilesubsidizing products considered worthy of preference on social grounds(butane, kerosene). Though this kind of policy can be justified in somecases, overall it has the effect of sheltering certain activities fromcompetition and removing the incentive or motivation to work towardgreater productivity. The price system that STIR has to observe forpurchasing crude oil and for the offtake of refined products is a goodexample of the distortions that can develop. The recent trend, however,is to promote greater transparency, pricing that is based on real costs,and to align domestic prices with international prices. At a time whenTunisia is moving inevitably toward b.:oming a net energy importer, suchmeasures appear eminently desirable. They will have the effect ofencouraging competition at all levels and selection of the leastexpensive and most suitable fuels.
6.28 In this context, it is not advisable to distort interfuelcompetition by fiscal measures, especially as regards imported fuels suchas fuel oil natural gas and coal. When members of the working groupvisited MoL Ucco and Portugal, they found that coal had been introducedwhen the cost of heavy fuel oil was much higher than that of coal (coalwas introduced in Morocco's generation system at a time when the pricesof heavy fuel oil and of coal were US$ 190 and US$ 95 per toe, respec-
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tively). Presently, although the price differential between these twofuels has shrunk, coal is still being used because heavy fuel oil isseverely taxed while coal is exempted. While this is attractive forconsumers, it is less so economically at the national level; it hasbrought about an artificial imbalance in the refining industry, forinstance.
6.29 This confirms, if confirmation is required, that substitutionchoices should not be artificially determined and/or based on cyclicalphenomena. They have to be based on an economic appraisal of all thepossible alternatives, taking the long-term development of the energymarket into account.
Pricing of Gas: Incentive for Conversion
6.30 Gas pricing should be based on economic costs and should givethe right signal to consumers regarding fuel utilization and interfuelsubstitution. The prices must cover all the costs involved in deliveringthe gas to the point of use, since this is where the competitiveness ofgas compared with heavy fuel oil is evident. Pricing must take intoaccount:
(a) the border cost of Algerian gas;
(b) the possible cost of storage or of any other form of security;and
(c) the cost of transport/distribution to the final consumer.
6.31 It must also take into account the contractual conditionsgoverning supply. That is why interruptible contracts that obligeindustries to maintain dual-fuel equipment and thus increase theflexibility of the national energy system and make it less vulnerable toprice variations are desirable.
6.32 The price of delivered natural gas must be attractive to theuser, taking into consideration the cost of conversion, efficiency gainsand the intrinsic qualities of natural gas. However, the results of theAME survey confirm STEG's experience that there is some unreadiness onthe part of industrialists to finance conversion notwithstanding thefrequently very short payback time.
6.33 From this point of view, it is desirable to avoid distortion ofprices for the various forms of energy through measures such asassumption of conversion costs, preferential prices or even taxing of thefuels to be displaced. Such measures would be contrary to true costpricing and the principles of transparency and alignment of prices witheconomic costs. It is desirable to make potential consumers aware of theadvantages of natiral gas and of the real economic value to them of quick
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conversion. If additional incentives for substitution are needed, low-cost financing or tax benefits, such as low-interest loans, tax creditson conversion investments, or accelerated depreciation should beconsidered.
6.34 The fiscal and pricing policies should be complemented byinformation and sensibilization of industrial users in the areas suppliedwith gas, and it is recommended that STEG and the "Agence pour laPromotion Industrielle" define and implement a strategy to directpotential gas user enterprises toward these areas.
Institutional Problems
6.35 Should STEC consider the coal option and should a coal terminalbe built, coal might be attractive for several large plants. It wouldthen be desirable to have a single agency responsible for negotiating andplanning all the supplies Tunisia requires and perhaps also managing theterminal (Skhira is not managed by ONPT, the national ports authority).
6.36 Two public authorities already handle the natural gas function.STEG's Gas Department is responsible for gas distribution in the countryand for construction of extensions to the system, based on the existingtrunk lines. ETAP is responsible for coordination of exploration andproduction and for the purchasing of imported natural gas. Does theexisting structure need to be changed?
6.37 Experience with development of natural gas in various countriesshows a great diversity of insticutional structures ranging from a publicmonopoly, vertically integrated from production through distribution, tocompeting structures that are not integrated vertically (as in the UnitedStates). From the institutional standpoint, production, imports,transport and distribution all have to be distinguished one from theother.
6.38 Natural gas production is in most cases handled by the oilcompanies. Their incentive to look for and develop gas depends largelyon the economic, fiscal and legal regime applied to natural gas.
6.39 Natural gas imports are frequently assigned to an enterprise inthe form of a monopoly (Austria, Belgium, France, Italy), which makes itpossible to:
'a) increase the country's negotiating power;
(b) ensure that development of gas, which is economicall.- justifiedover the long term, is not blocked or frustrated by cyclicalmovements; and
(c) ensure overall long-term security of supply.
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6.40 Gas transport and distribution are entrusted to gas companies,often monopolies, with responsibility for gas development and inparticular:
(a) market studies: initial market studies for electricity,industry and household energy; market studies for new areas tobe served;
(b) demand forecasts;
(c) system design: transport system, distribution systems,storage, provisions for security and reliability;
(d) system management;
(e) gas supply: purchase, contract negotiation, security of supply,etc., and
(f) pricing and commercial policy.
6.41 Combination of these functions under a single authority makesit possible to ensure the overall technical, economic and commercialcoherence oE the gas policy. Other countries' experience tends todemonstrate that gas cannot be developed to take the place of oilproducts until there is a clearly expressed political will to develop gasand this will is embodied in a company that assumes full responsibilityfor the project.
6.42 The question whether gas enterprises should be public orprivate has been handled in various ways. Natural gas distribution is anatural monopoly which must, therefore, be supervised. A simple form ofsupervision is public ownership of the enterprises. A more complexmethod consists of leaving the activity to the private sector but settingup a regulation mechanism that may be extremely complex (as in the UnitedStates and the United Kingdom).
6.43 If a new system is developed, public control of the sectorwould seem to be the simplest solution. The main imperative remains theeconomic justification of conversion to gas and, therefore, a price forgas delivered to the consumer that is competitive compared withalternative forms of energy.
Recommendations for Implementation of the Strategy
6.44 To encourage the substitution of natural gas for petroleumproducts in the medium term, dnd of natural gas and/or coal for petroleumproducts in the longer term, it will be necessary to:
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(a) implement the policies recommendee by the Tunisian Government,which promote:
(i) greater transparency and clear rules and procedures toeliminate extra costs; and
(ii) elimination of remaining price distortions, by aligningthe prices of the various forms of energy with economiccosts;
(b) launch an information campaign targeting industrial clients inthe areas supplied by the natural gas system, emphasizing theeconomic and financial benefits and the reduced air pollutionthat can be gained from switching from fuel oil to gas:
(c) avoid distortion of prices for the various forms of energythrough tax measures. If the Government finds incentivemeasures in support of an adequate price policy appropriate, itwould be more advisable to grant tax rebates to encouragemanufacturers to invest in conversion than to applypreferential tariffs that are not economicall; justified;
(d) take the necessary steps to ensure greater market penetrationfor natural gas, including:
(i) promotion of the best possible use of the existinginfrastructure by the offer of interruptible supplycontracts to large industrial consumers to encouragethem to retain the possibility of using heavy fuel oilafter conversion;
(ii) study of the necessary infrastructure, including storagefacilities, to ensure security of supply at a levelacceptable to consumers;
(iii) negotiation of supply contracts which would ensure thecompetitiveness of natural gas with other forms ofenergy, specifically coal;
(iv) study of the institutional problems posed by rapiddevelopment of gas, even though Tunisian authorities donot plan to restructure the energy sector in the nearfuture. In the short term, STEG should strengthen andrevivify its gas department through increased funding,accounting transparency, increased management autonomy,a commercial policy for natural gas that is independentof, and even competitive with the commercial policy forelectricity, etc.; and
- 64 -
(v) consideration of the combined-cycle option in thereassessment of the Miskar field and/or Franig andencouragement of production in order to increase thenatural gas potential; and
(e) carry out a prefeasibility study of a coal-fired powergeneration station at a new site, in the event that thedevelopment of the energy market justifies the introduction ofcoal after the year 2000; and
(f) study and issue national environmental protection regulations,particularly standards for atmospheric emissions:particulates, C02, S02 and NOx. Adoption of such standardsshould be considered a prerequieite for inclusion of coal-firedplants in the electricity generation system.
- 65 - Annex 1
ORGANIZATION OF TUNESIA'S ENERGY SECTOR Page 1 of 2
ORGANIZATION CHARTTHE HYDROCARBONS SECTOR
STATE OF TUNISIA
STATE SECRETARIAT FOR ENERGY AND MINING
651 5001 100 1 10
TRAPSA SNDP
591 501
FHH25 A0 0 998.%1
SAROST SEREPT CTF SODEPS SOTUGAT
COQQSERCIAL AND FINANCIAL FLOWS
(Crude oil trade) STIRWORLD CRUDE OIL
MARKET
-to ~ ~ -
WORLD PkTROL 9 PPlXODUCTS MA&RKET DISTRIBUTION CONSMERS
0~~~~~~~~~~~~~~~~~~~~~~~~~~~~0
PRODUCERS OF PRs,IC iTUNISIAN CRUDE I_V
ALGFRIAN GAS I
Taxes and Duties
Source: ETAP
- 67 - Annex 2Page 1 of 2
PRODUCTION OP PRIMARY IMERCY AND CRUDE OIL, 1970-1987
PRIMARY ENERGY - PATTERN OF OUTPUT AND DEMAND, 1970-87
(Ktoe)
Year Primary Energy Total Primary
Output Energy Demand
1970 4,286 979
1971 4,238 1,118
1972 4,100 1,2301973 4,128 1,3661974 4,425 1,479
1975 4,823 1,656
1976 3,980 1,800
1977 4,638 2,012
1978 5,365 2,208
1979 6,016 2,579
1980 6,203 3,084
1981 5,980 3,1791982 5,829 3,144
1983 6,183 3,5621984 6,150 3,6961985 6,048 3,8531986 5,860 3,8641987 5,610 3,935
Source: 1970-1985: AlE data base1986-1987: STEG - Electricity, Gas
OGE - Oil products
GROSS OIL PROOUCTION BY FIELD, 1966-1987
(In metric tons)
Makhrouga
Douleb Sidi Sidi Chouech Larrich
Year El Borma Saummana Tamesmida Lateym Bahara Ashtart Asseida Tazerka Debbech HaJeb Total
1966 624,535 624,535
1967 2,210,036 2,210,036
1968 3,032,513 155,466 3,187,979
1969 3,532,977 166,231 3,699,208
1970 3,928,246 193,070 24,930 4,146,246
1971 3,872,780 195,256 28,623 4,096,659
1972 3,559,140 168,146 26,920 209,307 3,963,513
1973 3,464,597 201,079 20,454 186,815 3,872,945
1974 2,471,376 228,841 16,814 167,917 31,819 1,209,415 4,125,682 1
1975 1,923,545 168,863 12,880 188,551 27,832 2,288,976 4,610,647 ch
1976 1,521,249 129,433 10,321 229,064 10,582 1,815,044 3,715,703 00
1977 1,717,125 104,658 8,893 229,464 4,695 2,219,239 39,348 4,323,422
1978 2,299,421 87,992 7,927 250,333 2,679 2,286,776 46,967 4,982,095
1979 2,835,143 80,524 8,316 199,738 678 2,406,396 38,670 5,569,465
1980 3,240,476 81,534 8,632 181,367 2,092,000 36,870 5,640,879
1981 3,301,074 69,015 11,704 146,273 1,847,853 34,758 5,410,677
1982 3,382,130 77,161 134,157 1,510,723 31,778 45,248 5,181,197
1983 3,441,386 70,951 121,903 1,308,372 9,234 514,994 63,230 5,530,070
1984 3,446,531 61,916 123,561 1,283,596 20,067 439,523 107,270 3,032 5,485.496
1985 3,484,233 60,216 133,695 1,211,492 18,467 345,635 122,068 36,764 5,412,570 1 t
1986 3,408,000 55,000 140,000 1,160,000 19,000 258,000 129,000 70,000 5,239,000 c
1987 3,331,000 48,000 135,000 1,011,000 17,000 239,000 164,000 41,000 4,986,000
Source&- ETAP.
Annex 3- 69 - Page 1 of 6
THE WORLD COAL MARKET
Development of Steam Coal Exports
In most of the industrial world, there was a widespreadmovement away from coal in .he 1960s in favor of replacement of coal withfuel oil and natural gas.
Until the first oil shock, steam coal exports were limited tosmall regional supplies. After the first and second oil shocks, coalsuddenly became economically attractive once again, particularly forelectricity generation and the manufacture of cement. Almost everywhere,units that had switched from coal to fuel oil in the 1960s are switchingback to coal. The uncertainties regarding nuclear programs are helpingto intensify this trend.
This new demand, along with the stagnation or decline ofEuropean coal production, which is becoming less and less competitive, isspurring the development of world trade in steam coal: 27 million tonsin 1974, 52 million tons in 1979, 107 million tons in 1983 and 136million tons in 1987.
In this growing market, the number of suppliers has multiplied,with the aggressive arrival of new exporters such as Australia (whichbecame the leading world exporter in 1986), China and Colombia.Australia, South Africa and the United States accounted for 73X of worldsteam coal exports in 1987.
Structure of Supply
Figure 4 shows the export capacities of the main coal producersin 1995, estimated on the basis of current market prices and existingport infrastructure.
On the left side of the graph are certain price-insensitivecountries, which export regardless of price levels, to earn foreignexchange (Poland, USSR).
In the next category are the low-cost exporters (China,Indonesia, Venezuela, Colombia) which are aiming to carve out a place inthe market or to maintain their position (South Africa).
Next there is Australia, in an intermediate position, followedby the United States, which plays the role of marginal producer of lastresort, able to amply supply world demand, and able to do this all themore easily since the bulk of its output is for the domestic market, andproducers can therefore sell at a price that does not cover all theircosts (exporting at marginal cost).
- 70 -
Annex 3Fiure 4 Page 2 of 6
DOLLARS PER TON (FOB) ($1985)
o ,, . . -
PRICE INSENSITIVE
CHINAo,
INDONESIAVENEZUELA
. ~~~~~COLOMBIAe
SCOLTtH AFRICA
t | ~~~~~~~~~AUSTRALIA
o
U. S.A.
oo
N 1 4CV 0U
_0 .
Annex 3
- 71 - Page 3 of 6
Figure 4 indicates a lasting overcapacity of coal and intensecompetition among the vbrious producers. It suggests the idea of a floorand ceiling price for exported steam coal: at US$ 25/t Australia and theUnited States do not export and the demand is not met; at US$ 60/t theU.8. mines are capable of satisfying a high level of demand for someconsiderable time.
Price structure
Coal was extremely competitive with heavy fuel oil between 1974and 1982 (Figure 5). Coal price movements are governed quite strongly bythe contract terms in effect. Long-term contracts are generallyconcluded on a cost-plus basis and price adjustments are made inaccordance with changes in cost.
Significant productivity increases have been achieved in themines, in land transport, in port infrastructure and in marine transport;this explains why cost increases were contained during the 1970s and1980s.
In real terms, the 1987 prices are 35% lower than the 1982prices, while the volumes exported rose 671 over the same period.
Economies of scale are particularly important for transport bysea: use of a Cape-size (100,000 t) rather than a 30,000-t carrierreduces the cost of a shipment from the U.S. to Western Europe by 40X,from US$ 10 to US$ 6/t.
Figure 5 shows some price volatility for coal, though lesspronounced than for fuel oil. Coal spot prices tend to fluctuate aroundthe prices set in new long-term contracts. Prices may soar for a whilein times of high demand (oil embargo or miners' strike in a producercountry), but they will normally fall back into line with the trendexpressed in the long-term contracts.
- 72 - Annex 3Page 6 of 6
Figure 5
Spot Pricas i Inlaeroatioaal Trade fof C"l and Heavy Fuel OilNominal Dollan per meAic ton a( coal eoJ quvlvio-ut AIc
CIF Noalh-Wes#tn Eumps
Heavy Fuel Oil Price (1)
L7d ~ 00Pr ice (2)
7 971 72 5741 '7b 78 s0 02 64 ' 'lb
(11 Maximum 3.5% Sulphur121 Maximum 1% Sulphur
Ssae Various irad
Annex 3- 73 - Page 5 of 6
The overall price structure, from the mining of the coalthrough delivery to the user, points up the importance of logisticalarrangemients. For imports of Australian coal into France in 1989, thestructure was as followss
US$/t
Minegate price Australia 25Transport mine-port 10Port charges 3
FOB price 38Freight 13
CIF price European port 51Port handling charges and processing 9Rail transport to Parisian region 13
Price delivered to user 73
The example above shows that transport and handling make up 65Xof the price of coal delivered to a large-scale user (served by its ownrail siding) and much more (80Z) for a small customer.
Conditions of Supply
For a country like Tunisia which, should it opt for coal, wouldhave to buy some 1 million t/a on the world market around the end of thecentury, supply poses .hree major questions: the quality of the coal,the freight terms and the method of supply.
Quality of the coal. The average export or import pricesconceal fairly large variations depending on the quality of the coalshipped. For steam coal f.o.b. U.S. East Coast, there can be a differenceof as much as US4 20/t between coal with a 1Z sulfur content (US$ 44-49)and one with a 1.5X sulfur content (US$ 30-42). This qualitydifferential is likely to be maintained in the future, subjectessentially to two factors: future environmental constraints imposed bybuyers and the real cost of new coal-use technologies.
- 74 - Annex 3Page 6 of 6
Freight conditions. The sea freight cost of steam coal is verysensitive to economie@ tf scale. In 1989, for shipnent from the U.S.East Coast to Western Europe, freight cost by carrier size was:
Size Cost (USS/t)
30-35,000 t loPanamax (70,000 t) 7,25Cape size (100,000 t1 6
Thesc cost differences tend to show that if Tunisia were to optfor coal, it would be in its interest tc construct port facilitiescapable of taking 70,OOO-t carriers (this would be possible in Skhira);this would obviate the need to go through a European terminal where thesavings obtained by using large carriers would be canceled out bytranshipment costs (mi.imum US$ 5/t).
Choice of method of supply. Coal can be bought either from aproducer '(long-term contract or spot) or from a trader (spot orcontract). The relative proportion of long-term contracts (with pricesrenegotiated yearly) to spot purchases is not known, but most largepurchasers (power companies and cement plants) seek to use both of theseprocurement methods and to use more than one supplier so as not to bedependent on a single supplier. One of the main advantages of purchasingthrough a trader is that a trader can mix various qualities of coal andthus come up with a quality-price ratio that is very close to thepurchaser's needs.
SE SunEY t ItDI MSConsmoption by Foar of Energy
Cessiml Ion by areach of Industry
Electrlclty NMotors! GM tNavy Fuel Oil tb
Blech 1965 1966 tff7 195 196 196? 19tt5 S9it6 19tt7 1965 196 P967
Cbmic6ls 48624.36 10431.18 21475.51 25172.94 24040.91 15751.96 49774.32 61963.43 63910.1 117.0t 91.4 129.4
Eaergy 63.45 101.29 25.81 0 0 a 35S69.t7 29565.5 30934.44 46.22 5135 52.36
No 0 0 0 0 0 0 0 0 0 0 0 0
Mf t 5771.41 65X6.04 6590.1 0 0 0 10149.29 969.51 10553.62 739.44 753.62 665.5
emS 84730.15 06967.9 87219.13 72281.26 6940t.26 35160.03 161021.03 173i02.04 173732.35 7094.52 8116.36 9205
ttEt 342.71 3396.3 3137.05 0 0 0 23156.25 24961.56 25M6.17 631.61 634.69 754.31
t.t 1 10934.73 9632.43 10724.64 0 0 0 9324,9 10160.06 110t9.13 0 0 a
sIofa 2133.7 2030.6 1776.39 0 0 0 754.81 665.02 677.18 1017.76 1072.19 1436.77
TOTAL 155730.5 1189t7.92 130948.64 96454.22 93458.19 71931.99 269902.47 313307.42 316265 9f46.63 10719.63 12390.76 1Share by farm of
eowigy In S 25.46f 19.105 22.35t 16.105 15.163 12.6 47.391 52.15t 53.96 .3f7 1.763 2.113 t t
oestl c Fuel Oi l tlafied Petroem, Gas AW_ieos Total Peecent Shar by ft3rmb
19t5 1968 IWt7 1595 196 1987 19tt5 19Om 1967 Isto 1966 1917 19t5 19e6 1967
hemicals 105.63 74.85 277.04 0 0 0 0 0 0 124794.5 96650.77 101544.01 20.409 16.065 17.335 Z
Enorgy 0 0 0 0 a 0 0 0 0 35779.53 2S718.44 31012.63 5.tt# 4.953 5.29
NI 0 0 0 0 0 0 0 0 0 0 0 0 .005 .000 .015 cn
A I 360.29 474.07 318.34 0 0 0 0 0 0 17040.43 17867.44 16122.55 2.79 2.943 3.095
olD6 5199.62 6066.3J 2761.62 0 540.63 361.65 15159.65 16535.42 11717.27 376.4 362947.39 31439.26 56.4 600.413 SO.273
tEl 4227.06 4771.68 5098t.62 32S65.06 35744.81 3320.5.6 0 0 0 64054.6 6709.04 67410.61 10.475 11.605 11.SIr
7T1. 147.13 137.60 0 too." 220.09 206.45 0 0 0 26637.03 20150.25 22267.63 3.37S 3.35S 3.603S #
Nttl, 0 0 0 0 0 a 0 0 0 3906.27 399 4090.3S 0.64' 0.6n3 0.70M
TOAl70 I000. 13 11534.81 8475.62 32745.34 36545.75 34100.95 151S5.65 16535.42 11717.26 61163.9 537819.33 385356.24 100.005 100.005 100.00S
Shar, bt Eam of
awrgy in t 1.6tt 1.92t 1.45S 3.335 6.605 5.833 2.465 2.721 2.00S
Source: AE Survy.
"ha
-76- Annex 4Page 2 of 2
SHARE OF TOTAL ENERGY COST IN TUF0VER OF
LISTED INDUSTRIAL EN7TERISES (0987)
0I ) (2)
Name of Total energy Turnover 1/(2)
Enterprise Branch cost n TO in T ,n S
'04 CheV. 3,769,714 82,660,442 4.561
STOA Chem. 0 n.o.Al io2 Chimie Chem. '72,711 2,086,512 8.28tSIAK A CheV. 2,626.60 3 n.1.
GRANUPFOS. S.A. Chem. 295,117 3.448,258 8.561
STOA (SFAX) Chem. 0 650,324
Industries Chi.mque de Gefsa ChV.. 2.932,698 75,072,580 3.91%SO'IAP Chem. 256,925 9,659,471 2.665
S,EPE 9 Chem. 0 n.s.iCF Chem. 586.567 36,601,640 1.60tSTIR Energy 2,025,785 543,906,234 0.37%STEBOIS (former STIS) (0 0 n.a.
Los CouscoussteOf0 du Sud IAA 322,590 4.066,564 7.935
RNTA IAA 105,726 n.a.,FTB (Tunis) IAA 50,134 11,895,381 4.7'S
STIL IPO"t) IAA 371,122 19.861,716 1.87%Tunsesi Lait )AA 'u,270 12,451,000 4.99%SIOS ZITEX IAA 203,014 2,303,974 8.81s
SF8T (SFAX) !AA 0 n.,s.Eta. Slama FrAres IAA 214,173 1,438,903 14.88S
Soc,1t6 LOs CrAaeiquos du Sud (MCCV 1.634,554 5,806,902 28.155
St6. Les Nouvelles, Faiencvrlo du Sud iMCCV 75,223 428,345 17.56%k6frectalres de Bizerte YCCV 95.729 1,604,457 5.97%Tunisi. Porcelaine (iMCCV 351,533 3,500,000 10.045
SO.TU.VER lMCCV 495.241 7,211,855 6.87%
El Anebib (mCCV 284,748 12,499,856 2.28t
Sriqueterla Fouchean l(MCCV 768,007 n.a.
CAT iMCCV 7,457,323 n.n.SICOAC IMCCV 172.000 7,100,000 2.42%
Verrarie de t(mssen S.A. (MCCV 462,236 1,659,310 27.865
S.A. du Ooaine de Potinville lMCCV 64,014 1,881,597 3.40%
pPROSAiNiCCV 411,891 1,293,079 31.85tM1 IMCCV 816,079 2,500,673 32.63%
51cC iMCCV 6,673,611 25,627,628 33.84%
Srlquet.rloe l;htor Zarrouk I MCV 2,501,t05 5,991,683 41.75t
Sriquotarie Rldha iolayaeh IMV 411,984 1,004,886 41.001U.G. Sriqutotais Jewel MCCV 294,9415 n.a.Sriqueteri Xassorlno ICCV 413,458 1,056,768 39.12t
Les Plutr.s Tunisiens I<CV 12t,660 n.a.Compagnie G6n lraI# de Boti0fnt C.G.S. I<V 804i,248 2,789,000 28.84%SAX CWamnique ImCV 453,600 1,500,000 30.24%
Briqueterie El Haa (mCCV 661,688 1,643,336 40.26tLat Ciunts d 'Ou El Khalil CIOCK) (MCCV 5,071,990 25,374,681 19.99%Onufactlure Tunis4anne de CAre Ique MICCV 744,836 4,935,977 15.09%
SCNOC8 (Brlquotorlo MZL J4l0) I(MCCV 294,000 993,668 29.59%Falencaer, Tunsialnn* de Tabarka (TMCCV 782,210 2,782,689 28,11S
oiti I timCCV 543,000 3,047,000 '7.82%
SOTACIS iMCcv 0 n.e.SOFAT INCCV 533,440 2,921,190 t8.24ESTULETAL lie (42,700 n.e.SOFOMCCA Ile 345,592 5,656,000 6.11%
Le Confort, S.A. 'ME 317,421 8,943,847 3.551
A eliers Mecaniques du Sehel iME 604,800 8,674,000 69.73%
El Fouie4d iME 3.595,805 83,853,000 4.29%
SiTER (SOGiTEX) iTIC 795,368 7,357,161 10.81%SITEX ITiC 866,542 48,877,000 1.77%S(TEx 'TIC 748,943 n.e.
SoOOTEX ITIC 550,098 n.c.M.ne die LOekOuet ISOTENI) lilMnes 394,'68 920,456 42.82%Soc.ete de jane. .0riss Mines 4(2,623 4.932,316 8.37%
K.Ve D0 . M,scelaneteos Industries
(AA * Agricultural and Food Industr,es
IMCCV * Construct.on Materials, Ceramics and Glassmorits
IME * echan cl c nd Electricsl IndustOies
ITHC * Text,ile, Clothing and 14Other industri*s
- 77- Annex 5Page 1 of 3
OPTIIZATION OPF QUIPWNT FOR ELECTRICITy GUHhTIOUBOSR CASE DATA AND RESULTS
=gmuv mwrx r Sm Rms T VW 1991ET RAUT EUELM C T FM
ID. . pPAl xa NISI SP1N M1R DAYS tw5U Om 091ar LioAD CIIY MME A17( nLiM ML A1Un RE s(L aAS (FIX) (VIM)
DMsU mm N WD nam sns = TP % -a .flh mS/ AN
3RADS 2125.1I0.2635.2400. .0 911.6 2 201S.0 36 150.1.75 .004IU3 2120.140.. 5.2400. .0 9U.6 2 2015.0 36 150.1.75 .005 6 18. 24. 3490. 3090. .0 911.6 2 2015.0 36 50. 1.75 .006 Q4 4 24. 30. 4500. 2000. .0 921.9 3 2010.0 25S50. 1.25 .007 G25 220. 25. 5000. 2500. .0 921.9 3 20:0.0 25 50. 1.25 .008 G0 6 15. 20. 5 0. 3000. .0 921.9 3 2010.0 25S50. 1.25 .009 0034 1 24. 30. 4500. 2000. .01925.0 4 2010.0 25 50. 1.25 .00
10 S0 515.2.5000. 3000. .01925.0 4 2010.0 25 50. 1.25 .00
Mm mZWmsm 0 USflh oYv1IXC UNTm IWE F1P" C2PAI Di N * ^ 4 IN GII aH
) DOM GiCNM : 4.000 $/KIf-W
133 uE PM2IL9 0. 50. 64.
mr.ULP. 64.;M EN 64.
mO AMTTfl AND ETMHiMrN = SES MU AMID AND REN-)
1991 2020VW:19.. (200./20..)
D.M3 9939495969798998 0 1 2 3 4 5 6 7 8 9101U12131415
3 .,.. ....... .- 24 $ . .- ... .-...
5S -i2 . .- 2.-2............6 Q34 .. -1-3.7 Q2 . . .-2... ...............8 QM -2 . 2 . .- 2 ..9 00.34... .. -1......10 0 ...- 2-3 .................
mmcr semMc=DjOOZWB CAPAa (100)
3V~EM LC ¶^)h
mmt FUEL TYPE0 * 2 3 4
M3R IL CAP PR. CAP IVJ M,Vi MCL TM00
1991 I 64. 0 0. 0. 0. 724. °. 130. Ie.1993 0. 0. 724. 250. 130. 1168.199S 0. 0. 676. 210. 130. 1080.M997 0. 0. 676. 160. 90. 99o.
1998 0. 0. 628. 120. 30. 842.20M2 0. O. 580. 120. 30. 794.2003 0. 0. S80. 90. 30. 764.2004 0. 0. 580. 0. 0. 644.2010 0. 0. 300. 0. 0. 364.20S 0. 0. 0. 0. 0. 64.
Annex 5- 78 - Page 2of 3
US IS A L;S O F DUUr TMs U rwj Ba 51 DI E 7M Y.
0 NU lU1 ¶mUHt~K2 TM VWI n& LOD3 ML Q/M2 G&Z tM¶4 T10 MMJe caz Q^S oM
NM mVD-aunm
9CfUM SYSgm mm ( nm i RA
lowS amR n c FSTND. 0. CAPA EAiJ (1B SPIDN PS mIS No ON 0 W WI Crm! IS AM3 )= MLI 33 L RE3 * 9L MU (IM f)
ID. MM MS 3 W 1RD MS OM I= 1PE % % MMW 3 $ MfIM
1 NM0 0 480. 600. 2643. 2360. .0 3m.3 0 5 2D.0 56 600. 2.18 .002 CM 0 480. 600. 2370. 2240. .0 723.1 1 2D 17.0 56 600. 1.71 .003 MD60 0 48D. 600. 2319. 2200. .0 911.6 2 20 16.0 56 600. 1.56 .004 c6 0 480. 600. 1s68. 1684. .0 921.9 3 2D 16.0 56 600. 1.56 .00S ODo 0 240. 300. 2415. 2290. .0 723.1 1 20 13.0 48 300. 1.87 .006 nMO 0 260. 3C0. 2367. 2250. .0 911.6 2 2D 12.0 48 300. 1.71 .007 a30 0 240. 300. 2012. 176. .0 921.9 3 20 5.0 21 300. 1.71 .008 CM 0 120. 150. 2704. 2663. .0 723.1 1 20 9.0 36 150. 2.03 .009 15 0 12. 150. 2650. 2600. .0 911.6 2 20 8.0 36 lSO. 1.87 .00
104 5 120. 150. 90. 1C. .0 921.9 3 2D 8.0 21 190. 1.87 .00U IM 0 80. I0 . 3qO. 2200. .0 921.9 3 2D 8.0 1 100. .9 .00
Annex 5- 79 Page 3 of 3
DYNPRO
m ' Qor 71L mmT8 AL¶ V ZN SAMcwm atf Dom=E CM. Plma CN= mm
PUl (ERDMh PART) IDC TM LZmF Ummrs. PAM')
7&WL mm 0PnL mm
NliO 475.0 1424.0 22.72 7.50 30. 24.5 32.50160 231.0 429.0 15.67 5.00 30. .0 .0POED 172.0 321.0 14.19 4.50 30. .0 .0
60 127.0 298.0 12.79 4.00 30. .0 .0C130 291.0 541.0 14.19 4.50 30. .0 .0FM30 217.0 404.0 12.70 4.00 30. .0 .0c30 160.0 375.0 1149 3.50 30. .0 .00115 367.0 681.0 12.70 4.00 30. .0 .0I115 274.0 509.0 11.15 3.50 30. .0 .0C15 202.0 473.0 9.66 3.00 30. .0 .0
1010 132.0 398.0 8.10 2.50 30. .0 .0
WOOC PXREM AND AUAAMU CCS VIM BE DIS U 1I) YDR : 1988BAR YEAR ICA ESIAT CAt=AITIN 13i: 1988
i991 DTAL VWS: =0K) = DW ltUSl ( 0) = ND I RO iD
NOe ff' AM1TJ3:;Eso 0160 im0 (60 C030 1130 cm0 C.5 1s CC15 1010
W JI RM AM TO AtL DC?C PrM MM - WIYR 8.0mD M RUE APMM 10 AtU a 1MG01CAPrlL 06=1 - %/U 8.0SNO W RATIOS 1m aPnL a61 ( 0)MCE1XC 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00I1QI 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00DWiII mmr c0 UU'IS mu 0m CAN BE Am ( 6)
50 50 500 50 50 50 50 50 50wM R or 0US ll11 mm H Al ( 7)
0 0 0 0 0 0 0 0 0 0 0
M TOLfl T H E R 1 A L I IC EamYm SL MNL GM MD gm Mwr mS
Sw am AP U1D AUL M MTC GPTN mm - WuI (14) 8.0ITW RAOE APR= 70 AM F = OCATIN MM= - VaI (15) 8.0
ECaI RATIoS FM RAThi CO= ( 0)DaOC 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00ICSE=I 1.00 lOC 1.00 1.00 1.00 1.00 1.00 1.00MIAMI= rE1MR FM I= COr (17)1DITC 1.0 1.00 1.00 1.00 1.00 .00 .00 1.001'E1QI 1.00 1.00 1.00 1.00 1.00 .00 .00 1.00
PnnWIrTDN CSF ECr lM E SMVED CX7 RUEIC (31) C CF2 03($/10) .OO .0000 .0000
IP=Y IA1 Cm 1MEQ ( 3) 1.0000Clr=L I=S 0' WIJD YAtff Df % (12) 100.0000
1ThTc FliON (16) : 1 SIIAa FUf1D
19%9 Y1t mm VW AIM IN MuE:011T10L I=w I= OD lYh1W IN % (12) 54
Annex 6- 80- Page 1 of 28
OPTIMIZATION OP EQUIPMN POR ELCTRICITY GENERATIONTECHNICAL AND ECONOMIC DATA
SUMMARY REPORTON A GENERATION EXPANSION PLAN FOR
ETUDE DE SUBSTITUTION INTER-COMBUSTIBLES POUR LA TUNISIE(SCENARIO TENDU DES PRIX DE COMBUSTIBLE-HYPOTHESE FORTE DE LA DEMANDE)
PROCESSED BY THE WASP-III COMPUTER PROGRAM PACKAGEOF THE IASA
STUDY PERIOD
1991 - 2020
PLANNING PERIOD
1991 - 2020
CONSTRUCTION COSTSIN MILLION TUNISIAN DINARS
ARE REPORTED ONLY FORPLANTS COMMISSIONED
DURING THE PLANNING PERIOD.ALL OTHER INFORMATION IS GIVEN
FOR THE WHOLE STUDY PERIOD.
DATE Of REPORT : DECEMIRE 1989STUDY CARRIED OUT BY : SOCIETE TUNISIENNE DE L'ELECTRICITE ET DU GAZ
DIRECTION Dl) ESTUDES ET DE LA PLANIFICATION
- 81- Annex 6Page 2 of 28
ASSUMPTION OF HIGH DEMAND FOR ELECTRICITY
ANNUAL LOAD DESCRIPTIONPERIOD(S) PER YEAR : 1
YEAR PEARLOAD GR.RATE MIN.LOAD GR.RATE ENERGY GR.RATE LOADFACTORNv % Mv % GWU X %
1991 920.0 - 327.5 - 5033.2 - 62.45
1992 980.0 6.5 348.9 6.5 5352.8 6.4 62.351993 1040.0 6.1 370.2 6.1 5680.6 6.1 62.351994 1110.0 6.7 395.2 6.7 6062.9 6.7 62.351995 1190.0 7.2 423.6 7.2 6499.9 7.2 62.351996 1270.0 6.7 452.1 6.7 6936.3 6.7 62.351997 1350.0 6.3 480.6 6.3 7414.5 6.9 62.701998 1430.0 5.9 S09.1 5.9 7853.9 S.9 62.701999 1510.0 5.6 537.6 5.6 8293.2 5.6 62.702000 1600.0 6.0 569.6 6.0 8787.5 6.0 62.702001 1700.0 6.3 605.2 6.3 9336.8 6.3 62.702002 1800.0 5.9 666.0 10.0 9935.9 6.4 63.012003 1900.0 5.6 703.0 5.6 10487.9 5.6 63.012004 2010.0 5.8 743.7 5.8 11095.0 5.8 63.012005 2130.0 6.0 788.1 6.0 11757.4 6.0 63.012006 2250.0 5.6 832.5 5.6 12472.2 6.1 63.282007 2370.0 5.3 876.9 5.3 13137.4 5.3 63.282008 2490.0 5.1 921.3 5.1 13802.6 5.1 63.282009 2610.0 4.8 965.7 4.8 14467.8 4.8 63.282010 2740.0 5.0 1013.8 5.0 15188.4 5.0 63.282011 2880.0 5.1 1065.6 5.1 16039.7 5.6 63.582012 3030.0 5.2 1121.1 5.2 16875.1 5.2 63.5B2013 3190.0 5.3 1180.3 5.3 17766.1 5.3 63.582014 3350.0 5.0 1239.5 5.0 18657.2 5.0 63.582015 3510.0 4.8 1298.7 4.8 19548.3 4.8 63.582016 3670.0 4.6 1357.9 4.6 20783.3 6.3 64.652017 3850.0 4.9 1424.5 4.9 21802.6 4.9 64.652018 4040.0 4.9 1494.8 4.9 22878.6 4.9 64.652019 4240.0 5.0 1568.8 5.0 24011.2 5.0 64.652020 4440.0 4.7 1642.8 4.7 25143.8 4.7 64.65
~~ qn * ' . .........4 *.. 4
@~~~~~~~~~~~ 5t
. . -.... '.. . .. * ... . '. . . .. ...
U . . ....... . _
X b%|! g ......... ~~~. ................ ......'-4rzgg '-
U I
- 83 - Annex 6Page 4 of 28
"CONTINUING COMPETITION" SCENARIO - HIGH DEMAND
MaRFE= SYSm nuIs on= CNM
(NMM L CAPACfY I ?J, Dan IN G H)HYuvrEmcTuIC DILU mm MEz WmL sYnm now
HY} COX)=IT CAP RP. W. ?TYRR 0 1 2 3 4 SUV=
PR. CA PR. CAP .W W 7M 3Tf 71= % 0
19911 64 0 0 0 0 72 290 130 120831.3 .37 41992 1 64 0 0 0 0 724 290 130 1208 23.3 1.981 101993 1 64 0 0 0 0 724 350 130 1268 21.9 1.934 101994 1 64 0 0 0 0 874 350 130 1418 27.7 .903 41995 1 64 0 0 0 0 9f6 310 130 1480 24.41.209 6196 164 0 0 0 0 976 610 130 1780 40.2 .179 1199 1 64 0 0 0 0 976 860 90 1990 47.4 .070 01998 1 64 0 0 0 0 928 112 30 2142 49.8 .047 01999 1 64 0 0 0 0 928 1120 30 2142 41.9 .099 12000 1 64 0 0 0 0 928 1120 30 2142 33.9 .217 12D01 1 64 0 0 0 0 929 1120 30 2142 26.0 .485 32002 1 64 0 0 0 0 880 143 30 2394 33.0 .163 12003 1 64 0 0 0 0 880 1390 30 2364 24.4 .440 32004 1 64 0 0 0 0 880 16C0 0 2544 26.6 .286 22051 64 0 0 0 0 880 1900 0 2844 33.5 .086 12006 1 64 0 0 0 0 880 1900 0 2844 26.4 .:08 22007 1 64 0 0 0 0 880 1900 0 284 20.0 .466 42008 1 64 0 0 0 0880 2200 0 3144 26.3 .152 12009 1 640 0 0 0 880 2200 0 3144 20.5 .336 32010 1 640 0 0 0 600 250 0 3164 15.5 .520 42011 1 640 0 0 0 600 2800 0 3464 20.3 .216 2212 1 64 0 0 0 060 2800 0 3464 14.3 .524 52013 1 64 0 0 0 0 60 3100 0 3764 18.0 .248 22014 1 64 0 0 0 0600 3200 0 3864 15.3 .351 32015 1 640 0 0 0 300 3800 0 4164 18.6 .529 62016 1 64 0 0 0 0300 4100 0 4464 21.6 .352 42017 1 64 0 0 0 0 30 4200 0 4564 18.5 .508 62018 1 64 0 0 0 0 300 4500 0 4864 20.4 .317 32019 1 64 0 0 0 0 300 4600 0 964 17.1 .495 62020 1 64 0 0 0 30 300 46 0 S26 18.6 .427 S
- 84 - Annex 6Page 5 of 23
"CONTINUING COMPETITION" SCENARIO - HIGH DEMAND
EXPECTED COST Of OPERATIONTOTAL COST
DOMESTIC AND FOREIGNTYPE o0 PLANT NU TVCH TVFL GZNL TGGO HYDRYEAR TOTAL COST BY PLANT TYPE (1000S)
1991 149369 0 0 97746 36421 12130 30721992 16433S 0 0 100372 41822 19069 30721993 168481 0 0 102037 49573 13799 30721994 170412 0 0 122541 38574 6225 30721995 179580 0 0 137347 3078S 8376 30721996 184320 0 0 122463 54665 4119 30721997 190S24 0 0 101063 84458 1931 30721998 199869 0 0 72215 124030 552 30721999 220217 0 0 8S207 131270 667 30722000 242220 0 0 99846 138391 912 30722001 264495 0 0 114014 146005 1404 30722002 276955 0 0 85742 187260 831 30722003 299210 0 0 997S5 194926 1457 30722004 313030 0 0 75S89 234370 0 3072200S 335663 0 0 55563 277028 0 30722006 367226 0 0 7173S 292420 0 30722007 399038 0 0 88238 307727 0 30722008 428402 0 0 67748 357582 0 30722009 462512 0 0 84062 375378 0 30722010 491568 0 0 54847 433649 0 30722011 534682 0 0 43109 488501 0 30722012 579840 0 0 58039 518729 0 30722013 627810 0 0 46896 S77842 0 30722014 683996 0 0 62715 618209 0. 30722015 727810 0 0 20831 703907 0 30722016 801790 0 0 18919 779799 0 30722017 867375 0 0 26368 83793S 0 30722018 940889 0 0 23411 914406 0 30722019 1021350 0 0 32056 986221 0 30722020 1097882 0 21163 31208 1042439 0 3072TOTALS 13390851 0 21163 2201684 11004322 71522 92160
- 85 - Annex 6Pag- 6 of 28
"CONTINUING COMPETITION" SCENARIO - HIGH DEMAND
CAP=A CAM FLOW SW9RYnm ocaNucriRU Ic
YEAR DCf. FMR. MM DCM. FM. TOTAL DOM. E>. 7=L GR. TCT.
1990 .0 .0 .0 1.1 2.4 3.6 .3 .6 .9 4.41991 .0 .0 .0 12.3 27.4 39.7 2.2 4.6 6.8 46.51992 .0 .0 .0 31.2 62.8 93.9 4.3 8.4 12.8 106.71993 .0 .0 .0 37.9 75.1 113.0 4.9 10.1 15.0 128.01994 .0 .0 .0 41.1 91.8 132.9 5.3 12.2 17.4 150.31995 .0 .0 .0 41.7 97.6 139.3 5.1 12.0 17.1 156.41996 .0 .0 .0 32.9 77.1 110.0 3.3 7.8 11.1 121.11997 .0 .0 .0 10.8 25.2 36.0 .6 1.4 1.9 38.01998 .0 .0 .0 1.0 2.3 3.3 .3 .6 .8 4.11999 .0 .0 .0 8.7 20.5 29.2 1.8 4.2 6.1 35.32000 .0 .0 .0 23.1 54.2 77.3 3.0 7.0 10.0 87.22001 .0 .0 .0 20.5 48.0 68.5 2.6 6.2 8.8 77.42002 .0 .0 .0 30.9 72.4 103.3 4.5 10.6 15.2 118.42003 .0 .0 .0 32.9 77.1 110.0 3.3 7.8 11.1 121.12004 .0 .0 .0 11.7 27.5 39.3 .8 2.0 2.8 42.12005 .0 .0 .0 8.7 20.5 29.2 1.8 4.2 6.1 35.32006 .0 .0 .0 23.1 54.2 77.3 3.0 7.0 10.0 87.22007 .0 .0 .0 20.5 48.0 68.5 2.6 6.2 8.8 77.42008 .0 .0 .0 30.9 72.4 103.3 4.5 10.6 15.2 118.42009 .0 .0 .0 33.9 79.4 113.3 3.6 8.3 11.9 125.22010 .0 .0 .0 19.5 45.7 65.2 2.4 5.6 8.0 73.32011 .0 .0 .0 25.9 60.9 86.8 3.8 9.0 12.8 99.62012 .0 .0 .0 33.1 80.3 11.4 4.9 11.9 16.8 130.32013 .0 .0 .0 44.5 107.0 151.5 6.2 14.7 21.0 172.42014 .0 .0 .0 37.0 86.9 123.9 3.8 8.9 12.7 136.62015 .0 .0 .0 24.7 60.0 84.7 3.4 8.0 11.4 96.22016 .0 .0 .0 32.3 75.5 107.8 4.8 10.6 15.4 123.12017 .0 .A .0 36.8 78.3 115.2 5.8 11.5 17.3 132.52018 .0 .0 .0 37.3 73.8 111.1 4.7 9.1 13.8 124.92019 .0 .0 .0 11.9 22.0 33.9 .7 1.3 2.0 35.9
.0 .0 .0 757.9 1726.4 2484.3 98.5 222.4 321.0 2805.3
- 86 - Annex 6Page 7 of 28
"CONTINUING COMPETITION" SCENARIO - HIGH DEMAND
SICT1Q DE Ua'Tz
DU'DISE (kDT) QA. rrT (kteo)
COIMM FMM GAZ T GAQ ML WM N3 RUE GP 2 GAZ GN SOLJ TML
1991 0 82542 32071 10180 124793 0 1105 433 65 16031992 0 84325 37101 16950 138375 0 1129 501 107 17381993 0 84304 43393 11504 139201 0 1129 586 73 17881994 0 99973 32400 4110 136483 0 1338 438 26 1802195 0 110875 25245 6120 142240 0 1484 341 39 18641996 0 91473 39388 1954 132815 0 1225 532 12 17691997 0 69082 59153 501 128736 0 925 799 3 1727
n8 0 4286S 84126 83 127075 C 574 1137 1 17111999 0 50610 8S174 168 135953 0 678 1151 1 18302000 0 59204 86663 342 146209 0 793 171 2 1966
WlM 0 775254 524714 51913 1351880 0 10378 7091 329 17798
2001 0 67694 89647 686 158027 0 906 1211 4 21222002 0 47063 112470 304 159838 0 630 1520 2 21522003 0 55372 114948 690 171010 0 741 1553 4 2299204 0 38038 135881 0 173918 0 509 1836 u 23452005 0 23955 156186 0 180140 0 321 2.11 0 24312006 0 33222 159972 0 193194 0 445 2162 0 2607207 0 42016 163432 0 205448 0 562 2209 0 2771200 0 28559 183253 0 211812 0 382 2476 0 2859209 0 36808 187095 0 223903 0 493 2528 0 30212010 0 22726 208301 0 231026 0 304 2815 0 3119
WMIZ. 0 395452 1511184 1680 1908315 0 5294 20421 11 25726
2011 0 15747 226162 0 241909 0 211 3056 0 32672012 0 22731 233433 0 256164 0 304 3154 0 34592013 0 16519 251295 0 267814 0 221 3396 0 36172014 0 23326 260278 0 283604 0 312 3517 0 3830201S 0 6380 284552 0 290931 0 85 3845 0 39312m6 0 5299 303737 0 309036 0 71 4105 0 41752017 0 8251 317480 0 325731 0 110 4290 0 44012018 0 6753 334380 0 341133 0 90 4519 0 4609209 0 9892 350237 0 360129 0 132 433 0 486520 10022 9201 358204 0 3427 146 123 4841 a 5u0
1WM 10022 124098 2919757 0 3053877 146 1661 39456 0 41264
L7 aL lO22 129403 4955655 53593 6314072 146 17333 66968 340 84788
u de 1991 68,52 74,70 74,00 157.70a Dr/tep
- 87 - Annex 6Page 8 of 28
"TIGHT MARKET" COMPETITTON - HIGH DEMAND
SUMMARY REPORTON A GENERATION EXPANSION PLAN FOR
ETUDE DE SUBSTITUTION INTER-COMBUSTIBLSS PCUR LA TUNISIE(SCZNARIO TENDU DES PRIX DE COMBUSTIBLE-HYPOTHESE FORTS DE LA DENANDE)
PROCESSED BY THE VASP-III COMPUTER PROGRAX PACCAGEOF THE IAEA
STUDY PERIOD
1991 - 2020
PLANNING PERIOD
1991 - 2020
CONSTRUCTION COSTSIN MILLION TUNISIAN DINARS
ARE REPORTED ONLY FORPLANTS COMMISSIONED
DURING THE PLANNING PERIOD.ALL OTHER INFORMATION IS GIVENFOR THE VHOLE STUDY PERIOD.
DATE O REPORT D DECENURE 1989STUDY CARRIED OUT BY . SOCIETE TUNISIENNE DE L'ELECTRICITE ET DU GAZ
DIRECTION DES EtUDES ET DE LA PLANIFICATION
- 88- Annex 6Page 9 of 28
"TIGHT MARKET" SCENARIO - HIGH DEMAND
ANNUAL LOAD DESCRIPTIONPERIOD(S) PER YEAR : 1
YEAR PEAKLOAD GR.RATE HIN.LOAD GR.RATE ENERGY GR.RATE LOADFACTCRNW % Sm % GWH % %
1991 920.0 - 327.5 - 5033.2 - 62.451992 980.0 6.5 348.9 6.5 5352.8 6.4 62.351993 1040.0 6.1 370.2 6.1 5680.6 6.1 62.351994 1110.0 6.7 395.2 6.7 6062.9 6.7 62.35199S 1190.0 7.2 423.6 7.2 6499.9 7.2 62.35199A 1270.0 6.7 452.1 6.7 6936.8 6.7 62.351997 1350.0 6.3 480.6 6.3 7414.5 6.9 62.701998 1430.0 5.9 509.1 5.9 7853.3 5.9 62.701999 1510.0 5.6 537.6 5.6 8293.2 5.6 62.702000 1600.0 6.0 569.6 6.0 8787.5 6.0 62.702001 1700.0 6.3 605.2 6.3 9336.8 6.3 62.702002 1800.0 5.9 666.0 10.0 9935.9 6.4 63.012003 1900.0 5.6 703.0 5.6 10487:9 5.6 63.012004 2010.0 5.8 743.7 5.8 11095.0 5.3 63.012005 2130.0 6.0 788.1 6.0 11757.4 6.0 63.012006 2250.0 5.6 832.5 5.6 12472.2 6.1 63.232007 2370.0 5.3 876.9 5.3 13137.4 5.3 63.282008 2490.0 5.1 921.3 5.1 13802.6 5.1 63.282009 2610.0 4.8 965.7 4.8 14467.8 4.8 63.:82010 2740.0 5.0 1013.8 5.0 :5188.4 5.0 63 .32011 2880.0 5.1 1065.6 S.1 16039.7 5.6 63.582012 3030.0 5.2 1121.1 5.2 16875.1 5.2 63.582013 3190.0 5.3 1180.3 5.3 17766.1 5.3 63.582014 3350.0 5.0 1239.S 5.0 18657.2 5.0 63.582015 3510.0 4.8 1298.7 4.8 19548.3 4.8 63.582016 3670.0 4.6 1357.9 4.6 20783.3 6.3 64.652017 3850.0 4.9 1424.5 4.9 21802.6 4.9 64.652018 4040.0 4.9 1494.8 4.9 22878.6 4.9 64.652019 4240.0 5.0 1568.8 5.0 24011.2 5.0 64.652020 4440.0 4.7 1642.8 4.7 25143.8 4.7 64.65
I"eq
0
X pN~~~~~ . . . . . . . . . _. . . . . . .
= i g 8 ~.. .... . . . . . . . . . .. . . . .
8~~~~~~~~~~~~~~~~ . .Rl . . .. . . . .. . . ._ . .__ .__ ._ . . .I ~~~~~. . . .. . . . . . . . ... . .4 . . 4 4. . -. 4. . 4. . 4. - . . . .
|~~~~~~~~~~~~E Ei A
.. ~~~~~~ . . . . . . . . .=wQsi%
-4... IIA...A"AIA.... a. aIna.a..
''lii{ i!FRAh0gi .Sig
- 90 - Annex 6Page 11 of 28
"TIGHT MARKET" SCENARIO - HIGB DEMND
SUMMARY OFFIXED SYSTEM PLUS OPTIMUM SOLUTION
(NOMINAL CAPACITY IN KW, ENERGY IN GYN)HYDROELEcTlRC TH£RMAL FUEL TYPE TOTAL SYSTEM E11ERGYHYDR CAPACITIES CAP RES. LOL?. NOT
YEAR 0 1 2 3 4 SERVEDPR. CAP PR. CAP HU TvCR TYFL GZNL TGGO %
1991 1 64 0 0 0 0 724 290 130 1208 31.3 .937 41992 1 64 0 0 0 0 724 290 130 1208 23.3 1.981 101993 1 64 0 0 0 0 724 350 130 1268 21.9 1.934 101994 1 64 0 0 0 0 874 350 130 1418 27.7 .903 41S95 1 64 0 0 0 0 976 310 130 1480 24.4 1.209 61996 1 64 0 0 0 0 976 610 130 1780 40.2 .179 11997 1 64 0 0 0 0 976 860 90 1990 47.4 .070 01998 1 64 0 0 0 300 928 820 30 2142 49.8 .096 11999 1 64 0 0 0 300 928 820 30 2142 41.9 .193 12000 1 64 0 0 0 300 928 820 30 2142 33.9 .402 32001 1 64 0 0 0 600 928 820 30 2442 43.6 .167 12002 1 64 0 0 0 600 880 820 30 2394 33.0 .496 42003 1 64 0 0 0 900 880 790 30 2664 40.2 .262 22004 1 64 0 0 0 1200 880 700 0 2844 41.5 .275 2200S 1 64 0 0 0 1500 880 700 0 3144 47.6 .139 12006 1 64 0 0 0 1500 880 700 0 3144 39.7 .303 32007 1 64 0 0 0 1800 880 700 0 3444 45.3 .156 12008 1 64 0 0 0 1800 880 700 0 3444 38.3 .320 32009 1 64 0 0 0 2100 880 700 0 3744 43.4 .169 12010 1 64 0 0 0 2400 600 700 0 3764 37.4 .361 42011 1 64 0 0 0 2700 600 700 0 4064 41.1 .226 22012 1 64 0 0 0 2700 600 700 0 4064 34.1 .485 52013 1 64 0 0 0 3000 600 700 0 4364 36.8 .331 32014 1 64 0 0 0 3300 600 700 0 4664 39.2 .228 22015 1 64 0 0 0 3600 300 700 0 4664 32.9 .521 62016 1 64 0 0 0 3600 300 900 0 4864 32.5 .537 62017 1 64 0 0 0 3900 300 900 0 5164 34.1 .417 S2018 1 64 0 0 0 4200 300 900 0 S464 3S.2 .341 42019 1 64 0 0 0 4200 300 1000 0 5564 31.2 .517 62020 1 64 0 0 0 4S00 300 1000 0 5864 32.1 .443 S
- 91 - Annex 6
Page 12 of 28
"TIGHT MABKET" SCENARIO - HIGH DEMAND
EXPECTED COST OF OPERATIONTOTAL COST
DOMESTIC AND FOREIGNTYPE OF PLANT NU TVCH TVFL GZNL TGGO HYDRYEAR TOTAL COST BY PLANT TYPE (1000S)
1991 174407 0 3 117225 43353 10757 30721992 198047 0 0 125031 51851 18094 30721993 212053 0 0 132417 59309 17255 30721994 220016 0 0 162978 46324 7642 3072
199S 238539 0 0 188643 38386 8437 30721996 242786 0 0 164228 70530 4956 30721997 250407 0 0 134007 111434 1894 3072
1998 255518 0 38600 100937 112266 643 30721999 279714 0 39645 118093 118075 828 3072
2000 308434 0 40944 137824 125401 1194 3072
2001 315400 0 83472 105969 122132 755 30722002 345388 0 86957 124239 1299r3 1208 3072
2003 353856 0 133283 93490 123178 833 3072
2004 365907 0 182578 66667 113589 0 30722005 383218 0 230001 47207 102939 0 3072
2006 411998 0 233689 61576 113661 0 3072
2007 424731 0 276970 44705 99985 0 3072
2008 450830 0 281357 56399 110001 0 3072
2009 462564 0 323924 41706 93862 0 3072
2010 471478 0 364238 25506 78662 0 30722011 491803 0 402889 20903 64939 0 30722012 521050 0 411957 27058 78963 0 3072
2013 542442 0 4S0322 22482 66566 b 30722014 564599 0 486837 19698 54992 0 3072
2015 580612 0 521744 10342 45454 0 3072
2016 624676 0 538999 13994 68611 0 3072
2017 650523 0 576162 12395 58894 0 3072
2018 678775 0 613053 11304 51346 0 30722019 719255 0 629683 14998 71502 0 30722020 748442 0 667893 1368S 63792 0 3072TOTALS 12487468 0 7615198 2215705 2489912 74495 92160
-92 - Annex 6Page 13 of 28
"TIGHT MARKET" SCENARIO - HIGH DEMAND
CNIrrL CAM FW S=RYnx . =CJSRUCrICN IDC
YEAR DM. FOR. XAL DC. PM. TOTL DOM. FOR. 7OA GR. TOr.
1990 .0 .0 .0 1.1 2.4 3.6 .3 .6 .9 4.41991 .0 .0 .0 12.3 27.4 39.7 2.2 4.6 6.8 46.51992 .0 .0 .0 31.2 62.8 93.9 4.3 8.4 12.8 106.71993 .0 .0 .0 39.1 77.4 116.6 5.5 11.2 16.7 133.31994 .0 .0 .0 46.2 100.9 147.1 6.9 14.9 21.8 168.91995 .0 .0 .0 55.0 118.3 173.3 8.1 16.6 24.7 198.01996 .0 .0 .0 45.6 90.0 135.6 5.7 10.9 16.6 152.21997 .0 .0 .0 18.0 33.4 51.3 2.5 4.7 7.2 58.51998 .0 .0 .0 23.4 43.5 66.8 5.3 9.9 15.3 82.11999 .0 .0 .0 40.9 76.1 117.0 6.9 12.9 19.9 136.92000 .0 .0 .0 41.3 76.8 118.2 7.9 14.6 22.5 140.62001 .0 .0 .0 61.8 114.9 176.7 11.1 20.7 31.8 208.52002 .0 .0 .0 68.8 127.9 196.7 10.6 19.7 30.2 227.02003 .0 .0 .0 51.5 95.8 147.3 7.1 13.1 20.2 167.52004 .0 .0 .0 35.2 65.5 100.7 6.0 11.2 17.3 118.02005 .0 .0 .0 40.9 76.1 117.0 6.9 12.9 19.9 136.92006 .0 .0 .0 41.3 76.8 118.2 7.9 14.6 22.5 140.62007 .0 .0 .0 61.8 114.9 176.7 11.1 20.7 31.8 208.52008 .0 .0 .0 68.8 127.9 196.7 10.6 19.7 30.2 227.02009 .0 .0 .0 52.8 98.1 150.9 7.6 14.2 21.8 172.82010 .0 .0 .0 41.3 76.8 118.2 7.9 14.6 22.5 140.62011 .0 .0 .0 61.8 114.9 176.7 11.1 20.7 31.8 208.52012 .0 .0 .0 68.8 127.9 196.7 10.6 19.7 30.2 227.02013 .0 .0 .0 53.4 99.9 153.3 7.8 14.6 22.3 175.62014 .0 .0 .0 48.0 98.4 146.4 8.1 16.2 24.3 170.72015 .0 .0 .0 64.5 128.6 193.1 10.3 19.6 29.9 223.02016 .0 .0 .0 51.8 96.7 148.5 7.1 13.3 20.4 168.92017 .0 .0 .0 37.9 75.1 113.0 5.9 11.5 17.3 130.42018 .0 .0 .0 37.3 73.8 111.1 4.7 9.1 13.8 124.92019 .0 .0 .0 11.9 22.0 33.9 .7 1.3 2.0 35.9
.0 .0 .0 1313.9 2521.2 3835.1 208.7 396.4 605.1 4440.2
- 93 - Annex 6
Page 14 of 28
"TIGHT MARKET" SCENARIO - HIGH DEMAND
DEPEISE (kDT) QUAN=TES (ktep)
OCRD&U FUEL GAZ NAT GASOIL TCTAL CHARB0N FUEL GAZ 1AT G4SOIL 7rIAL
1991 0 102021 38271 8807 149099 0 1119 423 46 15881992 0 104597 44390 15375 164362 0 1147 491 80 17181993 0 106557 48554 13914 169025 0 1169 537 72 17781994 0 125572 35363 4949 165885 0 1377 391 26 17941995 0 138607 27660 5362 171629 0 1520 306 23 1854
1996 0 113730 46800 2386 162916 0 1248 517 12 17771997 0 85666 71061 412 157139 0 940 786 2 17271998 27955 58708 68989 140 155792 387 644 763 1 17941999 28131 68176 70073 262 166643 389 748 775 1 19132000 28749 78082 71585 492 178909 398 857 791 3 2048
1T1L 84835 981717 522747 52099 1641398 1173 10769 5779 271 17992
2001 57384 55516 67668 197 180764 794 609 748 1 21522002 58328 65829 70326 474 194956 807 722 777 2 23092003 87664 45199 64457 232 197552 1212 496 713 1 24222004 117030 27927 57468 0 202425 1618 306 635 0 25602005 144368 16077 49898 0 210342 1997 176 552 0 27242006 147080 23572 54331 0 224983 2034 259 601 0 28932007 173954 13867 45656 0 233477 2406 152 505 0 30622008 177180 19730 49868 0 246779 2450 216 551 0 32182009 203529 11689 40468 0 255687 2815 128 447 0 33902010 228222 6206 31840 0 266268 3156 68 352 0 3576
ITmL 1394740 285611 531981 902 2213233 19288 3133 5881 5 28307
2011 251692 3821 24530 0 280043 3481 42 271 0 37942012 258359 6647 30471 0 295477 3573 73 337 0 39832013 281619 4355 24023 0 309996 3895 48 266 0 42082014 303518 2989 18284 0 324791 4197 33 202 0 44322015 324236 1583 13778 0 339597 4484 17 152 0 46542016 336923 3090 22094 0 362108 4659 34 244 0 49382017 359298 2350 17588 0 379237 4969 26 194 0 51892018 381475 1851 14162 0 397488 5276 20 157 0 54522019 393702 3254 21123 0 418079 5445 36 234 0 57142020 416847 2674 17726 0 437247 5765 29 196 0 5990
mmT'L 3307670 32615 203779 0 3544063 45743 358 2253 0 48353
'wI'L GomfL 4787245 1299942 1258507 53001 7398695 66204 14260 13912 275 94652
prix de 1991 72,31 91,16 90,46 192,45en DT/tep
- 94 - Annex 6Page 15 of 28
"CONTINUING COMPETITION" SCENARIO - LOW DEMAND
SUMMARY REPORTON A GENtRATION EXPANSION PLAN FOR
ETUDE GE SUBSTITUTION INTER-COMBUSTIBLES POUR LA TUNISIE
(SCENARIO DE CONCURRENCE PERSISTANTE - HYPOTHESE FAIBLE DE LA DEMANDE)
PROCESSED BY THE WASP-III COMPUTER PROGRAN PACKAGEOF THE IAEA
STUDY PERIOD
1991 - 2020
PLANNING PERIOD
1991 - 2020
CONSTRUCTION COSTSIN KILLION TUNISIAN DINARS
ARE REPORTED ONLY FORPLANTS COMMISSIONED
DURING THE PUNNING PERIOD.ALL OTHER INFORHATrON IS cIVENFOR THE WHOLE STUDY PERIOD.
DATE 0? REPOPT : DECENBRE 1989
STUDY CARRIED OUT BY : SOCIETE TUNISIENNE DE L'ELECTRICITE ST DU CAZ
DIRECTION DES ETUDES ST DE LA PLANIrICATION
- 95 - Annex 6Page 16 of 28
"CONTINUING COMPETITION" SCENARIO - LOW DEMAND
HYPOTHESE FAIDLE DE LA DEMANDE
ANNUAL LOAD DESCRIPTIONPERIOD(S) PER YEAR : 1
YEAR PEAKLOAD GR.RATE MIN.LOAD GR.RATE ENERGY GR.RATE LOADFACTORXV % M} % GWH % N
1991 830.0 - 295.5 - 4540.8 - 62.451992 865.0 4.2 307.9 4.2 4724.7 4.0 62.351993 900.0 4.0 320.4 4.0 4915.9 4.0 62.351994 940.0 4.4 334.6 4.4 5134.4 4.4 62.351995 980.0 4.3 348.9 4.3 5352.8 4.3 62.351996 1020.0 4.1 363.1 4.1 5571.3 4.1 62.3S1997 1070.0 4.9 380.9 4.9 5876.7 5.5 62.701998 1120.0 4.7 398.7 4.7 6151.3 4.7 62.701999 1170.0 4.5 416.5 4.5 6425.9 4.5 62.702000 1220.0 4.3 434.3 4.3 6700.5 4.3 62.702001 1270.0 4.1 452.1 4.1 6975.1 4.1 62.702002 1320.0 3.9 488.4 8.0 7286.3 4.5 63.012003 1370.0 3.8 506.9 3.8 7562 3 3.8 63.012004 1420.0 3.6 525.4 3.6 7838.3 3.6 6;.012005 1480.0 4.2 547.6 4.2 8169.5 4.2 63.012006 1540.0 4.1 569.8 4.1 8536.5 4.5 63.282007 1600.0 3.9 592.0 3.9 8869.1 3.9 63.282008 1660.0 3.8 614.2 3.8 9201.7 3.8 63.282009 1720.0 3.6 636.4 3.6 9534.3 3.6 63.282010 1790.0 4.1 662.3 4.1 9922.3 4.1 63.282011 1860.0 3.9 688.2 3.9 10358.9 4.4 63.582012 1930.0 3.8 714.1 3.8 10748.8 3.8 63.582013 2000.0 3.6 740.0 3.6 11138.6 3.6 63.582014 200.0 3.5 765.9 3.5 11528.5 3.5 63.582015 2150.0 3.9 795.5 3.9 11974.0 3.9 63.582016 2230.0 3.7 825.1 3.7 12628.5 5.5 64.652017 2310.0 3.6 854.7 3.6 13081.6 3.6 64.6S2018 2400.0 3.9 888.0 3.9 13551.2 3.9 64.652019 2490.0 3.8 921.3 3.7 14100.9 3.7 64.652020 2580.0 3.6 954.6 3.6 14610.6 3.6 64.65
ODC14
44
o
-4x
o g g 1! g ' ' '~~~~. . . . . .. .' . . . . .' . .. .. .. . . . .143
9 . .. . . .. . .. . .i..i.i .4.4 . * . -~. ..4 .*. .O
o-4
l-6~~~~~~
'.488888g88808888Rg88808080....... .. .
o i3R-=l4gRg>RR8f^!g
- 97 - Annex 6Page 18 of 28
"CONTINUING COMPETITION" SCENARIO - LOW DEMAND
SUNMARY orFIXED SYSTEM PLUS OPTIMUM SOLUTION
(NOMINAL CAPACITY IN MV. ENERGY IN GVN)HYDROELECTRIC THERMAL FUEL TYPE TOTAL SYSTEM ENERGYHYDR CAPACITIES CAP RES. LIOLP. NOT
YEAR 0 1 2 3 4 SERVEDPR. CAP PR. CAP NU TVCH TVFL GZNL TGGO G t
1991 1 64 0 0 0 0 724 290 130 1208 45.5 .263 11992 1 64 0 0 0 0 724 290 130 1208 39.7 .463 21993 1 64 0 0 0 0 724 350 130 1268 40.9 .333 11994 1 64 0 0 0 0 874 350 130 1418 50.9 .091 01995 1 64 0 0 0 0 976 310 130 1480 51.0 .087 01996 1 64 0 0 0 0 976 310 130 1480 45.1 .154 11997 1 64 0 0 0 0 97, 560 90 1690 57.9 .049 01998 1 64 0 0 0 0 928 520 30 1542 37 7 .426 21999 1 64 0 0 a 0 928 620 30 1842 57.4 .048 02000 1 64 0 0 0 0 928 820 30 1842 5;.O .080 02001 1 64 0 0 0 0 928 820 30 1842 45.0 .132 12002 1 64 0 0 0 0 880 820 30 1794 35.9 .323 22003 1 64 0 0 0 0 880 1090 30 2064 50.7 .055 02004 1 64 0 0 0 0 880 1000 0 1944 36.9 .251 2200S 1 64 0 0 0 0 880 1000 0 1944 31.4 .410 32006 1 64 0 0 0 0 880 1300 0 2244 45.7 .066 02007 1 64 0 0 0 0 880 1300 0 2244 40.3 .110 12008 1 64 0 0 0 0 880 1300 0 2244 35.2 .179 12009 1 64 0 0 0 0 880 1300 0 2244 30.5 .287 22010 1 64 0 0 0 300 600 1300 0 2264 26.5 .547 42011 1 64 0 0 0 600 600 1300 0 2564 37.8 .196 22012 1 64 0 0 0 600 600 1300 0 2564 32.8 .320 32013 1 64 0 0 0 600 600 1300 0 2564 28.2 .509 42014 1 64 0 0 0 900 600 1300 0 2864 38.4 .184 2201S 1 64 0 0 0 1200 300 1300 0 2864 33.2 .368 32016 1 64 0 0 0 1500 300 1300 0 3164 41.9 .180 22017 1 64 0 0 0 1500 300 1300 0 3164 37.0 .296 32018 1 64 0 0 0 1500 300 1300 0 3164 31.8 .502 52019 1 64 0 0 0 1800 300 1300 0 3464 39.1 .224 22020 1 64 0 0 0 1800 300 1300 0 3464 34.3 .376 4
- 98 - Annex 6Page 19 of 28
"CONTINUING CO,1ETITION" SCENARIO - LOW DEMAND
EXPECTED COST OF OPERATIONTOTAL COST
DOMESTIC AND FOREIrNTYPE Of PLANT NU TVCH TVFL GZNL TGGO HYDRYEAR TOTAL COST BY PLANT TVPE (lOGOS)
1991 129762 0 0 94961 26837 4892 30721992 137825 0 0 96824 30999 6930 30721993 140514 0 0 99578 33454 4410 30721994 141804 0 0 116915 19078 2739 30721995 145157 0 0 127010 12377 2699 3072
1996 157995 0 0 136061 15646 3216 30121997 159746 0 0 110742 44207 1724 3072
1998 i70903 0 0 118768 48095 967 30721399 177753 0 0 85843 88302 535 30722000 191833 0 0 96007 92157 597 30722001 204307 0 0 105445 95096 694 30722002 21621i 0 0 113249 98921 978 30722003 220469 0 0 74028 142797 572 3072
2004 230007 0 0 82275 144660 0 3072
2005 244970 0 0 92853 149045 0 30722006 258607 0 0 60120 195415 0 30722007 276785 0 0 69728 203985 0 3072
2008 295797 0 0 80114 212611 0 30722009 315652 0 0 912 5 221295 0 30722010 317850 0 41935 54009 218833 0 3072
2011 330306 0 82297 36522 208414 0 3072
2012 351467 0 84434 43319 220641 0 30722013 373826 0 86433 51645 232675 0 30722014 385744 0 128573 35892 218207 0 3072
2015 391594 0 172101 17856 198564 0 30722016 410295 0 215311 13144 178769 0 30722017 435028 0 218615 16940 196401 0 3072
2018 462636 0 220803 22393 216369 0 30722019 475496 0 265642 15490 191291 0 30722020 504321 0 268464 20446 212339 0 3072TOTALS 8254665 0 1784610 2179463 4167482 30952 92160
- 99- Annex 6Page 20 of 28
"CONTINUING COMDPETITION" SCENARIO - LOW DEMAND
CAPML CASE FLOW SIMYcasuMcrRcN mc
YEfAR DCN. FMR. WMThL DCt. FR. 7=L Ma4. F0R. TML GR. TMf.
1990 .0 .0 .O 1.1 2.4 3.6 .3 .6 .9 4.4
1991 .0 .0 .0 12.3 27.4 39.7 2.2 4.6 6.8 46.5
1992 .0 .0 .0 30.2 60.5 90.7 4.1 7.8 11.9 102.6
1993 .0 .0 .0 29.2 54.6 83.8 3.1 5.9 8.9 92.7
1994 .0 .0 .0 18.0 37.6 55.6 2.3 5.2 7.5 63.1
1995 .0 .0 .0 23.1 54.2 77.3 3.0 7.0 10.0 87.2
1996 .0 .0 .0 19.5 45.7 65.2 2.4 5.6 8.0 73.3
1997 .0 .0 .0 22.1 51.9 74.0 2.7 6.4 9.1 83.1
1998 .0 .0 .0 10.8 25.2 36.0 .6 1.4 1.9 38.0
1999 .0 .0 .0 1.0 2.3 3.3 .3 .6 .8 4.1
2000 .0 .0 .0 8.7 20.5 29.2 1.8 4.2 6.1 35.3
2001 .0 .0 .0 22.1 51.9 74.0 2.7 6.4 9.1 83.1
2002 .0 .0 .0 11.7 27.5 39.3 .8 2.0 2.8 42.1
2003 .0 .0 .0 8.7 20.5 29.2 1.8 4.2 6.1 35.3
2004 .0 .0 .0 22.1 51.9 74.0 2.7 6.4 9.1 83.1
2005 .0 .0 .0 12.0 27.6 39.6 1.2 2.5 3.6 43.2
200G .0 .0 .0 7.4 13.7 21.0 2.4 4.5 6.9 27.9
2007 .0 .0 .0 28.2 52.5 80.7 6.6 12.2 18.8 99.5
2008 .0 .0 .0 55.7 103.6 159.3 9.3 17.3 26.6 185.8
2009 .0 .0 .0 46.7 86.8 133.5 5.8 10.8 16.6 150.1
2010 .0 .0 .0 19.2 35.7 54.9 3.1 5.8 8.9 63.8
2011 .0 .0 .0 29.5 54.8 84.3 7.2 13.3 20.5 104.8
2012 .0 .0 .0 61.8 114.9 176.7 11.1 20.7 31.8 208.5
2013 .0 .0 .0 67.6 125.6 193.2 10.0 18.6 28.6 221.7
2014 .0 .0 .0 46.7 86.8 133.5 5.8 10.8 16.6 150.1
2015 .0 .0 .0 18.0 33.4 51.3 2.5 4.7 7.2 58.5
2016 .0 .0 .0 22.1 41.1 63.3 4.8 8.8 13.6 76.9
2017 .0 .0 .0 33.6 62.4 96.0 4.5 8.4 13.0 109.0
2018 .0 .0 .0 11.9 22.0 33.9 .7 1.3 2.0 35.9
2019 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0
.0 .0 .0 701.0 1395.0 2096.0 105.8 207.8 313.6 2409.6
-100- Annex 6Page 21 of 28
"CONTINUING COMPETITION" SCENARIO - LOW DEMAND
aNtE DE 02ETLDBENSE MMD mI (ktep)
MMDt MME GA2 NINT lOWIL Tal0 FlRl CM Nt PAT =I TMOL
1991 0 79757 224U7 2942 105186 0 1068 304 19 13901992 0 80812 26385 4931 11128 0 1082 357 )1 14701993 0 81916 27744 2388 112048 0 1097 375 15 14871994 0 94563 13654 758 108915 0 1266 185 5 14551995 0 101030 7713 713 109457 0 1352 104 5 14611996 0 103724 102 1140 115106 0 1389 138 7 15341997 0 77426 29761 323 107510 0 1036 402 2 14411998 0 81023 31976 424 113424 0 1085 432 3 15191999 0 51103 56637 66 107807 0 684 765 0 14502000 0 56361 56975 109 113445 0 754 770 1 1525
WmThL 0 807716 283575 13794 11508 0 10813 3832 87 14732
2001 0 61529 57450 175 ll9155 0 824 776 1 16012002 0 66434 58930 372 125736 0 889 796 2 1688203 0 37751 83460 84 121294 0 505 1128 1 16342004 0 42526 83936 0 126461 0 569 1134 0 1704205 0 48327 84608 0 132935 0 647 1143 0 17902006 0 25917 106706 0 U2623 0 347 1442 0 17892007 0 30798 108020 0 138818 0 412 1460 0 19722008 0 35791 109274 0 145065 0 479 1477 0 19562009 0 40889 110477 0 151365 0 547 1493 0 2m40201 27939 22270 104936 0 155145 408 298 1418 0 2124
nOIX 27939 412230 907796 630 134596 408 5518 12268 4 18198
2o1 53776 12299 95635 0 161709 785 165 1292 0 22422012 54592 15297 98429 0 168318 797 205 1330 0 23322013 55280 18836 100938 0 175054 807 252 1364 0 24232014 80280 10733 90354 0 181366 U72 144 1221 0 25362015 105966 5034 78196 0 189195 1546 67 1057 0 26712016 131631 2788 66529 0 200948 1921 37 899 0 28572017 13211 4289 71701 0 208101 1928 57 969 0 29542018 132726 6340 T773 0 216239 1937 85 1043 0 30652019 157518 3421 64664 0 225603 2299 46 874 0 32182020 5384 5156 70146 0 233685 2311 69 948 0 3328
nm L 1062262 84190 813764 0 1960216 1S503 1127 10997 0 27627
7M%L GOL 1090201 1304137 2005135 14424 4413897 15911 17458 27096 91 60557
prix de 1991 68.52 74,70 74,00 157,70e Dr/tap
- 101 - Annex 6Page 22 of 28
SUMMARY REPORTON A GENERATION EXPANSION PLAN FOR
ETUDE DE SUBSTITUTION INTER-COMBUSTIBLES POUR LA TUNISIE(SCENARIO TENDU DES PRIX DE COMBUSTIBLE-HYPOTHESZ 'AIBLE DE LA DEMANDE)
PROCESSED BY THE WASP-11 COMPUTER PROGRAM PACKAGEOF THE IAEA
STUDY PERIOD
1991 - 2020
PLANNING PERIOD
1991 - 2020
CONSTRUCTION COSTSIN MILLION TUNISIAN DINARS
ARE REPORTED ONLY FORPLANTS COMMISSIOhED
DURING THE PLANNING PERIOD.ALL OTHER INFORMATION IS GIVENFOR THE YHOLE STUDY PERIOD.
DATE OF REPORT : DECEEBRE 1989STUDY CARRIED OUT BY : SOCIETE TUNISIENNE DE LELECTRICITE ET DU GAZ
DIRECTION DES ETUDES ET DE LA PLANIFICATION
-102 - Annex 6Page 23 of 28
"TIGHT MARKET" SCENARIO - LOW DEMAND
ANNUAL LOAD DESCRIPTIONPERIODIS) PER YEAR 1 S
YEAR PEAKLOAD GR.RATT IN.LOAD GR.RATS ENERGY GR.RATE LOADFACTOR
W. E to GUH % '4
1991 830.0 - 95.5 4540.8 ' 62.45
2992 865.0 4.2 307.9 4.2 4724.7 4.0 62.35
1993 900.0 4.0 320.4 4.0 4915.9 4.0 62.35
1994 940.0 4.4 334.6 4.4 5134.4 4.4 62.35
1995 980.0 4.3 348.9 4.3 5352.8 4.3 62.3S
1996 1020.0 4.1 363.1 4.1 5571.3 4.1 62.35
1997 1070.0 4.9 380.9 4.9 5876.7 S.S 62.70
1998 1120.0 4.7 398.7 4.7 6151.3 4.7 62.70
1999 1170.0 4.5 416.5 4.5 6425.9 4.5 62.70
2000 1220.0 4.3 434.3 4.3 6700.5 4.3 62.70
2001 1270.0 4.1 452.1 4.1 6975.1 4.1 62.70
2002 1320.0 3.9 488.4 8.0 7286.3 4.S 63.01
2003 1370.0 3.8 506.9 3.8 7562.3 3.8 . 63.01
2004 1420.0 3.6 525.4 3.6 7838.3 3.6 63.01
2005 1480.0 4.2 547.6 4.2 8169.5 4.2 63.01
2006 1540.0 4.1 569.8 4.1 8536.5 4.5 63.28
2007 1600.0 3.9 592.0 3.9 8869.1 3.9 63.28
2008 1660.0 3.8 614.2 3.8 9201.7 3.8 63.28
2009 1720.0 3.6 636.4 3.6 9534.3 3.6 63.28
2010 1790.0 4.1 662.3 4.1 9922.3 4.1 63.28
2011 1860.0 3.9 688.2 3.9 10358.9 4.4 63.58
2012 1930.0 3.8 714.1 3.8 10748.8 3.8 63.58
2013 2000.0 3.6 740.0 3.6 11138.6 3.6 63.58
2014 2070.0 3.5 765.9 3.5 11528.5 3.5 63.58
2015 2150.0 3.9 795.S 3.9 11974.0 3.9 63.58
2016 2230.0 3.7 82S.1 3.7 12628.5 5.5 64.65
2017 2310.0 3.6 854.? 3.6 13081.6 3.6 64.65
2018 2400.0 3.9 888.0 3.9 13591.2 3.9 64.65
2019 2490.0 3.8 921.3 3.7 14100.9 3.7 64.65
2020 2580.0 3.6 9SI.6 3.6 14610.6 3.6 64.65
0
to
§~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ -4
W W ! .. ............................
ilE i g...............................i ....i.;.:.. . .-.-. .0 4 O0.0a SEs ................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
t ilW 8 ~. . . . . . _. _. . ^. _ . _ _. . . . . . . . . . . . . . . . . . .
g MiM_sERfl f l 6 E ; C ; i R g i E Q
. ...
c~~~~~~~~~~~~~~~',) k R ig.IxP AIAh * gil
- 104 - Annex 6Page 25 of 28
"TIGHT MABKET" SCENARIO - LOW DEMAND
SUMMARY OFTTXED SYSTFN PLUS OPTMH SOLUTION
(NOMINAL CAPACITY JN NV, ENERGY IN GWE)HYDFOELECSRIC TEER1AL FUEL TYPE TOTAL SYSTEM ENERGYHYDR CAPACITIES CAP RES. LOLP. NOT
YEAR 0 1 2 3 4 SERVEDPR. CAP PR. CAP NU TVCH TVFL GZNL TGCO % %
3991 1 64 0 0 0 0 724 290 130 1208 45.5 .263 11992 1 64 0 0 0 0 724 290 130 1208 39.7 .463 21993 1 64 0 0 0 0 724 350 130 1268 40.9 .333 11994 1 64 0 0 0 0 874 350 130 1418 50.9 .091 0199S 1 64 0 0 0 0 976 310 130 1480 51.0 .087 01996 1 64 0 0 0 0 976 310 130 1480 45.1 .154 11997 1 64 0 0 0 0 976 560 90 1690 57.9 .049 01998 1 64 0 0 0 0 928 520 30 1542 37.7 .426 21999 1 64 0 0 0 0 928 820 30 1842 57.4 .048 02000 1 64 0 0 0 0 928 820 30 '.842 51.0 .080 02001 1 64 0 0 0 0 928820 30 1842 45.0 .132 12002 1 64 0 0 0 0 880 820 30 1794 35.9 .323 22003 1 64 0 0 0 300 880 790 30 2064 50.7 .111 12004 1 64 0 0 0 300 880 700 0 1944 36.9 .471 32005 1 64 0 0 0 600 880 700 0 2244 51.6 .140 12006 1 64 0 0 0 600 880 700 0 2244 45.7 .230 22007 1 64 0 0 0 600 880 700 0 2244 40.3 .361 32008 1 64 0 0 0 900 880 700 0 2544 53.3 .112 120C9 1 64 0 0 0 900 880 700 0 2544 47.9 .175 12010 1 64 0 0 0 1200 600 700 0 2564 43.2 .322 32011 1 64 0 0 0 1200 600 700 0 2564 37.8 .523 52012 1 64 0 0 0 1500 600 700 0 2864 48.4 .188 22013 1 64 0 0 0 1500 600 700 0 2864 43.2 .295 32014 1 64 0 0 0 1800 600 700 0 3164 52.9 .108 12015 1 64 0 0 0 2100 300 700 0 3164 47.2 .212 2.2016 1 64 0 0 0 2100 300 700 0 3164 41.9 .411 42017 1 64 0 0 0 2400 300 700 0 3464 50.0 .171 22018 1 64 0 0 0 2400 300 700 0 3464 44.3 .289 32019 1 64 0 0 0 2400 300 700 0 3464 39.1 .474 52020 1 64 0 0 0 2700 300 700 0 3764 45.9 .217 2
- 105 -- Annex 6Page 26of 28
"TIGHT MARXET" SCENARIO - LOW DEMAND
EXPECTED COST OF OPERATIONTOTAL COST
DOMESTIC AND FOREIGNTYPE Of PLANT RV TVCH TVFL GZNL TGGO IYDRYEAR TOTAL COST ar PLANT TYPE (10003)
1991 153513 0 0 112535 32364 5541 30721992 168960 0 0 118754 38864 8270 30721993 176294 0 0 125167 42898 $156 30121994 161806 0 0 151279 246i40 3014 30721995 192092 0 0 170112 1590 3004 30721996 207548 0 0 180418 20355 3704 30721W97 209218 0 0 145651 58626 1870 30721998 224664 0 0 156370 64058 1164 30721999 230208 0 0 109724 116845 566 30722000 249921 0 0 123778 122421 650 30722001 266335 0 0 136305 126177 782 30722002 285582 0 0 148629 132705 1176 30722003 281395 0 42688 105088 129861 685 30722004 298694 0 43895 118368 133358 0 30722005 313050 0 102436 81057 126485 0 30722006 319870 0 89204 95066 132527 0 30722007 339486 0 89368 108832 138214 0 30722008 335363 0 133599 72774 125918 0 30722009 354255 0 133728 85030 132426 0 3072
2010 346848 0 117639 49205 116932 0 30722011 369291 0 178237 60899 127084 0 30122012 367660 0 219146 39782 105660 0 30722013 387908 0 220333 48707 115796 0 3072
2014 387162 0 258279 32083 93727 0 30722015 383883 0 293334 14029 73448 0 3072
2016 412043 0 298173 20229 90569 0 30722017 416727 0 330699 13656 69299 0 3072
2018 438428 0 335267 17553 82537 0 3072
2019 462090 0 339409 23252 96358 0 3072
2020 467247 0 371777 15853 76545 0 3072
TOTALS 9227538 0 3657210 2680183 2762402 35582 92160
- 106- Annex 6Page 27 of 28
"TIGHT MARUKET" SCENARIO - LOW DEMAND
aPfr.L CASH W MRIrtUa IDC
YAR D:ti. Fm. AL mR. E>. TMa DCMi. FMV. TOM GR. m.
1990 .0 .0 C0 ..1 2.4 3.6 .3 .6 .9 4.41991 ,0 .0 .0 12.3 27.4 39.7 2.2 4.6 6.8 46.51092 .0 .0 .0 30.2 60.5 90.7 4.1 7.8 11.9 102.6193 .0 .0 .0 29.2 54.6 83.8 3.1 5.9 8.9 92.71994 .0 .0 .0 18.0 37.6 55.6 2.3 5.2 7.5 63.119i5 .0 .0 .0 23.1 54.2 77.3 3.0 7.0 10.0 87.2199 .0 .0 .0 19.5 45.7 65.2 2.4 5.6 8.0 73.31997 .0 .0 .0 22.1 51.9 74.0 2.7 6.4 9.1 83.11998 .0 .0 .0 12.0 27.6 39.6 1.2 2.5 3.6 43.21999 .0 .0 .0 6.1 11.3 17.5 1.8 3.4 5.2 22.62000 .0 .0 .0 23.4 43.5 66.8 5.3 9.9 15.3 82.12001 .0 .0 .0 39.7 73.8 113.5 6.4 11.3 18.2 131.62002 .0 .0 .0 35.2 65.5 100.7 6.0 11.2 17.3 113.02003 .0 .0 .0 39.7 73.8 113.5 6.4 11.8 18.2 131.62004 .0 .0 .0 34.0 63.2 97.2 5.4 10.1 15.6 112.72005 .0 .0 .0 34.8 64.7 99.6 5.1 9.5 14.7 114.22006 .0 .0 .0 18.0 33.4 51.3 2.5 4.7 7.2 58.52007 .0 .0 .0 23.4 43.5 66.8 5.3 9.9 15.3 82.12008 .0 .0 .0 39.7 73.8 113.5 6.4 11.8 18.2 131.62009 .0 .0 .0 34.0 63.2 97.2 5.4 10.1 15.6 112.72010 .0 .0 .0 36.1 67.1 103.1 5.7 10.6 16.3 119.52011 .0 .0 .0 24.1 44.7 68.8 4.3 8.0 12.4 81.22012 .0 .0 .0 45.5 84.6 130.1 10.1 18.8 28.9 159.02013 .0 .0 .0 73.3 136.2 209.5 10.9 20.3 31.2 240.62014 .0 .0 .0 45.8 85.2 131.0 6.1 11.4 17.6 148.62015 .0 .0 .0 34.8 64.7 99.6 5.1 9.5 14.7 114.22016 .0 .0 .0 18.0 33.4 51.3 2.5 4.7 7.2 58.52017 .0 .0 .0 22.1 41.1 63.3 4.8 8.8 13.6 76.92018 .0 .0 .0 33.6 62.4 96.0 4.5 8.4 13.0 109.02019 .0 .0 .0 11.9 22.0 33.9 .7 1.3 2.0 35.9
.0 .0 .0 840.5 1613.0 2453.5 132.2 251.8 384.0 2837.5
- 107 - Annex 6Page 28 of 28
"TIGHT MARKET" SCENARIO - LOW DEMAND
DMUSE (kDT) fMr1'ES (ktep)
R MM GIZ NU GASGII WM Ct" MM GPZ NAT GASOh Cjl Ta
1991 0 97331 27489 3592 128411 0 1068 304 19 13901992 Q 98619 32253 6019 136891 0 1082 357 31 14701993 0 9S966 33915 2915 136797 0 1097 375 15 14871994 ( 115400 16691 926 133017 0 1266 185 5 14551995J 0 1232.92 9428 871 133591 0 1352 104 5 14611996 0 126579 1252C 1392 140491 0 1389 138 7 15341997 0 94487 36381 394 131262 0 1036 402 2 14411998 0 98877 39089 518 138483 0 1085 432 3 15191999 0 62364 69235 81 131680 0 684 765 0 14502000 0 68780 69649 133 138561 0 754 770 1 1525
WMTA1 0 985695 346651 16838 1349184 0 10813 3832 87 14732
2001 0 75087 70229 214 145530 0 824 776 1 16012002 0 81073 72038 454 153565 0 889 796 2 16882003 27873 52228 68431 142 148675 385 573 756 1 17162004 27942 58162 68812 0 154915 386 638 761 0 17852005 55607 35310 63025 0 153942 769 387 697 0 18532006 55692 42074 64559 0 162325 770 462 714 0 19452007 55812 48344 65824 0 169980 772 530 728 0 20302008 83384 28349 58088 0 169821 1153 311 642 0 21062009 83480 33906 59873 0 177259 1154 372 662 0 21882010 110817 17996 50522 0 179335 1533 197 559 0 2288
MMTAL 500606 472529 641402 810 1615347 6923 5184 7090 4 19201
2011 11257 23236 54132 0 188624 1539 255 598 0 23922012 136387 12678 42886 0 191950 1886 139 474 0 24992013 137259 16440 46284 0 199983 1898 180 512 0 25902014 160211 8543 35328 0 204082 2216 94 391 0 27002015 181037 3200 25826 0 210063 2504 35 285 0 28242016 184595 5744 32205 0 222543 2553 63 356 0 29722017 203561 2873 22743 0 229178 2815 32 251 0 30982018 206920 4381 Z7450 0 238750 2862 48 303 0 32132019 209965 6504 32032 0 248501 2904 71 354 0 33292020 228815 3508 237529 0 469852 3164 38 2626 0 5829
WTML 1760007 87107 556413 0 2403527 24340 956 6151 0 31446
WIMA GENEAL 2260613 1545331 1544465 17648 5368057 31263 16952 17073 92 65380
prix de 1991 72,31 91,16 90,46 192,45eu DTltep
Annex 7- 108- Page 1 of 2
COSTS O CONVERSION IN THE C lMT WORKS
PROPORTION OF FIXED INVESTMENT IN CONVERTING CEMENTWORKS FROM FUEL OIL TO COAL
Description Percent Share
Civit/st-uctural works 12.90
*4ethancial works (equlpment) 42.45
Electrical/instrumentation 7.64
Customs dutles on Imported equipment 2.21
Minimum tax 2.71
Road and sea transport(including Insurance) 4.07
Engineering, supplies andconstruction manaement 13.42
contingencies 13.43
Initlal expenses 0.67
Total 100.00
- 109 - Annex 7Page 2 of 2
Total Cost of Conversion
Bizerta cement plant: US$20/t Total cost: 780,000 t x 20 = USS15,600,000,USS17.75/t Total cost: 780,000 t x 17.75 US$13,485,000
Description US$20/t USS17.75/+
Clvil/structural work.s 2,013,000 1,787,000Mechanical wcrks (equlipmnt) 6,622,000 5,876,000Electrical/instrumentation 1,192,000 1,058,000Customs duties on imported equipment 345,000 306,000Minimum tax 423,000 564,000Rcd and sea transport 635,000 564,000EnAgineer:ng/suppl es andconstructlon me agement 2,092,000 1,867,000
Contingencies 2,173,000 1,928,000Initial expenses 105,000 93,000
Total 15,600,000 13,345,000
SICC, CJO cement plants: USS20/t Total cost: 900,000 t x 20 USS18,000,000USS17.75/t Total cost: 900,000 t x 17.75 USS15,975,000
Description US$20/t US$17.75/t
Civil/structural works 2,332,000 2,061,000Mechanical works (equipment) 7,641,000 6,731,000Electrical/instrumentation 1,375,000 1,220,000Customs duties on Imported equipment 398,000 353,000Minimum tax 488,000 433,000Road and sea transport 733,000 650,000Engineering, supplies andconstruction management 2,416,000 2,144,000
Contingencies 2,507,000 2,226,000Initial expenses 120,000 107,000
Total 18,000,000 15,975,000
Annex 8- 110- Page 1 of 2
COST OF TRANSPORT OF COAL BY THE TUNISIAN NATIONAL RAILROAD (SNCFT)
S^enarlo 1: FROM THE PORT OF LA GOULETTE
Annual Dally No. of cars Cost perTonnage Tonnage needed/day ton (TM)
Bizerta cement plant 118,000 394 13 3.823CJO 125,000 420 14 2.752SICC 125,000 420 14 3.926
Rotation Total required
Bizerta ceaeit plant 2 26 40-t carscWO 2 28 40-t carsiCC 2 29 40-t cars
Scenario 1: FROM THE PORT OF BIZERTA
No. of Total Cost percars required ton (TD)
CJO 14 SG cars 28 SG14 NG cars 28 NG 4.537
SICC 14 SG cars 28 SG14 NG cars 28 NG 5.558
Total 28 SG cars28 NG cars
Scenario IIl: FROM THE PORT OF SKHIRA
No. of Total Cost percars required ton (TD)
Sizerta cement plant 13 SG cars 39 SG13 NG cars 26 NG 10.914
CJO 14 NG cars 42 NG 10.098
SlCC 14 NG cars 28 NG 7.139
Total 41 NG cars 109 NG13 SG cars 26 SG
SG - Standard Gage NG - Narrow Gage
Source: SNCFT.
Annex 8-i111l- Page 2 of 2
SNCFT presently has the following self-unloading cars:
- standard gage: 43 40-t SM- narrow gage: 83 40-t SM
120 40-t YSC
The SM cars are currently used for hauling iron ore. The YSCcars are for cereals, phosphates and china clay. These cars cannottherefore be assigned exclusively for use with coal, but some of them couldbe assigned to coal service:
- standard gage: 15 carsnarrow gage: 60 cars.
In view of this constraint and that formed by standard-narrowgage transfer, Scenario I (port of La Goulette) is the best option.
The costs shown are the present rates, including VAT and withoutrebate (220 millimes/ton).
- 112 - Annex 9Page 1 of l
WORK REQUIRED TO PMSPARELA GOULETTE AND BIZERTE TE u RCXVY COAL 6/
Port of La GouletteNTD
Transfers from Derissa: remove existing equipment(unloader, tracks and gantry all in disrepair) 2.5
Rehabilitation of dock 1.0
Dredging 0.3
Gantry 2.5
Equipment for unloading, storage and offtake 1.5
Total 10.3
Port of Bizerte
200-m wharf 2.0
Gantry 2.5
Conveyor between wharf and plant 1.5
Total 6.0
6/ To receive ships of a capacity of 20-25,000 tons (Source: ONPT).
Annex 10- 113- Page 1 of 12
)IUhCCIGAN D PORTUGUtSE EXPERIENCE VITH USE OF COAL(Information gathered during a visit by a Tunisian delegation)
Foreword
In connection with the study on interfuel substitution in theindustry and electricity sectors under the World Bank/UNDP Energy SectorManagement Assistance Program (ESMAP), a Tunisian delegation visitedMorocco and Portugal to find out about their experience with coal use.
This report, prepared by the members of the Tunisiandelegation, presents the delegation's chief findings and the datagathered from visits to Moroccan and Portuguese establishments, and asuimary of their observations and conclusions regarding use of coal.
Morocco
Place of coal in the energy context
Morocco's energy balance for 1986 was as follows.Consumption
Product (Ktoe) X
Coal 900 17Oil products 4191 79Natural gas 67 1Hydroelectricity 167 3
Total 5325 100
of which the followingwas produced locally
Anthracite 360 58Oil and natural gas 89 15Hydroelectricity 167 27
Total 616 100
Energy deficit 4570 88.4
Annex 10- 114 Page 2 of 12
This substantial energy deficit has led Morocco to diversifyits sources of supply and to encourage use of fuels other than petroleumproducts, such as coal.
After the second oil shock, intensive efforts were made todiversify away from oil, and the share of coal in total consumption rosefrom 8% in 1980 to 17% in 1986.
Morocco's efforts to switch to coal were unquestionablyfacilitated by the experience it already possessed with coal, since theJerada mine in the east of the country had been producing anthracite forover 40 years, the Casablanca Roches Noires power station (75 MW), whichuses the fluidized-bed process, had been in operation since 1952, and theJerada power station (2 x 75 MW), which burns powdered coal, dates from1973.
Both of the power stations mentioned burn Moroccan anthracitefrom Jerada. Anthracite has also been used since 1960 in two sugarmills, where it is mixed with 25% imported coal.
There was a further surge in coal after 1982, when the cementworks were converted to burn imported steam coal. Between 1982 and 1986all of Morocco's cement works (except one 250,000-t plant in Tangier),representing 3.4 million tons production capacity, were converted tocoal.
As regards the use of coal for electricity generation, two 150-MW units burning imperted steam coal were put into service at theMohammedia power station in April 1986.
Today, Morocco imports about 1.2 million tons of steam coal ayear for the Mohammedia thermal power station and the cement works. Thecoal is distributed as follows:
- Mohammedia 800,000 t- Cement works 400,000 t
Coal supply and distribution
Almost all coal supply and distribution operations are handledby the Societe Commerciale de Charbon et de Bois (Sococharbo), asubsidiary of Charbonnages Marocains (Moroccan Coalmines), which suppliesthe coal to the cement works, sugar mills, foundries and the OfficeNationale de l'Electricite (ONE).
- 115 Annex 10Page 3 of 12
Methods of delivery - supply contracts. For the first threeusers listed, Sococharbo takes care of all supply arrangements, from thecall for bids through physical delivery on site.
ONE issues the calls for bids itself. Sochocarbo assists inevaluating the bids, and handles all subsequent operations.
The contract that Sococharbo establishes with the suppliers --an annual contract for ONE and the cement works -- sets out thespecifications for the coal, the procedures for verifying compliance withthese specifications, the conditions for freight and delivery, thepenalties and bonuses, and the terms of payment. Another contractincorporating the same terms and conditions links Sococharbo with theuser of the coal.
Supply. The coal is imported through the port of Casablanca,which has two coal wharves. One of these can handle 20,000-t coalcarriers and has a 1.5-ha storage area with a capacity of 80,000 tons; itis equipped with two gantry cranes, one of 180 t/h capacity, the other600 t/h. The other wharf does not have gantry cranes but can handle40,000-t self-unloading carriers, for which transport and unloading costsare lower. It has an 8,0Q0-m2 storage area and a storage capacity of40,000 tons.
In 1987, the carrier unloading rate for carriers was 4,000tons/day. Sochocarbo supervises carrier reception and also takes care ofthe different fees and charges: tolls, lighterage, unloading, rental ofstorage and weighing areas, charges for laboratory analysis, miscella-neous port charges and fees.
Sococharbo has a maintenance shop in the port, as well asrolling stock for handling and compacting the coal. The storage area ishosed to keep dust levels down and prevent pollution problems. Thissystem seems to work well.
Distribution. The coal is either trucked into the Mohammediapower station in covered 30-t trucks or brought in by rail in trains oftwenty 50-t cars. The trucks unload at the power station while thetrains offload at an unloading facility in front of the power station,and the coal is moved to the storage area by conveyors.
The cement works and sugar mills are essentially served byroad. Road transport is more cost-effective for distances of less than250 km.
The trucks are owned by a trucking group which negotiates theterms and conditions of the coal haulage contract with Sococharbo eachyear.
Annex 10116 - Page 4 of 12
Use of coal in electricity generation
Present situation: Mohammedia power station. Morocco has along tradition of using coal for power generation. The Roches Noires andJerada power stations have been burning Moroccan coal for nearly 20years. This coal, from the Jerada mine in eastern Morocco, is ananthracite; its calorific value is about 6,500 kcal/kg lower than that ofraw coal. However, a strategy based on large-scale importation of steamcoal was decided on in 1981. Two years after the 1979 oil shock, ONEopted to convert the third and fourth units of the Mohammedia powerstation to coal. These units were then still in the construction stageand, like the first and second units, were originally designed to burnheavy fuel oil.
Located about 30 km from the port of Casablanca, the Mohammediathermal power station now has four sets with a unit power of 150 14W, twoof which operate exclusively on heavy fuel oil and two on coal.
Conversion of the third and fourth units was done with Lhe goalof keeping as much as possible of the features and equipment originallyplanned, and consequently the stack, the rotating air reheaters and therecycled air blowers were kept.
The main additions needed in the conversion were:
- air blowers to move the powdered coal;
- coal reception, storage and handling equiprment (storageyard, conveyors, machinery for storing the coal and removingit from storage
- coal crushers;
- storage and crusher feed hoppers in the boiler room;
- dust collectors to remove the dust from the chimney smokeand ensure adequate protection of the environment;
- clinker extractors;
- ash recovery and disposal equipment.
The coal is brought to the power station either by road, in 30-t trucks, or by rail in trains made up of twenty 50-t cars. The trainsoffload the coal at a unloading facility in front of the power station,and moved by conveyors to the storage yard. This yard has a capacity of160,000 tons, sufficient for about two and a half months' operation.
Use. Use of coal in the power station demands greater skilland attention from the technicians in charge than is needed for operationwith heavy fuel oil.
- 117 - Annex 10Page 5 of 12
Safety. Use of coal poses no major safety problem. The onlyadditional safety measures called for are temperature control in the coalheap and compacting to prevent spontaneous combustion.
Pollution. All the antipollution equipment has been obtained.However, pollution parameters such as ash and sulfur content in the smokeare not monitored.
Mohammedia uses around 800,000 tons of coal a year, creatingsome 90,000 t of ash. This ash is dumped into the sea and has not causedany pollution problems so far, according to the power stationtechnicians.
Prospects: the Jorf power station. ONE has programmedinstallation of two 300-MW steam thermal units in 1993. These willconstitute stage A of the Jorf power station, which will comprise four300-MW units in all by around the year 2000. Jorf will be constructed ona site a few kilometers from the Jorf Lasfar phosphate terminal.
Once this terminal is provided with a coal dock it will be ableto receive 100,000-t coal carriers to supply the power station.
With the addition of Jorf, ONE's annual coal consumption willreach 3 million tons.
Economic and financial aspects. Coal was introduced intoMorocco's power generation system at a time when heavy fuel oil and coalprices were US$ 190 and US$ 95/toe respectively. The economic study ofconversion of the Mohammedia 3 and 4 units was made from the nationalviewpoint. That is, it considered the capital costs and fuel pricesexcluding taxes and duties. It took particular account of:
- the capital expenditures needed for conversion;
- the special features of operation with fuel oil and withcoal.
Since the purpose of the study was to determine the paybacktime for the capital expenditures entailed by conversion, the samecalculations were made from the standpoint of the power-generationauthority, ONE. These calculations showed that both from the nationalstandpoint and from that of ONE, the payback time was relatively short,namely between three and five years.
The chief assumptions adopted in the calculations were:
- movement of fuel prices in current currency between 1981 and1985: 15% for heavy fuel oil and 10 for coal;
- capital expenditures required for conversion:US$ 63 million.
_ 118 - Annex 10Page 6 of 12
Prospects. With the Jorf power station (4 x 300 MW), whosefirst two units are programmed for 1993, ONE has embarked on a long-termstrategy of large-scale importation of coal. These two units will bringONE's steam thermal installed power up to 1785 MW, of which 900 MW willoperate on steam coal.
Since the drop in prices of petroleum products in 1985, thedifferential between heavy fuel oil and coal prices is no longer as greatas it was in 1980-81; in 1988, prices were in the region of US$ 60 andUS$ 85/toe, respectively.
Coal equipment in a dual-fuel (heavy fuel oil + coal) steamthermal power station entails an estimated additional cost of 351 of thecost of a plant burning heavy fuel oil alone.
The above factors imply that coal is no longer as attractive asit was in 1980-91. Moreover, the payback time for the capitalexpenditures for a single thermal plant exceeds 10 years. However, theintroduction of coal in the Jorf power station, designed to operate oncoal and on fuel oil, is also seen as a means for diversifying ONE'sprimary energy supply sources.
Use of coal in the cement sector
Morocco has eight cement plants, all in the private sector:
Annual productionCement plants capacity (tons)
Agadir 1,000,000Asmar (Marrakech) 450,000Asment Temara (Rabat) 650,000Cadem (Mekn&s) 650,000C.I.O.R. (Oujda) 1,200,000Cinouca (Casablanca) 1,200,000Tangier 650,000Tetouan 250,000
These plants were all converted to coal in 1982-85 except for Tangier,whose conversion is presently envisioned. The group visited theCasablanca and Temara cement plants.
The main additional equipment required for conversion is:
- equipment for bringing coal from storage;- feed hopper;- conveyor and magnetic screen;- crusher;- separation cyclone;- storage hopper for powdered coal;- filter with dust removal sleeve;
- 119 - Annex 10Page 7 of 12
- inerting equipment for the powdered coal hopper, filter,crusher and cyclone.
This equipment is being installed in the Casablanca cementplant; the coal is prepared in a unit some 30 km from the plant andbrought in by special tank trucks under stringent safety measures.
Pollution. Since the cinders and fly ash are recovered asclinker, conversion to coal does not create any additional pollutionproblem in the cement works.
Safety. We were informed of some incidents that causedmoderate physical damage. However, in the opinion of everyone we met,such accidents can be prevented by proper training in coal-use techniquesand ensuring that personnel are aware of safety problems. The vigilanceand discipline of the staff will ensure safety.
Financial aspects. The magnitude of the price differential inMorocco between heavy fuel oil (heavily taxed) and coal (tax exempt)spurred the cement works to convert to coal as of 1982, i.e. earlier thanONE. The financial attractiveness of these conversions was evidenced bythe payback times of two to three years achieved.
Energy policy
After the second oil shock, Morocco instituted a tax systemfavoring the use of coal over that of heavy fuel oil. The purpose ofthis policy was to encourage consumption of a fuel whose internationalprice was appreciably lower than that of heavy fuel oil (US$ 95/toe forcoal, as opposed to US$ 190/toe for heavy fuel oil) and to promotediversification of energy sources.
Although the international price differential between fuel oiland coal is now considerably less, this policy is still in effect. Thequestion of tax policy concerning fuels is, however, being reconsideredby the Ministry of Mine; and Energy, who are thinking of modifying thispolicy.
An important argument in favor of revision of the taxationsystem for coal is that the refineries are presently operating at 50% ofcapacity, largely on account of the drop in consumption of fuel oil sincethe introduction of coal.
- 120 - Annex 10Page 8 of 12
Portugal
Place of coal in the energy context
Portugal's domestic energy resources are limited, amounting to:
- hydropower capable of meeting 50% of the country'selectricity needs;
- a coal mine in the north of the country, which produces alow-grade coal used exclusively in a 3 x 50-MW thermal powerstation in operation since 1958.
The rest of Portugal's electricity generation is based onimported coal and heavy fuel oil, though very little use is currentlymade of the latter. There are two oil-fired power stations, one of 2 x125 MW and the other of 4 x 250 MW, and only two units in the secondstation are in service.
With regard to coal, one power station in the Sines region ispresently operating with three 300-MW units. Coal is also used inindustry, especially in the cement sector where it is the only fuel usedin virtually all the plants. The industry and power sector coal users inPortugal deal directly with the suppliers and negotiate their contractsindividually.
Taxes and duties on heavy fuel oil are in the region of 40%whereas coal is tax exempt.
Coal in electricity generation
Coal supply through the international market for Portugal'snational electricity authority EDP began in 1985 with the Sines thermalpower station. This station will ultimately comprise six 300-MW steamthree units were in operation, and the fourth was scheduled to be broughtinto service in November 1989.
The total site area is 125 ha, 25 ha of which is used for ash.
The coal yard is large enough to contain four active stockpilesof 160,000 tons apiece and one reserve pile of 900,000 tons.
The supply terminal is located 7 km from the power station.The terminal is currently receiving 40,000-t and 65,000-t self-unloadingcoal carriers, at a rate of six per month. The coal is moved into thepower station on conveyors operating at 2,000 t/h.
_ 121 _ Annex 10Page 9 of 12
Use and safety. The comments made for Morocco apply here also.
Pollution. Portugal's rules on coal pollution have beenaligned with those of the European Community i-or some years. Powerstations built after 1992 will have to meet the EC requirements, butexisting facilities are only required to come as close as they can tothese norms.
The EC rules set a limit of 1% for steam coal sulfur content.This limit will have to be observed for the first unit of the Pego powerstation, to be installed in 1993.
The Sines power station produces 840 tons of ash per day, 80%in the form of fly ash.
The ash deposited under the dust collectors is first storedtemporarily in enclosed areas, then shipped out to the cement plants.This procedure is also consistent with an EC recommendation that ash berecycled in cement plants. The ash is hauled by tank trucks.
The ash deposited in the base of the Sines boiler is stored inan area located inside the power station site. To prevent dust fromblowing about and to blend the area into the surrounding countryside, theash heap is covered with a layer of earth and covered with appropriatevegetation.
A plastic sheet laid over the ground before the ash is dumpedcollects rain and hose water runoff and prevents it from permeating thesoil and polluting the ground water. This runoff water is drained intothe power station effluent treatment system.
Prospects: the Pego power station. The Pego power station, ona site on the Tagus, 120 km north of Lisbon, will comprise four 300-MWunits. The first unit is scheduled to go into service in 1992.
With the installation of Pego's fourth unit, installed coal-fired steam thermal power will total 3,000 MW as compared with 2,000 MWin oil-fired steam thermal power.
Economic and tax aspects. Like many countries, Portugal optedfor coal for electricity generation following the second oil shock in1979. This decision was considered justified for two main reasons:
-the price differential between coal and heavy fuel oil, 80% infavor of coal prior to 1980-82;
-the existing port infrastructure: the Sines terminal, whichservices the Sines power station, could handle 40,000-t coal carrierswithout problems.
- 122 - Annex 10Page 10 of 12
Since the Sines power station was part of an industrial complex(refinery, thermal power station, chemical industry), the capitalexpenditures for the first stage were considerably reduced.
Continuation of the coal-burning power station program over themedium term is considered warranted. The seven 300-MW units to beinstalled between 1989 and 2000 (three in Sines and four in Pego) willnot in fact require new infrastructure. The Sines terminal, which is tobe developed to handle 150,000-t carriers, will serve both the Sines andthe Pego power stations.
It is estimated that the Sines terminal expansion could bringabout a 7% reduction in the CIF cost of a ton of coal. At an annualconsumption of 4 million tons of coal, this reduction would permitrecovery of the estimated US$ 20-million cost of the expansion in lessthan a year.
Coal in the cement sector
Two cement groups, Cimpor and Seciles, produce cement inPortugal. The first has five plants, including the one we visited inAlhandra, and the second has one plant. The fuel used in all theseplants is coal.
Coal supply. The Cimpor group has a department responsible forcoal supply which handles all contacts with suppliers, contracts, carriercharter, and all import formalities. Following an annual call for bids,the coal is purchased at an FOB price and a Portuguese shipping companyis chartered to carry it. The coal is brought in by 60,000-t carrierswhich are then unloaded on the Tagus into 2,700-t barges which deliverall the coal to a wharf at the Alhandra cement plant, from which truckstake it to the storage yard for use in Alhandra or onward shipment byrail to the groups' other cement plants.
Coal use. The comments on safety and pollution made forMorocco apply here also.
Financial aspects. As for Morocco, the investment payback timehas been short, about two years, partly due to the taxation of heavy fueloil.
Recycling of ash. An agreement between Cimpor, EDP and theEnvironment Directorate requires the cement plants to use all the fly ashproduced by EDP. This agreement has been satisfactory for all partiesconcerned, as it combines protection of the environment with financialreturns for Cimpor and EDP.
- 123 - Annex 10Page 1-1 of 12
Summary
The main questions generally raised about coal relate toproblems with use, safety and pollution.
Concerning the first point, it was clearly apparent in both thecement plants and the power stations that using coal requires a specificknowhow, a higher level of competence on the part of the technicians, andgreater vigilance and availability on the part of all personnel, than forheavy fuel oil.
This is due mainly to the difficulties posed by the techniquefor coal combustion, which is more complex than for heavy fuel oil, andto the safety problems at all stages in the preparation and feedsequence. However, with thorough training and sensibilization ofpersonnel to safety problems, these difficulties are surmountable.
However, we must not expect quick mastery of the technicalproblems connected with coal use. The manager of one cement plantvisited commented that a good 10 years is needed to fully master thetechnique of using coal.
Pollution did not seem to be a problem in the storage yardsvisited. No dust was seen blowing about at the time we were there; ofcourse, the situation could be different at other locations.
Concerning smoke emissions from the stacks, the use of dustcollectors gives very satisfactory results and keeps fly ash emissionswithin reasonable proportions; however, the absence of desulfurizationequipment in the Moroccan and Portuguese thermal power stations meansthat the sulfur levels in the smoke exceed the maxima permitted by thenew EC rules. New power stations in Europe will have to includedesulfurizers, the cost of which is substantial.
According to the operators, ash disposal does not cause anyproblems. In our opinion, the dumping of ash at sea should be studied inorder to prevent harmful impacts on the marine environment, which thePortuguese experts see as inevitable. Recycling to cement works remainsthe best solution and storage on site of heavy ash and any residualnonrecycled ash, as is done in Portugal, also seems to be a satisfactoryarrangement.
In the economic and financial sphere, the decisive importanceof tax advantages in motivating consumers to use coal must be borne inmind. In both Morocco and Portugal, users' decisions to opt for coalwere based on the differential between the domestic prices for coal andheavy fuel oil, which was appreciably greater than the price differentialon the international markets.
Annex 10- 124 - Page 12 of 12
The large variation in coal transport costs in relation tocarrier capacity, and the substantial savings that can be obtained byshipping coal in large-capacity carriers must also be emphasized.
ENERGY SECTOR MANACEKENT ASSISTANCE PROGRAM
Activities Completed
Country Project Date Number
ENERGY EFFICIENCY AND STRATEGY
AfricaRegional The Interafrican Electrical Engineering College:
Proposals for Short- and Long-Term Development 3/90 112/90Participants' Reports - Regional Power Seminaron Reducing Electric System Losses in Africa 8/88 087/88
Bangladesh Power System Efficiency Study 2/85 031/85Bolivia La Paz Private Power Technical Assistance 2/90 111/90Botswana Pump Electrification Prefeasibility Study 1/86 047/86
Review of Electricity Service Connection Policy 7/87 071/87Tuli Block Farms ElectrificationPrefeasibility Study 7/87 072/87
Burkina Technical Assistance Program 3/86 052/86Burundi Presentation of Energy Projects for the
Fourth Five-Year Plan (1983-1987) 5/85 036/85Review of Petroleum Import and Distribution
Arrangements 1/84 012/84Burundi/Rwanda/Zaire (EGL Report)
Evaluation de l'Energie des Pays des Grands Lacs 2/89 098/89Congo Power Development Study 5/90 106/90Costa Rica Recommended Technical Assistance Projects 11/84 027/84Ethiopia Power System Efficiency Study 10/85 045/85The Gambia Petroleum Supply Management Assistance 4/85 035/85Ghana Energy Rationalization in the Industrial
Sector of Ghana 6/88 084/88Guinea- Recommended Technical AssistanceBissau Projects in the Electric Power Sector 4/85 033/85
Management Options for the Electric Powerand Water Supply Subsectors 2/90 100/90
Indonesia Energy Efficiency Improvement in the Brick,Tile and Lime Industries on Java 4/87 067/87
Power Generation Efficiency Study 2/86 050/86Diesel Generation Efficiency Improvement Study 12/88 095/88
Jamaica Petroleum Procurement, Refining, andDistribution 11/86 061/86
Kenya Power System Efficiency Report 3/84 014/84Liberia Power System Efficiency Study 12/87 081/87
Recommended Technical Assistance Projects 6/85 038/85Madagascar Power System Efficiency Study 12/87 075/87Malaysia Sabah Power System Efficiency SLudy 3/87 068/87Mauritius Power System Efficiency Study 5/87 070/87Mozambique Household Electricity Utilization Study 5/90 113/90Panama Power System Loss Reduction Study 6/83 004/83Papua New Energy Sector Institutional Review: ProposalsGuinea for Strengthening the Department of
Minerals and Energy 10/84 023/84Power Tariff Study 10/84 024/84
UENEGY SECTOR MANAGEMENT ASSISTANCE PROGRAM
Activities Completed
Country Project Date Number
ENERGY EFFICIENCY AND STRATEGY (Continued)
Senegal Assistance Given for Preparation of Documentsfor Energy Sector Donors' Meeting 4/86 056/86
Seychelles Electric Power System Efficiency Study 8/84 021/84Sri Lanka Power System Loss Reduction Study 7/83 007/83Syria Electric Power Efficiency Study 9/88 089/88
Energy Efficiency in the Cement Industry 7/89 099/89Sudan Power System Efficiency Study 6/84 018/84
Management A3sistance to the Ministry ofEnergy and Mining 5/83 003/83
Togo Power System Efficiency Study 12/87 078/87Uganda Energy Efficiency in Tobacco Curing Industry 2/86 049/86
Institutional Strengthening in the Energy Sector 1/85 029/85Power System Efficiency Study 12/88 092/88
Zambia Energy Sector Institutional Review 11/86 060/86Energy Sector Strategy 12/88 094/88Power System Efficiency Study 12/88 093/88
Zimbabwe Petroleum Supply Management 2/90 109/90Power Sector Management Assistance Project:Background, Objectives, and Work Plan 4/85 034/85
Power System Loss Reduction Study 6/83 005/83
HOUSEHOLD, RURAL, AND RENEWABLE ENERGY
Burundi Peat Utilization Project 11/85 046/85Improved Charcoal Cookstove Strategy 9/85 042/85
Cape Verde Household Energy Strategy Study 2/90 110/90China Country-Level Rural Energy Assessments:
A Joint Study of ESMAP and Chinese Experts 5/89 101/89Fuelwood Development Conservation PrQject 12/89 105/89
Costa Rica Forest Residues Utilization Study, Volumes I & II 2/90 108/90Cote d'Ivoire Improved Biomass Utilization--Pilot Projects
Using Agro-Jndustrial Residues 4/87 069/87Ethiopia Agricultural Residue Briquetting: Pilot Project 12/86 062/86
Bagasse Study 12/86 063/86The Gambia Solar Water Heating Retrofit Project 2/85 030/85
Solar Photovoltaic Applications 3/85 032/85Ghana Sawmill Residues Utilization Study, Vol. I & II 10/88 074/87Global Proceedings of the ESMAP Eastern and Southern
Africa Household Energy Planning Seminar 6/88 085/88India Opportunities for Commercialization of
Non-Conventional Energy Systems 11/88 091/88Indonesia Urban Household Energy Strategy Study 2/90 107/90Jamaica FIDCO Sawmill Residues Utilization Study 9/88 088/88
Charcoal Production Project 9/88 090/88Kenya Solar Water Heating Study 2/87 066/87
Urban Woodfuel Development 10/87 076/87
Activities Completed
Country Project Date Number
HOUSEHOLD, RURAL, AND RENEWABLE ENERGY (Continued)
Malawi Technical Assistance to Improve the Efficiencyof Fuelwood Use in the Tobacco Industry 11/83 009/83
Mauritius Bagasse Power Potential 10/87 077/87Niger Household Energy Conservation and Substitution 12/87 082/87
Improved Stoves Project 12/87 080/87Pakistan Assessment of Photovoltaic Programs,
Applications and Markets 10/89 103/89Peru Proposal for a Stove Dissemination Program
in the Sierra 2/87 064/87Rwanda Improved Charcoal Cookstove Strategy 8/86 059/86
Improved Charcoal Production Techniques 2/87 065/87Senegal Industrial Energy Conservation Project 6/85 037/85
Urban Household Energy Strategy 2/89 096/89Sri Lanka Industrial Energy Conservation: Feasibility
Studies for Selected InduEtries 3/86 054/86Sudan Wood Energy/Forestry Project 4/88 073/88Tanzania Woodfuel/Forestry Project 8/88 086/88
Small-Holder Tobacco Curing Efficiency Project 5/89 102/89Thailand Accelerated Dissemination of Improved Stoves
and Charcoal Kilns 9/87 079/87Rural Energy Issues and Options 9/85 044/85Northeast Region Village Forestry and WoodfueLPre-Investment Study 2/88 083/88
Togo Wood Recovery in the Nangbeto Lake 4/86 055/86Uganda Fuelwood/Forestry Feasibility Study 3/86 053/86
Energy Efficiency Improvement in theBrick and Tile Industry 2/89 097/89
IBRD) 22227
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Oil\Gas fields 0 25 50 75_ Champs petrollgaz \&} KIL'OMETERS
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ELECTRIC LINES: 0eAKorineLIGNES ELECTRIQUES: N1ordWfl
225 kV K ssqrine___ zq f Kasserine Sidi Bou" Zid 33
150 kV Feriono S[di Monsour
90 kVJebe Onk V .Sax., -S
Moknossy Aet e;mkhSUBSTATIONS:POSTES: <,fGafsa
225 kV ,,, 1 hio7 'i'? ,,,setloogli aG (ui.
90k150 kV Teshim
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POWER PLANTS: GbeI!i Cim nlerie -
CENTRALES Chot7 , GIbe ;ELECTRIQUES: I i7 ' ' o
El THERMAL MedenineoTH-ERMIQUE 6'0
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NATIONAL CAPITAL a b o
CAPITALE DU PAYS U Wodd, o/d 'h.F.o - .ChSoo . 0 25 5O 75
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tA- od 2hln07E f,- Coro.'o,- ay
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8 9 10 11
MARCH 1990
