An Optimisation Model of the New Zealand Energy Supply and Distribution System

Abstract

New Zealand's energy supply industry is becoming increasingly complex. There is growing interaction between the various sectors of the industry, with decisions made in one sector havingramifications in all other sectors. The analysis of energy options and policies therefore requires a simultaneous consideration of all sectors of the supply industry. This research has been concerned with the development of a mathematical programming model of New Zealand's energy supply, production and distribution system. The model describes the steady state operation of all sectors in the energy system for a given year. Forecast demand for energy is satisfied subject to various operational constraints. The Optimality criterion is usually that of least cost, where this includes annuitised capital costs for plant and equipment, fuel costs, and also annual operation and maintenance costs. Demand is specified in terms of useful (effective) energy to the consumer. Several consumer categories are defined, allowing the consideration of features appropriate to individual categories as well as the process of inter-fuel substitution. Decision variables of the model include the levels of energy production, capacities of process plant and equipment (e.g. electricity generation stations), and the amount of each fuel type supplied to the various consumer demand categories. The methodology used is linear programming, with (in a limited number of cases) extensions to include non-linear terms in the objective function. The model can be used to analyse a wide range of issues concerning energy production and use in New Zealand. Several studies on specific areas have been undertaken with the model; results and conclusions from a number of these studies are described.