In operating and planning electric distribution business, the expansion and demand growth must be intertwined. Expansion won’t happen if not demand driven. Increasing demand must be met by system expansion. The figure below is a graphical illustration of Philippine Electric Cooperatives (PECs) in year 2006, depicting their distribution line in circuit kilometers versus the annual sales in MWh.
From the figure, EC #91 has the longest ckm but does not have the highest sales. EC #96 has the highest energy sales with operating significant lesser ckm of distribution line compared to EC #96. It can by thought that EC #96 might have a service area that is very rural thus it has to erect longer lines to reach consumers. On the other hand, if this is not the case, then EC #96’s investment in distribution lines is not optimized since it has put a longer ckm with a smaller demand.
The regulation of system expansion must meet the rise of demand up to the point that it satisfies reliability and quality performance. However, investment in distribution business must not be overdone because some of these costs are passed on to the consumers.
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