Evaluate Demand In Either A Essay Example
Evaluate Demand In Either A Essay Example

Evaluate Demand In Either A Essay Example

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Evaluate methods of balancing capacity and demand in a service or manufacturing organization with which you are familiar.

This text is submitted as a requirement for the completion of the Master of Commerce Degree in Strategic Management and Corporate Governance.

Definitions

Capacity refers to the "specific ability of an entity (person or organization) or resource, measured in quantity and level of quality, over an extended period." (Source) Capacity utilization is the measure of how much productive capacity is being used by a plant, firm, or country in the production of goods and services. It is typically expressed as a percentage and calculated by dividing the total capacity by the portion being utilized.

The text below provides definitions and explanations of various terms related to demand and the electricity industry. These definitions have been sourced from different websites.

In economics, demand refers to a consumer's desire and willin

...

gness to pay a certain price for a particular good or service. As demand increases, the price of the item also increases, and vice versa (Source: investopedia.com).

The Electricity Glossary, sourced from power2switch.com, offers the following terminologies used in the electricity industry:

- Megawatt (MW) is a unit of energy equivalent to 1000 kW or 1,000,000 watts.

- Kilowatt (kW) is a unit of energy equal to 1,000 watts.

- Grid describes the interconnected transmission system.

- Thermal power is the conversion of heat into electricity.

- Hydro-power is derived from the weight or motion of water and used to drive machinery.

- Co-generation involves using fuel to produce electricity as well as another product such as steam or water.

- Demand (Source: power2switch.com)

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measured in kilowatts (kW) or megawatts (MW), represents the installed capacity, load, power supply and demand within the electricity industry. These definitions and terminologies provide insights into consumer demand as well as key concepts. A load curve graphically depicts the supplied electricity over a certain period while load shedding discontinues electric current on specific lines when the demand exceeds the supply. [Source: power2switch.com]

"Demand Side Management (DSM)" refers to the practice of lowering energy consumption or shifting energy usage from peak to off-peak periods in order to effectively decrease overall energy expenses. The Ministry of Energy and Power Development defines Demand Side Management as a collaborative process involving electricity suppliers and other stakeholders to influence customer electricity usage (Source: www.energy).

gov. zw)

Background

This paper investigates how to reconcile electricity capacity and demand. The ZESA group comprises of two primary entities: Zimbabwe Power Company (ZPC), which generates electricity, and Zimbabwe Electricity and Transmission Company (ZETDC), which transmits electricity to distribution points and delivers it to customers. This evaluation examines the strategies implemented by ZETDC to synchronize electricity capacity with demand.

The electricity system in Zimbabwe is interconnected from power stations to the customer. The ZESA group of companies will be considered as one organization due to their synergistic relationships. There has been a shortage of electricity in Zimbabwe since 2007, based on supply and demand projections which showed that electricity demand would exceed supply. To meet this increased demand, new power stations would need to be built. However, it was also realized that there are alternative methods of matching available capacity with electricity demand without constructing new power stations. The status of electricity supply and demand in Zimbabwe is as

follows:

Zimbabwe Power Company (ZPC) operates five power stations in the country - Hwange Power Station, Kariba Power Station, Bulawayo Power Station, Harare Power Station, and Munyati Power Stations.

Zimbabwe experiences severe power shortages as the demand for power surpasses the supply. Currently, thermal power stations are unable to reach their installed capacity due to technological limitations.

The power generation conversion processes lead to significant energy loss and inefficiencies, resulting in extremely low efficiency levels averaging only 30%. The table above shows that both Hwange Power Station and the small thermal power stations are unable to achieve their full installed capacity. However, Kariba, a hydro-power station, is able to reach a utilization rate of up to 100% thanks to its energy-conserving technology. In Zimbabwe, the maximum power demand is approximately 2200MW, which typically occurs during the winter peak period. Conversely, during off-peak periods, the demand drops to around 1600MW.

The electricity industry currently has an available capacity of 1338MW, which results in a shortfall of about 562MW during peak periods and 262MW during off-peak periods. To address this issue, imports and load shedding are utilized. The medium-term measures for matching capacity with demand in the electricity industry include demand-side management (DSM) and installing prepaid meters for all domestic customers.

Demand-side management allows consumers to manage their consumption by implementing measures such as switching off geysers and lights to save on electricity units. Installing prepaid meters promotes energy conservation as consumers only use electricity based on what they have paid for. Moreover, ripple control systems can be installed for geysers to automatically switch them off when electricity demand exceeds capacity, resulting in energy savings. These ripple control geysers can save

up to 45MW in the short term and up to 250MW in the long term.

Another significant measure is replacing incandescent lamps with compact fluorescent lamps (CFLs), which yield substantial power savings comparable to constructing a standalone power station. The Zimbabwe Electricity Transmission and Distribution Company (ZETDC) is responsible for managing and ensuring these power savings are achieved. Currently, ZETDC is carrying out a project to substitute incandescent lamps with energy-efficient CFLs, which will result in savings of 80MW once implemented.
ZETDC's ability to regulate may face challenges due to consumers' willingness to use CFLs, which is crucial for the success of this initiative.

ZETDC has implemented Time of Use Pricing as a strategy to establish an electricity pricing system based on different periods of usage. The main goal is to reduce the demand for electricity during peak times and encourage customers, especially those in the manufacturing industry, to adjust their schedules and operate during off-peak hours. By doing so, ZETDC aims to optimize the load curve by ensuring that large customers consume power at night when supply is generally sufficient and costs are lower. This approach effectively balances capacity utilization and overall demand.

ZETDC has control over a measure that is quite effective: promoting the use of renewable energy sources such as solar geysers, solar water pumps, biogas digesters, and solar lighting systems. This promotion helps to free up power from the grid for productive sectors of the economy. By utilizing alternative sources for lighting, cooking, and water pumping, a significant amount of electricity is saved from the grid. This saved power helps to reduce the deficit between available capacity and demand. However, the effectiveness of this measure

is dependent on consumers taking the initiative to use renewable energy technologies.

Another measure that can be taken is the promotion of co-generation. Co-generation involves generating electricity for one's own consumption while also simultaneously generating heat energy that can be used to produce additional electricity. This reduces energy bills for organizations that implement this practice, as they are generating their own power. Because electricity is both generated and consumed at the same location, there is a decrease in transmission and distribution losses. Examples of organizations that implement co-generation include Hippo Valley Estates, Triangle Estates, and Chisumbanje Ethanol Plant.These generators do not rely on ZETDC for electricity. Instead, they produce power by utilizing bagasse, which is the byproduct of sugar cane.

Encouraging companies to participate in co-generation is an effective way to reconcile capacity and demand, saving a significant amount of power. Excess power can be sold to ZETDC, thereby increasing the available power supply. However, the success of this measure relies on consumers taking the initiative to engage in co-generation.

Statutory maintenance is regularly conducted on power generator units to ensure safety and reliability. This maintenance is timed during periods of low demand, typically in the summer, to maintain a balance between capacity and demand. Winter, when demand is highest due to water and space heating, is avoided for maintenance. While statutory maintenance does not increase available capacity, it enhances the reliability of generator units and prevents unplanned power cuts.

The rehabilitation of Hwange Power Station and small thermal power stations is another measure being taken to increase generating capacity. This refurbishment project is expected to add an additional 90MW to 340MW within the next two years.The funding problems

make it difficult to fully replace the power stations that have exceeded their lifespan, resulting in costly rehabilitation efforts that are being carried out gradually.

Refurbishing only critical components of the generator units, while ignoring ancillary equipment, leads to frequent breakdowns and power disruptions. Zimbabwe currently imports approximately 35% of its electricity from the Southern African region. Firm import contracts exist with Hydro Cahorra Bassa (HCB) of Mozambique and Zambia Electricity Supply Corporation (ZESCO). However, when there is a significant shortfall, ZETDC turns to the spot market for additional electricity imports. This method of importing electricity has its drawbacks, as excess power may not be available if ZESCO and HCB experience power shortages. The availability of power on the spot market depends on the availability of excess power in countries selling electricity on the market.

If there are technical issues with interconnectors used for power transmission, the country will be unable to import power. Load shedding occurs during peak periods, resulting in up to 700MW of power being shed. Load shedding is the last resort used by ZETDC to balance available capacity and demand. When demand exceeds supply significantly, certain customers are switched off to achieve balance. This final option employed by ZETDC has negative effects on production in the industry. Implementing short to medium term measures would ensure that Zimbabwe has sufficient power without relying on imports, as indicated in the table below.

Source

Zimbabwe Electricity Transmission and Distribution Company can use the measures mentioned in the table to meet the available capacity and demand without the need for new power stations until 2014. After 2014, additional power will be added to the grid through

the expansion projects of Hwange and Kariba Power Stations, which will contribute 900MW. This will result in surplus power for 2015 and 2016. Typically, surplus power is necessary to maintain reserves and ensure a consistent supply in case of unexpected events or generator issues. However, ZETDC cannot achieve this due to the existing power deficit.

Long-Term Measures to Balance Supply and Demand of Power

  • In order to address the issue of balancing capacity and demand, it is necessary to implement long-term measures such as the development of new power projects. Proposed projects include the Sengwa Thermal Power Station (1400MW), Batoka Hydro Power Station (800MW), Coal-bed Methane Gas Fired Power Station (470 MW), and Conho Hydro Power Station (100MW). However, these projects face challenges such as financial constraints and potential redundancy of existing power stations if there is insufficient demand in the Southern African region. Other countries in the region are also focusing on power station development with plans to export surplus electricity.

The availability of the electricity market may be compromised if each country achieves self-sufficiency in local power production. Economic growth fuels the demand for electricity.

As the economy grows and expands, the demand for electricity also increases. Projections are made to determine future electricity needs based on economic growth rates, which then guide the implementation of future projects.

Conclusion

The analysis above demonstrates that there are various measures to reconcile capacity and demand in the electricity industry, but these measures can only be implemented in the short term. In the long term, new power projects are necessary.

References

  • Collins Dictionary
  • The Free Dictionary by Farlex
  • Power2Switch Glossary
  • Norconsult - ZESA Holdings Report on Zimbabwe Power System Development Plan, Prioritising the Critical Actions for the Development of the Zimbabwe Power System Final Report , December 2010
  • Energy.gov.zw
  • Investopedia
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    com)

  • www. sapp. co. zw
  • The website www.sapp.co.zw is available on the internet (com). It can be accessed by visiting the URL mentioned above.

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