AACIMP 2010 Summer School lecture by Gerhard Wilhelm Weber. "Applied Mathematics" stream. "Modern Operational Research and Its Mathematical Methods with a Focus on Financial Mathematics" course. Part 9. More info at http://summerschool.ssa.org.ua

1. 5th International Summer School
Achievements and Applications of Contemporary Informatics,
Mathematics and Physics
National University of Technology of the Ukraine
Kiev, Ukraine, August 3-15, 2010
A REVIEW ON THE STATE OF THE ENERGY
SECTOR OF TURKEY FROM THE PERSPECTIVE
OF OPERATIONAL RESEARCH
Eren ÖZCEYLAN a, Turan PAKSOY a, Elise Del ROSARIO b,
Erik KROPAT c, Gerhard-Wilhelm WEBER d
a Selçuk University, Department of Industrial Engineering, Campus, Konya, Turkey.
b Consultant, Department of Energy, Philippines;
Past President, International Federation of Operational Research Societies.
c Universität der Bundeswehr München, Operations Research, Munich, Germany.
d Middle East Technical University, Institute of Applied Mathematics, Ankara, Turkey.
eozceylan@selcuk.edu.tr, tpaksoy@yahoo.com, elise@jgdelrosario.com,
erik.kropat@unibw.de, gweber@metu.edu.tr

2. Agenda
 Introduction
 Energy Sector in Turkey
 Different Energy Resources in Turkey
 Energy Sector in the Philippines
 OR in Energy Sector
 Conclusion
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A Review on the State of the Energy Sector of Turkey from the Perspective of Operational Research

3. Introduction
Decision support in the energy sector
 Long-term strategic planning
Power generation capacity expansion planning
 Short-term operational issues
Optimizing unit commitment
Distinct players
Utilities, regulatory bodies, governments, marketers, end-users, researchers
Operational Research
Multi disciplinary approach to support better decisions through the
application of advanced analytical tools.
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A Review on the State of the Energy Sector of Turkey from the Perspective of Operational Research

4. Introduction
Modeling and predicting electricity distribution
play a vital role in developed and developing countries
for policy makers and related organizations.
Underestimation of the consumption
→ potential outages that are devastating to life and economy.
Overestimation of the consumption
→ unnecessary idle capacity / wasted financial resources.
Nonlinear models for electricity energy consumption
with good accuracy in order to avoid costly mistakes.
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A Review on the State of the Energy Sector of Turkey from the Perspective of Operational Research

5. Primary energy consumption, GDP, population,
electricity production and consumption in Turkey
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A Review on the State of the Energy Sector of Turkey from the Perspective of Operational Research

6. Turkey’s energy production and consumption
Energy is essential for economic and social development and improved
quality of life in Turkey, as in other countries.
Much of the world’s energy is currently produced and consumed in ways
that cannot be sustained if technology were to remain constant and if
overall quantities were to increase substantially.
Policymaking
 Efficiency in energy production, transmission, distribution and consumption.
 Expansion of electricity supply infrastructure.
 Reduction of carbon emissions.
affect patterns of energy use / alter the composition of the energy mix
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A Review on the State of the Energy Sector of Turkey from the Perspective of Operational Research

7. Turkey’s energy production values in the years
1990, 1995 and 2000
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A Review on the State of the Energy Sector of Turkey from the Perspective of Operational Research

8. Turkey’s total energy consumption in the years
1990, 1995 and 2000
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A Review on the State of the Energy Sector of Turkey from the Perspective of Operational Research

9. The relationship between electricity
consumption and GNP in Turkey
The relationship between electricity consumption and Gross National
Product (GNP) in Turkey has been erratic in the past.
Net Electricity Consumption (NEC)
 increased steadily during the period of 1975–2000.
 slight decreased between 2000 and 2001.
Gross national Product (GNP)
 decreased three times (1979, 1993 and 2001) due to economic crisis.
NEC of Turkey has not been sensitive to economic crisis since the effect of
the economic crisis disappears in the period of one or two years.
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A Review on the State of the Energy Sector of Turkey from the Perspective of Operational Research

10. The relationship between electricity
consumption and GNP in Turkey
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A Review on the State of the Energy Sector of Turkey from the Perspective of Operational Research

11. A Brief Overview of Turkey’s Energy Sources
Used for Generating Electric Power
In Turkey, electricity is produced by
 thermal power (TPPs),
 geothermal energy,
 wind energy,
 hydropower plants.
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A Review on the State of the Energy Sector of Turkey from the Perspective of Operational Research

12. A Brief Overview of Turkey’s Energy Sources
Used for Generating Electric Power
Thermal resources
meet 60% of Turkey’s total installed capacity for electric power generation,
while 75% of total electricity is generated from TPPs.
Total thermal generation
Natural gas
Coal
Liquid fuel
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A Review on the State of the Energy Sector of Turkey from the Perspective of Operational Research

13. Coal
Turkey accounts for almost 90% of the coal consumed in the Middle East
Coal consumption (1999): 84 Mt
Hard coal consumption (1990): 8 Mt
Lignite consumption (1990): 46 Mt
Hard coal consumption (projection 2020): 147 Mt
Lignite consumption (projection 2020): 185 Mt
increase by 139 Mt
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A Review on the State of the Energy Sector of Turkey from the Perspective of Operational Research

14. Coal
As a result of planning studies,
production and consumption of coal is expected to increase,
primarily to fuel additional coal-fired generating capacity.
Projects
1210 MW hard coal-fired plant (near Iskenderun), to be fueled by imported coal
1440 MW lignite-fired plant (Afsin-Elbistan B plant)
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A Review on the State of the Energy Sector of Turkey from the Perspective of Operational Research

15. Coal
Natural gas-fired plants have been gaining great importance
In 1999, the share of coal-fired plants in the total installed capacity was 26%,
followed by natural gas at 24%, and oil at 6%.
The coal share of energy consumed for electricity generation is projected to be
30% in 2010 and 27% in 2020.
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A Review on the State of the Energy Sector of Turkey from the Perspective of Operational Research

16. Natural Gas
Turkey’s natural gas demand
Natural gas
Coal
Liquid fuel
Turkey continues to expand the use of natural gas
5 municipalities, 6 industrial zones, 200 industrial plants,
2 fertilizer production facilities, 7 power plants
utilize natural gas as an energy source.
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A Review on the State of the Energy Sector of Turkey from the Perspective of Operational Research

17. Natural Gas
 In Turkey, as in Europe and the United States, energy policies have had an
important effect on the availability of natural gas and its development
as a fuel for electricity generation.
 Turkish natural gas demand is projected to increase extremely rapidly in the
coming years, with the prime consumers expected to be natural gas-fired
electric power plants and industrial users.
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A Review on the State of the Energy Sector of Turkey from the Perspective of Operational Research

18. LPG
Utilization of LPG as an energy source in Turkey
 Used since the beginning of the 1960s.
 Share of LPG / natural gas (2000): 30 and 70%
Ratio will change in favor of natural gas.
 LPG in cogeneration plants: < 1% today.
Recent expansion of LPG industry in Turkey has demonstrated
the long-term potential for the regional LPG markets.
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A Review on the State of the Energy Sector of Turkey from the Perspective of Operational Research

19. Oil
The Turkish historian Evliya Celebi first mentioned the existence of oil in
Turkey in the 18th century. The first productive well, operated by the European
Petroleum Company, was located in the Hora Deresi region.
Crude oil production (2002): 2.4 Mt (8% of the total oil demand)
Oil reserves: 954 Mt (in known areas)
Extractable oil: 156 Mt
Remaining recoverable reserve (2002): 39 Mt
With the current production level and no additional reserve discovery,
the production capacity will still be available for some 16 years.
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A Review on the State of the Energy Sector of Turkey from the Perspective of Operational Research

20. Oil
Between 1990 and 2002, oil supply increased at an average
growth rate of 2.2% annually.
In 2002, 8.3% of the total electrical energy generation
came from oil fired plants.
Oil consumption (1990): 22.7 Mt
Oil consumption (2002): 29.6 Mt
Final oil consumption (2002): 24.2 Mt
(42.7% of Turkey’s total final energy consumption).
Oil production has declined since the early 1990s
and is expected to decrease due to the natural depletion of the fields.
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A Review on the State of the Energy Sector of Turkey from the Perspective of Operational Research

21. Hydro
Gross hydro potential: 432,986 GWh
Hydroelectric energy production (1990): 23,148 GWh
Hydroelectric energy production (2002): 33,684 GWh
Annual average growth rate: 3.2%
Hydropower potential (2002): 126 billion kWh
(34% has been exploited)
It is projected that the increase in the hydro energy
production will continue in the coming years.
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A Review on the State of the Energy Sector of Turkey from the Perspective of Operational Research

22. Geothermal
Estimated geothermal electrical power: 4000 – 4500 MWc
Direct use (heat) potentials: 31.500 MWt
Potential for electricity generation: 764.81 MWc
Potential for heat generation: 3173 MWt
(Data: MTA)
Large potential of geothermal development in Turkey
in terms of moderate and low temperature resources
(→ direct use applications).
Denizli Kizildere geothermal power plant produced an
electrical energy of 105 GWh in 2002.
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A Review on the State of the Energy Sector of Turkey from the Perspective of Operational Research

23. Wind
Progress in wind energy technology in recent years has drawn private
sector attention to this energy resource. As a consequence, numerous companies
have submitted their applications to the MENR for the construction of new wind
power plants.
 Highest wind power potential
Aegean, Marmara, and East-Mediterranean regions of Turkey
 Theoretically available potential for wind power
88,000 MW
 Economically feasible potential for wind power
some 10,000 MW
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A Review on the State of the Energy Sector of Turkey from the Perspective of Operational Research

24. Conclusion
New challenges require novel solutions
How to deal with the
political, economic, planning, environmental and social aspects
of energy production and consumption
 How to guarantee secure supplies
 How to promote energy efficiency in industry, services and households
 How to deal with market power
 Identifying the links between energy use and industrial production patterns
 How to value the benefits of renewable resources
 How to select the best options for greenhouse gas mitigation
 How to refine the regionalization of the energy markets
for an improved analysis, decision making and development
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A Review on the State of the Energy Sector of Turkey from the Perspective of Operational Research

25. Conclusion
 Historical electricity consumption indicates
a continuing increase into the future.
 Population growth, accompanied by the increase in
social and economic development and urbanization
supports this trend.
Installation of additional electricity power plants will be
very important for the near future.
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A Review on the State of the Energy Sector of Turkey from the Perspective of Operational Research

26. Conclusion
Putting up additional generating capacity brings to the fore other issues:
 facility types and lead times of having these facilities up and running,
 huge capital outlays required for power generation and transmission
facilities,
 disposition of aging, high maintenance facilities which may include
shutting down or rehabilitating these equipment or plants, and
 Privatization/nationalization of certain operations and services.
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A Review on the State of the Energy Sector of Turkey from the Perspective of Operational Research

27. Optimizing Power Generation in
the Philippines
In the face of excess capacity, which plants are best
to operate that will result in minimum power
generation costs?
Capacity Utilization
10000
9000
8000
Excess Capacity
7000
6000
Spinning Reserve
(MW)
5000
4000
3000
Forecasted Demand for 2003
2000
1000
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28. Plants as classified by fuel used and ownership
IPP
NPC IPP
NPC
Oil-Based
Hydro
Geothermal
Natural Gas
Coal

29. Optimizing Power Generation
The situation:
 6 coal, 3 natural gas, 12 oil based,
10 hydro, 5 geothermal plants each with
own efficiency, fees, ownership profile
 Generating capacity greater than
requirement
 Demand for power varies hourly
 Transmission facilities limit output from a
power grid

30. Minimize total generation
cost while considering:
 Plant Capacities are not exceeded.
 Hydroelectric plants are limited by water levels in case
of Kalayaan, by pumping.
 Total capacity of running plants are at least 13.2%* over
demand (spinning reserve).
 Southern Luzon transmission requirement does not
exceed any of the possible combinations.
 Fuel consumption is affected by activity level.
 IPP take-or-pay / foreign currency payments are
complied with.
 Set-up time must be allowed before operation.
 Preventive Maintenance schedule must be followed.
*2.8% primary response,10.4% secondary response

31. Optimizing Power Generation
OR was used to:
 Forecast hourly demand
 Determined which plants to schedule for power
generation using MIP
Outcome:
 Challenged widely-held beliefs and rules of thumb
used in dispatching.
 Showed savings of USD 40M against current
scheduling practices.

32. Planning rural electrification
projects in Peru
Determined:
 the location of each wind turbine and design
of micro grids
 location and sizing of equipment (batteries,
inverters, controllers and meters)
Such that investment costs are minimum but
satisfying demand and technical constraints.
Technique used: MILP

33. Conclusion
The two examples showed how OR has
been used to help optimize resources
in the area of energy in the context of
a developing country.
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A Review on the State of the Energy Sector of Turkey from the Perspective of Operational Research

34. There are other novel tools available from OR
 mathematical programming,
 stochastic programming,
 multi-criteria decision making,
 control and system theory,
 stochastic optimal control,
 martingale method,
 applied probability, by the use of
 stochastic calculus and
 financial mathematics, especially,
 portfolio optimization,
 graphs and networks,
 combinatorial optimization,
 OR in environmental protection, etc..
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A Review on the State of the Energy Sector of Turkey from the Perspective of Operational Research

35. Conclusion
 New and multifaceted problems arising in the energy
sector require novel approaches and methodological
developments.
 Operational Research models and methods can
provide quantitative insights into complex problems and
uncover the best courses of action.
 This paper is an invitation to the international
community of researchers and practitioners in the area
of energy to make use of the rich methodologies and
toolboxes of modern OR.
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A Review on the State of the Energy Sector of Turkey from the Perspective of Operational Research