The Simulation of Taiwan’s Power Generation System

Abstract

A nation’s power supply is of vital importance to its future prosperity and the long-term planning of its electricity generating capacity is an important part of its development plans. On the one hand, a lack of power can severely restrict the opportunities for wealth creation causing shortages of items both for home consumption and, possibly more importantly, for export. On the other hand, the ownership costs of production facilities are enormous, tying up capital and using resources even if they are not engaged in production.

One complication of power consumption is the difficulty in forecasting future demand, depending as it does upon weather conditions as well as the prevailing economic climate. Because demand fluctuates a great deal during the day a certain amount of over-capacity is vital if excessive outages are to be avoided.

In this chapter the economic determination of reliability standards for such a supply is described. Use is made of a computer simulation of the whole of Taiwan’s generating capacity together with an ‘Input-Output’ analysis of its economy using the Leontief framework.

Besides the pure economics of power generation the consumer also requires increasing reliability. As consumer groups become more vocal, on the one hand becoming increasingly impatient of electricity shortages and on the other becoming ever more concerned about environmental issues, it is important that the determination of a long-term planning policy is sensitive to extra- economic inputs.