Operation Optimisation towards Generation Efficiency Improvement in Saudi Arabia Using LSS ...

196 Pages·2017·6.36 MB·English

Operation Optimisation towards Generation
Efficiency Improvement in Saudi Arabia Using LSS,
Simulation and Mathematical Programming

By
Mohammad Althaqafi
Student ID: 0839747

A thesis submitted for the degree of
Doctor of Philosophy

College of Engineering, Design and Physical Sciences

Brunel University London

March 2017
Abstract
The efficiency of fossil power generation has improved in recent decades with the different
types of fuel and advancing technologies playing a crucial role in this trend. The Kingdom of
Saudi Arabia (KSA) is considered among the lowest countries in the world in terms of
generation efficiency. As a consequence, recent studies have proposed upgrading the
generation stock with highly efficient units, and increasing the share of natural gas over oil to
improve the average efficiency. However, despite efforts being made in that direction in the
past few years, they have not had a significant impact and there have been few studies in the
literature aimed at tackling what the real issues are in the kingdom.
This research explores the causes leading to the current level of energy efficiency in KSA using
Lean Six Sigma (LSS) and a simulation model, subsequent to which a new framework is
developed aimed at delivering sustained continuous improvement. Firstly, LSS is applied to
identify the primary area of waste and secondly, the actual efficiency is measured using real
data collected from KSA. Subsequently, the outcomes are analysed through utilising a
simulation model that has been designed and tested to ensure accurate results are obtained.
Following this, an improvement plan is proposed using mathematical models and mathematical
programming, which was implemented using a simulation model. Finally, controlling the
obtained improvement is included for sustaining its continuity.
The main contribution of this thesis lies in the integration of LSS and a simulation model to
identify the most influential factors in relation to the generation efficiency level in KSA in
terms of their impact on fuel and emissions. Moreover, this research involves developing a new
merit order using a mathematical model and mathematical programming for optimisation. The
novelty can be seen in combining the quality and quantity of production to generate a single
operation measure.
The results show that the power plants’ operation is a primary cause of the current level of
efficiency, while the generation stock has the potential to deliver higher efficiency levels.
Around 3.5 and 6% improvement in efficiency have been achieved over the two research
stages. This figure has resulted in a fuel saving worth $1.8 billion, significant reduction in
subsidies and 8.5 Mtonnes reduction in the total CO produced. Finally, this thesis provides a
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framework based on incentives for power providers that can ensure continuous improvement.

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Dedication
I dedicate this thesis to the soul of my father, Taher Abed, and to my wonderful mother, Afaf
Jamal, to my wife, Lama and to my dear children, Sara, Sultan and Sahl.

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Acknowledgements
I would like to acknowledge my limitless gratitude to Allah Almighty for granting me countless
blessings. Without His blessings, I would not have been able to complete this thesis. Infinite
praises are due to Allah, and may endless peace and blessings be upon His beloved Messenger
Mohammed.
I would like to extend my sincere thanks to my supervisor, Dr. Qing Ping Yang. His full
engagement and his valuable comments that maximised the significance of this research all the
way. It was a privilege to work with him.
I would like to express my deepest gratefulness gratitude to my mother Afaf, and my parents-
in-law, Dr. Abdulaziz and Dr. Roshdia. Their continuous sacrifices and love will remain the
greatest of debts that, indeed, can never be repaid either in this life or in the hereafter.
To my life journey partner and loving wife, Lama. She has been a devoted and patient partner
throughout my involvement with the research project, and this has been greatly appreciated.
Indeed, her devotion made this journey a memorable story. I would like to express my utmost
love for her.
To my brothers, sisters and lovely children, Sara, Sultan and Sahl for their love and hope that
infuses in my soul every day when writing this thesis.
Finally, I owe a great deal to friends and colleagues for their constant support, most notably
Mohammad Almosairy, Abdullah Alshahrani, Haidar Alhertani, Iqbal Patel, Mohammad
Aleid, Seraj Allaf and Yosef Alwafi.

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Author’s Declaration
I hereby declare and confirm that this thesis is my own work and efforts. Also, it has not been
submitted before for any award. Where other sources of information have been used, they have
been acknowledged.
Mohammad Althaqafi
March 2017

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Table of Contents
Chapter 1 Introduction ............................................................................................................... 1
1.1 Research Introduction .......................................................................................................... 1
1.2 Background to the Research ............................................................................................... 2
1.3 Problem Statement ............................................................................................................... 6
1.4 Research Significance .......................................................................................................... 7
1.5 Aims and Objectives of this Research ............................................................................... 8
1.6 Researcher Contributions .................................................................................................... 9
1.7 Organisation of the Thesis ................................................................................................ 10
1.8 Author’s Publications ........................................................................................................ 11
Chapter 2 Literature Review .................................................................................................... 12
2.1 Introduction ......................................................................................................................... 12
2.2 Impact of Efficiency........................................................................................................... 12
2.3 The Definition of Efficiency ............................................................................................. 13
2.3.1 Gross Efficiency and Net Efficiency ................................................................. 14
2.3.2 Design Efficiency and Operational Efficiency .................................................. 14
2.3.3 Net Calorific Value (NCV) and Gross Calorific Value (GCV) ......................... 14
2.4 Efficiency of Electricity Sector in SA ............................................................................. 15
2.4.1 Major Types of Losses in the Electricity System ............................................. 18
2.4.2 Supply Side Efficiency ...................................................................................... 24
2.4.3 The Cost of Inefficiency and the Gain of Efficiency ......................................... 25
2.5 Factors Influencing Efficiency in Power Plants Systems ............................................. 26
2.5.1 Age (deterioration) ............................................................................................. 26
2.5.2 Environment Impact........................................................................................... 27
2.5.3 Fuel quality ........................................................................................................ 28
2.5.4 Pollution ............................................................................................................. 29
2.5.5 Maintenance ....................................................................................................... 29
2.5.6 Operation............................................................................................................ 29
2.5.7 Subsidy ............................................................................................................... 32
2.6 The Role of Industry Reform ............................................................................................ 35
2.7 Emissions ............................................................................................................................. 37
2.8 Methodology ....................................................................................................................... 39
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2.8.1 Lean, Six Sigma and Lean Six Sigma ................................................................ 39
2.8.2 Mathematical Modelling .................................................................................... 43
2.8.3 Mathematical Programming............................................................................... 43
2.9 Summary .............................................................................................................................. 44
Chapter 3 Methodology ........................................................................................................... 46
3.1 Introduction ......................................................................................................................... 46
3.2 Need for a Comprehensive Methodology ....................................................................... 46
3.3 Lean Six Sigma Implementation ...................................................................................... 47
3.4 Lean Six Sigma Framework .............................................................................................. 48
3.5 Simulation Methodology ................................................................................................... 49
3.6 Arena Software ................................................................................................................... 52
3.7 Mathematical Modelling ................................................................................................... 52
3.8 CO2 Calculation .................................................................................................................. 53
3.9 Data Collection ................................................................................................................... 54
3.10 Framework for Lean Six Sigma, Simulation and Mathematical Programming
(LSSSMP) ....................................................................................................................................... 54
3.11 Conceptual Model .............................................................................................................. 56
3.12 Summary .............................................................................................................................. 58
Chapter 4 Implementation........................................................................................................ 59
4.1 Introduction ......................................................................................................................... 59
4.2 Stage 1 of DMAIC: Define ............................................................................................... 59
4.3 Stage 2 of DMAIC: Measure ............................................................................................ 61
4.4 Stage 3 of DMAIC: Analyse ............................................................................................. 84
4.5 Stage 4 of DMAIC: Improve ............................................................................................ 91
4.6 Stage 5 of DMAIC: Control .............................................................................................. 95
4.7 Summary .............................................................................................................................. 96
Chapter 5 Results Analysis and Discussion ............................................................................. 97
5.1 Introduction ......................................................................................................................... 97
5.2 Results Analysis ................................................................................................................. 97
5.3 Discussion ......................................................................................................................... 106
5.4 Validation and Verification ............................................................................................. 109
5.5 Summary ............................................................................................................................ 111
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Chapter 6 Conclusion and Future Work ................................................................................ 112
6.1 Introduction ....................................................................................................................... 112
6.2 Conclusion ......................................................................................................................... 112
6.4 Research Limitations ....................................................................................................... 113
6.5 Future Work ...................................................................................................................... 113
References .............................................................................................................................. 114
Appendix A ............................................................................................................................ 128
Appendix B ............................................................................................................................ 145
Appendix C ............................................................................................................................ 146
Appendix D ............................................................................................................................ 148
Stage 1............................................................................................................................................ 148
Stage 2............................................................................................................................................ 160
Stage 3............................................................................................................................................ 172

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List of Tables

Table 2-1 Difference in energy content between GCV and NCV (Eurelectric 2003) .......................... 15
Table 2-2 Available data of HR in SEC power plants in SA ................................................................ 18
Table 2-3 The Impact of energy improvement ( Eurelectric 2003) ...................................................... 26
Table 2-4 Local and international fuel price in Saudi Arabia US$ (ECRA 2013a) ............................. 34
Table 2-5 Average sales price and total subsidies per sector in SA (2010) (Alyousef & Stevens 2011).
.............................................................................................................................................................. 34
Table 2-6 Average carbon dioxide rate for selected fuel type in electricity generation in OECD
countries (IEA 2013) ............................................................................................................................. 38
Table 2-7 Impact of improving efficiency on emissions (Eurelectric 2003) ........................................ 39
Table 3-1 CO2 emission factor (The Climate Registry 2015) .............................................................. 53
Table 3-2 Stages, activities and tools used in this study ....................................................................... 55
Table 4-1 Input, output & efficiencies of electricity generation in Saudi Arabia ................................. 62
Table 4-2 Calculated HR of SEC power plants based on ECRAs’ reports from 2007 to 2015 ............ 64
Table 4-3 Fuel consumed, electricity produced and efficiency of oil and gas in Saudi Arabia from
2007 to 2013. ........................................................................................................................................ 66
Table 4-4 Generation unit types in percentages, based on capacity (SA) ............................................. 67
Table 4-5 Average age of generation units in SA (2011-2015) ............................................................ 68
Table 4-6 Input, output and efficiencies of electricity generation in the UK........................................ 69
Table 4-7 Amount of saving if efficiency is improved, based on 2012 figures .................................... 71
Table 4-8 HR and gross production of SEC’s power plants for 2011. (Andejani, 2014) ..................... 74
Table 4-9 Simulation model contents ................................................................................................... 79
Table 4-10 Power plants ranked based on efficiency............................................................................ 89
Table 5-1 Optimisation results ............................................................................................................ 101
Table 5-2 Results summary ................................................................................................................ 106
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List of Figures

Figure 1-1 Actual and projected load in Saudi Arabia (ECRA, 2013b) (ECRA, 2014b) ....................... 3
Figure 1-2 Annual fuel consumption in electricity generation in SA by fuel type ................................. 4
Figure 1-3 Age of generation units in SA based on capacity .................................................................. 4
Figure 1-4 Generation units by technology type ..................................................................................... 5
Figure 1-5 Overview of the electricity system in Saudi Arabia .............................................................. 6
Figure 1-6 Research motivations ............................................................................................................ 8
Figure 2-1 Weighted average efficiencies of selected countries based on fuel type ............................. 20
Figure 2-2 Minimum, average and maximum efficiency in EU countries (2003-2005) (Graus &
Worrell 2009) ........................................................................................................................................ 21
Figure 2-3 Auxiliary consumption in power plants as a percentage of total production in 2007 (Graus
2010) ..................................................................................................................................................... 22
Figure 2-4 Transmission and distribution losses 2006-2012 (The World Bank 2014) ......................... 24
Figure 2-5 Different system losses in SA ............................................................................................. 25
Figure 2-6 Average efficiency and average age of power plants in the EU 2005 (Graus et al. 2008) .. 27
Figure 2-7 Age vs heat rate (General Electric 1996) ............................................................................ 27
Figure 2-8 The impact of loading hours on operational efficiency ....................................................... 31
Figure 2-9 Impact of loading on fuel consumption (Flextricity 2013) ................................................. 31
Figure 2-10 Final stage of electricity sector structure in SA (ECRA 2014a) ...................................... 36
Figure 2-11 Average CO2/ kWh based on unit’s type (VGB powertech 2004) (VGB Powertech 2015)
.............................................................................................................................................................. 38
Figure 2-12 modelling process (Giordano et al. 2013) ......................................................................... 43
Figure 3-1 Conceptual model of the electricity system (flowchart) ..................................................... 51
Figure 3-2 Framework for implementing Lean Six Sigma with Simulation and mathematical
programming (LSSSMP) ...................................................................................................................... 56
Figure 3-3 Research flowchart .............................................................................................................. 57
Figure 4-1 Process map ......................................................................................................................... 60
Figure 4-2 Losses points (VSM) ........................................................................................................... 61
Figure 4-3 Average system losses ......................................................................................................... 63
Figure 4-4 Pareto chart for average losses in the system (2006-2014) ................................................. 63
Figure 4-5 Global average efficiency of fossil fuel generation 1990-2003 converted from GCV to
NCV ...................................................................................................................................................... 65
Figure 4-6 Efficiency based on unit type (Eurelectric 2003; IEA-ETSAP 2010) ................................ 67
Figure 4-7 Average efficiency based on the average age of power plants in selected countries (Graus
& Worrell 2009) .................................................................................................................................... 68
Figure 4-8 Efficiency based on fuel type in SA and the UK ................................................................ 70
Figure 4-9 Efficiency trend (2007-2014) .............................................................................................. 70
Figure 4 11Cause and effect diagram ................................................................................................... 73
Figure 4-12 Fuel injection in power plants in BTU .............................................................................. 75
Figure 4-13 Sub model modules ........................................................................................................... 75
Figure 4-14 Auxiliary consumption ...................................................................................................... 76
Figure 4-15 Transmission and distribution stage .................................................................................. 76
Figure 4-16 Statistics used in the model ............................................................................................... 78
Figure 4-17 Simulation model blocks ................................................................................................... 81
Figure 4-18 Run setup configuration .................................................................................................... 82
Figure 4-19 Sample of the model results .............................................................................................. 83
Figure 4-20 Efficiency and utilisation for each power plant ................................................................. 86
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