IPM Overview

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IPM Overview
Elliot Lieberman U.S. Environmental Protection
Agency Washington, D.C. 20460
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Documentation on Web
www.epa.gov/airmarkets/epa-ipm
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What is IPM?

• The Integrated Planning Model (IPM) is a tool
  developed by ICF Consulting and used by EPA for
  policy analysis.
• IPM is a long-term capacity expansion and
  production costing model for analyzing the
  electric power sector.
• It is a multi-regional, deterministic, dynamic
  linear programming model.
• IPM finds the least-cost solution to meeting
  electricity demand subject to environmental,
  transmission, fuel, reserve margin, and other
  system operating constraints.

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Linear Program Advantages

• Finds optimal solution
• Comprehensive, integrated approach
• Bottom-up detail
• Allows fine grain parameter variations
• Analysis based on detailed disaggregate
  information

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Typical IPM Constraints and Variables
140,225 Constraints
1,980,251 Variables

• Electricity Demand Constraints
• Reserve Margin Constraints
• Environmental Constraints
• Transmission Constraints
• Fuel Constraints
• Other Operational Constraints

• Model plants
• Existing Units
• Planned/Committed Units
• Potential Units
• Retrofit options
• Repowerings and retirements

(x load segments x coal or fuel types x run
years x seasons)
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Model Regions
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Reserve Margin Assumptions
Reserve margin is a measure of the systems
generating capability above the amount required
to meet peak load requirements.
Planning Reserve Margins
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Generating Resources
Categories represented

• Existing units
• Planned/committed units
• New potential units that the model can build
• Repowerings, relicensings, and retirements

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Potential Units

• Pulverized Coal
• Integrated Gasification Combined Cycle
• Combined Cycle
• Combustion Turbine
• Nuclear

• Biomass Gasification Combined Cycle
• Wind
• Solar
• Geothermal
• Landfill gas
• Fuel cells

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Emission Control Technologies

• SO2 Scrubbers
• Limestone Forced Oxidation (LSFO)
• Magnesium Enhanced Lime (MEL)
• Lime Spray Dryer (LSD)
• NOx Post-Combustion Controls
• Selective Catalytic Reduction (SCR)
• Selective Non-catalytic Reduction (SNCR)
• Gas Reburn

• Mercury Removal
• Activated Carbon Injection (ACI)
• By-product of SO2, NOx, and particulate controls
• Other
• Combustion Optimization
• Biomass cofiring

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First Stage Retrofit Assignment Scheme in EPA
Base Case 2000
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Run Year Mapping in EPA Base Case 2000
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Model Plant Aggregation
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Categories Used in Aggregation Scheme

• Model Region
• Unit Technology Type
• Fuel Demand Region
• Environmental Regulations
• NOx SIP Call Participation
• State Specific Regulations in CT, MO and TX
• State
• Texas
• Connecticut
• Missouri
• Unit Configuration
• Boiler Type
• Firing Type
• SO2 Pollution Control
• NOx Pollution Control
• Particulate Matter Control
• Heat Rate
• Low Efficiency Group
• Mid Efficiency Groups

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Typical Model Plants
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Financial Assumptions
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Financial Assumptions

• Discount Rate
• Represents the time value of money
• Allows for inter-temporal analysis
• Capital Charge Rate
• Allows annualized capital payments to be
  calculated for an investment

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Discount Rate
Key parameters considered

• Capital structure
• Pre-tax debt rate
• Post-tax equity rate

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Capital Charge Rate
Key parameters considered

• Capital structure
• Pre-tax debt rate (or interest cost)
• Debt life
• Post-tax return on equity
• Taxes and insurance
• Depreciation schedule
• Book life

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Factors Affecting the FinancingOf Different
Technologies

• Risk profile
• Medium risk
• High risk
• Financing scheme
• Project financing
• Corporate financing

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