Operation optimisation towards generation efficiency improvement in Saudi Arabia using LSS, simulation and mathematical programming

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 CO2 produced. Finally, this thesis provides a framework based on incentives for power providers that can ensure continuous improvement.