# Presentation: 341165

## IPM Overview

- Elliot Lieberman
- U.S. Environmental Protection Agency
- Washington, D.C. 20460

## Documentation on Web

- www.epa.gov/airmarkets/epa-ipm

## 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.

## Linear Program Advantages

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

## Typical IPM Constraints and 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

_**140,225 **__**Constraints**_

_**1,980,251 **__**Variables**__** **_

- (**x** load segments **x** coal or fuel types  **x** run years  **x** seasons)

## Slide 6

## Model Regions

**Model Regions**

## Slide 8

## Reserve Margin Assumptions

**Reserve Margin Assumptions**

- Reserve margin is a measure of the system’s generating capability above the amount required to meet peak load requirements.

**Planning Reserve Margins**

## Generating Resources

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

- Categories represented

## Potential Units

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

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

## 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

## First Stage Retrofit Assignment Scheme in EPA Base Case 2000

**First Stage Retrofit Assignment Scheme in EPA Base Case 2000**

## Run Year Mapping in EPA Base Case 2000

**Run Year Mapping in EPA Base Case 2000**

## Model Plant Aggregation

## 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
- High Efficiency Group
- Size
- Coal Steam Units
- Less than 25 MW
- From 25 MW to less than 100 MW
- 100 MW or greater
- Non-coal fossil units and other non-coal emitting units
- Less 25 MW
- 25 MW or greater

## Slide 17

## Slide 18

## Slide 19

## Typical Model Plants

**Typical Model Plants**

## Financial Assumptions

## 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

## Discount Rate

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

- Key parameters considered:

## Capital Charge Rate

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

- Key parameters considered:

## Factors Affecting the FinancingOf Different Technologies

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