A System Dynamics Model of the Mauritian Power Sector

Mauritius, a Small Island Developing State and one f the most successful economies in Africa, has experienced sustained economic growth during th e past three decades. Mauritius’ power sector has evolved considerably during this period t cater for increases in electricity demand following such growth. The island has continuously invested in additional capacity to meet such increases in demand in the medium term. Approximate ly 78% of Mauritius’ electricity needs are met through imported energy sources, mainly oil and coal. However there are increasing concerns about price volatility and security of sup ply from such sources. Policymakers are thus committed towards a sustainable energy development plan for the country. In this line, authorities have embarked into elaborating a compre hensive energy policy for Mauritius. Threshold-21 (T21) is a tool that applies system dy namics to aid in policy making in an integrated manner. This paper documents the first i teration in the development of a power sector model for Mauritius based on T21 models. The aim is to provide a description of the Mauritian power landscape and translate the same into a syste ms dynamics model. Future work includes expansion of the model to cover the whole of the Ma uriti n energy system and to do policy analysis. Introduction Volatility of fuel prices, growing demand, deficien cy of rainfall and the quest towards ensuring a sustainable future poses serious challenges to Maur itian policymakers as far as energy is concerned. Energy is central to our quality of life and is an essential ingredient to the commercial and industrial development of a country. The emergi ng economic model and reforms have underpinned the incumbent Mauritian government’s po licy. Tourism, information technology, seafood hub, sugar production and textile manufactu ring are envisaged to become the main pillars of this economic model. Such a model is ene rgy intensive and requires thorough planning. There is growing awareness in the need for sustaina ble development; the concept of “Maurice Ile Durable”, meaning “Mauritius Sustainable Island”, h as become a major focus on the island. The aim is to make Mauritius a proof of concept in sust ainable development. Energy is the central theme within the concept and its planning is an ess ential step towards the goal of achieving sustainability. Since independence in the late sixt ies, the island has never implemented an integrated energy policy. Mauritius has thus embark ed in drafting its first long term energy policy (Ministry of Public Utilities 2007). System dynamic methods have been applied to complex systems modeling since its inception in the mid-1950s. The method has been widely applied t o energy planning and policy analysis since the 1970s; starting with as part of Forrester’s WOR LD1 model and his subsequently refined WORLD2 model (Forrester 1970). FOSSIL2 is a U.S ene rgy supply and demand model that was used by the U.S Department of Energy to prepare pro jecti ns for energy policy analysis (Naill 1992). John Sterman then worked on a systems dynami cs odel that captured energy-economy interactions (Sterman 1981). Identification of cros s sector interactions has urged researchers to build integrated and comprehensive system dynamics odels. Threshold 21 (T21) is a dynamic simulation framewor k designed to support comprehensive, integrated long term national planning with strict adherence to causality (Barney, et al. 1995). T21 provides ability for comparative analysis of po licy options and thus allows the user to identify the policy options best contributing towar ds their goals. It incorporates a country’s economic, social and environment dimensions into a single framework. Each dimension is composed of modules and sub modules. The Energy mod ule is an important part of the overall framework (Bassi 2006). The model has been customiz ed for developing countries, such as Mozambique, Malawi and Bangladesh, as well as devel oped countries, for example United States and Italy. There has been keen interest amongst the Mauritian esearch community and policy makers to explore the development and use of integrated tools as an input to the energy planning needs of the country (Mauritius Research Council 2008). Thi s study documents the findings in the development of a model for the power sector of Maur itius based on existing T21 models. The model is derived from a bottom up approach and is t he first step towards the ultimate goal of developing a comprehensive and integrated tool to s upport policy analysis of the energy sector of the country. Background Mauritius is a tropical island situated in the sout h-west Indian Ocean about 855km east of Madagascar with a surface area of 1,864km . The Republic of Mauritius is composed of the main island of Mauritius and several outlying islands. T he population of Mauritius is approximately 1.2 millions. Rodrigues, with an area of 108km , is the second largest island and situated 560km east of the island of Mauritius. It has a populatio n of about 35,500 and its economy is based on fishing, cattle rearing and Tourism. Agalega Island s are located 1000km north of Mauritius and have a population of 300 inhabitants engaged into c oc nut exploitation. St Brandon comprises of sand banks, shoals and islets and is located some 4 30km north east of Mauritius. It is used as a temporary fishing base. Since independence, Mauritius has progressed from a low income, agriculture based economy to a middle income diversified economy. During the pas t three decades, annual growth has been of the order of 5% to 6% (Sacerdoti 2005). Mauritius h as one of the highest Gross Domestic Product (GDP) per capita in Africa and a relatively high standard of living. Mauritius is Small Island Developing State (SIDS) a nd shares similar sustainable development challenges with other member states. SIDS are defin ed as low lying coastal countries that share similar sustainable development challenges: small p opulation, limited resources, remoteness, susceptibility to natural disasters, vulnerability to external shocks and excessive dependence on international trade. Energy dependence is seen as a major source of economic vulnerability for many small island developing states. Assessments of current and future patterns of energy use, form part of a broad list of strategies identified by the SIDS members to face energy challenges. (United Nations 2005). Power production in Mauritius Mauritius has no known oil, coal or gas reserves an d is heavily dependent on imported sources of energy. More than 70% of the country’s electricity requirements were met from oil in the 80’s. With the volatility of the price of oil and instabi lity in the middle-east, there has been increasing concerns about the vulnerability of the Mauritian e conomy as a result of its dependence on oil. The strategy of decision makers has been to diversi ty the sources of energy with the introduction of coal and bagasse in the power production mix. Figure 1 Energy Mix for th The power landscape is characterized by the Central Electricity Board (CEB) and the Independent Power Producers (IPPs). The CEB, a responsibility to produce 40.7 legislation has the monopoly over the transmission, distribution and commercialization of electricity. CEB’s production is fired by fuel oil and kerosene and, to a minimal extent, wind. There are nine hydro plants and only three are able to generate all year round during peak hours. IPPs are private power generators of the Sugar Indu stry who produce the electricity requirements of the bagasse (a byproduct of sugar production) hours a day. IPPs can be classified as continuous producers, bur ning from bagasse only in the crop season, and firm producers, burning bagasse and coal a ll year round. From Figure 1, the performance of the island in terms of renewab le sources of electricity i.e. 22% in 2007 is above many developed countries. The totality of the bagasse produced is burned for electricity production and more electricity fro m this source is envisaged ma increases in boiler efficiencies in the IPPs and th e use of more fibrous varieties of sugarcane (Ministry of Public Utilities 2007) 0.0 Hydro Wind Kerosene Oil Coal Bagasse