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Techno-Economic Analysis of A Cost-Effective Power Generation System
Techno-Economic Analysis of A Cost-Effective Power Generation System
Techno-Economic Analysis of A Cost-Effective Power Generation System
Renewable Energy
journal homepage: www.elsevier.com/locate/renene
a r t i c l e i n f o a b s t r a c t
Article history: Off-grid, rural island communities seldom have access to electricity and for those that do, the quality and
Received 5 August 2018 availability are unsatisfactory. Gilutongan Island is one of the many off-grid islands in the Philippines
Received in revised form with very limited access to electricity. Residents are provided with electricity from 6:00 p.m. to 10:30
28 February 2019
p.m. through a 194-kVA diesel generator, paying US$ 0.14 per bulb and US$ 0.16 per outlet. Payment for
Accepted 27 March 2019
electricity is collected on a daily basis with collections usually amounting to US$ 74.32 per day. With
Available online 30 March 2019
consumption totalling to 276 kW for 4.5 h, this roughly translates to a cost of US$ 1.21 per kWh. Using
Hybrid Optimisation Model for Electric Renewables (HOMER), this paper presents a techno-economic
Keywords:
Energy access
analysis of a proposed cost-effective power generation system for the island, aiming to provide elec-
Renewable energy tricity access to the residents 24 h a day with reduced energy cost. Two options are considered: diesel-
Hybrid power systems solar hybrid and solar only. Considering location constraints of the island, the hybrid system proves to be
HOMER more effective, reducing cost of energy by 70% to US$ 0.3556 per kWh. Determining the load profile of
the island is imperative in creating the system, dictating its size and capacity, which in turn affects its
sustainability.
© 2019 Elsevier Ltd. All rights reserved.
https://doi.org/10.1016/j.renene.2019.03.124
0960-1481/© 2019 Elsevier Ltd. All rights reserved.
906 L. Lozano et al. / Renewable Energy 140 (2019) 905e911
as well as protect them from unpredictability of fuel prices and identification of appliances and their usage patterns, reduce bias in
supply [5]. Hybrid power systems combining renewable energy and the interviewees, and knowledge of regulations and recommen-
diesel generators are seen to be the most suitable solution in rural dations on the use of certain appliances.
electrification and have seen to successfully provide electricity to This interview-based methodology is also adapted by Ozawa
rural communities in China, Tanzania, Algeria, Ecuador, and Laos et al. in modelling household energy use in Japan [22]. However,
[6]. In a study of an off-grid village in Sind, Pakistan, a hybrid power the study considered very specific urban household appliances
system using photovoltaic, wind, and diesel is seen to reduce 69% of such as vacuum cleaners, microwave ovens, hair dryers, heaters,
greenhouse gas emissions and to provide a levelised cost of energy electric pots, and dishwashers. Energy consumption was obtained
at $0.45/kWh [7]. Although requiring high initial investment than by considering an electricity consumption factor based on smaller
pure diesel systems, techno-economic analysis shows that hybri- chunks of operating time. In a residential area in Iran, domestic load
dised systems considering PV, wind and diesel is the most modelling (DLM) was used to determine loads profile. Survey
economical solution to electrification of rural areas in Colombia in questionnaires were also deployed to determine energy usage and
terms of long-term economic implications and carbon footprint the analysis reflected the influence of the season, the day, the
reduction [8]. In India, central grid extension coupled with family type and the dwelling type. The study, however, only took
renewable energy sources is seen to improve electrical supply to 20 specific load profiles of the use of washing machines within that
cases showing reduction in average cost of electricity, minimisation residential area by using multivariate stochastic modelling to
of grid losses, and reduction in power interruptions [9]. A grid-tied approximate the behaviour of controllable loads in the area [23]. In
hybrid micro-grid system is also considered optimal for rural Seo and Hong [24], electricity load profile for an urban apartment in
village Kallar Kahar in Punjab, Pakistan providing for a levelised Korea was also obtained by survey and actual measurement. The
cost of energy at $0.05744/kWh [10]. daily average energy consumption was obtained from survey
In most studies involving design of optimal hybrid systems for samples and analysed using time-series and causal forecasting
rural electrification, HOMER software is used as in the cases of PV- techniques. The best fit was obtained by means of root mean square
biomass-diesel systems in India [11], hybrid microgrids in Papua errors and the result indicated that time series analysis would best
New Guinea [12], grid-tied and off-grid systems in rural India [13], describe the behaviour of energy consumers in determining the
power systems in Algeria [14], sizing of renewable off-grid systems daily electricity load. Other methodologies for load profiling
in Sri Lanka [15], assessment of hybrid renewable power sources in include clustering and pattern recognition techniques [25] and
Malaysia [16], hybrid application of biomass gasifier and PV sources using cyber physical systems [26].
in Bangladesh [17], and in mini-grid solutions to rural electrifica- This paper presents techno-economic analysis of two potential
tion programs in sub-Saharan Africa [18]. The main challenge in power generation systems for Gilutongan Island, an island bar-
using HOMER is to create as realistic a load profile as possible in angay in Cordova, Cebu, Philippines. The island has unique prob-
order to come up with feasible optimal designs. The individual lems in designing the system because of location constraints.
household demands usually constitute the aggregate demand of a Majority of the land is said to be owned only by two families and
community [19] and determining the usage of electricity is crucial most of the residents are considered illegal settlers. The optimal
in the sizing of the power generation system. This is emphasised by power generation mix that will yield the lowest cost of energy
Mandelli et al. in their case study in rural Uganda [20] where they (COE) is determined. Daily load demand is derived from surveys of
used stochastic modelling in formulating load profiles needed to three levels (households, business establishments, and public fa-
conduct simulation of an off-grid PV battery system. cilities) considering both existing electrical appliances and pro-
In Hartvigsson and Ahlgren [21], two methods were used to jected electrical uses of island residents. An existing 194-kVA diesel
obtain daily load profiles for three levels (households, small and generator set is considered along with a new solar PV system
medium enterprises, and entire mini-grid) in a rural Tanzanian design for the electrical supply. The optimal solution is derived
village: interview-based and measurement. The interview-based using HOMERPro for design and cost optimisation. The solution
methodology is considered to be the most common and resource- presented in this paper hopes to provide a baseline point for
efficient method but with issues on generating accurate load pro- possible cost-effective and reliable electricity access to island res-
files. The methodology required taking average household usages idents 24 h a day that is expected to improve their quality of life,
considering appliances, power ratings of appliances, usage of ap- expand their access to basic services and pave way for development
pliances, and time of day used of the average household based on of the community.
socio-economic status and the energy consumption at any given
time is computed based on Equation (1). 2. Method and materials
N Xn 2.1. Method
Et ¼ * Pm;t (1)
n m
HOMERPro is used to simulate potential power generation
Larger loads, on the other hand, required a different calculation schemes to compute for COE. Solar resource, together with the load
for daily energy consumption, which is the rated power of the load profile of the community, and the technical and economic com-
multiplied by the total time used in a day as shown in Equation (2). ponents are the parameters considered. Fig. 1 shows the framework
for the HOMERPro simulation. Daily load profile, energy resource,
X
k
tusage technical components, and economic components are the main
Et ¼ Pm * (2) inputs to the model. Geographical and technical constraints are
m topen
likewise determined.
The measured demand is obtained by using clamp-on current The load demand profile is obtained through surveying of three
meters deployed simultaneously in multiple locations. The results levels: households, business establishments (excluding a privately-
of the study showed high discrepancies in energy and load factors owned restaurant on the island) and public facilities. A simple,
between the two methodologies with the interview-based showing stratified random sampling was done for households while 100% of
low energy usage calculations. Improvements to the interview- the establishments and facilities were surveyed. A 2% margin of
based methodology were presented and included careful error was considered resulting to 301 total sample population for
L. Lozano et al. / Renewable Energy 140 (2019) 905e911 907
INPUTS
Daily Load Energy Technical Economic
Profile Resource Components Components
Geographical
Constraints OUTPUTS
HOMERPro Simulation Model
Economic Power System
Technical Analysis Schematic
Constraints
3. Data presentation
60.0
Energy Consumption (kW)
50.0
40.0 HOUSEHOLD
BUSINESS
30.0 FACILITY
TOTAL
20.0
10.0
0.0
0:00
1:00
2:00
3:00
4:00
5:00
6:00
7:00
8:00
9:00
10:00
11:00
12:00
13:00
14:00
15:00
16:00
17:00
18:00
19:00
20:00
21:00
22:00
23:00
households, businesses, and facilities are shown individually in the set at 24 h per day is not nominal. Two possible scenarios are
chart as well as the total demand for all three levels. This is considered to meet the electricity demand of the island: a hybrid
considering the appliances and their usage as projected by the system consisting of the existing diesel generator set and a solar PV
users if electricity is available 24 h per day. The load is expected to installation with storage, and a purely renewable energy system
peak at 65.3 kW at around 7:00 in the evening with the lowest load consisting of only solar PV.
of 21.6 kW between 4:00 to 7:00 in the morning. The hybrid system consists of 100 kW solar PV, 200 batteries
Fig. 5 shows the generated monthly average solar global hori- and the 194-kVA generator set. The solar PV is constrained at
zontal irradiance (GHI) of the island. Results show that Gilutongan 100 kW due to the limitations of the identified locations. Fig. 6
has an average of 5.29 kWh/m2/day. shows the monthly average electricity production of the system,
including the power output of the generator and the solar PV
3.2. Technical and economic components installation.
The solar PV only system consists of 314 kW solar PV and 718
3.2.1. Technical components and costs batteries. Because no diesel generator set is considered for this
The technical components (with unit costs) considered in the scenario, the number of solar cells is not constricted. Fig. 7 shows
HOMER simulation are given in Table 2 below. Note that the the power output of the system.
194 kVA diesel generator is already existing on the island. Table 3 summarizes the production details of the two proposed
scenarios.
3.2.2. Economic components The hybrid system is able to produce 41.1% of electricity from
Assumptions for the economic components such as inflation renewable energy sources. The system dumps about 21.4% of
rate, discount rate, and diesel cost used in the HOMER simulation electricity and stores about 4.84 h of electrical supply in the bat-
are given below. teries, enabling it to supply the electrical load for that span of time
on batteries alone. The solar PV only system is able to produce
Between January 2018 and June 2018, inflation rate rose from 100% of electricity from renewable energy sources. Surplus power
3.4% to 5.2% [32]. The inflation rate used in the simulation is the is at 39.3% while unmet electrical load is at 8.59%. However, bat-
average over this six-month period, which is 4.3%. teries are able to supply electrical load for 17.4 h, given that there is
The interest rate as of June 2018 is 3.5% [33]. This is used as the no sun.
discount rate in the simulation.
The island sources out its diesel from the mainland at US$ 0.84
(or Php45) per litre. This is assumed to increase by 2% every year,
considering recent increases in oil prices in the Philippines at
US$ 0.011 (Php 0.55) to US$ 0.014 (Php 0.70) per litre [34].
Systems fixed capital cost includes installation, transportation
and other incidental costs related to the implementation of the
system.
Exchange rate is assumed to be Php 50 to US$ 1.00.
The existing 194-kVA diesel generator set can supply the pro-
jected load demand of the island. However, operating the generator
Table 3
Summary of production of two proposed scenarios.
Production, %
Solar PV 41.1% 100%
Diesel generator set 58.9% 0
Excess electricity, % 21.4% 39.3%
Unmet electrical load, % 0 8.59%
Fig. 5. Monthly average solar global horizontal irradiance, Gilutongan island. Down-
Autonomy, hrs. 4.84 17.4
loaded from the National renewable energy Laboratory.
Table 2
Technical components used in the simulation.
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