QUESTION 2 (17/18)

(a) Discuss the importance of life-cycle cost analysis in comparing different renewable
energy project design options.
(5 marks)

(b) A 10 MWp solar farm project has an average capital cost of RM3.50/watt. The
Operational and Maintenance (O&M) is RM 500,000/year. The project will be financed
with a RM 30 million, 20 year loan with 6% interest. The remaining capital cost will be
provided by an equity investment that requires a 15% annual return. The solar farm has
the average system performance ratio of 80%. Assuming the solar farm site has the
annual Peak Sun Hour of 1650-hour. For simplicity, assume no ageing factor. Determine
the followings:

i. Total system capital cost for the 10 MW solar farm project.

(2 marks)
ii. The amount of equity investment.
(2 marks)
iii. The annual loan repayment.
(4 marks)
iv. The annual return (cost) of equity investment.
(2 marks)
v. The total annual cost.
(2 marks)
vi. Levelized cost of solar energy
(4 marks)
vii. Assuming the price of electricity from the grid is RM0.30/kWh, has the solar farm
achieve grid parity status?
(2 marks)

viii. Discuss the potential options to make this project more cost competitive.
(2 marks)

[25 marks]
2021

a) Answer the following with reference to the load duration curve as shown in Figure Q2
and the unit cost of electricity from the three types of generation as shown in Table Q2

i) Explain how to construct the load duration curve.

(3 marks)

ii) Examine which generation type is suitable for baseload and peaking generation.

(4 marks)

iii) Complete the Table Q2 (a) for the generated energy in unit TWh.
(3 marks)

Figure Q2 (a): Load duration curve

Table Q2 (a): Unit cost of electricity from the three types of generation
Generation Type Rated Power Generated Capacity Unit cost
(MW) Energy (TWh) Factor (¢/kWh)

Coal-steam 3500 0.91 5.00

Combined-cycle 1200 0.47 6.00

Combustion 13.00
1300 0.10
turbine
b) A solar system integrator is preparing a proposal for Net Energy Metering project at
UTeM. The relevant information is as given in Table Q2 (b).

Table Q2 (b): Information for UTeM solar system

UTeM’s annual average maximum demand 5 MW
Overall PV system costs RM 3,500 / kW
Loan interest rate 6%
Loan period 25 years
PV system’s capacity factor 0.16
Annual operation and maintenance (O&M) costs RM 120,000

i. What is the maximum capacity that the solar system integrator can propose for
this NEM project for UTeM?
(2 marks)
ii. Calculate the average daily effective Peak-Sun-Hour
(2 marks)
iii. Calculate the levelised cost of energy (LCOE) for this solar PV system,
assuming maximum solar PV capacity is proposed.
i (1 + i ) n
Note: Capital recovery factor =
(1 + i ) n − 1

(6 marks)
iv. If the solar company is targeting a 25% premium rate, what is the solar tariff
rate that the company would propose to UTeM.
(2 marks)
v. Calculate the annual saving for UTeM with the offered solar tariff rate as
proposed in (iv). Assume UTeM electricity tariff = RM0.365/kWh.
(3 marks)

[25 marks]
2021

a) A solar system integrator is preparing a proposal for Net Energy Metering project at UTeM
based on the NEM 3.0 scheme offered by the goverment. The relevant information is as
given in Table Q2(b).
Table Q2(b): Information for UTeM solar system
UTeM’s annual average maximum demand 5 MW
Overall PV system costs RM 3,500 / kW
Loan interest rate 3%
Loan period 10 years
PV system’s capacity factor 0.18
Annual operation and maintenance (O&M) costs RM 40,000

Based on this information, conduct an economic evaluation to determine the solar tariff rate
that the company will propose to UTeM for a premium rate of 20% together with the annual
savings that UTeM will obtain. Assume UTeM’s electricity tariff to be a flat rate of RM
0.39/kWh.
(11 marks)
QUESTION 3

You are tasked to prepare a proposal for Net Energy Metering project for a university campus.
Table Q3.1 shows the working day and weekends / holiday energy consumption for the
university buildings and Table Q3.2 shows the relevant information for the solar system. Based
on the given information,

a) Propose the required solar system capacity that will completely offset the university’s
buildings annual energy consumption.
(5 marks)
b) Calculate the average levelized cost of energy (LCOE) for the duration of 5 years by taking
into consideration the solar system annual degradation.
(15 marks)
c) Calculate the total electricity bill saving for the first 5 years. Assume university’s electricity
tariff is at RM 0.402/kWh and the project is self-financed by the university.
(5 marks)

[25 MARKS]

Table Q3.1: University buildings average annual energy consumption.

Parameter Working day Weekend / Holidays
Energy Consumption, kWh 5,000 1,500
Number of days 245 120

Table Q3.2: Solar system data

Parameter Data
Overall solar system cost RM 3,000/kWp
Annual maintenance cost 2% of total system cost
Interest rate 5%
Loan period 20 years
Average solar radiation 5 kWh/m2 / day
Solar system performance ratio 80%
Solar system degradation 1.5% / year
20222023sem 1

QUESTION 3

You have received a Call for Proposal from a public university to install solar photovoltaic
system at the campus’s building rooftop. The electricity energy consumption data for the
university buildings is as shown in Table Q3(a) and the relevant information for the solar
photovoltaic system is as depicted in Table Q3(b)

a) Which solar scheme would you propose to the university, Net Energy Metering (NEM) or
Self-Consumption (Selco)? Give your reasoning.
(3 marks)
b) Assumed that you choose to propose Net Energy Metering scheme, which of the following
DC solar capacity you would choose to design the system. Give your justification. Note:
Maximum allowable capacity under NEM Gomen = 1 MWac
a. 0.8 MWp
b. 1.0 MWp
c. 1.2 MWp
(3 marks)
c) Calculate the percentage of campus’s electricity consumption that will be offset by the
proposed solar system at the first year of installation.
(4 marks)
d) Propose the solar tariff that you would offer to the university. Assume profit rate of 20%
for your company for the solar energy sold to the university.
(10 marks)
e) Evaluate the economic impact of the loan interest rate to the project viability from the
perspective of investors/project owners if it were to increase from 4%/annum to
10%/annum.
(5 marks)
 Table Q3(a): University buildings average annual energy consumption.
Parameter Working day Weekend / Holidays
Energy Consumption, kWh 8,000 2,400
Number of days 245 120
Electricity tariff, RM/kWh 0.365 0.365

Table Q3(b): Solar system data

Parameter Data
Overall solar system cost RM 3,000/kWp
Annual maintenance cost 1% of total system cost
Interest rate 4%
Loan period 20 years
Average solar radiation 5 kWh/m2 / day
Capacity factor 16%
Solar system degradation 1.5% / year

[25 MARKS]