Why not go green? : an analysis of the viability of solar PV mini-grids in Tanzania
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Currently, practically all off-grid power systems supplying electricity access in rural Tanzania are diesel-based. The operator, Tanesco, spend more than US$ 45 million per year purchasing more than 50 million liters of diesel fuel, maintaining a diesel-based generating capacity of about 55 MW in total. The ambitious plans of increasing the level of rural electrification and limited ability to extend the existing power grid, introduces small off-grid power systems (mini-grids) as
a viable option for electricity access in remote rural areas. Despite a certain level of hydropower and biomass resources being evident, the lion’s share of mini-grid candidates will call for other solutions, currently pointing toward diesel, PV or diesel-PV hybrid concepts.
The aim of this thesis has been to assess under which circumstances PV systems can be implemented for cost-competitive and viable power production on mini-grids in rural Tanzania.
The capability of PV systems to provide certain levels of supply security in comparison to more conventional generating technologies depend on meteorological conditions, in addition to establishment of system design and operation criteria. Domestic solar insolation ranges from less than 3.5 kWh/m2day and high seasonal variation in the Kilimanjaro area of the North Eastern Highlands zone, to about 6.0 kWh/m2day and very low seasonal variation in Central Tanzania. Standard deviations in the average annual insolation data has been estimated to less than ±5 % for all conducted measurements, suggesting a high potential for relatively predictable PV power production in most zones.
An LCOE of 0.61 US$/kWh estimated for a base-case PV system under average irradiation conditions is within the willingness to pay for low-consumption electricity (estimated to range from 0.8 US$/kWh to 1.2 US$/kWh). The results also suggest that PV systems are significantly less costly than diesel-based generation, and competitive to diesel-PV hybrids. The technical modularity of PV systems may enable developers to implement stepwise capacity expansion, in order to reduce initial expenditure and provide gradual development of electricity access to rural communities.
While it makes good economic sense to pursue solar energy on mini-grids, there are several meaningful and challenging barriers. The high initial costs of PV systems, combined with income uncertainty in rural areas due to low customer affordability introduce high financial risk, which makes it somewhat difficult to attract private investors. In addition, LCOE estimates obtained for PV systems involve a high degree of configuration dependence and sensitivity to availability
of the solar resource and operational criteria. In particular, the supply security required from a PV system will determine the extent of battery storage capacity needed, which typically represents about 30 % of overall initial costs.
Up-front donor support to developers presenting economically viable operational models and business plans for off-grid electrification projects, may contribute to overcome capital boundaries and promote a broader utilization of solar and other renewable resources on minigrids
in Tanzania.Keywords:
Rural Electrification
Diesel generator
Grid parity
Mains electricity
Nameplate capacity
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Rural communities in developing countries lack access to affordable, reliable, and sustainable forms of energy, which are essential factors for improving living conditions. These communities rely on diesel and kerosene, which are highly polluting compared to renewable energy technologies, to satisfy their energy needs. In this study, hybrid renewable energy systems (HRESs) have been analyzed, which are designed to overcome the fluctuating nature of renewables, for off-grid electrification. The results of this study—which covers many countries and examples—show that the successful integration of HRES is influenced by factors such as government support—and community organization — which is essential to keep these systems operating over the project lifetime. The levelized cost of energy (LCOE) of different mini-grids was compared and analyzed. The results reveal that by comparing the LCOE range of diesel (between USD 0.92/kWh and USD 1.30/kWh), solar photovoltaic (USD 0.40/kWh and USD 0.61/kWh), and hybrid solar photovoltaic/diesel (USD 0.54/kWh to USD 0.77/kWh), diesel is the most expensive technology. Additionally, the study addressed barriers that can hinder the implementation of mini-grids, such as lack of supportive policies and high capital cost. However, governments' incentives are instrumental in lowering capital costs. These results are of particular importance for developing countries, where electricity supply via HRES is often quicker and cheaper than grid extension. The insights from this paper are a good starting point for in-depth research on optimal local design and ownership models, which can help accelerate the implementation, and lower the costs of sustainable electricity supply in remote areas.
Rural Electrification
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Through rigorous rural electrification projects, over 99.97% of Bhutan's households now have access to electricity, which is predominantly generated from run-of-the-river hydropower plants. Despite this achievement, around 5% of the rural households still do not have access to electricity to meet their cooking load demands and, therefore, they extensively rely on firewood, LPG, and kerosene for cooking purposes. Apart from hydropower, penetration of other renewable sources such as solar and wind power in the country is negligible. Thus, an attempt was made to determine the investment costs of installing PV systems for off-grid households in remote settlements by studying their economic feasibility. The study shows that the initial cost of investment for an off-grid Solar Home System for a rural household is US$1.42 per Wp using polycrystalline PV modules and US$1.55 per Wp using monocrystalline PV modules. The average cost of installing SHS is determined to be US$ 2342.67 per household. The results of analyses indicate that standalone SHS for remote rural households is not financially viable with the current price of electricity supply in Bhutan. However, SHS provides a more cost-effective option than a grid-line extension, which is estimated to cost about US$ 6700 per household for the remaining off-grid settlements. Keywords: Rural electrification, off-grid, solar home system, PV system, economic analysis. JEL Classifications: C8, G0, Q4 DOI: https://doi.org/10.32479/ijeep.10665
Rural Electrification
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Ghana’s urban population in the middle and high-income segments often seek
electricity alternate power systems either as a solution in the face of power outages, or
as a reliable second option. Some middle- and high-income household users seek to
know what options there are, in relation to a second electricity source, and what the
techno-economic implications could be. The study sought to assess the technical
feasibility and economic benefits of investments in diesel generators and solar PV
systems with battery storage. The cost-benefit scenarios of diesel generators were
compared to those of Solar-PV systems with battery storage, using a daily base
electrical load of 3.3kW peak. Simulations were run with HOMER, comparing
options of combined grid and solar home systems, as well as combined grid and diesel
generator systems. Running a household solely (considering the base load) on
Ghana’s national grid offers a yearly operating cost of $839, translating to a monthly
electricity bill of $70 (about GHc 330) and a total NPC of $10,732. Investing an
initial amount of $1,332 in an SHS for the same household offers a yearly operating
cost of $665, translating to a monthly electricity bill of $55 (about GHc 260) and a
total NPC of $9,828. The difference between the total NPC of the grid-only system
and that of the recommended SHS (i.e. $10,732 - $9, 828 = $904) offers a payback
period of about a year and a half on the initial investment. Given the above results, an
investment of $2,000 or less in a Solar PV system with battery storage is better than
making that same investment in purchasing a diesel generator. The results show that
an investment in purchasing a diesel generator to supplement the national grid
provides very little or no benefits. Maintenance cost for each kilowatt of solar
installation done is an average of USD $4 as compared to an average of USD $40 for
a diesel generator system. There are also benefits in the inclusion of a renewable
fraction (16% or more) in the energy supply of homes that invest in solar systems,
contributing to goal 7 (affordable and clean energy) of the UN’s sustainable
development goals.%%%%A thesis submitted to the Department of Mechanical Engineering, Kwame Nkrumah University of Science and Technology, Kumasi in partial fulfillment of the requirements for the degree of Master of Science – Renewable Energy Technologies, 2018.%%%%KNUST
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Electricity retailing
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Bangladesh, a small developing country in South Asia, has been in energy crisis for long time that reduces country's economic growth potential. Bangladesh can actively consider a distributed power generation system alongside of its central and conventional supply system of electric power. This paper explores electricity demand and partial fulfillment of that demand through grid-connected PV system. It was found that if Bangladesh was to generate 5% of its total electricity demand by solar energy by 2020, it could be achieved by exploiting only 13% of her total technical potential. Life cycle cost analysis shows the cost of energy from gridconnected PV system is 25.5 US cents/KWh, which is much higher than the cost of electricity generated from combined cycle gas turbine. Considering the externality benefit of solar PV systems, the government should offer 30-40% of total installation cost as subsidy. This subsidy requires the government to allocate 1-1.5% of total government budget from 2010 to 2020.
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A Techno-Economic Analysis of Off-Grid Solar PV System: A Case Study for Punjab Province in Pakistan
Fossil fuels are the primary sources of electricity generation in Pakistan. The energy demand and supply gap have intensified recently due to the massive population and fossil fuels are unable to meet the gigantic energy requirement of the country. Meanwhile, they also have adverse environmental impacts. Remote rural regions that are far away from the national grid do not have any means to fulfill their energy needs. The off-grid solar photovoltaic (PV) system has emerged to be the best energy option to electrify these remote regions. However, the strategic problem pertaining to local electricity generation is the absence of the area-specific generation capacity and economic feasibility data for solar energy. To address this problem, this study aims to assess the potential and economic viability of utilizing an off-grid solar PV system for rural electrification in the Punjab province of Pakistan. The research results reveal that there is an excellent solar irradiance in the rural areas of Punjab for electricity generation. In addition, suitable tilt angles have been calculated to increase the energy output of solar PV in the respective regions. Furthermore, this study has undertaken the economic viability for solar PV systems, and it was found that electricity generation from the solar PV costs Pakistani rupees (PKR) 7.15 per kWh and is much cheaper than conventional electricity, which costs PKR 20.7 per kWh. Besides, the system can reduce carbon emissions considerably. If 100% of the unelectrified households adopt solar PV system, then 617,020 metric tons of CO2 could be mitigated annually. Based on research findings, this study has suggested essential policy recommendations that would serve as a guideline for the government and stakeholders to maximum deploy the off-grid solar PV rural electrification programs in Punjab as well as on a national scale.
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Capacity planners in developing countries frequently use screening curves and other system-independent metrics such as levelized cost of energy to guide investment decisions. This can lead to spurious conclusions about intermittent power sources such as solar and wind whose value may depend strongly on the characteristics of the system in which they are installed, including the overall generation mix and consumption patterns. We use a system-level optimization model for Kenya to evaluate the potential to use grid-connected solar PV in combination with existing reservoir hydropower to displace diesel generation. Different generation mixes in the years 2012 and 2017 are tested with a unit commitment model. Our results show that the value of high penetrations of solar in 2012 exceeds expected payments from the national feed-in-tariff. Under two 2017 generation mix and demand scenarios, the value of solar remains high if planned investments in low-cost geothermal, imported hydro, and wind power are delayed. Our system-scale methodology can be used to estimate the potential for intermittent renewable generation in other African countries with large reservoir hydro capacities or where there is a significant opportunity to displace costly diesel generation.
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Qatar is emerging as one of the most dynamic and innovative economies in the Middle East over the last decades. The rapid expansion in the industrial sector, as the key economic driver, in addition to, the strong growth in construction sector, driven by large government investments, alongside the rapidly increasing population and rising living standards put continuously increasing pressures on domestic energy consumption leading to the escalating demand for electricity. To meet these challenges, Qatar has started thinking for long term plans for reducing it dependency on fossil fuels and implementing energy conservation measures as part of its 2030 National Vision. Therefore, Qatar start investing large amounts of money in supporting research and development in the renewable energy sector, in particular, the photovoltaic (PV) technologies for electricity production due to the high level of insolation resulted from its geographical location in the subtropical ridge. Plans are underway to generate 2% of the national electricity production from solar photovoltaic systems by 2020, and 20% by 2030. Solar PV is one of the four main direct solar-energy technologies, in addition to, the concentrating solar power (CSP), solar thermal and solar fuels. Solar PV has various applications and the majority of the installed PV systems are grid connected either through small-scale rooftop (up to ten kWs) or ground-mounted systems installed on residential or commercial properties (ten kW to one MW), or through utility-scale PV farms (one MW or more). Solar PV systems are being installed everywhere around the globe and in developed countries the fastest growing sector is the distributed, grid-connected, rooftop systems. The motivation for individuals to install their own PV system can vary; early solar adopters chose to own solar PV system because of environmental concerns, or a desire to reduce their reliance on the electric power grid. In recent years due to the rapid decline in PV system installed price, the market for solar photovoltaic systems is growing rapidly into a mature industry welcoming an entirely new class of consumers motivated by the prospect of saving money on their electricity bills and making a responsible investment in their home. The projective of this work is creating a Profitability Analysis Tool (PAT) for PV systems in the context of distributed, grid-connected buildings. An economic evaluation model will be designed to evaluate the electrical energy production from PV systems taking into account all the operational incomes as well as all the expenses for the implementation, operation and maintenance of the PV system during its entire lifetime based on discounted cash flow analysis. The proposed profitability analysis tool will help the investors (home owners) to evaluate their solar PV investment through a wide range of economic inductors such as, Net Present Value (NPV), Internal Rate of Return (IRR), Simple Payback Time (SPT), Benefit to Cost Ratio (BCR) and Profitability Index (PI). The proposed profitability analysis tool gives the investors the ability to investigate different financing methods (combination between equity and debt) in addition to evaluating the advantages of applying different proposed governmental incentives (subsidies and tax incentives). Furthermore, since the variations in discount rate, tariff rate, installation and maintenance cost per kW and solar insolation will have a great impact in the profitability analysis, a sensitivity analysis using Monte Carlo simulation will be included in the proposed profitability analysis tool to highlight the impact of these variations. Furthermore, this Monte Carlo based sensitivity analysis will act as a guide for governmental policy designers to navigate their way to increase distributed solar PV adaptation in Qatar.
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