Feasibility Study of Photovoltaic (PV)-Diesel Hybrid Power

Systems for Remote Networks

GM Shafiullah, Craig E Carter
School of Engineering and Information Technology, Murdoch University, Australia
Emails: [email protected]; [email protected]

Abstract— Stand-alone generators are mostly used to deliver in a more sustainable way. Due to high initial investment and
power to consumers in isolated remote locations or rural maintenance costs, governments are becoming more reluctant
communities, which usually increase the cost of energy to provide capital funding of grid extensions to deliver
generation. Solar photovoltaic (PV) systems are experiencing a electricity to remote locations or rural areas. Small scale
world-wide rapid take-up due to their rapidly reducing cost and
stand-alone power systems, such as diesel generator based
climate-friendly attributes. This study aims to develop a PV-
Diesel hybrid power system for the remote township of Cue power systems, with or without renewable energy sources, are
(27.4210S, 117.8960E), to investigate the techno-economic being used to supply power to remote or rural communities.
possibilities of integrating solar PV within the existing diesel Decentralized renewable energy systems concentrating on a
network. Hybrid Optimization Model for Electric Renewable small entity have become the catalyst for providing more
(HOMER) has been used to evaluate the performance of the sustainable forms of energy to remote populations. From the
hybrid power system based on the performance metrics: net available research, it is evident that hybrid power systems with
present cost (NPC), cost of energy (COE), renewable fraction renewable energy sources can be reliable, cost-economic,
(RF) and greenhouse gas (GHG) emissions. Simulation, effective and more sustainable compared to either grid-
optimization and sensitivity analysis of the models has been
connected or stand-alone generators utilizing a single fossil
performed and an optimum model selection has been made,
based on techno-economic and environmental performance. fuel based power source [1 - 4].
From the simulation analysis, it is clearly observed that Cue, as Many countries around the world, such as India, South
well as other mid-west locations within Western Australia, has Africa and Australia are currently doing extensive research
enormous potential for substantially increasing the use of solar and development on hybrid power systems for rural
PV in parallel with the existing stand-alone generators, thereby communities that comprise stand-alone generators integrated
reducing the use of diesel fuel, generator operating hours, with renewable energy sources or microgrid-based power
resulting in reduced energy costs and GHG emissions. systems with distributed renewable energy resources [4].
Integration of renewable energy sources, in particular solar PV
Index Terms— Rural communities; Hybrid power systems;
HOMER; Solar PV, Diesel Generators.
and wind turbines, with diesel generation can significantly
reduce diesel fuel use and operating and maintenance costs,
I. INTRODUCTION thereby reducing GHG emissions [5].
The cost of solar PV has declined rapidly in recent years as
Around the world, over 1.2 billion people, or roughly a increasing sales has supported large scale low cost
quarter of the global population, have no access to reliable manufacture of PV panels and research into producing more
electricity, including over 50 million people in Africa and 300 efficient and cheaper PV panels. This now makes PV a very
million people in India [1]. Most of the rural areas that are far promising energy source, as it is climate-friendly and now
from mainland urban areas have a lack of access to modern economically competitive. In addition, PV requires minimum
facilities, as well as energy services, which is considered a maintenance and is easy to expand to meet growing energy
significant global development challenge. A reliable and needs. However, the power output of PV is variable in nature
continuous electricity supply is required for the economic and is only available on average for 8 to 10 hours per day.
development of communities, as well as the delivery of key Hence, PV itself cannot supply all of the customer load
public services, including health, education and infrastructure. demand on a 24-hour basis. Moreover, PV generation is at a
Access to reliable and affordable electricity can help support maximum during the middle of the day, when residential
income-generating activity and allow utilisation of modern customer load demand is comparatively low, hence PV
appliances and agricultural equipment. However, electricity generation does not align well with residential customer load
power networks must be complex entities, if they are to demand. Therefore, it is necessary to integrate solar PV into
maintain a reliable and quality power supply to communities either a grid-connected system or an off-grid system with
diesel generators and/or energy storage systems. From various working together to integrate solar PV with existing diesel
research sources, it has been established that PV-diesel power generators to reduce the use of diesel fuel, cost of energy and
systems with energy storage can be a reliable and efficient the operating hours of diesel generators, with the additional
source of electricity for rural or remote communities [3]. benefit of creating Renewable Energy Certificates (RECs) that
The initial capital cost of PV power is still high compared put a value on the consequent reduction in GHG emissions.
to that provided by diesel generation, however diesel The Australian Renewable Energy Agency (ARENA) has
generation has high operating and maintenance costs, supported a few solar PV/Diesel minigrid system proposals to
principally due to the high delivered cost of diesel fuel. Saheb- supply reliable, efficient and climate-friendly power to remote
Koussa [7] developed a wind/PV/diesel hybrid system with communities, in particular within the Northern Territory [12].
battery backup, in which it is evident that the hybrid system is Recently, CSIRO and TERI, India undertook a ‘smart
the most suitable configuration for all the sites considered. A minigrids’ project, which intends to demonstrate the reliability
solar/diesel/battery hybrid power system was designed for a and efficiency of a renewable energy powered stand-alone
typical rural household by Nfah et al. [8], in which it was electrical power system (known as a minigrid) in India and
shown that the system met the required load demand with Australia and improve community, government and industry
optimal performance. acceptance of the technology, thereby accelerating renewable
Dekker et al. [9] developed a hybrid power system (HPS) and smart minigrid deployment in the partner countries [4].
for typical residential loads within a rural South African Shafiullah et al [13] investigated promising locations within
community to explore the prospects of PV. The results Australia to integrate large-scale renewable energy generation
demonstrated that from a financial, technical and into the energy mix, in which it was shown that the Northern
environmental point of view, South Africa is an ideal country Territory and the states of Western Australia and Queensland
to deploy standalone power systems with solar PV. Shafiqur et are very prospective for solar PV. Therefore, in line with the
al. [10] developed a wind-PV-diesel hybrid power system for recent initiatives from Federal Government agencies such as
a village in Saudi Arabia and the results showed that the most ARENA and the Clean Energy Finance Corporation (CEFC)
economical power system had 35% of its annual electricity to deploy clean energy within Australia, this paper focuses on
demand supplied from renewable energy, commonly referred the benefits and possible deployment issues to integrate solar
to as 35% renewable energy penetration. The COE from this PV with an existing Western Australian diesel network. In this
optimal hybrid system was $0.212 US/kWh at a diesel price of paper, a feasibility study has been undertaken to investigate
$0.2US/litre, while the COE for the diesel only system was the prospects of a PV/diesel hybrid power system in the
$0.232US/kWh. In an another study [3], it is shown that a Australian context, in particular within the Mid West region of
PV/diesel hybrid system comprising 2.5 MWp of PV capacity, Western Australia, which considers production costs, cost of
4.5 MW of diesel capacity and a battery with 60 minutes of energy, contribution from PV and the reduction in GHG
autonomy can generate 27% of its energy from PV, with a emissions. A number of hybrid power system configurations
COE of $0.17US/kWh, assuming a diesel fuel price of have been modeled using HOMER simulation software to
$0.1US/litre. From the study, it was shown that increasing PV compare PV/diesel/battery, PV/diesel and diesel only systems
capacity can reduce the number of diesel generator operating by considering the performance metrics: NPC, COE and RF.
hours. This model also investigates the GHG emissions from these
Compared with other parts of the world, Australia is one of systems.
best locations for solar energy, as it has huge open spaces and II. BACKGROUND
long periods of sunshine. Solar irradiation in Australia is the
highest on a per square metre basis compared to the other Western Australia, where the feasibility study has been
continents and solar PV is considered to be the most undertaken, is on the western side of the Australia, and covers
promising new energy source in Australia. Australia’s total an area of more than 2.5 million square kilometres that can be
PV capacity has increased significantly over the last decade classified as being semi-arid or arid [14]. The estimated
due to a combination of factors including the Australian population of Western Australia was 2.581 million with a
Government’s Renewable Energy Target (RET) to increase growth rate of 1.6% at the year ended December 2014 [15].
electricity generation from RE to equal 20% of the forecast Horizon Power [16] is responsible for supplying efficient and
Australian annual demand (originally set at 45,000 GWh- now reliable power to much of regional Western Australia. Out of
33,000GWh) by 2020, the Solar Homes and Communities their 38 power systems in the State, more than 30 are isolated
Plan (SHCP), Solar Flagships, greater public awareness, feed- power systems, which provide power to more than 100, 000
in-tariff payments for surplus electricity from PV installations, residents of regional towns and communities. In the Mid West
a huge drop in the price of PV systems, and highly effective region of Western Australia, Horizon Power is the utility that
marketing by PV retailers [11]. Due to geographical supplies electricity to the townships of Cue, Meekathara, Mt
dispersion and low population densities, the remote locations, Magnet, Yalgoo, Wiluna and Sandstone using isolated power
towns and communities of Western Australia and the Northern systems, in particular powered by stand-alone diesel
Territory are not connected to large electricity grids. Stand- generators [17]. Cue is a small town located 620 km north-east
alone generators, in particular diesel generators, are used to of Perth with a population of 328 and is also known as the
provide power to consumers within these remote communities. Queen of the Murchison [18]. Energy Generation Ltd (enGen)
Government agencies, utilities and researchers are currently generate power for the town using diesel generators with a
capacity of 0.8 MW under an agreement with Horizon Power, model outputs: NPC, COE and RF. Simulations are
which distributes and sells the electricity to its customers in undertaken for every possible system combination and
Cue [19]. Horizon Power maintains a reasonable amount of configuration for a period of one year. The simulations were
spinning reserve or surplus operating capacity to respond to a carried out with an Intel Core 2 Duo CPU, 4.0 GB of RAM
sudden increase in the load demand or sudden decrease in the with Windows XP Operating System.
renewable energy output. The level of spinning reserve varies
from town to town based on generation capacity and load Performance Metrics
demand [16].
In this study, the total net present cost (NPC), cost of energy
Due to the high solar irradiance, the Mid West region of
(COE) and renewable fraction (RF) have been considered as
WA is one the most promising regions, particularly in the
performance metrics to evaluate and compare different hybrid
more northern and western parts of the region, which aligns
power systems.
well with off-grid locations such as Cue [19]. Horizon Power
Net Present Cost (NPC)
encourages customers to install roof-top PV to generate their
The total NPC of a system is the present value of all the costs
electricity to reduce its generation of high cost electricity
that it incurs over its lifetime, minus the present value of all
using expensive diesel fuel. In 2012, Horizon Power offered a
the revenue that it earns over its lifetime. Costs include capital
buyback rate of 50c/kWh at Cue for all types of customers
costs, replacement costs, operational and maintenance costs,
[20]. However, the variable nature of renewable energy
fuel costs, and emissions penalties [22]. The NPC is evaluated
sources introduces potential technical challenges into the
using equation:
distribution network that reduces the quality and reliability of
TAC
power. Therefore, careful attention needs to be taken to limit NPC ($)
CRF
renewable energy penetration, i.e. the maximum hosting where TAC is the total annualised cost and CRF is the capital
capacity in a network. Horizon Power assigned a managed recovery factor. CRF is represented by the following equation:
hosting capacity limit of 461 kW at Cue [21], i.e. the i(1  i) N
maximum possible renewable energy generation at Cue, CRF ($)
(1  i) N  1
considering spinning reserve, generator loading capacity,
where N is the number of years and i is the annual real interest
systems voltage and frequency variations and variable PV
rate (%).
generation.
Cost of Energy (COE)
COE is the average cost per kWh of electricity. To calculate
III. HYBRID POWER SYSTEMS the COE, HOMER divides the annualised cost of producing
This study has involved the development of a electricity by the total useful electric energy production [22].
PV/diesel/battery hybrid power system model using HOMER COE can be calculated using equation:
[22] simulation software to identify the cost of hybrid power Cann,tot
COE ($)
systems with different combinations, and compare their E
performance based on the previously stated performance where Cann,tot is the annual total cost and E is the total
metrics. This section discusses the simulation software electricity consumption. The lower the NPC and COE are, the
HOMER, performances metrics, load profile, RE sources and better is the hybrid model output [22].
essential components to design a hybrid system for this study. Renewable Fraction (RF)
The RF is that portion of the system’s total energy production
Simulation Software originating from renewable power sources. HOMER
HOMER [22] models a power system’s physical behaviour calculates the RF by dividing the total annual renewable
and evaluates design options both for off-grid and grid- power production by the total energy production. The higher
connected power systems for remote, stand-alone and the RF is, the better the hybrid model output is [22]. RF is
distributed generation applications. Inputs to HOMER contain represented by equation:
diesel generator data, electric load data, solar PV data, system Eren
f ren
component specifications and costs, and information for Etot
optimisation of the model. It simulates thousands of system where Eren is the renewable energy production and Etot is the
configurations, optimises for lifecycle costs and generates total energy production.
multiple results to produce sensitivity analyses on most of the
inputs. This analysis is useful to support decision making or in Load Profile
the development of recommendations from the model. In this
study, sensitivity analysis has been undertaken to study the A typical load profile has been considered for this analysis
effects of varying the integrated solar PV and battery based on monthly load demands at Cue. Daily load demand is
capacities and to make appropriate recommendations in illustrated in Figure 1, in which the peak demand occurs
developing hybrid power systems. HOMER simulations have between 17:00 and 19:00 hours. The electric load has a
been performed evaluating the sensitivity to the variables of seasonal variation with December to March being the peak
solar irradiance, diesel generator and fuel prices to produce the summer/early autumn months and June to August being the
peak winter months. There are lower loads during the
remaining spring and autumn months.

Figure 1: Daily load demand at Cue

Solar Photovoltaic (PV)

Figure 3: Diesel/PV Hybrid Power Systems
Hourly solar radiation data for Cue was collected from the
Bureau of Meteorology (BOM), Australia [23] and imported Table I: Technical data and study assumptions of hybrid power system
Description Value/Information
into HOMER to calculate daily radiation and monthly average Diesel Generator
values of clearness index. Figure 2 shows the average daily Minimum load ratio (%) 40
radiation for each month in kWh/m2/day and the monthly Capital Cost $1000/kW
clearness index curve over the whole year. From Figure 2, it Replacement Cost $900/kW
Operation & Maintenance Cost $0.025/hr
can be seen that solar radiation is the highest in the month of Lifetime 15000hours
December with an average solar radiation of 5.77 Fuel price $1.25/L
kWh/m2/day. However, solar radiation is low in the months PV
from May to July i.e., in the late autumn and winter seasons. Capital Cost $1352/kW
Replacement Cost $1000/kW
Operation & Maintenance Cost $50/year
Hybrid System Components Lifetime 20 years
Inverter
The major components of the grid-connected hybrid system Capital Cost $800/kW
are the diesel generators, solar PV, battery and bi-directional Replacement Cost $700/kW
power inverter, as shown in Figure 3. For the economic Operation & Maintenance Cost $0/year
analysis, the numbers of units to be used, capital costs, Lifetime 20years
Battery
replacement and O&M costs, along with operating hours have Type of battery Surette 4KS25P
to be defined in HOMER in order to simulate the system. Nominal Voltage 4V
Details of technical information of different components and Nominal Capacity 1900 Ah
study assumptions are given in Table I. Capital Cost $170
Replacement cost $130
Lifetime 2 years
Control Strategies
Operating Reserve
As percent of load Hourly load 10%
As percent of Solar Power output 25%
Dispatch Strategy Load following
Generation control Allow systems with
multiple generators
Generator schedule Optimized

IV. MODEL EVALUATION

Considering the daily peak load demand at Cue, the proposed
hybrid model has four diesel generators, each with a
maximum capacity of 200kW, i.e. a total maximum diesel
capacity of 800kW. However, the model considers four search
Figure 2: Daily solar radiation at Cue
spaces (50kW, 100kW, 150kW and 200kW) for each diesel
generator. This study also considers the minimum diesel
loading to be 40% of their nominal maximum power rating to
avoid poor fuel combustion leading to carbon build up in the
cylinders and glazing or polishing of the cylinder walls - bore from diesel only, PV/diesel and PV/diesel/battery connected
glazing. Maintaining a 40% diesel loading also reduces the systems.
risk of diesels operating in reverse power after a significant V. RESULTS ANALYSIS
portion of the load demand is lost, e.g. following the trip of a
distribution feeder. The maximum PV capacity was set at A diesel/PV/battery hybrid power system model has been
500kW, considering the managed hosting capacity defined by developed for Cue in Western Australia, using HOMER
Horizon Power. However, the model also considers 200kW, simulation tools. The optimization results for this location,
300kW and 400kW PV systems. The minimum spinning based on a specific solar irradiation of 5.77 kWh/m2 per day,
reserve or operating reserve has been set at 10% of the load are illustrated in Figure 4. From Figure 4, it can be seen that
and 25% of the solar PV power. However, a battery is also in a PV/diesel/battery connected system, the COE is only
connected to the system to prevent system instability and $0.433/kWh, as 27% of the total energy is produced from
reduce spinning reserve requirements needed to cover a solar PV, while COE in a diesel-only connected system is
sudden major reduction in PV generation and/or increase in $0.514/kWh. The optimal hybrid system for the town
load demand. This analysis does not consider the additional comprises 500kW PV, four generators with rated power of
diesel capacity that may be required to cover unscheduled 100kW, 150kW, 200kW and 200kW, and a 200kW rated
outages and scheduled maintenance of the diesel generators. power converter. From the results, it is evident that the
The simulation software simulates the long-term operation PV/diesel/battery configuration is cost-economic compared to
of the hybrid system, based on respective search sizes for the the diesel only configuration, as generators are costly to
predefined sensitivity values of the components. Different maintain and operate. However, including PV and battery
NPC, COE and RF values have been observed as model storage requires additional upfront capital costs. The cash
outputs. This study also estimates the total yearly emissions flow summary for the different capital, operating and salvage
components are shown in Figure 5.

Figure 4: Optimization results of hybrid power system at Cue

The system generates 3157 MWh of electricity

per year with a total yearly load consumption of 3026
MWh. The average power contributions from both the PV
and diesel generators for each month are shown in Figure
6. From the results, the amount of CO2 emitted from the
PV/diesel/battery system is 2,135,378 kg/yr, while for the
diesel only system; the amount is 2,744,388 kg/yr. This
indicates that the integration of PV and battery into the
existing diesel network reduces CO2 emissions
significantly. From the results, it has also been observed
that generator operating hours and fuel consumption of the
Figure 5: Cash flow summary of the hybrid power system PV/diesel/battery system is 17,878 hr/yr and 810,905 L/yr
respectively. On the other hand, in a diesel only system,
the generator operating hours and fuel consumption is
21,346 hr/yr and 1,042,155 L/yr. Therefore, it can be reduce the cost of energy generation by reducing fuel
concluded that the proposed hybrid power system will consumption and diesel generator operating hours.

Figure 6: Monthly average electricty generation from PV/diesel systems

Figure 7: Load demand, PV generation and unmet load

From Figure 7, it is shown that the proposed hybrid month of January, in which it can be seen that PV alone
system can meet consumer load with a unmet load of 0% can almost supply all of the customer load demand in the
and negligble excess energy. Figure 7 also shows the load middle of the day. It can also be seen that, in a few
demand, PV generation and inverter output power in the instances, there was surplus generation from PV in the
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