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Significant Increase in Fuel Efficiency of Diesel Generators with Lithium-Ion

Batteries Documented by Economic Analysis

Article in Energies · October 2021

DOI: 10.3390/en14216904

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Article

Significant Increase in Fuel Efficiency of Diesel Generators

with Lithium-Ion Batteries Documented by Economic Analysis
Vedat Kiray 1,*, Mehmet Orhan 2 and John Nwankwo Chijioke 3

1 Energy Management Program, Vistula University, 02-787 Warsaw, Poland

2 Department of Economics, Finance & Healthcare Administration, Langdale College of Business Administra-
tion, Valdosta State University, Valdosta, GA 31698, USA; [email protected]
3 Electrical and Electronics Engineering Department, Nile University of Nigeria, Abuja 900001, Nigeria;

[email protected]
* Correspondence: [email protected]

Abstract: As the global diesel generator market grows and generators gain wider use, various meth-
ods are being developed to increase their energy efficiency. One of these methods entails integrating
a Li-ion battery with diesel generators (DGs). This method did not attract attention until recently
because it was economically unappealing. A significant decrease in the price of Li-ion batteries in
recent years has made hybrid diesel generator/Li-ion battery systems more viable. We present a
model-based economic analysis of a hybrid DG/Li-ion battery system with the aim of increasing the
energy efficiency of diesel power generators. Special blocks were developed for calculations and
comparisons with a MATLAB Simulink model, including 457 kW DG operating modes with/with-
out a Li-ion battery. We simulated the system in order to calculate the conditions required to achieve
savings in fuel and the level of savings, in addition to the payback time of the Li-ion battery. Fur-
thermore, we present the additional savings gained by postponing the investment in a new diesel
Citation: Kiray, V.; Orhan, M.;
generator thanks to the Li-ion battery. Based on our findings, the payback period of the Li-ion bat-
Chijioke, J.N. Significant Increase in
tery system varies between 2.5 and 4 years. According to our 12-year economic analysis, the cost
Fuel Efficiency of Diesel Generators
savings resulting from postponing new investments can reach 40% of the profit gained from the
with Lithium-Ion Batteries
Documented by Economic Analysis.
savings during such a period.
Energies 2021, 14, 6904. https://
doi.org/10.3390/en14216904 Keywords: diesel generators; economic analysis; Li-ion battery; fuel efficiency; MATLAB Simulink

Academic Editor: Abdul-Ghani

Olabi
1. Introduction
Received: 15 September 2021
This article explores a diesel generator (DG) hybrid operation method involving a Li-
Accepted: 17 October 2021
ion battery. Although this hybrid operation method is recognized as a technique for in-
Published: 21 October 2021
creasing fuel consumption efficiency in diesel generators, it is not yet considered practical.
The aim of this article is to prove that hybrid DG/Li-ion battery systems are now viable
Publisher’s Note: MDPI stays neu-
tral with regard to jurisdictional
due to the significant decrease in Li-ion battery prices and to search for conditions under
claims in published maps and institu-
which these savings are achievable. In addition to the profit from fuel savings, we inves-
tional affiliations. tigate the extra savings in cost resulting from reduced DG operating time, as well as the
savings from delayed capital investment.
The use of DGs is increasing rapidly due to the increase in global energy demand.
According to statistics for current trends, the DG market is expected to be at least USD
Copyright: © 2021 by the authors. Li- 27.36 billion by 2022 [1]. This factor along with figures suggesting a compound annual
censee MDPI, Basel, Switzerland. growth rate (CAGR) of 9.8% [2] are undoubtedly important signs that the DG market will
This article is an open access article continue along this smile curve for a long time. This is because DGs offer one of the cheap-
distributed under the terms and con- est and most practical solutions for geographic environments where electricity is not
ditions of the Creative Commons At- available or where the power produced is insufficient. It would be unrealistic to expect
tribution (CC BY) license (http://crea- renewable energy sources to completely replace DGs in the near future. Therefore, efforts
tivecommons.org/licenses/by/4.0/).
to increase the efficiency of DGs will continue.

Energies 2021, 14, 6904. https://doi.org/10.3390/en14216904 www.mdpi.com/journal/energies

Energies 2021, 14, 6904 2 of 22

Given the usage rates of DGs worldwide, it is easy to see that their negative external-
ities in terms of CO2 emissions are not negligible. For example, the US Environmental
Protection Agency’s Carbon Emissions Calculator shows that a DG feeding a 1 MW load
for 15 h a day emits 3506 metric tons of CO2 per year [3,4]. Even a marginal global im-
provement in the fuel efficiency of DGs would lead to a significant global impact in the
reduction of CO2 emissions.
Most DGs deploy fixed-speed diesel engines, and one of the most pressing concerns
for a fixed-speed DG is the drastic reduction in fuel efficiency during low-load operations
[5]. Fixed-speed generators operating at low loads consume remarkably more diesel than
they do at their rated loads [6,7].
There are many methods that have been developed to increase the fuel efficiency of
off-grid DGs [6]. One is to integrate the DG with a storage battery. This method has been
known for a long time in the form of hybrid DG/battery systems. In this work, we adopt
the term” hybrid DG/Li-ion battery system” since we deploy a Li-ion battery. The basic
operational logic of these systems is as follows: A Li-ion battery is added to a DG with the
accompanying battery peripheral equipment such as the charger, inverter, and energy
management system. This system of batteries is charged during the DG’s fuel-efficient
period; that is, when the DG is feeding medium- or high-power loads. Operation of the
DG is stopped in periods of very low fuel efficiency while low power loads are fed, and
these loads are fed by the Li-ion battery. Thus, savings in fuel are achieved by evading the
operating modes of the DG in which it has inefficient fuel consumption.
However, the achievement of these savings in fuel depends on certain factors, such
as the DG’s low-load runtime and diesel fuel price and the capital investment in the Li-
ion battery system. In addition to savings in fuel, the hybrid DG/Li-ion battery system
enhances the system uptime due to the reduced operating time of the DG, thus delaying
the next DG investment. With such high capital investments, postponement of new in-
vestment yields high economic returns. A significant change in one of the three factors
mentioned above has the potential to seriously affect the performance of the hybrid
DG/Li-ion battery system economically. However, there are not enough economic anal-
yses on this subject in the literature.
There are hardly any articles focusing directly on hybrid DG/Li-ion battery systems
in order to improve fuel efficiency in diesel power generators. Using the wider search
index “Battery” instead of a more specific index, such as “Li-Ion Battery”, reveals only
about 10 articles, which mostly deal with other important technical issues rather than eco-
nomic analysis. Furthermore, articles on economic analysis use different perspectives de-
pending on what they deem important. The few existing studies we have encountered
generally approach the issue in terms a hybrid DG/battery without focusing on Li-ion
batteries. There is a considerable gap in the literature regarding the economic gains of
using hybrid DG/Li-ion battery systems. We bridge this gap by investigating the fuel sav-
ings and the postponement of the investment in a new DG using proper assumptions.
Arun et al. from the Indian Institute of Technology Mumbai presented an appropriate
optimum-sizing methodology for battery-integrated diesel generation systems in 2008 [8].
They aimed to minimize the investment and operating costs of the system. They increased
the overall fuel consumption efficiency using a battery instead of a DG at low loads and
reduced the capital cost by using the battery in parallel with the DG at overloads. In an-
other, more recent article they expanded their economic analysis by incorporating uncer-
tainty in demand [9]. In addition, Simon Sloane from the Eaton Corporation showed that
hybrid DG/battery solutions could provide significant fuel and other OPEX savings at a
remote telecom site powered by a diesel generator [10].
Singla et al. proposed that fuel consumption efficiency can be increased by adding a
battery to a DG. They proved that a trade-off between battery size and the carbon footprint
can be achieved and formulated an optimal schedule for battery charge and discharge
[11]. The same team presented a technique based on stochastic network calculus to choose
a battery size to trade off carbon in a housing complex in a follow-up paper. They solved
Energies 2021, 14, 6904 3 of 22

the problem in two steps: First, they studied the problem of eliminating the use of genset
and then found the smallest battery size needed to ensure a set target for loss-of-power
probability. Second, they studied the trade-off between the size of battery and genset car-
bon emission [12].
Kusakana showed that hybrid DG/battery systems provide fuel savings using eco-
nomic analyses [13–16] in four different studies authored and co-authored between 2013
and 2016. These studies focused on hybrid DG/battery systems without Li-ion batteries.
Although these studies are closely related to ours in terms of purpose, their models, meth-
ods of analysis and findings are different.
In another study, Zhou et al. focused on coordinated power management strategies
for a hybrid electric boat (HEB) [17]. With the aid of the management strategy used, the
diesel fuel efficiency was amplified by operating at an optimal level of power-sharing and
stopping one of the two variable-speed DGs when it was unnecessary. This study con-
cluded by highlighting the power management performance obtained through the de-
ployed strategy. This research, however, did not highlight the economic dynamics in-
volved in the setup. Kusakana et al. developed an optimal energy management model for
an RTG crane fueled by a hybrid DG/Li-ion battery system with economic and environ-
mental analyses. Their work aimed to reduce the energy cost and CO2 emissions by min-
imizing the amount of fuel consumed and maximizing the potential energy recovered
through regenerative braking during the container lowering phase [18].
In contrast to the literature on DG/Li-ion battery systems, many PV/DG/Li-ion or
wind/DG/Li-ion applications focus on providing energy when renewable energy sources
are insufficient and on storing cheap or surplus energy [19–23]. While the difference be-
tween these studies and ours should be appreciated, they contribute to the topic as they
demonstrate the interoperability of Li-ion batteries with DG systems.
Our research contributes the following novelties to the related literature:
• Hybrid DG/Li-ion battery systems often contribute to increasing fuel consumption
efficiency and reduce CO2 emissions. However, unless the necessary conditions are
met, the investment made in the add-on battery and peripheral equipment will not
pay for itself. These necessary conditions relate to the battery price, diesel fuel price,
and operating times of the DG under low loads. Unlike other studies, we present the
implications of these conditions in detail, with economic analysis using up-to-date
prices;
• We offer a detailed examination of the additional savings arising from postponement
of investment in a new DG. We calculated that this saving can reach up to 40% of the
profit obtained from fuel savings over a 12 year timeframe;
• We focus directly on the Li-ion battery rather than generic batteries. We highlight the
advantage of compatibility between the working lives of DGs and Li-ion batteries;
• We prove that the significant decline in Li-ion battery prices to USD 130 in 2021
makes hybrid DG/Li-ion battery systems economically attractive;
• We share the details of the model developed in the MATLAB Simulink environment,
as well as the calculation/comparison blocks we designed for economic analysis.
The most significant contribution of our article is that we prove that a method to
increase energy efficiency in DGs is now viable due to the substantial decrease in Li-ion
battery prices. We explore the conditions under which and such applications can be real-
ized and to what extent. We make use of marginal analysis from economics studies to
model and provide conclusions on the use of DG/Li-ion battery systems.
The obvious gap in the literature on the use of hybrid DG/Li-ion battery systems is
primarily related to economic feasibility. However, the consistent drop in Li-ion battery
prices [24] over the last two years has made hybrid DG/Li-ion battery systems viable. Cur-
rently, Li-ion battery prices are around USD 130 per kilowatt-hour, making them even
more competitive than lead acid batteries of equivalent capacities [25,26]. The economic
analysis we conducted aims to draw attention to this new field and fill the crucial gap in
Energies 2021, 14, 6904 4 of 22

the literature. We provide insight into the hybrid system from an economic viewpoint.
We prove that Li-ion batteries make DGs significantly more efficient in their fuel con-
sumption and that the hybrid DG and Li-ion battery system is competitive at current fuel
prices.
We derive the conditions for optimal fuel savings using a Simulink model’s calcula-
tion and comparison blocks. In addition, we evaluate the appropriate time for the hybrid
system to amortize itself. A marginal cost–benefit analysis is used to provide economic
facts on the extra savings resulting from the postponement of the new investment due to
the reduced DG operating time. We also provide a 12-year economic analysis to compare
the returns from fuel savings and the returns from DG investment postponement.
Section 2 presents the objectives of the model-based economic analysis deployed in
this article, detailing the steps taken towards determining the model design criteria and
the list of outputs produced by the model. Section 3 covers the individual functions of the
sub-blocks of the model. Section 4 discloses the way the working scenarios were generated
and their results. Section 5 presents and discusses the analysis used. Finally, the conclu-
sion summarizes and discusses the results.

2. Objectives and Characteristics of the Model

The main objectives of the model are:
(a) To prove that the Li-ion battery system add-on enhances DGs’ fuel efficiency and
investigate factors that have direct impacts on fuel savings;
(b) To determine the levels of savings in fuel that can be achieved through fuel efficiency
in different scenarios;
(c) To determine how the variable capacity of a Li-ion battery affects fuel savings from
an economic perspective, since the capacity of a Li-ion battery added to a DG varies
with the power and duration of the loads it needs to feed;
(d) To determine the degree to which the working time of the DG is reduced as a result
of the addition of a Li-ion battery, as well as the degree that investment in a new DG
is postponed and the economic cost saving implied by this postponement;
(e) To compare the profits resulting from fuel saving and postponement of new
investment.

2.1. Main Characteristics of the Model

We opted to use a 457 kW off-grid DG to demonstrate fuel efficiency in the economic
analysis because the wastage caused by fuel inefficiency reveals itself more clearly in high-
power DGs.
Inputs: The parameters (factors) that affected the performance of the hybrid DG/Li-
ion battery system were identified as the inputs of the system. These variables were the
Li-ion battery price (in USD/kWh), diesel fuel price (in USD/liter), and load profile (in
kWh). We used different combinations of these variables to set different operating scenar-
ios.
Modeling the change in load profile: Since the maximum load was 457 kW, we cal-
culated other loads as percentages of this maximum load. For example, a 90 kW load cor-
responding to 20% of the maximum load would be simply 20%L. We defined these loads
at six different levels as 10%L, 20%L, 30%L, 50%L, 60%L, and 80%L. We varied the acti-
vation times of these loads (in hours) to determine the load profile. Since the load levels
were limited, we obtained the corresponding energy efficiency value (kWh/L) for each
load from the curve shown in Figure 1 and used it as constant in the model. This curve
was obtained from the real application of the DG, which we used as an example [7].
Energies 2021, 14, 6904 5 of 22

Figure 1. Diesel generator fuel efficiency curve (This curve is from ACEP documentation [7]): (a)
The relation between Load (kW) rate and Fuel Efficiency (kWh/L); (b) Values obtained from the
Chart.

Modeling the increase in fuel consumption efficiency: To model the increase in fuel
consumption efficiency in the DG, we ran the DG both without and with a Li-ion battery
in parallel. We used the same load profile for both modes of operation. Here, our aim was
to feed low-power loads, involving in very low fuel consumption, from the Li-ion battery
instead of the DG and to charge the Li-ion battery in the period when the DG fed medium-
and high-power loads; that is, in the period when energy efficiency was high. Thus, we
moved the working period with high energy efficiency to the working period with low
energy efficiency.
Modeling the resulting fuel economy: The two operating modes we mentioned above
represent the DG working at conventional fuel consumption efficiency and at increased
fuel consumption efficiency. High fuel efficiency allows the same job to be done with a
smaller amount of fuel. Therefore, by comparing the daily fuel consumption of these two
operating modes, we found the daily fuel-saving amount and the economic equivalent of
this for different diesel fuel prices. By simulating the model under different scenarios, we
determined the conditions under which a level of fuel saving and its economic equivalent
could be realized.
Modeling the payback period of the Li-ion battery system: In order to model the pay-
back period of the Li-ion battery added to the DG, the Li-ion battery price had to be de-
termined. In our model, we determined that the Li-ion battery capacity most suitable for
each load profile of the DG had to be used. Otherwise, the hybrid DG/Li-ion battery sys-
tem at stake would lose its economic feature. Taking this reality into account, the model
was used to calculate the optimal Li-ion battery capacity for each load profile. Based on
this calculation, we determined the total cost of the Li-ion battery system. We calculated
the payback time by using the economic equivalent of the annual savings achieved and
the total investment amount for the Li-ion battery system.
Outputs: We list all outputs, some of which were intermediate, below:
• Diesel fuel consumption amount (L/kWh), calculated with the data received from
the real fuel efficiency curve for a 457 kW DG that we used as an example applica-
tion;
• Total daily energy consumption (kWh) for both operating modes;
• Total daily diesel fuel consumption (L) for both operating modes;
• The amount of energy saved per day and per year (in kWh), based on the difference
in total daily energy consumed in both operating modes;
Energies 2021, 14, 6904 6 of 22

• The amount of diesel fuel (L) saved daily and annually, based on the difference in
total daily diesel consumption in both operating modes;
• The economic value (in USD) of the annual diesel fuel amount (in L) saved, accord-
ing to the different diesel fuel prices;
• The required Li-ion battery capacity (in kWh) and its economic value (in USD), ac-
cording to the activation times of low-power loads;
• The prices of peripherals, such as the charger, inverter, and energy management
system (in USD);
• The payback time (in years) of the Li-ion battery and peripheral equipment added
to the DG, which was obtained by comparing the economic value of the annual
amount of diesel fuel saved with the investment in the Li-ion battery and peripheral
equipment;
• The reduction in daily and annual DG working time (in hours) thanks to the Li-ion
battery added to the DG;
• The delay in new investment (in years) due to savings in the DG’s operating time,
relative to the average DG life;
• The increase in the service life of the DG (in years).

2.2. Assumptions
• The DG was assumed to work for 350 days a year. The daily working times of the
loads varied according to the scenarios but we assumed that each load operates for
2.5 h in total out of 15 h of daily work in order to compute the average payback pe-
riod;
• All loads that made up the load profile were assumed to be resistive, as our aim
was to determine the contribution of the Li-ion battery system to the fuel consump-
tion efficiency under the most basic conditions;
• When the ratio of the load fed by the diesel generator (DG) fell below 20%L, the DG
was deactivated and the loads fed by the Li-ion battery. The battery was charged
when the load rate exceeded 50%L. The charging process was reflected in the DG as
an extra load;
• Delays or technical problems that could have occurred during the activation and
stopping of the DG and Li-ion battery were ignored.
• There was no energy loss considered during charging and discharging of Li-ion
batteries.

3. Functions of the Model Blocks

Figure 1 shows the fuel efficiency curve of a DG [8], obtained from a real application.
A closer examination of the curve reveals that fuel efficiency starts to decrease when the
load ratio falls below 50%, with an even sharper decrease when the load ratio falls below
20%. The model uses the fuel consumption values obtained from this real efficiency curve
for different load levels.

3.1. Inputs Block

We collected all inputs in a block and named it “Inputs”. These variables were the
Li-ion battery price (in USD/kWh), diesel fuel price (in USD/liter), and load profile (in
kWh). We used different combinations of these variables to set different operating scenar-
ios. Other inputs used in this model, but kept fixed across scenarios, were the annual op-
erating time of the DG (in days); the total cost of the peripheral equipment, such as the
charger, inverter, and energy management system (in USD); and the average service pe-
riod of the DG (in years). We determined the activation times of the loads with the signals
we produced in the “Signal Builder” component. These signals were used to determine
the activation times of the breakers connected to the loads in the working blocks of the
DG with and without a Li-ion battery. We entered the other inputs into the model using
Energies 2021, 14, 6904 7 of 22

the “Constant” components and moved them to the relevant blocks with “GoTo” (Figure
2).

Figure 2. Inputs block.

3.2. Blocks Modeled for DG Operation with/without Li-Ion Battery

Figures 2 and 3 display the blocks where we modeled the operating modes of the DG
with and without a Li-ion battery, respectively.

Figure 3. DG working without Li-ion battery.

We represented a 457 kW diesel generator with a “Three Phase Programmable Volt-

age Source” and used the same load profile in both blocks. Each distinct load level was
modeled with a “Three-Phase RLC Load” component. We set the power (kW) values of
these components as equal in both blocks and then we kept them fixed. We made changes
in load profiles by adjusting the activation times of these loads. We carried those signals
that we produced with the “Signal Builder” component in the inputs block to these two
blocks with the ”From“ components and we controlled the on/off of the “Breaker” com-
ponent in front of each load component with these signals. We calculated the activation
times of the loads by using the “Integrator” components in these two blocks, so that we
did not have to manually enter these values in the other blocks. However, in order to
express the calculated values in hours, we performed these transformations by using the
“Gain” components after the integral blocks. We sent these results to the “Calculations”
blocks.
In the “DG working without Li-Ion Battery” block seen in Figure 3, all loads were
directly connected to the DG. In the ”DG working with Li-Ion Battery“ block shown in
Energies 2021, 14, 6904 8 of 22

Figure 4, medium- and high-power loads (30%L, 50%L, 60%L, 80%L) were fed by the DG,
while low-power loads (10%L, 20%L) were powered by the Li-ion battery.

Figure 4. DG working with Li-ion battery.

While the DG fed the medium- and high-power loads, it also charged the Li-ion bat-
tery. We made the transition from the DG to the Li-ion battery using Simulink’s ”Step“
component and some simple “Logic” components. After the transition to the Li-ion bat-
tery, we also used these “Logic” operations to reset the diesel fuel consumption of low-
power loads (10%L and 20%L). We used the ”Charger“ sub-block for the charge process
of the Li-ion battery and the ”Inverter“ sub-block for the discharge process. In both blocks,
the current and voltage of the circuits were measured by the ”Three-Phase V-I Measure-
ment“ component and converted to RMS values with the ”RMS“ components. These
measurement results are shown Figure 5a,b. Figure 5c shows the SOC(%), current (A), and
voltage (V) values of the Li-ion battery. These values are important in testing the reliability
of a model.

(a) (b)
Energies 2021, 14, 6904 9 of 22

(c)

Figure 5. Scope outputs from blocks for a DG working without/with Li-ion battery: (a) DG Output Voltage and Current
for DG-alone Working; (b) DG Output Voltage and Current for DG Working with Li-Ion Battery; (c) The Battery SOC,
Current and Voltage values

Figure 5a shows that, as the load level fed by the DG decreased, the current drawn
from the DG decreased, whereas there was a slight increase in the DG output voltage.
Figure 5b shows that the DG stopped at the 36,000th second and the loads started to be
fed by the Li-ion battery. We accepted the peak voltage occurring during the transition
and the decrease in the voltage level after the transition as normal. Figure 5c shows the
transition in the 36,000th second, with the SOC value, the increase in the discharge current,
and the increase in the discharge output voltage. The SOC display also shows that the Li-
ion battery discharged quickly when feeding 20%L and demonstrated slower discharge
when feeding 10%L. The SOC display proves that the battery capacity calculated by the
model was suitable for feeding 10%L and 20%L loads as planned.

3.3. Calculation Block for DG Operation without Li-Ion Battery

In this block, we calculated the daily and annual energy consumption of the DG in
the operating mode without a Li-ion battery, the annual fuel consumed, and the cost of
the fuel consumed according to the determined diesel fuel price (Figure 6). We present
the equations we used in these calculations below.
In Equation (1), the daily fuel consumption (Cday) is calculated according to how
many hours a day each level of load is deployed. Then, this value is multiplied by the
annual number of active working days of the DG to find the yearly consumption (Cyear)
in Equation (2). The annual diesel fuel cost (COSTyear) is calculated by multiplying the
diesel fuel price by the annual fuel consumption amount (Equation (3)).

Cday =∑Load%=10%,20%,30%,50%,60%,80% t × (Pload / ɳload ) (1)

Cyear = Cday × D (2)

COSTyear = Cyear × FP (3)

where:
Cday: daily fuel consumption (L);
Cyear: annual fuel consumption (L);
Load%: the ratio of instantaneous load to maximum load;
Pload: load (kW);
ɳload: fuel efficiency (kWh/L; for corresponding load);
t: time (hours);
D: number of active working days of the DG;
Energies 2021, 14, 6904 10 of 22

COSTyear: annual diesel fuel cost;

FP: fuel price (USD).
To create the above equations in the Simulink environment, we manually entered the
power value (kW) of each load for six different load levels and the corresponding diesel
fuel consumption efficiency using the “Constant” components. However, since the acti-
vation times of the loads were calculated in the blocks mentioned above, we transferred
those values to this block with the “From” components. Thus, by summing up the amount
of diesel fuel consumed for each load, we calculated the daily fuel consumption amount
and, multiplying this value by the annual activation time (days) of the DG, we determined
the total fuel consumed (L) annually. Multiplying this result by the diesel fuel price, we
calculated the annual cost of the total amount of fuel consumed (USD).

Figure 6. Calculation block for DG working without Li-ion battery.

3.4. Calculation Block for DG Operation with Li-Ion Battery

The function of this block was the same as that of the block described above. How-
ever, since the data entering the block were different, the results produced by the block
were also different (Figure 7). As the fuel efficiency of DG was very low during operations
at 10%L and 20%L loads, the generator was deactivated, and these loads were fed by the
Li-ion battery. The values of the 10%L and 20%L loads were taken as 45 kW and 90 kW
by calculating them in proportion to the nominal load, and these values were multiplied
by the operating times to determine the amount of energy that the Li-ion battery should
have (Equation (4)).

EL-ion (kWh) = ( t × P10%) + (t × P20%) (4)

where EL-ion is the amount of energy that the Li-ion battery must provide (kWh).
To model the charge period of the Li-ion battery, we assumed that the energy con-
sumed by the charges was equal to the energy required to charge the Li-ion battery. In
this case, we represented the charging process of the Li-ion battery with 10%L and 20%L
loads. However, unlike the normal low-power loads, we accepted that the corresponding
energy consumption efficiency was high (Figure 7, green area A). In the discharge period
of the Li-ion battery, the loads (10%L and 20%L) were fed by the Li-ion battery, so the
working times of the DG were zero (Figure 7, green area B).
If we assume that the DG works 15 h a day and that each load is active for 2.5 h,
because of the Li-ion battery feeding 10%L and 20%L loads, the daily working time of the
Energies 2021, 14, 6904 11 of 22

DG would be reduced to 10 h. The amount of the extra diesel fuel consumption (CdayBB)
in a day’s operation was calculated using Equation (5) below.

CdayBB =∑Load%=60%,70%,90%(t × (Pload / ɳload ) (5)

Figure 7. Calculation block for DG operation with Li-ion battery.

3.5. Block of Comparisons and Outputs

We grouped the calculations performed in the “Comparison” block under four sub-
blocks (Figure 8). The energy storage capacity of the Li-ion battery was calculated in the
sub-block at the bottom left. For this calculation, the powers of the loads (A10L, A20L) fed
by the Li-ion battery and the feeding times for each load (A10T, A20T) were used. In ad-
dition, since the discharge depth rate recommended for Li-ion batteries is 80%, this infor-
mation was added to the calculation with the “Constant” and “Gain” components. The
result obtained (the capacity of the Li-ion battery) was transferred to the sub-block seen
in the lower right. In this sub-block, this value was multiplied by the diesel fuel price and
the determined price of the inverter/charger and energy management system was added.
The output obtained (the needed investment) was transferred to the “Payback Period Cal-
culation” sub-block. In the upper right sub-block, the savings in the DG’s annual working
time were calculated in hours. Indeed, this period was equal to the total annual operating
time of the Li-ion battery. The time saved as calculated in this sub-block was intended for
comparison with the average operating times of the DGs. In the sub-block where the pay-
back period was calculated, the outputs from the working blocks for the DG with and
without a Li-ion battery were compared. The formulas used to obtain this information are
presented below.
The daily amount of fuel normally required by a DG to provide this same energy was
calculated using Equation (6).

Cday_discharge (Liter) = [{t × (CL10% /ɳ10%) + CL20%/ɳ20%)} ] (6)

The Li-ion battery recovers its discharged energy during the DG’s fuel-efficient op-
eration mode. The amount of fuel consumed in this high fuel-efficiency phase was calcu-
lated using Equation (7).

Cday_charge (Liter) = [t × {(P10%/ɳ60% ) + (P10%/ɳ70% ) + (P10%/ɳ90% )} (7)

Daily fuel savings (Csave) were determined by comparing the fuel consumption cor-
responding to charge and discharge operations (given by Equation (8)).
Energies 2021, 14, 6904 12 of 22

Csave = Cday_discharge – Cday_charge (8)

Similarly, daily fuel savings (Csave) were calculated with Equation (9).

Csave = Cday − CdayBB (9)

where:
Cday_discharge: daily fuel consumption corresponding to the Li-ion battery discharge
process (L);
Cday_charge: daily fuel consumption corresponding to the Li-ion battery charge pro-
cess (L);
Csave: savings in fuel consumption;
t: Load operating time (hours; working time of all loads according to the specified
scenario was 2.5 h);
CL10%, CL20%: loads of 10% and 20% compared to the maximum load (kW);
ɳ10%, ɳ20%: DG fuel efficiency rates for different loads (kWh/L).

Figure 8. Comparisons and outputs block.

We examined how the model produced the payback time with an assumed average
run time of the DG where the load at each level was fed for 2.5 h: the Li-ion battery price
was assumed to be USD 130, based on its market value as of 2021. The investment budget
required for a Li-ion battery that can store 422 kWh of energy is USD 52,650. Since the
maximum load that would be supplied by the Li-ion battery was 90 kW (20%L), the price
of an inverter/charger with a power of 90 kW was assumed to be USD 30,000 [27]. There
was no need to allocate a separate budget for MPPT as the new generation inverters have
MPPT features. In the process of adding Li-ion batteries to the DG, both battery manage-
ment and a special energy management system were needed. We allocate USD 3000 for
these processes. Considering the prices of all components and various expenses, the cost
of the backup storage system to be added to the DG was valued at USD 88,000.

4. Scenarios and Simulation Results

Energies 2021, 14, 6904 13 of 22

There are three factors that affect the amount of savings in fuel achieved in hybrid
DG/Li-ion battery systems. These factors are the Li-ion battery price, the diesel fuel price,
and the DG’s operating time under low loads. In this section, we describe simulations of
the effects of these factors using case-by-case scenarios.
The Li-ion battery price used was based on the US energy market. A value of USD
130 was assumed [25,26] in all the simulated scenarios as it was not possible to obtain
these data for all countries of the world.
The diesel fuel prices we used as case studies for our scenarios were from web-based
information sources on global fuel prices. Diesel fuel prices per liter vary between USD
0.03 and USD 1.8 around the world [28]. In many European countries, the average diesel
fuel price is around USD 1.5 (Table 1).

Table 1. Diesel fuel prices in selected countries [28].

Country Price($) Country Price($) Country Price($) Country Price($) Country Price($)
Russia 0.698 Argentina 0.977 Ghana 1.095 Jamaica 1.262 Belize 1.542
Kyrgyz- Mozam-
0.730 0.980 Cambodia 1.104 Curacao 1.266 Malta 1.548
stan bique
Guate-
Tunisia 0.740 0.991 Brazil 1.104 Aruba 1.297 Hungary 1.552
mala
Came-
Pakistan 0.744 Mongolia 0.998 1.111 Canada 1.300 Lithuania 1.590
roon
Suriname 0.745 Georgia 0.998 Australia 1.130 Grenada 1.318 Austria 1.597
DR Nicara- Czech Re-
Liberia 0.774 1.005 1.135 Bulgaria 1.344 1.602
Congo gua public
Saint Lu- Cayman
Indonesia 0.793 Vietnam 1.016 1.136 1.346 Serbia 1.613
cia Island
Burma 0.801 Bhutan 1.021 Honduras 1.139 Senegal 1.366 Uruguay 1.621
Uzbeki- EI Salva- Bosnia
0.817 1.024 Ukraine 1.142 1.366 Latvia 1.651
stan dor Hertz
Northern
Montene-
Belarus 0.845 Guinea 1.025 Thailand 1.155 Macedo- 1.380 1.652
gro
nia
Trinidad
0.845 Zambia 1.032 Morocco 1.162 Japan 1.394 Albania 1.668
Tobago
Wallis
Costa
Turkey 0.876 Lesotho 1.032 1.172 Bahamas 1.395 and Fu- 1.673
Rica
tuna
Swazi- Madagas- Luxem-
0.879 1.036 Uganda 1.177 India 1.399 1.687
land car bourg
Bangla-
Togo 0.890 1.036 Mail 1.183 Malawi 1.409 Slovakia 1.689
desh
Puerto
0.907 Paraguay 1.040 Mauritius 1.185 Seychelles 1.412 Spain 1.696
Rico
Zimba-
Chad 0.913 Peru 1.047 Fiji 1.186 1.421 Yemen 1.698
bwe
Cape
Panama 0.914 Tanzania 1.050 Chile 1.187 1.429 Croatia 1.737
Verde
Philip- South Af- Switzer-
Benin 0.917 1.052 1.192 Romania 1.456 1.757
pines rica land
South Ko-
Dominica 0.918 Mexico 1.064 Cuba 1.200 1.456 Estonia 1.763
rea
New Zea-
Sri Lanka 0.920 Gabon 1.065 Burundi 1.207 Lebanon 1.461 1.767
land
Sierra Le-
0.944 Rwanda 1.067 China 1.219 Poland 1.473 Ireland 1.815
one
Energies 2021, 14, 6904 14 of 22

Guyana 0.948 Taiwan 1.070 Moldova 1.226 Andorra 1.482 Singapore 1.830
San Ma-
USA 0.956 Nepal 1.077 Kenya 1.234 Jordan 1.495 1.834
rino
Domini-
Burkina
Namibia 0.970 1.078 can Re- 1.247 Cyprus 1.531 Mayotte 1.849
Faso
public
Ivory
Botswana 0.974 1.084 Laos 1.252 Slovenia 1.531 Belgium 1.860
Coast

In scenario 1, we kept the diesel fuel price fixed (USD1) and the working times of all
loads increased evenly. This scenario is closer to what is observed in real applications, as
consumption can occur at very different levels during the day. Table 2 shows the values
obtained from the simulation of this scenario.
In scenario 2, We aimed to determine the most economical advantage that a Li-ion
battery could bring for a per-liter diesel fuel price of USD 1.2. To simulate these conditions,
we fixed the active times of the medium- and high-powered loads at 2.5 h, while increas-
ing the operating hours for small-load power. Table 3 shows the values obtained from
scenario 2.
In scenarios 1 and 2, the Li-ion battery prices were fixed at USD 130. However, in
scenario 3, we adopted battery prices from two years ago and four years ago to show that
hybrid DG/Li-ion battery systems were not very attractive economically due to the high
Li-ion battery prices then. Table 4 shows the values obtained from scenario 3.
The main characteristics of the scenarios were as follows.
Scenario 1:
• Six different loads operating for equal times;
• The longest total working time was 24 h (6 × 4 = 24);
• The shortest total working time was 6 h (6 × 1 = 6);
• The diesel fuel price per liter was USD 1.2;
• The Li-ion battery price per kWh was USD 130.
Scenario 2:
• The loads L10% and L20% operated for between 2.5 and 7 h. The other loads oper-
ated for 2.5 h;
• The longest total working time was 24 h (7 + 7 + (4 × 2.5) =24);
• The shortest total working time was 15 h (2.5 + 2.5 + (4 × 2.5) = 15);
• The diesel fuel price for a liter was USD 1.2;
• The Li-ion battery price per kWh was USD 130.
Scenario 3:
• Six different loads operating for equal times;
• Each load’s working time was 2.5 h and the total working hours was 15 (6 × 2.5 =
15);
• The diesel fuel price (USD/liter) varied between USD 0.7 and USD 1.7;
• The 2021 Li-ion battery price per kWh was USD 130;
• The 2019 Li-ion battery price per kWh was USD 157;
• The 2017 Li-ion battery price per kWh was USD 221.
We made the necessary changes to the model for each scenario, ran the model, and
recorded the simulation results in the tables below.
Energies 2021, 14, 6904 15 of 22

Table 2. Payback time with varying working hours (scenario 1).

Scenario 1: Working Times of the Loads are Variable, Diesel Fuel Price is Fixed (USD 1.2/Liter)
Postponemen
Working Time Working Time for 30%L Total Time Saved for
Payback t Ratio
for + 50%L + Working Fuel Saved DG Working
Duration for New
10%L + 20%L 60%L + 80%L Time (L/Year) Time
(Years) Investment
(Hours/Day) (Hours/Day) (Hours/Day) (Hours/Day)
(%)
4 4 4 4 4 4 8 + 16 = 24 44,174.12 2.73 8
3.5 3.5 3.5 3.5 3.5 3.5 7 + 14 = 21 38,652.35 2.84 7
3 3 3 3 3 3 6 + 12 = 18 33,130.59 2.98 6
2.5 2.5 2.5 2.5 2.5 2.5 5 + 10 = 15 27,608.82 3.18 5 33
2 2 2 2 2 2 4 + 8=12 22,087.06 3.48 4
1.5 1.5 1.5 1.5 1.5 1.5 3 + 6=9 16,565.29 3.98 3
1 1 1 1 1 1 2 + 4=6 11,043.53 4.97 2

Table 3. Payback time with varying working hours (scenario 2).

Scenario 2: Working Times of the Loads are Variable, Diesel Fuel Price is Fixed (USD 1.2/Liter)
Total
Working Time Working Time for Saved Time from
Working Payback Postponement Ratio
for 30%L + 50%L + Saved Fuel DG Working
Time Duration for New Investment
10%L + 20%L 60%L + 80%L (L/Year) Time
(Hours/Day (Years) (%)
(Hours/Day) (Hours/Day) (Hours/Day)
)
7 7 14 + 10 = 24 77,304.71 2.41 14 58
6.5 6.5 13 + 10 = 23 71,782.94 2.45 13 56
6 6 12 + 10 = 22 66,261.18 2.48 12 54
5.5 5.5 11 + 10 = 21 60,739.41 2.53 11 52
5 5 10 + 10 = 20 55,217.65 2.58 10 50
2.5 2.5 2.5 2.5
4.5 4.5 9 + 10 = 19 49,695.88 2.65 9 47
4 4 8 + 10 = 18 44,174.12 2.73 8 44
3.5 3.5 7 + 10 = 17 38,652.35 2.84 7 41
3 3 6 + 10 = 16 33,130.59 2.98 6 37
2.5 2.5 5 + 10 = 15 27,608.82 3.18 5 33
2.5 2.5 4 4 4 4 5 + 16 = 21 27,608.82 3.18 5 23

Table 4. Payback time with varying diesel fuel prices (scenario 3).

Scenario 3: Diesel Fuel Prices are Variable, Working Times are Fixed (15 h total)
Payback Period with Payback Period with
Diesel Fuel Payback Period with
2019 Li-Ion Battery 2017 Li-Ion Battery
Total Working Time (Hours) Price Current Li-Ion Battery
Prices—USD 157 Prices—USD 221
(USD/liter) Prices—USD 130 (Years)
(Years) (Years)
0.7 5.45 6.16 7.84
0.8 4.77 5.39 6.86
0.9 4.24 4.79 6.10
1.0 3.82 4.31 5.49
6 × 2.5 = 15 1.1 3.47 3.92 4.99
1.2 3.18 3.59 4.57
1.3 2.94 3.32 4.22
1.4 2.73 3.08 3.92
1.5 2.55 2.88 3.66
Energies 2021, 14, 6904 16 of 22

1.6 2.39 2.70 3.43

1.7 2.25 2.54 3.23

5. Economic Analysis
We conducted an economic analysis of the scenarios based primarily on the amount
of diesel fuel saved (in terms of the liters of fuel, their value in USD, and the value saved
converted to the payback period of the Li-ion battery), the years saved in the life of the
DG (postponement of new DG purchase), and the reduction in total cost and increase in
the total profit.
All three scenarios underline the substantial reduction in the runtime of the DG lead-
ing to the fuel saved. The amount of fuel saved based on scenario 1 is plotted in Figure 9,
which is based directly on Table 2. Our model proved that the Li-ion battery added in-
creased energy efficiency to the DG and saved fuel. The amount saved depended on three
factors: the Li-ion battery price, the diesel fuel price, and the feeding time of the DG to
low loads. Tables 2 and 3 demonstrate how much these savings changed depending on
the loads and the varying runtime of the battery. Similarly, Table 4 displays the significant
change in payback time vis-a-vis the diesel fuel price changes while keeping the operating
time fixed.
In Table 2, we set the Li-ion battery price to USD 130, the diesel fuel price to USD 1.2,
and the operating times of all loads fed by the DG to the same timeframe in order to com-
pute the payback period as no longer than 4.97 years. As the Li-ion battery was used for
1 h at both 10% and 20% loads, the total amount of fuel saved was 11,044 L per year. The
saving increased up to 44,174 L per year when the battery ran for 4 h for both 10% and
20% loads. This is a massive saving in diesel fuel. This amount surged constantly as the
Li-ion battery was used to replace the DG for more hours (see Figure 9 portraying the
constant increase in fuel saved in USD).
Although we confined our setup to several scenarios representing average, high, and
low working hours of the battery replacing the generator, the savings in fuel were also
apparent in other possible scenarios. Our setup was tailored to be extended in order to
compute the savings in further scenarios. Similar savings followed in scenario 2, where
we set changing working hours for the Li-ion battery. In this scenario, we fixed the diesel
fuel price to 1.2 USD/liter to compute the payback period for different working hours of
the battery. The payback period declined from 3.18 years to 2.41 years as the working time
increased from 2.5 to 7 runtime hours a day. The lowest saving in diesel fuel was when
the Li-ion battery replaced the DG for 2.5 h with both 10% and 20% loads, for which there
was a net saving of 27,609 L per year. This saving increased massively as the battery was
run for more hours up to a maximum run time of 7 h for both 10% and 20% loads
Energies 2021, 14, 6904 17 of 22

Scenario 1
48,000 6

PAYBACK PERIOD IN YEARS

44,174
40,000 4.97 5
FUEL SAVED IN USD

38,652
32,000 3.98 3.48 27,609 33,131 4
24,000 3
22,087 2.73
3.18 2.98
16,000 16,565 2.84 2
11,044
8,000 1
0 0
0.5 1 1.5 2 2.5 3 3.5 4 4.5
WORKING TIME

Fuel Saved Payback Period

Figure 9. Fuel savings and payback time with operating times for 10%L + 20%L loads.

Figure 10 visualizes the figures in Table 3, with an emphasis on the drastic diesel fuel
savings scaled on the left axis.

Scenario 2
90,000 3.18 71,783 77,305 3.5
2.98 2.84

PAYBACK DURATION IN YEARS

2.73 2.65 2.53 2.48
FUEL SAVED IN USD

80,000 2.58 3
70,000 2.41 2.5
60,000 2.45 2
50,000 60,739 1.5
55,218 66,261
40,000 44,174 49,696 1
38,652
30,000 33,131 0.5
27,609
20,000 0
2 2.5 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5
WORKING TIME

Fuel Saved Payback Period

Figure 10. Fuel savings, payback time, and working time for 30%L + 50%L + 60%L + 80%L fixed for 2.5 h.

Another major focus of our research was the payback period, which is the duration
in years after which the savings in fuel equal the cost of replacing the Li-ion battery with
a brand new one. Figures 10 and 11 show this period on the right axis in years for scenarios
1 and 2. As expected, the payback period fell when the Li-ion battery was used for more
hours. This period reached a maximum of 4.97 years in scenario 1 with a 1 h runtime for
the battery with 10%L and 20%L. This period declined to 2.73 years in scenario 1, where
the Li-ion battery ran for 4 h at 10%L and 20%L.
Diesel fuel savings can be easily converted into the payback period of the Li-ion bat-
tery given the prices of the diesel fuel and the battery. We extended our analysis to include
these periods for scenarios 1, 2, and 3. This period was calculated as simply the number
of years required to recover the cost of the brand new Li-ion battery with fuel saved. These
periods are appended to the columns of Tables 2–4. Since this period was at the same time
a function of the diesel and battery prices, we made assumptions about both prices to
compute the payback period. It was easy to conclude that the payback period would be
Energies 2021, 14, 6904 18 of 22

lower as the battery was run for more hours, and the battery price was lower and the fuel
price was higher. The payback periods listed in all three tables are visualized along the
right axes of Figures 10 and 11 and the left axis of Figure 11. Table 4 expands the analysis
by changing Li-ion battery prices to account for the drastic change over the past four years.
The Li-ion battery prices from past years, presented in Table 4, give an idea about the
possible increases in Li-ion battery prices. Payback periods less than 3.5 years are colored
to highlight the differences between such periods. The payback period was higher as the
Li-ion battery price became higher, which is underlined by the highest curve in Figure 11.

Scenario 3
9

8 7.84

7 6.86
DIESEL FUEL PRICE, $/LITER

6.1
6 6.16 5.49
5.39 4.99
5 4.79 4.57
4.31 4.22
5.45 3.92 3.66
4 4.77 3.92 3.43
3.59 3.23
4.24 3.32
3.08 2.88
3 3.82 2.7
3.47 2.54
3.18 2.94
2 2.73 2.55 2.39
2.25
1

0
0.6 0.7 0.8 0.9 1 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8
PAYBACK PERIOD IN YEARS

Payback Period with Li-Ion battery price $130

Payback Period with Li-Ion battery price $157
Payback Period with Li-Ion battery price $221

Figure 11. Payback years for different fuel prices.

One main objective of our research was to compute and report the economic value of
the savings we modeled. We already documented the savings in fuel in terms of liters and
their value, and we can conclude our economic analysis by highlighting the net decline in
cost resulting from the adoption of the hybrid model. This requires a holistic approach
including all cost items in scenarios with and without the use of a Li-ion battery and in-
cluding the assumptions we made. In this regard, we continued with a marginal analysis;
that is, an analysis of the net changes in cost items when the Li-ion battery was used. The
net assets for the use of the battery were considered to be the costs avoided for the diesel
fuel (USD 300,139) and in the postponement of the DG purchase (USD 50,000); i.e., since
the DG is run for less time, its life period is longer. On the other hand, the Li-ion battery
still has to be paid for (USD 175,688), and this is the liability to be subtracted from the
profit. Table 4 details all these elements and it can be concluded that the net economic
benefit of using the hybrid system is USD 174,451.
In a hybrid DG/Li-ion battery system, increased runtime with low-power loads
means more efficient use of the Li-ion battery, more economical use of fuel, and shorter
payback time. On the other hand, in order to feed low-power loads for a longer time, the
Energies 2021, 14, 6904 19 of 22

Li-ion battery capacity must be increased, which results in the payback time being pro-
longed. However, it is difficult to understand at first glance how these two opposite situ-
ations compare to each other. The “Comparisons and Outputs” block presented in Figure
8C calculates the required investment for the Li-ion battery system when the operating
time with low-power loads increases. Tables 2 and 3 reveal that the operating time with
low-power loads increases while the payback time decreases. However, the decrease in
the payback time is slower than the increase in the operating time with low-power loads.
The reason for this is that the cost of peripheral equipment, such as the charger/inverter
and energy management system, added to the cost of the Li-ion battery does not change.
This is because the cost of these peripherals varies depending on their operating power
(kW) and current (A), not how long they feed the loads.
Tables 2 and 3 also show the amount that the operating time of the DG was reduced
and the degree to which the new DG investment was postponed. For example, according
to the simulation results, a DG working 350 days a year and 15 h a day will have an aver-
age working life of 21,000 h over 4 years. When a Li-ion battery is added to this DG, the
same DG can complete 21,000 h in 6 years (Figure 8B).
Looking at the DG prices, it can be seen that the average price of a 457 kW DG is
around USD 50,000. Postponing such an investment for a few years in off-grid systems
that depend on DGs can be an important economic gain. For example, for this same DG
working 350 days a year and 15 h a day, the new investment postponement period would
be 2 years.

6. Discussion
We obtained deep insights into the parameters and conditions that would yield the
savings targeted from the simulation results through the economic analysis. For realistic
results in this research, we assumed that the DG operates for a total of 15 h a day. The DG
was assumed to feed low loads for 5 h of this assumed total operation time. This assump-
tion is reasonable for prime DGs, which do not operate for 9 h a day. However, it is still
realistic to assume that prime DGs operate even up to 20 h a day; in countries like the UK
and Switzerland, where the diesel fuel price is USD 1.8 per liter, much higher savings are
possible.
All scenarios presented in this study were also accompanied by conditions under
which the incorporation of a Li-ion battery to the DG would be economically impractical.
For example, when diesel fuel prices fall below USD 1 per liter and the operating time of
the DG at low loads drops below 4 h in total, there are no effective savings.
In addition to the fuel savings achieved, there are additional savings due to the post-
ponement of the new investment. These savings amount to approximately 40% of the
profit from fuel savings for a 12-year period. The results obtained for these additional
savings are consistent with everyday experience. This is because 15 h of work per day can
be considered normal for a prime DG. In addition, a period of 12 years, as used for the
economic analysis, is also consistent with observations in off-grid systems, as off-grid sys-
tems are generally used in places that are distant from the central energy grid.
It is a fortuitous advantage that the lifetimes of Li-ion batteries and DGs are both
around 6 years [29] and thus compatible. For the power’s electronic components, a lifecy-
cle of 6–8 years is still practical. The lifetime of Li-ion batteries is in the range of 2000–2500
cycles [30]. For a battery charged and discharged once a day, this amounts to approxi-
mately 7 years. To allow for the possibility of more than one cycle in some days, the lifecy-
cle used for the Li-ion battery was downscaled to 6 years.
The estimated lifespan of a DG working 10 h a day instead of 15 h a day is 6 years.
This detail was considered when examining the additional savings resulting from the
postponement of the new investment. As seen in Table 5, the costs of the battery systems
and add-on peripherals were cumulated and added to the calculation again at the end of
the first 6-year period.
Energies 2021, 14, 6904 20 of 22

In the presented analysis, the money saved from the reduced diesel-fuel transport
costs and the reduced breakdown maintenance costs of the DG were not accounted for.
However, these costs can be quite high in rural off-grid systems. Along with the economic
advantage from the reduced DG operating hours there is the comfort resulting from the
reduced environmental noise and sound pollution from the DG.

Table 5. Comparison of savings over 12 years.

DG System Hybrid DG/Li-Ion Battery System

Total cost of saved diesel fuel
0 10 × 30,139.62 = 300,139
(USD/12 years)
Total investment for Li-ion battery system
0 2 × 87,844 =175,688
(USD/12 years)
Total profit from energy efficiency
0 124,451
(USD/12 years)

Total investment (USD/12 years) 3 × 50,000 2 × 50,000

Total profit from postponement of new
investment 0 50,000
(USD/12 years)
Total extra profit 0 174,451

7. Conclusions
This study presented a model-based economic analysis of hybrid DG/Li-ion battery
systems. The study shone light on how the battery systems can be used to increase the
energy efficiency of high-power diesel generators.
To provide a detailed and realistic economic analysis, we modeled the DG in its iso-
lated mode and in the mode where it operates in synergy with a Li-ion battery. The model
also used a graphical plot of the real power versus the fuel efficiency curve of a 457 kW
DG. We obtained simulation results under different operating conditions by changing the
Li-ion battery price, diesel fuel price, and operating times of a DG with low loads. The
results in their refined forms lead to the following conclusions:
• Hybrid DG/Li-ion battery systems, which were previously not very feasible due to
the high Li-ion battery prices in past years, have now become more feasible;
• Even with the hybrid DG/Li-ion battery systems, fuel savings can only be achieved
under certain conditions. The factors that affect these conditions are Li-ion battery
prices, diesel fuel prices, and the DG’s feeding time with low-power loads. In this
study, we analyzed the effects of these factors in detail critically;
• According to the results of the economic analysis, the addition of a Li-ion battery to
a DG can pay for itself in between 2.5 and 4 years under certain conditions;
• This study creates awareness of additional savings in hybrid DG/Li-ion battery sys-
tems that are not covered in the literature. These savings result from the postpone-
ment of the investment in a new DG due to the reduction in the working time of the
DG. The 12-year-period economic analysis adopted for the study showed that the
profit from these extra savings is about 40% of the profit from fuel savings.
By highlighting the fact that DG/Li-ion battery systems are now viable, our work at-
tempts to pioneer research on other aspects of such systems. For instance, the stably grow-
ing DG market is a source of concern in terms of CO2 emissions. Research efforts aimed at
alleviating the climate effects of this growth are critical. Hybrid DG/Li-ion battery systems
can be converted to hybrid DG/PV/Li-ion battery systems or Hybrid/PV/Li-ion battery
systems with simple modifications. In this respect, these systems can be used as a step in
the transition to renewable energy.
Energies 2021, 14, 6904 21 of 22

In presenting the economic analysis in this work, we avoided technical details on the
specifications of the DG, charger, and inverter, as well as the energy management blocks.
These remain open areas that we intend to explore in our future research.

Author Contributions: V.K. carried out the research and develop the MATLAB Simulink Model
and wrote the first version of the paper. M.O. Develop the Economic analysis section. M.O. and
J.N.C. did proofreading and corrections. All authors have read and agreed to the published version
of the manuscript.
Funding: This work was supported by the Vistula University with a publication grant.
Institutional Review Board Statement: Not applicable.
Informed Consent Statement: Not applicable.
Data Availability Statement: This article includes the original contributions presented in the study.
Citations can be made by citing the authors. Further inquiries can be directed to the corresponding
author.
Acknowledgments: Kiray thanks Vistula University for the economic contribution toward the real-
ization of this research. Orhan thanks Valdosta State University for the support provided for scien-
tific projects.
Conflicts of Interest: The authors declare no conflict of interest.

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