LIFE CYCLE COST ANALYSIS OF A

DIESEL/PHOTOVOLTAIC HYBRID POWER GENERATING

SYSTEM

BY
AGAJELU, BENJAMIN ONYINYE
REGISTRATION NUMBER: 2009246007F

MECHANICAL ENGINEERING DEPARTMENT

NNAMDI AZIKIWE UNIVERSITY AWKA

THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE

REQUIREMENTS FOR THE DEGREE OF
MASTERS IN ENGINEERING
(MECHANICAL ENGINEERING)

AUGUST, 2012.
i

APPROVAL PAGE
This is to certify that this thesis presented by Agajelu Benjamin Onyinye, with registration
number: 2009246007F to the department of Mechanical Engineering, Nnamdi Azikiwe
University, Awka, has been accepted in partial fulfillment of the requirements for the award of
degree of Masters in Engineering in Mechanical Engineering.

--------------------------------Dr. N.O. Ibekwe

----------------------------------Date

(Project Supervisor)

----------------------------C.A.O. Eze

--------------------------Date

(Head of Department)

------------------------------Prof D.O. Onukwuli

-----------------------------Date

(Dean Faculty of Engineering)

-----------------------------Prof Luke Anike

-------------------------------Date

(Dean School of Post-Graduate Studies)

--------------------------Prof M.O.I. Nwafor

---------------------------Date

(External Examiner)

ii

DEDICATION

This thesis is dedicated to my loving parents; Engr & Mrs. Ben Agajelu for all they have
been and still are to me.

iii

ACKNOWLEDGEMENT

I am most grateful to God Almighty for giving me the grace to do my masters degree
programme, and carry out this work.
I would like to thank my supervisor Dr. N.O. Ibekwe, in a special way, for his constant support
and guidance throughout the development of this project. I also thank Dr. C.H. Achebe,
representing all members of staff of the department for their academic support and kindness.
My invaluable appreciation goes to my parents Engr & Mrs. Ben Agajelu for being firmly by
my side throughout the course of this programme. I also thank my uncle, and his wife Prof &
Mrs. S.I. Agajelu for their great support.
I will not fail to thank Engr & Mrs. Abel U. Nwobodo whose moral and financial support
helped in seeing me through this programme; you are the Bomb.
In a special way, I thank the CEO Juhel Pharmaceuticals Limited, Dr Eric Okoye for his help
and kindness.
My course mates and very good friends, Ekene, Obiora, Nwocha, Innocent, Pet, Jerry, Sigma
and others, I wish you well in your future endeavours.
There are so many others not listed here, who have contributed in no small measures to make my
programme worthwhile, for that I am very grateful.
God bless you all.

iv

ABSTRACT
This work is a life cycle cost analysis (LCC) of a diesel/photovoltaic hybrid power generating
system for an off-grid residential building in Enugu. It aims at optimizing different hybrid
system configurations, and comparing the result obtained with the photovoltaic stand alone
(PVSA) system and conventional diesel stand alone (DSA) system. The lifetime of the project is
25 years and a real interest rate of 9% per annum is assumed for the system analysis. The
average hourly electrical load demand data for residential sector in Enugu were obtained from
the power holding company of Nigeria (PHCN). The solar resource data for the location for the
year 2010 were gotten from the NASA Langley Research Centre. The sizes of different
components were determined to make sure their sizes suit the load demand. A PV stand alone
system is firstly sized, after which modules of the PV array are removed in sequence to get six
different sizes, at the same time, introducing the diesel generator to make a hybrid system. The
hours of operation of the diesel generator increases as modules are removed from the PV array.
Optimization of the hybrid system is done to determine the system configuration that would
satisfy the load demand at minimum cost. The result shows that the hybrid system with 20
modules and a 2.5 kVA diesel generator will serve the load at minimum cost. A life cycle cost
analysis of the systems is done using the net present value (NPV) and internal rate of return
(IRR). The result shows that the LCC of the hybrid system is N3459274, that of DSA system is
N7098192 and N3594881 for the PV stand alone system. The NPV of the hybrid system is
N3,638,918 when compared with the DSA system and the internal rate of return is at 26.3%. the
NPV of the PV stand alone system when compared with the DSA system is N3,428,747 with its
internal rate of return at 24.6%. The results obtained show that the diesel/photovoltaic hybrid
system is economically the best option for power generation

TABLE OF CONTENTS

Approval

ii

Dedication

iii

Acknowledgement

iv

Table of contents

List of tables

viii

List of figures

ix

Nomenclature

Abstract

xiv

Chapter 1
Introduction

1.1 Background

1.2 Problem statement

1.3 Objectives of the thesis

Chapter 2
Literature Review

2.1 Life Cycle Cost Definitions

2.2 What is a hybrid power system

2.3 History of hybrid power generation

2.4 Hybrid power systems

2.5 System benefits

2.6 Photovoltaic systems

8
vi

2.6.1 Estimating PV power output

2.6.2 Factors affecting PV output

2.7 Diesel generator

10

2.7.1 Life cycle of diesel generator

10

2.7.2 Pollutant emissions

11

2.8 Storage battery in PV power system

11

2.8.1 Battery types

12

2.8.2 Lead acid battery

12

2.8.3 Operation conditions of battery in hybrid PV system

14

2.9 Power plant economics

14

2.9.1 Sinking Fund

15

2.9.2 Present worth concept

16

Chapter 3
System Analysis

17

3.1 System load

17

3.2 Resources

20

3.3 Components

20

3.3.1 Photovoltaic array

21

3.3.2 Converter

26

3.3.3 Battery bank

27

3.3.4 Diesel generator

31

3.4 Dispatch strategy

34

Chapter 4
Economic Analysis

35
vii

Chapter 5
Conclusion and Recommendation

49

5.1 Conclusion

49

5.2 Recommendation

50

References

51

Appendix

52

viii

LIST OF TABLES

Table 2.1 Summary of merits and demerits of different power systems

Table 3.1 Average electricity demand for month of March

17

Table 3.2: Daily load demand for each month of the year

18

Table 3.3: Meteorological data and global solar radiation for Enugu

19

Table 4.4: Monthly excess kWh capability of PV array for six array sizes

25

Table 3.6: Diesel generator operational characteristics for five array sizes.

34

Table 3.5: Annual amount of energy stored and lifetime of battery

bank for different array sizes
Table 4.1 Cost of major components considered for the analysis

31
41

Table 4.2 Life cycle cost of optimal hybrid system 44

Table 4.3: System cost for DSA

46

Table 4.4: DSA system result

46

Table 4.5 Cash flow for hybrid and PV stand alone systems

47

ix

LIST OF FIGURES

Figure 2.1 Effect of discharge rate on available energy from a lead-acid battery

14

Figure 3.2: Block diagram showing hybrid system components and configuration 20
Figure 3.2: Annual power supply to the battery bank for different array sizes.

32

Figure 3.3: Fuel curve for the diesel generator

34

Figure 4.1(a): Hybrid system NPC vs. number of modules in system

43

Figure 4.1(b): Hybrid system NPC vs. percentage of annual power

supplied by PV array

43

Figure 4.2: Cost of energy of different system sizes

45

Figure 4.3: Net cash flow for hybrid and DSA systems

48

Figure 4.4: Internal rate of return for the hybrid system and DSA system

49

NOMENCLATURE

number of battery in parallel

number of battery in series
number of battery in battery bank
,

total annualized cost (N/yr)

annualized capital cost (N/yr)

annualized replacement cost (N/yr)
, &

annual operation and maintenance cost (N/yr)

annual fuel cost (N/yr)

initial capital cost of the component (N)
net present cost (N)
replacement cost of the component (N)
cost of energy (N/kWh)
capital recovery factor
battery bank autonomy (days)
used depth of discharge (%)
battery bank capacity (Ah)
required daily load (kWh)
primary load served (kWh)
PV required energy (kWh)

PV required energy (Ah)

xi

annual inflation rate (%)

PV derating factor (%)
diesel generator fuel consumption (L/hr)
fuel curve intercept coefficient (L/kWh)
fuel curve slope (L/kWh)
is a factor arising because the component lifetime can be different from the
project lifetime
measured monthly mean daily global radiation (kW/m2)

G=

incident radiation at STC (1kW/m2)

=

annual real interest rate (%)

nominal interest rate (%)
system design current (A)

Im

is the PV module current in STC (A)

IRR

internal rate of return

number of modules in parallel
number of modules in series
number of hours the generator operates in a year (hr/yr)
number of batteries in the battery bank

psh

peak sunshine hours a day

PPV

input power to the inverter from PV (kW)

Pconout

output power from the converter (kW)

rated capacity of the PV array (kW)

total annual power generated by the PV array (kWh/yr)

xii

annual power supply to the load from PV array that does not pass through the

battery bank (kWh/yr)

electrical output of the generator that goes to the battery bank (kW)
rated capacity of the generator (kW)

electrical output of the generator (kW)

PVSA

Photovoltaic Stand Alone

lifetime throughput of a single battery (kWh)
annual battery throughput (kWh/yr)
battery bank life (years)
lifetime of a component (years)
diesel generator operating lifetime (years)

generator lifetime (hours)

project lifetime (years)
remaining life of the component at the end of the project lifetime (years)
replacement cost duration for the entire project lifetime (years)
salvage value
sinking fund factor
PV cell temperature in the current time step (0C)

PV cell temperature under STC (250C)

system voltage on the DC side (V)
module voltage (V)
temperature coefficient of power (%/0C)
xiii

efficiency of the battery

con

converter efficiency
inverter efficiency
hourly self discharge rate

xiv

CHAPTER 1

INTRODUCTION

1.1 Background
Procurement costs are widely used as the primary (and sometimes only) criteria for equipment or
system selection based on asimple payback period. Life cycle cost (LCC) analysis is required to
demonstrate that operational savings are sufficient to justify theinvestment costs (often the
investment costs, for the lowest long term cost of ownership, are greater than for the
simplepayback period).

Simple payback criteria is a relative measure for only one case. The more complicated LCC
analysis works forcomparing alternatives. The simple payback method is frequently used for
small capital expenditures which are so clearlyeconomical that the time and expense of a full
LCC analysis is not worthwhile. Thus a life cycle cost analysis for different electric power
generating systems is carried out in this work.

Electricity is one of the fundamental necessities for everyday life. However off grid regions in
Nigeria still use diesel or other fossil fuelled generators as their major power source for
shortperiods (5-7 hours/day). Most of these diesel generators are oversized.Initial cost of diesel
generators may be comparatively low, but the longterm cost can be high due to running cost (fuel
consumption and maintenance requirements).In Nigeria the price of diesel fuel suppliedfrom
Nigeria National Petroleum Company is high since it amounts to N95/litre.

Having said that the cost of power generation with diesel generator is high in a standalone mode,
one can consider alternative energy sources. Considering the environmental effects of fossil
fuelled generators, renewable energy generators like photovoltaic panels, wind turbines, are the
best alternatives. Such renewable energy generators have high capital costs but low operation
and maintenance costs as opposed by conventional diesel generators with low capital costs and
high operation and maintenance costs. In south eastern part of Nigeria, power generation from
solar energy is quite viable since there is a good amount of solar irradiation in the area.
1

In this thesis, the cost implication of hybridizing a non-renewable energy source (diesel
generator) and a renewable energy source (photovoltaic generator) for off-grid power generation
for residential consumption in Enugu, south east Nigeria will be evaluated.

The major concern in design of such systems is sizing the system componentsand managing
diesel generator operation to satisfy the load demandeconomically. If the system is oversized, it
will be more expensive without increasing theperformance level. However if the system is too
small, the system will notbe able to reach load demand. The power systems analysis in this
thesis shows the cost benefit of using a hybrid system for power generation for residential
building that does not have access to the national grid.

This design analysis investigates the method of choosing alternate generationcapacity to

supplement the output of the PV array when there is a large discrepancybetween month-to-month
system needs versus month-to-month PV generationcapacity. If installation of a PV array to meet
minimum sun availabilityresults in significant excess generation for a number of months, then
much ofthe PV output is wasted. In such cases, it often makes better economic sense touse a
generator to supplement the PV output during the months of low PV outputand size the PV to
meet most of the needs during months of higher peak sun.

Objectives of the thesis

In the following chapters, an overall appraisal of adding a PV panel to the conventional diesel
generator for off grid power generation for a residence will be examined.
The main objectives are thus:

To size the diesel/photovoltaic hybrid power generation system for Enugu considering
the resources available.

To determine the cost benefit of using diesel/photovoltaic hybrid system in place of

conventional diesel stand-alone system.

CHAPTER 2

LITERATURE REVIEW

2.1 Life Cycle Cost Definitions

Life cycle cost is the total cost of ownership of machinery and equipment, including its cost of
acquisition, operation,maintenance, conversion, and/or decommission. LCC is the summation of
cost estimates from inception to disposal for both equipment and projects as determined by an
analytical study and estimate of total costs experienced inannual time increments during the
project life with consideration for the time value of money. The objective of LCCanalysis is to
choose the most cost effective approach from a series of alternatives toachieve the lowest longterm cost of ownership. LCC is an economic model over the project life span. Usually the cost
ofoperation, maintenance, and disposal costs exceed all other first costs many times over
(supporting costs are often 2-20times greater than the initial procurement costs). The best
balance among cost elements is achieved when the total LCCis minimized. As with most
engineering tools, LCC provides best results when both engineering artand science are merged
with good judgment to build a sound business case for action.Businesses must summarize LCC
results in net present value (NPV) format considering depreciation, taxes and the timevalue of
money. [1]

2.2 What is a hybrid power system?

Off grid renewable energy technologies satisfyenergy demand directly and avoid theneed for
long distribution infrastructures.A combination of different but complementaryenergy generation
systems based onrenewable energies or mixed (RES- with abackup of Liquefied Petroleum Gas
(LPG)/diesel/gasoline genset), is known as ahybrid power system (hybrid system).Hybrid
systems capture the best featuresof each energy resource and can providegrid-quality
electricity, with a power rangebetween 1 kilowatt (kW) to several hundreds of kilowatt. They can
be developed as newintegrated designs within small electricitydistribution systems (mini-grids)
and canalso be retrofitted in diesel based powersystems. [2]

2.3 History of Hybrid Power Generation

Research on hybrid power systemscombining renewable and fossil derivedelectricity
generators started 25 years ago, but few have written papers about cost savings derived when
compared with stand-alone systems. The first papers describing renewable energy hybridsystems
appeared in the mid-eighties, but literature on hybrid systems did not blossomuntil the early
1990s. Initially, this expansion in hybrid literature was driven by the needto increase grid
stability and reliability as large quantities of wind power were beingadded to small autonomous
grids [3].

There are some papers that optimize hybrid system and a few noteworthy papers are mentioned
here. Schmid examined the economic feasibility of converting stationary diesel plants in rural
Brazil

into

Diesel/Battery/Photovoltaic

(PV)

plants

and

found

that

conversions

wereeconomically favorable for smaller (<50 kW) diesel-based systems [4]. Park modeled the
cost savings of converting a ferrys propulsion from diesel into PV/Battery/Diesel [5]. Chedid
created

software

that

predicted

the

operational

cost

of

hypothetical

autonomousPV/Wind/Diesel system. He concluded that the inclusion of renewable energy into a

diesel power plant would significantly reduce the operational cost of the plant[6].Nehrir used a
Matlab model to examine the performance of a Wind/PV system and concluded that the use of
anelectric hot-water heater as a dump load made the renewable-only system more economically
feasible [7]. Ashok used a Quasi-Newtonian method to find the system that provided the lowest
cost electricity to a rural Indian village. He finds that a PV/Wind/Diesel/Microhydro system
would provide 24 hour coverage at the cost of only US$0.14/kWh [8]. Nfah examined
picohydro/biogas/PV systems for use in rural Cameroon and reasoned that the inclusion of
biogas would decrease the generation cost of hybrid systems [9].Ruther converted a diesel-only
mini-grid into a hybrid system in rural Brazil. He then used diesel consumption data to show that
similar PV/diesel systems with no battery storage can reduce diesel fuel consumption in
Northern Brazilian plant. Ruther dismissed the inclusion of battery banks into a hybrid because
the losses introduced by the batteries increases diesel fuel consumption [10]. Ruther admits one
limitation to the PV/Diesel system is that a solar arrays total energy contribution to a hybrid
system without energy storage cannot be above roughly 10 percent because of PVs tendency to
destabilize a grid. Phuangpornpitak examined the economic benefit (or lack thereof) of 10
4

solar/wind/diesel hybrid systems installed in Thailand between 1990 and 2004 [11].
Phuangpornpitak supplied a mix of experimental data and HOMER model data to provide
information on the technical and financial operation of the systems. This was the only paper
found that described the financial cost of actual systems and even stated that some systems were
more costly than the baseline diesel-only system due to overdesign. Nayar et al. built, installed,
and tested a PV/diesel/battery/grid Uninterruptible Power Supply (UPS) in two locations in India
[12]. He reported roughly 24 hours of data on the system performance including plots of the
battery banks voltage, inverter power output, utility voltage, and system frequency, but omitted
any information on system cost. He concluded that he successfully created a system that would
improve power reliability and power factor to the load. While these four papers do use and report
limited experimental data on the cost of a hybrid system, they do not discuss system design and
optimization.

In Nigeria, fossil fuel generators are mostly used for power generation for off-grid locations or to
serve critical needs. There are distinct disadvantages of fossil fuel generators, such as high
operation and maintenance costs, high emission of greenhouse gases (GHG) and other pollutants,
and so on. Very little attempt has been made to generate power for remote areas with renewable
resources such as in solar panels and wind turbines. These renewable energy generators are
expensive to install. In this project, we model a hybrid system comprising the fossil fuel (diesel)
generator and a renewable energy (photovoltaic) generator.

2.4 Hybrid Power Systems

Hybrid systems are one means of providing electrical power in areas that are notconnected to a
power grid. A hybrid remote power system integrates two or more powersources. Such systems
eliminate problems associated with the separate power generators.Such systems are inherently
reliable due to multiple power sources and generally usediesel generating set-capable of
providing full rated power on demand as the secondenergy source. They are independent of a
large, centralizedelectricity grid and incorporate more than one type of power source. Isolated
AC systems include at least the following: conventional AC diesel generators, an
electricaldistribution system, and distributed AC loads. A hybrid system could also

includeadditional power sources such as renewables (wind turbines, photovoltaic panels)

andstorage.
There may be more than one diesel generator supplying power to the network. These
arenormally connected to an AC bus in the power house where the diesel generators are located.
Thisbus provides power to the distribution network. When there is more than one
dieselgenerator, a control system must be employed to properly allocate the power from the
generators. These control systems may take a variety of forms especially as computerizedcontrol
systems become more widespread and one of the approaches is to use one leaddiesel to set the
grid frequency and to set the others to run at fixed throttle [10].

2.5 System Benefits

A key feature of hybrid systems is the fact that theirconstituent system strengths complement one
another [12]. This provides a number ofadvantages, which are also determined in part by the
system type: significantly greaterreliability in power supply due to the use of two or more energy
sources; more efficientsystem solutions by virtue of a high degree of flexibility during the design
phase and inoperation; lower overall maintenance costs due to the shorter operating cycles of
themotor generator units; and longer service life time of components as a result of reduceduse.
Karnavas and Papadopoulos (1999) also highlight the following advantages of solarhybrid
systems : reduced operational cost due to less fuel consumption and low PVmaintenance;
improved reliability through diversifying power sources and continuouspower supply; increased
operational life due to less genset operating hours; improvedenergy services and environmentally
friendly due to reduced emissions and noisepollution.

A hybrid system that relies on photovoltaics forthe generation of most of the power during
periods when there is sunshine, and usegenerator power when sunshine is not available offsets
capital costs of photovoltaics andoperating costs of the diesel generator.

Table 2.1: Summary of merit and demerits of different power supply systems
Power Supply System
Diesel /battery

Advantages

Disadvantages

Low initial capital cost

Noisy

Generate

Short durability

power

on

demand

Very expensive to run and

maintain
Environmental pollution

PV Stand alone

Safe, clean and quiet to

Not well suited for

operate;

highlyenergy-intensive

Highly reliable;

uses such as

Require virtually no

Heating

maintenance;

Operate

cost-

effectively in remote
areas and for
many applications;

Flexible and can be

expanded at any time
tomeet demand

Increased autonomy
independence from the

grid

or

backup

during

outages.

PV/Diesel/Battery Hybrid

Reduced

operational

cost due to less fuel

consumption

and

low PV

Additional investment
cost

ofrenewable

energy sources,

maintenance

Improved

batteries and power

reliability electronics.

through diversifying

Limited experience of

power sources and continuous customers and supply utilities

power supply

Increased

with renewable energy

operational hybrid power system

life due to less genset

Improved

Life-cycle

economic

Environmentally

analysisrequired

friendly due to reduced

based on detailed

emissions and noise pollution

Systems are generally

morecomplex.

energy

services

technology.

operating hours

and

system simulation.

Smooths out seasonal

weather fluctuations

Reduced

deep-

cycling of batteries

Extended battery life

Avoid

noisy

generator

2.6 Photovoltaic Systems

2.6.1 Estimating PV Power Output
PV systems produce power in proportion to the intensity of sunlight striking the solar array
surface. Theintensity of light on a surface varies throughout a day, as well as day to day, so the
actual output of a solar power system can vary substantially. There are other factors that affect
the output of a solar power system. These factors need to be understood so that the user has
realistic expectations of overall system output and economic benefits under variable weather
conditions over time.

2.6.2 Factors Affecting Output

Standard Test Conditions

Solar modules produce dc electricity. The dc output of solar modules is rated by manufacturers
underStandard Test Conditions (STC). These conditions are easily recreated in a factory, and
allow for consistent comparisons of products, but need to be modified to estimate output under
common outdoor operating conditions. STC is: solar cell temperature = 25; solar irradiance
(intensity) = 1000 W/m2 (often referred to as peak sunlight intensity, comparable to clear summer
noon time intensity); and solar spectrum as filtered by passing through 1.5 thickness of
atmosphere (ASTM Standard Spectrum). Amanufacturer may rate a particular solar module
output at 100 Watts of power under STC, and call theproduct a 100-watt solar module. This
module will often have a production tolerance of +/-5% of the rating, which means that the
module can produce 95 Watts and still be called a 100-watt module. To beconservative, it is
best to use the low end of the power output spectrum as a starting point (95 Watts for a100-watt
module).

Temperature

Module output power reduces as module temperature increases. When operating on a roof, a
solar module will heat up substantially, reaching inner temperatures of 50-75. For crystalline
modules, a typicaltemperature reduction factor recommended by the CEC is 89% or 0.89. So the
100-watt module will typically operate at about 85 Watts (95 Watts x 0.89 = 85 Watts) in the
middle of a spring or fall day, under full sunlight conditions.

Dirt and dust

Dirt and dust can accumulate on the solar module surface, blocking some of the sunlight and
reducing output. Much of California has a rainy season and a dry season. Although typical dirt
and dust is cleaned off during every rainy season, it is more realistic to estimate system output
taking into account the reduction due to dust buildup in the dry season. A typical annual dust
reduction factor to use is 95% or 0.95. So the 100- watt module, operating with some
accumulated dust may operate on average at about 81 Watts (85 Watts x 0.95 = 81 Watts).

Mismatch and wiring losses

The maximum power output of the total PV array is always less than the sum of the maximum
output of the individual modules. This difference is a result of slight inconsistencies in
performance from one module to the next and is called module mismatch and amounts to at least
a 2% loss in system power. Power is also lost to resistance in the system wiring. These losses
should be kept to a minimum but it is difficult to keep these losses below 3% for the system. A
reasonable reduction factor for these losses is 98% or 0.98.

DC to AC conversion losses

The DC power generated by the solar module must be converted into common household AC
power using an inverter. Some power is lost in the conversion process. Modern inverters
commonly used in residential PV power systems have peak efficiencies of 92-95% indicated by
their manufacturers, but these again are measured under well-controlled factory conditions.
Actual field conditions usually result in overall DC-to-AC conversion efficiencies of about 8993%, with 91% or 0.91 a reasonable compromise.
So the 100-watt module output, reduced by production tolerance, heat, dust, wiring, AC
conversion, andother losses will translate into about 68 Watts of AC power delivered to the
house panel during the middle of a clear day (100 Watts x 0.95 x 0.91 x 0.98 x 0.95 x 0.90 = 73
Watts).

2.7 Diesel Generator

2.7.1 Life cycle of diesel generator
A diesel generator can operate for between 500050,000 hours (average20000 hours), depending
on the quality of the engine, whether it has beeninstalled correctly, and whether operation and
maintenance (O&M) have been properly carried out [13]. Regular maintenance and low load
operation are the main factors affecting thediesel generator life.

Regular maintenance
Diesel engines require routine maintenance for longlife service. Thenormal maintenance
requirements are about the same as owning a dieselpowered vehicle oil, oil filter and fuel filter
10

in tropical and cold climates.It is advisable to have a water fuel separation filter system installed,
water or moisture in diesel fuel can be damaging to a diesel engine because thewater properties
create advanced ignition and accelerated knock. The engine will need oil change every 100 to
250 hours depending on thedust conditions. Companies recommend changing the oil filter
anytime the engine oil will be changed.Air filter need to be changed as required depending on
how much dust is in the air, Diesel generators need a lot of clean air to operate properly and
willcollapseif the air filter is dirty. Manufacturers recommend checking the air filter atleast every
100 hours .In industrial environment checking is recommended every 50 hours.Fuel filters are
normally changed every 200 to 250 hours depending on howclean the fuel and dust conditionsare
[14].

Low load operation.

Low load operation is when the engine operates for a prolonged period of time below40 50 %
of its rated output power [14].
During periods of low loads, the diesel generator will be poorly loaded withthe consequences of
poor fuel efficiency and low combustion temperatures.The low temperatures cause incomplete
combustion and carbon deposits(glazing) on the cylinder walls, causing premature engine wear.
Therefore to avoid glazing the diesel generator should be operated near its full rated power.

2.7.2 Pollutant emissions

Number of kg of CO2 produced per litre of fuel consumed by the dieselgenerator depends upon
the characteristics of the diesel generator and ofthe characteristics of the fuel. It usually falls in
the 2.42.8 kg/Lrange [15].

2.8 Storage battery in PV power system

Except in PV powered water pumping systems, storage batteries areindispensable in all PV
power systems operating in standalone mode to acteither as a power buffer or for energy storage.
The PV generator is neither a constant current nor a constant voltagesource. The maximum
power output of the generator varies according thesolar radiation and temperature conditions
[15].In the early morning or late afternoon, the PV generator may not be able tomeet the load
demands especially with short high current peaks such asduring motor-startup. A battery which
11

is constant voltage source acting as apower buffer between the PV generator and the load, will
compensate forthe limitation of the generator. When solar radiation is higher than neededto meet
the load requirement, excess energy is stored in the battery tosupply power to the load during
night and cloudy days of low solarradiation [15].

2.8.1 Battery types

The two battery types that have been used for PV systems are leadacidand nickelcadmium.
Due to higher cost, lower cell voltage (1.2 V), lowerenergy efficiency and limited upper
operating temperature (40 C),Nickel cadmium batteries have been employed in relatively few
systems.Their use is based mainly on their long life with reduced maintenanceand their
capability of standing deep discharge without damage. The leadacid battery will remain the
most important storage device in the nearfuture, especially in PV systems of medium and large
size [15].

2.8.2. Lead acid battery

The lead-acid battery is still the most common for relatively economicalstorage of relatively
large quantities of electrical energy, and will probablyremain so for at least for the next few
years [16].

Lead acid battery function and structure

A battery is made up of two or more electrochemical cells interconnectedin an appropriate
series/parallel arrangement to provide the requiredoperating voltage and current levels. The
familiar 12V leadacid batteryused in automobiles consists of six 2-V cells connected in series
andpackaged .in a rubber or plastic case [16].

Battery has two electrodes, in the charged state, the positive electrodeconsists of lead dioxide
PbO2 and the negative electrode of pure lead (Pb), amembrane embedded in a plastic box
separates the two electrodes.Diluted Sulphuric acid (H2SO4) fills the empty space between the
twoelectrodes, a fully charged lead -acid battery has an acid density of about1.24 Kg/litre at
temperature of 250C, and the density changes with thetemperature and charge state [4].The
overall reaction is given by the following equation.
12

Pb + PbO2+ 2H2SO4 2PbSO4 + 2H2O

Lead acid battery characteristic
Voltage, specific gravity and state-of-charge
The nominal voltage of a leadacid cell is 2V, while the upper and lowerlimits of discharging
and charging open circuit voltage at 25 celltemperature are 1.75 and 2.4V, which corresponds
to 10.5 and 14.4V for a12V battery (respectively). The maximum acceptable battery cell
voltagedecreases linearly with increasing cell temperature.The specific gravity of the acid
solution of the battery decreases slightlywith increasing temperature. Cell voltage and specific
gravity of the acidsolution are mainly a measure for the state-of-charge of the battery cell.

Self discharge
Leadacid battery cells are available with either pure lead or leadcalciumgrids to minimize the
self-discharge rate.All leadacid cells have some loss in capacity on standing due to
internalchemical reactions. Self-discharge rate, increaseswith increasing cell temperature and
remain relatively low for cell withlead calcium grids.

Storage capacity and efficiency

Batteries are commonly rated in terms of their Ampere hour (Ah) orWatthour (Wh) capacity.
Ah-capacity is the quantity of discharge currentavailable for a specified length of time valid only
at a specific temperatureand discharge rate. For example, a 12V battery rated at 100 Ah over 20
hcan deliver 5 Ah for 20 h (C20 rate) is equivalent to 1.2 kWh of energy(12V 100 Ah). At 5 h
discharge rate, the same battery will deliver amaximum of 70 Ah equivalents to 0.8 kWh of
energy (C5 rate).High discharge current would result in reduction of the battery capacity andwill
shorten its life. In addition, the Watthour capacity (Wh) or energycapacity is the time integral of
the product of discharge current and voltagefrom full charge to cutoff voltage. Battery capacity
increases about 1% forevery 1oC increase in temperature.Lower temperature results in decreasing
the capacity due to slowerchemical reactions. The Amperehour efficiency of a battery cell
(Ah) isthe ratio of the number of Amperehours obtainable during discharge tothat required to
restore it to its original condition. The value for a leadacidcell is about 90%. The voltage of a
battery cell dependson its state-of-charge. Therefore, its Watt hour efficiency takes the
voltagevariation during charging and discharging into account, and amount toabout 75%.
13

Fast and slow charge and discharge

Higher discharge rates results in less charge being available as energyto a load.At higher
charging rates a smaller fraction of the charging energy is usedfor charging and a larger fraction
is used to heat up the battery.The batterycan be fully charged at higher charging rates, but it takes
more energy athigher charging rates to obtain full charge.

Figure 2.1: Effect of discharge rate on available energy from a lead-acid battery.

2.8.3 Operation conditions of battery in hybrid PV-system

Energy from batteries is needed whenever the renewable energy isinsufficient to supply the load.
On the other hand, energy is storedwhenever the supply from the renewable energy system
exceeds the loaddemand. The minimum storage level is limited to 20% of what is availablein the
battery before the discharging cycle begins [16].

2.9Power Plant Economics

A power plant should provide a reliable supply of electricity at minimum cost to the consumer.
The cost per kWh is determined by:
1. Fixed costs, mainly interests and depreciation
2. Operation and maintenance costs (O&M), covering wages, overhauling of equipment,
repairs including spare parts, water, lubricating oil, and miscellaneous expenses.
3. Fuel costs, dependent on the type of generator and the amount of electricity generated.
4. Replacement of components costs.

14

Fixed costs consist of annual costs for interest and depreciation.

Interest rates i depend onthe general financial conditions at the time of installation.

Depreciation rates are determined by the life expectancy of the equipment and the method used
for calculating the depreciation.
The power generating unit and its components will have a certain period of useful life. After
years of use, the equipment loses its efficiency or becomes obsolete and needs replacement. To
enable this to be done when necessary, some money is put aside annually, and is known as the
depreciation fund or sinking fund.[17]
There are two methods of accumulating the money for the depreciation fund:
1. Straight line method
2. Sinking fund method

The straight line method is based on the assumption that depreciation occurs uniformly every
year according to a straight line law. The money saved neglects any interest.

2.9.1 Sinking Fund

In the sinking fund method, a sum of money is set aside every year for N years and invested to
earn a compound interest. Let us suppose P is the annual deposit and i is the interest compounded
annually when the deposit is invested. At the end of the first year, P naira is deposited. After
(N-1) years this will be worth (compounded annually)
# (1 + )

2.1

At the end of the second year, P naira is deposited. After (N-2) years this will be worth
# (1 + )

2.2

At the end of (N-1) years, P naira is deposited. After 1 year this will be worth
# (1 + )

2.3

At the end of Nth year, P naira is deposited and this will be worth P naira
At the end of N years, the value of all the sums deposited will be
(1 + )

+ (1 + )
=

+ + (1 + ) +

+ (1 + ) + (1 + ) + + (1 + )

This is a geometric progression with a common ratio of

2.4

=1+ .
15

Therefore, the sum is

(1 + ) 1

This sum is equal to

=

2.5
=

2.6

(1 + ) 1

For the purpose of this work, we call the term

is called sinking fund factor

2.9.2 Present worth concept

In the evaluation of power plant development plans or alternate payment schemes (cash flow
schemes) for financing a power plant project, the influence of interest on the value of funds to be
spent at a later date leads to the present worth concept. The present worth is the value of a sum of
money at the present time that, with compound interest, will have a specified value at a certain
time in the future.

Compound interest payment at the interest rate i will increase the value of a fund by
(1+i)Nwithin N years. The present worth (PW) of a payment C to be made after N years is
therefore
=

2.7

(1 + )

On many occasions, equal amounts of annual expenses are required. Then the present worth of a
uniform annual series of payments P after N years is calculated from equations 2.6 and 2.7
=
=
Here, the term

(1 + )
(
(

)
)

[(1 + ) 1]

(1 + ) 1

1
(1 + )
2.8

is called the capacity recovery factor or present worth factor

16

CHAPTER 3

SYSTEM SIZING

3.1 System load

Serving loads is the reason for the existence of power generation systems, so analysis of power
systems begins with the analysis of the load or loads that the system must serve.

Hourly average load data for residential sector in Enugu was collected from the Power Holding
Company of Nigeria (PHCN).
Table 3.1: Daily average electricity demand for month of March
Hour

Load(kWh)

00:00-01:00

0.68

01:00-02:00

0.58

02:00-03:00

0.59

03:00-04:00

0.65

04:00-05:00

0.75

05:00-06:00

0.79

06:00-07:00

1.08

07:00-08:00

0.84

08:00-09:00

0.75

09:00-10:00

0.82

10:00-11:00

0.80

11:00-12:00

0.94

12:00-13:00

0.95

13:00-14:00

0.98

14:00-15:00

1.01

15:00-16:00

1.09

17

16:00-17:00

1.05

17:00-18:00

1.15

18:00-19:00

1.31

19:00-20:00

1.50

20:00-21:00

1.48

21:00-22:00

1.44

22:00-23:00

0.98

23:00-24:00

0.72

Total

22.93

Table 3.1 above shows the hourly load demand for each day in the month of March. From the
table, it can be deduced that:
Total daily load demand

22.93 kWh

Average hourly load

0.955 kW

Peak load

1.50 kW

Load factor

0.64

Total load demand for March

710.83 kWh

Since the demand for electricity varies with season, the monthly average load demand is shown
in table 3.2 below
Table 3.2: Average daily load demand for each month of the year
Month

Load(kWh/day)

January

21.03

February

22.00

March

22.93

April

22.54

May

19.89

18

June

17.84

July

17.43

August

17.01

September

18.88

October

19.67

November

19.95

December

21.03

Total

240.20

Annual average

20.02

3.2 Resources
The term resource applies to anything coming from outside the system that is used by the system
to generate power. That includes renewable resources such as solar energy as well as diesel used
by the diesel generator.
The monthly mean daily global solar radiation data for Enugu were obtained from the NASA
Langley Research Center, Atmospheric Science Data Center; New et al. 2010, as shown below:
Table 3.3: Meteorological data and global solar radiation for Enugu (Lat:6026'24''N and
Long:7030'36''E)
Month

psh

Clearness index
2

Temperature

(hours)

(kWh/m /day)

January

6.35

6.35

0.65

25.84

February

6.55

6.55

0.62

26.27

March

5.99

5.99

0.56

25.81

April

6.45

6.45

0.52

25.54

May

6.49

6.49

0.50

25.40

June

5.35

5.35

0.48

24.39

July

3.86

3.86

0.43

23.62

August

3.78

3.78

0.40

23.61

()

19

September

4.45

4.45

0.43

23.80

October

5.94

5.94

0.47

24.09

November

7.50

7.50

0.56

24.10

December

6.93

6.93

0.63

24.78

psh = peak sunshine hours a day

G = measured monthly mean daily global radiation
The price of diesel at the time of this study is N95.00 per litre

3.3 Components
A component is any part of a micro-power system that generates, delivers, converts, or stores
energy. This section describes the components of each system.
Figure 3.1 shows the block diagram of the hybrid dwelling electrical system.It is assumed that
the batteries will be placed in a reasonably well-insulatedlocation. The array is located as close
as practical to the batteries, but free ofany objects that may shade the array.

20

Battery
Bank

Ibat
Ire
PV
Array

Iinv-DC
Charge
Regulator

Inverter

VDCIch-DC

Battery
Charger

Ich-AC
Diesel
Generator

Id

Iinv-AC
IAC

AC Load

VAC
Figure 3.1: Block diagram showing hybrid system components and configuration

3.3.1 Photovoltaic Array

A Photovoltaic, PV array is a device that produces DC electricity in direct proportion to the
global solar radiation incident upon it.The power output of the PV array depends strongly on the
amount of solar radiation striking the surface of the PV array and also on the PV cell
temperature.

Irradiance will affect the current generated by a solar cell, the higher the irradiance the higher the
current. The effect of irradiance on voltage is minimal. Solar cells vary under temperature

21

changes; the change in temperature will affect the power output from the cells. The voltage is
highly dependent on the temperature and an increase in temperature will decrease the voltage.
The power output of the PV array at any given time is simulated by using the expression:
=

3.1

(source: Graham VA, Hollands KGT, 1991)

Where:
is the rated capacity of the PV array, i.e. its power output under standard test condition
is the PV derating factor (%)
G is the solar radiation incident on the PV array in the current time step (kW/m2)
is the incident radiation at STC (1kW/m2)
The derating factor

is a scaling factor meant to account for effects of temperature, dusts on

the panel, wire losses, or anything else that would cause the output of the PV array to deviate
from the expected ideal conditions.

Sizing the PV Array

Sizing the array for a hybrid system is generally an iterative process. The first step is to size the
array for a system with no generator and then to gradually reduce the number of modules in the
array while simultaneously computing the percentage of the annual energy needs provided by the
PV array. The life cycle cost (LCC) of the system is computed for each proposed configuration
and the optimal choice is made for the number of modules in the array.
For the PV sizing, the following systematic procedure is used.
The daily required energy, E'PV, in Ah from the PV array is

22

3.2

Where:
is the required energy (kWh), and
is the system voltage on the DC side (V).
Taking into consideration the converter losses and the meteorological data, the required design
current Id in Amperes of the PV array is
=

3.3

(source: Erbs D.G. et al,1982 )

Where:
psh is the peak-sunshine hours of the considered month for the design (hours)
is the converter efficiency
Then the number of modules mp connected in parallel is
=

3.4

Where:
Im (A) is the PV module current in STC.
Similarly, the number of modules ms connected in series is:
=

3.5

Where:

23

is the module voltage (V)

The total number of modules in the array is therefore, number of modules in parallel times
number of modules in series, i.e.
Total number of modules =

3.6

For the design analysis, BP4175 photovoltaic module is used with the following specifications:
High-efficiency photovoltaic module using silicon nitride monocrystalline silicon cells.
Performance:
Rated power

175W

Nominal voltage

24V

Limited warranty

25 years

Temperature coefficient of power

-(0.50.05)%/0C

NOCT (Air 20C; Sun 0.8kW/m2 ; wind 1m/s) 472C

Dimensions:
Length

1595 mm

Width

790 mm

Depth

50 mm

Manufacturer

BP Solar

Website

www.bpsolar.com

Since PV and diesel generator output capability come in steps, this analysis will explore the LCC
of several combinations of PV and diesel generator.

24

To calculate the total number of modules that would be sufficient for the load demand, refer to
equations 3.2 to 3.6.

From table 3.2, the annual average daily load = 20.02 kWh/day
The design current,

from equations 3.2 and 3.3 will be 169.9

Where:
psh = 5.86 hours
converter efficiency = 95%
PV derating factor = 88.2%
System voltage on DC side = 24V
Now, the number of modules needed in parallel = 169.9 7.29 = 23 modules in parallel
Since the system voltage is equal to the module voltage, there will be no series connection.
Therefore, the total number of modules needed to serve the load demand is 23.

To form a hybrid system, we remove some modules from the array and make up the
shortcomings by the remaining modules in the array by introducing a diesel generator. We repeat
this for different array sizes to find the hybrid system that would serve the load at minimum LCC
for the period considered.

25

Table 3.4:Monthly excess kWh capability of PV array for six different array sizes.
month
January
February
March
April
May
June
July
August
September
October
November
December
Total
Useful PV
Generation
Useful
DieselGen
Generation
% of
Generation
by PV

kWh
needed
651.9
616.0
710.8
676.2
616.6
535.2
540.3
527.3
566.4
609.8
598.5
651.9
7300.9

23
modules
56.8
44.2
-42.3
20.4
107.7
42.6
-109.5
-105.5
-85.8
53.1
211.5
121.5

20
modules
-31.8
-38.3
-125.9
-66.7
17.1
-29.6
-163.4
-158.2
-145.9
-29.8
110.3
24.8

16
modules
-155.8
-153.9
-242.9
-188.6
-109.6
-130.7
-238.7
-232.0
-230.0
-145.8
-31.5
-110.5

12
modules
-279.8
-269.4
-359.8
-310.5
-236.3
-231.9
-314.1
-305.9
-314.1
-261.8
-173.3
-245.9

8
modules
-403.9
-384.9
-476.8
-432.4
-363.1
-333.0
-389.5
-379.7
-398.2
-377.8
-315.0
-381.2

4
modules
-527.9
-500.5
-593.8
-554.3
-489.8
-434.1
-464.9
-453.5
-482.3
-493.8
-456.8
-516.6

6,957.8

6,511.3

5,330.9

3,998.1

2,665.4

1,332.6

789.6

1,970

3,302.8

4,635.5

5,968.3

95.3%

89.2%

73%

54.8%

36.5%

18.3%

Table 3.4 shows the excess monthly kWh produced by the PV array for the 23-module array as
well as for arrays of 20, 16, 12, 8 and4 modules.The negative values show the demands that are
not met by the PV array which would be served by the diesel generator. The excess power
generated are for alternate uses such as water pumping or space/water heating for it not to be
totally

dumped.

The

table

also

shows

the

percentage

of

annual

system

kWh

requirementssupplied by these arrays. Normally, when the PV system provides lessthan 95% of
the system needs, an alternate source of electricity is incorporatedinto the system [16]. Hence, in
this case, the 23-module system should provide goodsystem performance year round without any
backup, provided that the dwellingoccupants reduce energy consumption in months like July,
August and September when the load demand is seen to be high.

26

3.3.2 Converter
While it is possible to obtain separate charge regulator, inverter and battery charger, it is also
possible toobtain the inverter, battery charger, and charge regulator functionsin a single package
which is known as converter.

Depending on the requirements of the load, a number of different types of converters are
available. Converter selection will depend on whether the converter will be a part of a gridconnected system or a stand-alone system. Each converter can be characterized by power and
efficiency.
Pcon,in,conand Pcon,out
Input power of converter: Pcon,in
Efficiency of converter: con
Output power of converter: Pcon,out
,

3.7

The converter for this particular system is relatively simple to specify, since itmust supply most
of the loads of the house.

Sizing the Converter

The Converter is sized based on peak power and in this case the peak power is 1500 watts. To
find the power rating to match the converter specifications the peak power is multiplied by a
factor of 1.1 to account for converter loss. Therefore Power Rating of inverter = 15001.1 =
1650 watts
An inverter with the following specifications was chosen:
Model: ML5500-24,
Nominal voltage: 24 Volt DC to 220 Volt AC inverter,
Rated power: 2000Watts
Efficiency: >90%
Lifetime: 10 years
Manufacturer:Plamy Power Converter Company.

27

3.3.3 Battery Bank

The battery bank is a collection of one or more individual batteries capable of storing certain
amount of DC electricity at fixed round-trip energy efficiency.
Storage batteries are indispensable in all PV power systems operating in standalone mode to act
either as a power buffer or for energy storage.
The battery bank combined with inverters output power should support as much of the load
demand as possible in order to avoid frequent (unnecessary) use of the diesel generator. When
designing a hybrid diesel-photovoltaic system, the selection of the battery is a significant factor,
since its capacity determines not only the energy it can supply but also the peak load that can be
served by the battery-inverter subsystem.

Sizing the Battery Bank

In general the capacity of battery is calculated as follows:
=

3.8

Where:
is the required daily load (kWh)
is the number of days the battery can supply the load
is the system voltage on the DC side (V)
is the used depth of discharge (%)
is the efficiency of the battery

28

The batteries are connected in series and parallel. The number of batteries connected in parallel
is:
( )

( )

3.9

The number of batteries connected in series is:

3.10

Therefore, the total number of batteries in the battery bank is given by:
=

3.11

Battery bank life

The life of a battery bank is calculated using the following equation:
=

3.16

(source: Manwell JF, McGowan JG, 1993)

Where:
is the number of batteries in the battery bank
is the lifetime throughput of a single battery (kWh)
is annual battery throughput (kWh/yr)
=

3.17

Where:
,

is the total annual power generated by the PV array (kWh/yr)

29

is the annual power supply to the load from PV array that does not pass through the

battery bank (kWh/yr)

is the electrical output of the generator that goes to the battery bank (kW)

is the number of hours the generator operates in a year (hr/yr)

For our design analysis, we used Trojan L16P with the following characteristics:
Nominal voltage

6V

Nominal capacity

360Ah (2.16kWh)

Lifetime throughput

3075kWh

Manufacturer

Trojan Battery Company

Website

www.trojan-battery.com

The battery bank is sized to be able to store energy that would be sufficient to serve the loads in
periods when the PV array does not generate power and the diesel generator is not operating.

To size the battery bank, we consider the month of March which has the highest load demand.
From table 3.1, the load demand = 22.93kWh/day. Considering the converter efficiency (95%)
and charge/discharge efficiency of the battery bank (90%), the load will then be 26.8kWh/day.
The peak sunshine hour (psh) for the month is 5.99 hours.
In one hour, the PV array for stand-alone mode would generate 4.47kW with an average hourly
consumption of 1.12kWh.
So, in 5.99 hours, the power consumed will be 6.71kWh (i.e. power consumed during the PV
generation hours that does not pass through the battery bank)
Therefore, power needed to be sent to the battery bank will be 26.8-6.71 =20.1kWh/day.
Dividing by the system voltage, we have 837.5Ah/day

30

But for the battery bank to deliver 837.5Ah/day, it would require 837.5 0.8 = 1046.9 size
battery bank, since depth of discharge (DOD) = 80%.

From equations 3.9 to 3.11 and the specifications for the battery used, there are 12 batteries in
the battery bank.
Table 3.5 below shows the amount of energy needed to be stored in the battery bank per year and
the corresponding lifetime for different array sizes.

Table 3.5: Annual amount of energy stored and lifetime of battery bank for different array sizes

Annual

20 modules

16 modules

12 modules

8 modules

4 modules

4,674.04

3,877.27

2,977.63

2,078.09

1939.73

7.89

9.52

12.39

17.76

19.02

throughput
(kWh)
Lifetime
(years)

For the hybrid system, the energy that passes through the battery bank is partly supplied by the
PV array, while the rest is supplied by the diesel generator. About 0.65kW of power generated
by the diesel generator is supplied to the battery bank each it operates.

3.3.4 Diesel Generator

Diesel generators are widely used as alternative energy sources mainly due to their low capital
costs. In a hybrid system, it is mainly included to supply power during extended periods of low
solar radiation and supply peak power in order to reduce the array size as well as the battery
bank. The generator should be operating at approximately 80 to 90% of its rated output in order
to ensure maximum generator efficiency. Therefore, the rating/size of the generator is
determined by the load. It must cover the maximum demand of the residence.

31

Generator Fuel Consumption

Fuel Curve
The fuel curve describes the amount of fuel the generator consumes to produce electricity. The
following equation gives the generators fuel consumption in L/hr as a function of its electrical
output:
=

3.18

(Source: Karnavas, Y.L., and Papadopoulos, D.P., 1999)

Where:
is the fuel curve intercept coefficient (L/kWh)
is the fuel curve slope (L/kWh)
is the rated capacity of the generator (kW)

is the electrical output of the generator (kW)

Generator Operational Life

In this work, we will specify the lifetime of the generator in terms of operating hours. Therefore,
the generator operating lifetime is:
=

3.19

Where:
,

is generator lifetime (hours)

is the number of hours the generator operates in a year (hr/yr)

(hrsyr) =

2
32

A 2.5kVA generator with a lifetime of 9000 operating hours is used for the analysis

The diesel generator is sized to meet the loads that could not be served by the PV array. Excess
power supply from the diesel generator is channeled to the battery bank where it is stored for
subsequent use. Doing this reduces the operation hours of the diesel generator and also increases
its efficiency of operation. An average of 2kW load is on the diesel generator each time it is
operating.

0.8
y = 0.134x + 0.405

Fuel consumption (L/h)

0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
0

0.5

1.5

2.5

Output power (kW)

Figure 3.2: Fuel curve for the diesel generator

As shown in the fuel curve, figure 3.2 the 2.5kVA diesel generator will generate approximately
3kWh per litre of diesel used at 80% operation efficiency, which results to 0.67 litres per hour.
Table 3.6 below shows diesel generator operational characteristics for different array sizes

33

Table 3.6: Diesel generator operational characteristics for five array sizes.
Parameter

20 modules

16 modules

12 modules

8 modules

4 modules

Operation time

394.8

985

1,651.4

2,317.8

2,984.2

264.5

656

1106.4

1553

1999.4

Lifetime (yrs)

22.8

9.1

5.4

3.9

3.0

Annual fuel cost

25,127

93,575

156,883

220,191

283,499

(hrs/yr)
Fuel
consumption
(L/yr)

@ N95 per litre

For the diesel stand alone system, the generatorruns continuously and will run well below its
maximum efficiencymost of the time, thus significantly increasing annual fuel and maintenance
costs.

3.4 Dispatch Strategy

A dispatch strategy is a set of rules that govern the operation of the generator(s) and the battery
bank. It is assumed that the hybrid system adopts the cycle charging dispatch strategy whereby
whenever a generator needs to operate to serve the primary load, it operates at 80% and above of
its rated capacity. Surplus electrical production is used to charge the battery bank.

34

CHAPTER 4

ECONOMIC ANALYSIS

In modern competitive energy markets, it is essential that every power systems must prove also,
besides its technical feasibility, its economic viability.

Hybrid system economic analysis used in this work is based on the use of life cycle cost (LCC).
Project with the lowest LCC will be selected. In addition, the analysis has been designed for
economic comparison of hybrid power system with diesel stand alone and PV-battery stand
alone systems.

Three different types of costs are analyzed and these are:

1. Initial capital cost (of purchasing equipment and installation)
2. Recurring costs; that occur every year of operation such as fuel cost, and maintenance
cost.
3. Non-recurring costs; that may occur on an irregular basis such as equipment replacement.

Project Lifetime
The lifetime of the power systems considered is 25 years. This is chosen because out of all
components, PV panel has the highest lifetime of 25 years. For other components that have
lifespan less than this, replacement costs of such components will be considered.

35

Interest Rates
Interest rates i depend on general financial conditions at the time of installation. Because of
inflation, i.e., decrease in the value of money, the concept of real and charged (nominal)
interest rates has been proposed.
The annual real interest rate is related to the nominal interest rate by the equation given
below:
=

1+

4.1

(source: A.L. Schmid et al 2001)

Where:
is the nominal interest rate
is the annual inflation rate.
For the purpose of this study, the annual real interest rate is assumed to be 9% over all costs
considered.

Life Cycle Cost

The life cycle cost of a system is the present value of all the costs that it incurs over its lifetime,
minus the present value of all the revenues that it earns over its lifetime.
We calculate the total LCC of a power system using the following equation:
=

(,

4.2

Where:
,

is total annualized cost (N/yr)

is capital recovery factor

36

is the project lifetime (years)

We rank all systems according to their total LCC.
The capacity recovery factor is a ratio used to calculate the present value of an annuity (a series
of equal annual cash flows). The equation for capital recovery factor is:
(, )=

(1 + )
(1 + ) 1

4.3

Where:
is number of years considered

Total Annualized Cost

The total annualized cost is the sum of the annualized costs of each system component. The
annualized cost of a component is equal to its annual operating cost plus its capital and
replacement costs annualized over the project lifetime.
,

+
+

, &

+
+

4.4
4.5

Where:
is annualized capital cost
is annualized replacement cost
, &

is annual operation and maintenance cost

is annual fuel cost (if applicable)

37

Annualized Capital Cost (Amortization)

The initial capital of each component is annualized over the project lifetime
To calculate the annualized capital cost of each component, we use the following equation:
=

4.6

Where:
is initial capital cost of the component

AnnualizedReplacement Cost (Depreciation Fund)

The annualized replacement cost of a system component is the annualized value of all the
replacement costs occurring throughout the lifetime of the project, minus the salvage value at the
end of the project lifetime.
=

4.7

is a factor arising because the component lifetime can be different from the project lifetime,
and is given by:
=

(,
0

,
,

>0
=0

4.8

(source: HOMER software)

is the replacement cost duration for the entire project lifetime, and is given by:
=

4.9

is the integer function, returning the integer portion or a real value.

We assume that the salvage value of the component at the end of the project lifetime is
proportional to its remaining life. Therefore the salvage value S is given by:
38

4.10

Where:
, the remaining life of the component at the end of the project lifetime, and is given by:
=

4.11

Note:
is replacement cost of the component
is lifetime of the component
is sinking fund factor
The sinking fund factor is a ratio used to calculate the future value of a series of equal annual
cash flows.
The equation for

is:
(, )=

(1 + ) 1

4.12

Cost of Energy (COE)

Cost of Energy is the average cost per kWh of useful electrical energy produced by the system.
To calculate the COE, we divide the annualized cost of producing electricity by the total useful
electric energy production. The equation for the COE is as follows:
=

4.13

Where:
is the primary load served

39

Net Present Value (NPV)

The net present value of the proposed system is the difference between the LCC of the base case
(diesel stand-alone) and the proposed system.
The sign of the NPV indicates whether the proposed system compares favorably as an
investment option with the base case system: A positive value indicates that the proposed system
saves money over the project lifetime compared to the base case system.
=

4.14

Or
=

4.15

Internal rate of return (IRR)

Internal rate of returnis the compound rate of interest that makes the present value of the savings
over the period being considered equal to the present value of the investment-related costs. Or,
internal rate of return is the interest rate that produces an NPV of zero for a cash flow stream.
Another way to think of IRR is this: IRR tells you just how high inflation rates have to go in
order to eliminate the present value of this investment.

An economic analysis was performed taking into consideration the current Nigerian market
prices for the used equipment. It is to be noted that the assessment is made taking the diesel stand
alone system as the reference system (which is to be substituted with the optimal system
derived). The relevant cost data for the economic assessment are shown in Table 4.1

40

Table 4.1 Cost of major components considered for the analysis

System

Capital cost

Replacement

O&M cost

Fuel cost

component

(N)

cost (N)

(N)

(N/Litre)

Diesel

90,000

90,000

7.42 per hour

95

95,000 per

95,000 per

3,500 per year

module

module

Converter

110,000

110,000

13,000 per year

Battery bank

456,000

456,000

4,000 per year

Generator
PV Array

Hybrid System
The LCC for systems with six different array sizes: 4, 8, 12, 16, 20, 23 was calculated, with the
system having 23 modules used as PV stand-alone power generating system. The result gotten is
as shown in figure 4.1(a) below. From the graph and calculations done, the system with 20
modules is the optimal system with the lowest LCC, N3.45106 for the project lifetime. Here, the
PV array generates 89.2% of the annual energy needs for the residence, with the diesel generator
producing the remaining 10.8%.
3.9
3.85
3.8

LCC x106 (N)

3.75
3.7
3.65
3.6
3.55
3.5
3.45
3.4
0

10

15

20

25

Number of modules

41

Figure 4.1(a): Hybrid system LCC vs. Number of modules in system

3.9
3.85
3.8

LCC x 10 (N)

3.75
3.7
3.65
3.6
3.55
3.5
3.45
3.4
0

20

40

60

80

100

120

PV annual % kWh

Figure 4.1(b): Hybrid system LCC vs. Percentage of annual power supplied by PV array

Based on the life-cycle cost figures, the systemwith 20 modules is chosen. The PV array of this
system supplies 89.2% of the annual energy needs and, as indicated by Figure 4.1(b), appearsjust
at the point where system cost vs. PV availability begins to increase sharply.In this system, the
PV array will provide most of the system energy needs overthe period from February to October.
From November to January, the generatorwill provide somewhere between 10.8 and 32.2
kWh/month with an annual fuel consumption of 264.5 litres with approximately 295 hours of
operation.The generator operates only if the batteries have discharged to 20% of theircapacity
and then charges the batteries throughout its hours of operation.

42

Table 4.2: Life cycle cost result of the optimal hybrid system (20 modules)
Component Capital (N)

Replacement

O&M

Fuel

Salvage

Total

(N)

(N)

(N)

(N)

(N)

PV

1,900,000

34380

1,934,380

Diesel Gen

90,000

12,616

28,776

246,817

9,430

387,639

Battery

456,000

407,385

39,292

43,967

946,644

Converter

110,000

66,092

127,691

6,378

310,161

System

2,556,000

486,093

230,139

24,817

59,775

3,459,274

Bank

48
47

Cost of energy (N/kWh)

46
45
44
43
42
41
40
39
0

10

15

20

25

Number of modules

Figure 4.2: Cost of energy of different system sizes

43

The annual cost of generating power for the hybrid configuration was calculated, and the results
are as shown in figure 4.2. From the graph, the cost of energy (COE) decreases as more modules
are being added to the system up to the 20 module system where the graph experiences upward
movement on addition of more modules. The 20 module hybrid power system has the least COE
per annum at N40.23 per kWh. While for the PV standalone system (23 modules) the cost of
energy is N41.55 per kWh.

Diesel Stand Alone System

In this study two identical diesel generators are used for diesel stand-alone system, since for
practical reasons one diesel generator unit should not operate continuously for a period longer
than ten hours.

Table 4.5 below shows the costs involved in the systems lifetime. The costs shown are the
present worth. We can see that the bulk of the systems cost is on the fuel with about 78% of the
life cycle cost. The fuel cost is high since the generator operates non-stop throughout the year.
We can also see that the replacement cost is also high. This is because, the more frequent the
generator operates, the less its lifespan and the more it requires replacement.

Table 4.3: System cost for DSA

Capital (N)

180,000

Replacement

O&M

Fuel

Salvage

Total

(N)

(N)

(N)

(N)

(N)

819,712

638,468

5,476,813

-16,801

7,098,192

The DSA system result is as shown below. The values gotten will be used to compare the
proposed hybrid system.

Table 4.4: DSA system result

Initial Capital

Total NPC

COE

Fuel

Operating Hours

(N)

(N)

(N/kWh)

Consumption

(hrs/yr)

(L/yr)
180,000

7,098,192

98.42

5,869.2

8,760
44

Table 4.5: Cash flow for hybrid and PV stand-alone systems

Cash flow Cash flow
for hybrid for PVSA

Cash
flow for
DSA

0
1
2
3
4
5

-2556000
-44549
-40870
-37495
-34398
-31559

-2751000
-18808
-17255
-15830
-14522
-13324

-180000
-571169
-524008
-631592
-441047
-531053

6
7
8
9
10
11
12

-28953
-26562
-255400
-22357
-66975
-18817
-17264

-290762
-11214
-10288
-9439
-55124
-7944
-177428

-371220
-446519
-312449
-375443
-262982
-315681
-221347

80458
435305
302161
366004
207858
307737
43919

13
14
15
16
17
18
19
20
21
22
23
24
25

-15839
-14530
-13330
-129281
-11220
-10294
-9444
-28293
-7948
-7293
-19306
-65440
54143

-6687
-6134
-5628
-5163
-4737
-108272
-3987
-23286
-3356
-3079
-66305
-2591
37282

-265434
-186303
-223184
-156808
-187659
-131982
-157790
-111086
-132677
-93499
-111560
-78696
-77004

258747
180169
217556
151645
182922
23710
153803
87800
129321
90420
45255
76105
39722

Year

Net cash
flow for
PVSA

Cum net
cash flow
for PVSA

Net cash
flow for
hybrid

Cum net
cash flow
for hybrid

-2571000 -2376000
552361 526620
506753 483138
615762 594097
426525 406649
517729 499494

-2376000
-1849380
-1366242
-772145
-365496
133998

-2571000
-2018639
-1511886
-896124
-469599
48130

342267
419957
57049
353086
196007
296864
204083

476265
896222
953271
1306357
1502364
1799228
2003311

128588
563893
866054
1232058
1439916
1747653
1791572

249595
171773
209854
27527
176439
121688
148346
82793
124729
86206
92254
13256
131147

2252906
2424679
2634533
2662060
2838499
2960187
3108533
3191326
3316055
3402261
3494515
3507771
3638918

2050319
2230488
2448044
2599689
2782611
2806321
2960124
3047924
3177245
3267665
3312920
3389025
3428747

45

4000000

3000000

Net cash flow (N)

2000000

1000000

0
0

10

15

20

25

30

-1000000

-2000000

-3000000

Time (years)

Figure 4.3: Net cash flow for hybrid and PVSA systems. Graph in red shows the net cash flow
for PV stand-alone while graph in blue shows the net cash flow for hybrid system

The net cash flows of the hybrid system and PVSA system is plotted as in figure 4.3 above, it
can be seen that the hybrid system and the PVSA systems were able to make a return of the
amount invested in them at the 4th year. We can now say that operating such systems at a real

46

interest rate of 9% per annum would be economically beneficial if operated for a period of 5
years and above. The curves also show that the net present value of the hybrid system is
N3,638,918 million, while that of DSA is N3,428,747

4
3.5
3

NPV x10 (N)

2.5
2
1.5
1
0.5
0
0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

-0.5
-1

Figure

4.4:

Real interest rate

Internal rate

of return

for

the

hybrid

system and

PVSA

system.

Graph in red shows rate of return for PVSA while graph in blue shows rate of return for hybrid
system.

These curves are based on the hybrid system and PV stand-alone cash flow figures in the
appendix. Here, however, we have used six different interest rates, 0.09, 0.15, 0.2, 0.25, and 0.3.
47

As you would expect, as the interest rate used for calculating NPV of the cash flow stream
increases, the resulting NPV decreases. For hybrid system, an interest rate of 0.263 produces
NPV = 0, whereas PV stand-alone systems NPV arrives at 0 with an interest rate of 0.246.
Hybrid system therefore has an IRR of 26.3%, PV stand-alone an IRR of 24.6%.
We can now say that, other things being equal, and using IRR as the decision criterion, the
hybrid system (with higher IRR) is the better choice.

48

CHAPTER 5

CONCLUSION AND RECOMMENDATION

Conclusion

In this thesis, three distinct power systems thatserve the same load demand are proposed and
assessedeconomically in a systematic manner. The obtained computational results showed
clearly that hybridizing PV array and diesel generator makes an economically efficient power
generating system for residential consumption. This hybrid system reduces the high capital cost
associated with PV panels and also reduces the high fuel cost, operation and maintenance costs
associated with diesel generator. The use of diesel generator reduces the number of modules
needed for the PV array, while at the same time the operation hours of the diesel generator is
drastically reduced as a result of high contribution of the PV array to power generation. From the
optimization done, it is clearly seen that system with 20 modules supplies the power needs at
minimum cost, with the PV array generating 89.2% of the total power demand and the diesel
generator producing 10.8% of the electricity demand.

Apart from the economic gains made, the hybrid system is also environmentally friendly because
of the reduced emission of greenhouse gasses and other pollutants associated with diesel. It is
also important to state here that the hybrid system will help in extending the lifetime of the nonrenewable energy sources.

49

Recommendation

From the work done, it is recommended that:

1. The federal government of Nigeria should encourage power generation from renewable
resources by subsidizing the cost of purchase and installation of the renewable energy
generators, like the photovoltaic panel.
2. A bigger project of this nature can be built for an entire community, from which more
gains can be made.
3. Future work should concentrate on evaluating manymore case scenarios with the goal of
gaining a general understanding of the operating decisions and real control
implementation.
4. Another option to be considered is to replace diesel generator with a windturbine, as wind
energy is clean, and can be utilized in such sites where the annual average wind speed
exceeds 5m/s.
5. Such hybrid systems are recommended for remote areas in developing countries like
Nigeria since they can be operated manually and does not require complicated electronic
controls.
6. Hybrid systems are recommended for telecommunication companies for powering their
transmission masts instead of using DSA systems
7. Further studies should show the reduction in emissions from the diesel generator as a
result of the hybridization.

50

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53