Capacity Building in Assessing Renewable Technologies and Enhancement of Renewable Energy Network – Case Studies
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Support to Scale Up Renewable Energy: Capacity Building in Assessing Renewable Technologies and Enhancement of Renewable Energy Network – Case Studies A Workshop sponsored by The Energy Sector Management Assistance Programme (ESMAP) and managed jointly with The World Bank (East and Pacific Region) for workshops in Indonesia, Vietnam and the Philippines, and China’s Energy Research Institute (ERI) for the workshop in China Presented by Dr. Roland R. Clarke Clarke Energy Associates Barbados www.clarkeenergyassociates.com [email protected] Source of presentation materials – www.retscreen.net 1 Power - Wind turbine - 20,700 kW / Jamaica Purpose of this Case Study To demonstrate the general functionality of RETScreen to workshop participants. Case study assignment A developer has proposed the construction of a 20 MW wind farm in the southwestern part of Jamaica. The output of this wind farm - the first major wind project on the island - would be sold to the local utility. The developer has proposed the use of twenty-three 900 kW Vestas wind turbines. You have been hired by a funding agency to prepare a preliminary feasibility study of the project, as a quick first verification that the proposal is reasonable. Site information The project site is located on a ridge, 900 to 1,000 meters above sea level, near the community of Wigton, Manchester, about 60 km west of Kingston. Meteorological towers have been installed on the site for the past several years, and measurements at 50 m indicate average wind speeds of 8.3 m/s. The wind farm is to be constructed on land that is owned by a bauxite mining company and that will be leased to the developer for a 20-year period. A minor road accesses the site and the area is in close proximity to a small port. There are no transmission lines nearby and therefore a line will have to be constructed to an interconnection point approximately 11 km away. The costs of travel to and accommodations near to the site are modest. Financial information The project developer, a government-owned entity, has negotiated the sale of wind-generated electricity to the local utility at a price of US$0.056/kWh for the first five years of operation, and US$0.05051/kWh for the next 15 years. The twenty-year contract between the two parties is for energy only. The developer plans to sell the GHG emissions reductions for US$10/tonne of CO2 equivalent under the Clean Development Mechanism; the vast majority of the Jamaican electricity supply is generated from oil-combusting power plants. The developer has already arranged much of the financing for the project. A commercial loan for US$16 million has been negotiated, the developer can put up US$3.2 million in equity, and a grant of US$7 million has been provided by an international donor. Additional financial figures are provided by the developer: the debt interest rate is 14%, the debt term is 15 years, their discount rate is 15%, they expect an inflation rate of 10%, and they foresee the US dollar, currently worth 65 Jamaican dollars, appreciating by around 7.5% per year against the Jamaican dollar. Prepare a RETScreen study, documenting any assumptions that you are required to make, and report on the significant conclusions from this analysis. Additional notes 2 There is no annual land lease costs foreseen for the twenty-year duration of the project. Since the contract for energy sales is in US dollars, the fuel cost escalation rate is, in Jamaican dollars, 7.5% per year, the expected rate at which the Jamaican dollar will depreciate against the US dollar. It is assumed that the GHG credit will be priced in US dollars at a fixed rate, and therefore 7.5% is used as the GHG credit escalation rate. The sale of GHG reduction credits enhances the financial feasibility of the project but is associated with some uncertainty regarding the transaction fees to be paid for administration costs of projects operating under the Clean Development Mechanism. High downtime losses are foreseen due to the frequent occurrence of hurricanes within the Caribbean. Indeed, it could be argued that the annual contingencies for O&M in the Cost Analysis page should be at the high end of the range suggested by RETScreen (i.e. 20%) due to tropical storms, although you should use 10%. The average atmospheric pressure and annual average temperature were estimated by adjusting the data from the Kingston/Norman Manley meteorological station for the 1,000 m difference in altitude between the weather station and the site. A 1,000 m increase in altitude will normally be associated with a roughly 6 ºC decrease in temperature. At 1,000 m, the average air pressure will be around 90 kPa. System description The wind farm consists of 23 NEG Micon NM 52/900 wind turbines, each with a rated power of 900 kW. The hub height is 49 m. Each turbine has its own low/medium voltage transformer situated inside the tower base. The turbines are sited on a ridge, approximately 100 m apart, in two rows separated by 300 to 350 m. Each turbine is connected to a project-site substation. Interconnection to the utility grid substation is via a 69 kV transmission line. 3 Power - Photovoltaic - School - 0.4 kW - Off-grid / Argentina Purpose of this Case Study To demonstrate the use of the RETScreen’s Load and Network spreadsheet to calculate facility loads prior to sizing a PV system for off-grid applications Case study assignment A local public utility has undertaken an electrification program for rural schools in the province of Neuquén in the remote mountainous region of Patagonia, Argentina. The schools are generally far away from the electrical grid and the two main power supply options being considered are diesel gensets and stand-alone photovoltaic (PV) systems. You are an engineer at the utility in the provincial capital and you have been asked to evaluate the financial viability of using PV to supply electricity to a school in one particular village. Site information The school is located in the foothills of the Andes (39°S, 71°W), on the Aucapan reservation of the Mapuche people, one of the region's indigenous populations. The nearest major town is the provincial capital Neuquén, some 430 km to the northeast. The school consists of classrooms and an apartment for a visiting teacher (who generally comes from an urban centre). The climate is harsh: hot and dry in the summer and cold, with high snowfalls, in the winter. Since the snow makes access particularly difficult, the school holidays take place in the winter (June through August) and the building is unoccupied at that time. When the school is open, its electric loads are estimated as follows (the lights and radio telephone use DC power while all other loads are AC): Based on your previous experience with similar projects, you decide to use imported polycrystalline PV modules from BP Solar rated at 50 Wp. Due to the occasional long periods of cloud cover in the mountains, you design the system for 6 days of autonomy. Financial information 4 For the project's 25-year analysis period, assume 5% fuel cost escalation rate, 2.5% inflation and 9% discount rate. The PV modules are imported to Neuquén city at a cost of US$ 8,000 per kWp plus 10.5% value added tax (IVA). This IVA is a reduced rate for renewable energy equipment. The general IVA rate is 21%. The pre-2002 exchange rate is 1 ARS = US$ 1. Local experience has shown that PV system batteries last about 3 years in these applications. The smallest commonly available diesel genset (2.5-3 kW) and appropriate shelter are estimated to cost about ARS 3,200 (including 21% IVA). Even such a small genset however would be oversized for the school's small load and would likely run at a 10-20% load factor. Genset maintenance costs are high due to harsh operating conditions and inexperienced users. Based on the utility's study of genset operation in schools, maintenance costs are estimated to average ARS 500 per year (including periodic overhauls and travel expenses). Diesel fuel costs around ARS 0.5/L in the cities, but is estimated to be 50% more expensive in remote villages. Prepare a RETScreen study, documenting any assumptions that you are required to make. Additional notes The coincident electrical load for the school is not expected to exceed 0.25-0.5 kW. Diesel gensets however are commonly only available starting at 2.5 or 3 kW. A genset therefore would be expected to run at 10-20% capacity, resulting in poor fuel consumption of around 1.5 L/kWh. The Argentinean peso (ARS) is taken to be on par with the US dollar for the purpose of this case study, since cost information is only available for the period prior to the currency devaluation of January 2002. Before devaluation, the Argentinean peso was pegged to the US dollar at a rate of 1:1. For either scenario (PV or genset), the same number of technicians will likely be brought in from the provincial capital to install the power supply and the inside wiring, light fixtures, etc., all on the same trip. Transportation costs are thus assumed to be equal for both scenarios. The only difference in labour is due to the longer time needed to install the PV system components. This incremental cost is conservatively estimated at ARS 800. A transportation and labour charge of ARS 250 is added to each tri-annual battery replacement.