Hybridgrids-Economic Benefits

RENEWABLE ENERGY IN
HYBRID MINI-GRIDS AND

ISOLATED GRIDS:
ECONOMIC BENEFITS AND
BUSINESS CASES
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Frankfurt School UNEP Collaborating Centre for Climate and Sustainable Energy Finance, 2015.
Renewable energy in hybrid mini grids and isolated grids: Economic benefits and business cases.
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TA B L E O F C O N T E N T S
TABLE OF CONTENTS
OVERVIEW
1. INTRODUCTION
1.1. Basis of decision making
1.2. Technology selection
1.3. Technical and financial modelling
2. SELECTED SITES
2.1. Puerto Leguizamo Colombia
2.2. Las Terrenas Dominican Republic
2.3. Bequia St. Vincent & the Grenadines
2.4. Nusa Penida Indonesia
2.5. Busuanga Philippines
2.6. Hola Kenya
2.7. Basse Santa Su Gambia
3. HYBRIDISATION: POTENTIAL AND BENEFITS
3.1. Status quo: Current demand and supply
3.2. Solar radiation and seasonality
3.3. Demand and PV-generation potential
3.4. Demand growth and expansion options
4. ECONOMIC VIABILITY ASSESSMENT
4.1. Approach and assumptions

4.1.1. Investment needs and cost structure

4.1.2. Hybrid LCOE = weighted diesel/PV LCOE?

4.1.3. Financial assumptions

4.1.4. Diesel price assumptions
4.2. Levelised cost of electricity Base case
4.3. Relevance of plant size, solar radiation and diesel prices
4.4. Sensitivity analysis

4.4.1. Impact of diesel price development

4.4.2. Impact of financing costs

4.4.3. Impact of achieved PV penetration level

4.4.4. Impact of CAPEX and OPEX changes

4.4.5. Summary of sensitivities

4.4.6. Impact of demand growth
5. FINANCIAL VIABILITY ASSESSMENT
5.1. Ownership structures
5.2. Cash flow analysis no-growth case
5.3. Cash flow analysis growth case
6. CONCLUSIONS
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ANNEXES
Annex 1: Glossary
Annex 2: Technical fact sheets
Annex 3: Technical assumptions
Annex 4: Assumptions for growth and technical upgrades
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A B B R E V I AT I O N S
ABBREVIATIONS
AFD
Agence Francaise de Developpement
BISELCO
Busuanga Island Electric Cooperative
CAPEX
Capital Expenditures
CERs
Certified Emission Reductions
CDM
Clean Development Mechanism
CEDENAR Electricity Company of Narino
CEET
Compagnie dEnergie Electrique du Togo
CIPC
Calamian Islands Power Corporation
DFI
Development Finance Institution
DSCR
Debt Service Cover Ratio
DSRA
Debt Service Reserve Account
EIA
U.S. Energy Information Administration
EIRR
Equity Internal Rate of Return
EMPULEG Public Utility Company of Leguizamo
FI
Financial Institution
FiT Feed-in-Tariff
HFO
Heavy Fuel Oil
HOMER
Hybrid Optimisation of Multiple Energy Resources
IEA
International Energy Agency
IFI
International Financial Institution
IRENA
International Renewable Energy Agency
IRR
Internal Rate of Return
IPP
Independent Power Producer
KPLC
Kenya Power and Lighting Company
kW
Kilo Watt
LCOE
Levelised Cost Of Electricity
MW
Mega Watt
NAWEC
National Water and Electricity Company of Gambia
NPC
National Power Corporation, Philippines
NPV
Net Present Value
NREL
National Renewable Energy Laboratory of the US Department of Energy
O&M
Operation & Maintenance
OPEX
Operational Expenditures
PLN
Perusahaan Listrik Negara (State Electricity Company of Indonesia)
PV Photovoltaic
RE
Renewable Energy
SENI
National Electric Interconnected Grid System in the Dominican Republic
SIN
National Electricity Grid of Colombia
SPV
Special Purpose Vehicle
SVG
St. Vincent and the Grenadines
UNEP
United Nations Environment Programme
VINLEC
St. Vincent Electricity Services
WACC
Weighted Average Costs of Capital
ZNI
Non-grid Connected Areas in Colombia
AUTHORS
AUTHORS
This study was prepared by Hirak Al-Hammad, Torsten Becker, Andrea Bode, Srishti Gupta and
Silvia Kreibiehl at the Frankfurt School UNEP Collaborating Centre for Climate and Sustainable Energy
Finance.
ACKNOWLEDGEMENTS
ACKNOWLEDGEMENTS
This study was commissioned by the United Nations
Environment Programmes Division of Technology,
Industry and Economics (UNEP DTIE), in cooperation with Siemens and the International Renewable Energy Agency (IRENA). We would like to thank
in particular Nicoletta Heilsberger, Matteo della
Volta and Torsten Wetzel from Siemens; Stefanie
Held, Jeffrey Skeer, Emanuele Taibi, Michael Taylor,
and Mohamed Youba Sokona from IRENA; and
Roberto Borjabad, Dean Cooper, Kornelia Guse,
Mark Radka and Merlyn Van Voore from UNEP for
their unwavering support and vital inputs.
A special thanks to Siemens, whose technical expertise enhanced the financial analysis provided
by the
Frankfurt School UNEP Collaborating
Centre.
This study would not have been possible had it
not been for the utilities and other stakeholders
at the selected sites, providing all required information and input data (particularly BISELCO,
CEDENAR, CIPC, EMPULEG, IPSE, KPLC, NAWEC, NPC,
PLN, and VINLEC) and the experts collecting this
data, and supporting the Frankfurt School UNEP
Centre with the actual analysis (Unai Arrieta,
Philipp Blechinger, Alan Dale Gonzales, Rebecca
Gunning, Tobias Panofen, Komang Pribadiana,
Mauricio Solano and Bernardo Tadeo).
Thanks also to Professor Dr. Michael Klein and

Professor Dr. Ulf Moslener for their invaluable inputs during the compilation of the study; Jiwan
Acharya, Jim Cohen and Achim Neumann for their
peer review and critical comments; Pierre Knoche
who supported this work as part of his studies at
Frankfurt School of Finance & Management; and
last but not least our advisory board that helped
putting this work in a broader context: Philipp
Gaggl, Steve Lindenberg, Peter Storey, Patrick
Theuret, and Marcus Wiemann.
This was indeed a worthy exercise, and we at the
Frankfurt School UNEP Centre hope that this research can be used as a reference point for minigrid work in the future. We also hope that these
results generate interest that can cascade into a
great success in the provision of clean and reliable
energy for those living in rural areas.
FOREWORD
FOREWORD
Clean Energy MiniGrids have the potential to increase energy
access, renewable energy use and energy
efficiency in developing countries. As such,
they are a priority for the UNs decade-long Sustainable Energy for All initiative. This report uses
public and private sector experience to show that
clean fuel for such isolated grids can be cost-effective for suppliers, though remaining affordable to
the targeted communities. It marks the start of a
shift to decentralised electrification worldwide using local clean energy supplies to protect the local
environment and improve local peoples lives.
Achim Steiner, United Nations Under-SecretaryGeneral and Executive Director,
United Nations Environment Programme
To ensure that global

energy systems satisfy
the need for reliability, affordability and
climate compatibility
in the future, it will be
critically important to
combine and integrate the right technologies. As
a globally active company, its our responsibility to
use our know-how and competence in developing
and implementing new products and solutions,
and to serve as a consultant in nearly all energy
markets, for just this purpose. By exploring various
approaches and analyzing their cost-effectiveness
in developing sustainable solutions, this study is
a valuable contribution to discussions on how to
create tomorrows energy systems.
Lisa Davis, Member of the Managing Board,
Siemens AG
The distribution of
renewable power on
hybrid mini-grids represents an excellent
opportunity for islands
and isolated communities to displace costly diesel fuel, boost energy security, contribute to
emissions reduction and lower electricity costs.
This report illustrates the potential cost savings
achievable from hybrid mini-grids in seven different countries spanning Africa, Asia and Latin
America. It provides further evidence of the increasing economic viability of renewable energy
globally.
Adnan Z. Amin, Director General,
International Renewable Energy Agency
Public infrastructure
investments can come
along with significant
capital cost requirements especially if
private financiers are
involved. This also
applies to the hybridization of decentralized electricity grids in the developing world. While the
environmental benefit of renewable energies is
non-controversial, they are still relatively capital
intensive compared to diesel generation capacity.
Besides fuel consumption, return on equity and interest on debt can possibly account for a bigger
part of electricity generation costs. This study contributes to the very topical discussions on the affordability of climate change mitigation, the challenges in crowding-in the private sector, as well
as the needs for continuous donor activities and
technical assistance on-site. It is part of Frankfurt
Schools endeavor to advocate green energy without
neglecting market realities and real economic costs.
Udo Steffens, President & CEO,
Frankfurt School of Finance & Management
OVERVIEW
OVERVIEW
Renewable power has significant potential to reduce the cost of electricity in rural and island settings across the developing world. In areas distant
from main power grids, regional isolated grids
often referred to as mini-grids operating on costly diesel fuel are often the main source of electricity to industry and households. Generating costs
can be reduced by hybridising these mini-grids
with renewable photovoltaic (PV) power.
On the basis of seven case studies in as many
countries, this report finds that hybridisation can
reduce average generation costs at five of the seven sites (from 0.3 to 8 percent) even assuming
private-sector financing terms and the EIA midcase scenario for oil prices. If financed with public
funds at a 5 percent real discount rate, assuming
the same oil price scenario, hybrid mini-grids can
achieve cost reductions at all seven sites (12 to 16
percent). And cost savings can be more significant
if higher oil-price projections occur. This is so even
if PV generation at the sites provides just 31 to 40
percent of total electricity. The reason is that diesel-only costs range from 31 to 44 USDc/kWh while
PV generation costs 16 to 23 USDc/kWh.
An increasing number of isolated grids is operated
by independent power producers (IPP) under concession, and it is expected that hybridisation projects, which are characterised by a higher capital
intensity than diesel-only plants, require further
private sector involvement, in particular to ensure
access to financing. The financial viability, i.e. the
attractiveness of a hybridisation project from the
perspective of equity investors and commercial
lenders, depends on the terms and conditions of
the existing or new power purchase agreement
(PPA). In most cases, no such framework exists and
IPPs cannot change the generation technology under the existing PPA.
This study argues that for projects that are economically viable, the regulator and/or government
should be incentivised to initiate the hybrid project, and to set up a PPA framework. Accordingly,
it assesses the economic viability of RE-based hy-
bridisation of existing so-called brownfield diesel grids and provides recommendations on how
economic viability can be translated into financial
viability. It thereby considers two options regarding operational set-up: operation and in particular
investment by the utility and government, respectively; and the outsourcing of operation and investment to the private sector.
This study aims to add value to the ongoing discourse by showcasing concrete examples and highlighting the differences between real-world isolated
grids. The analysed projects include three physical
islands (Bequia, St. Vincent & the Grenadines; Nusa
Penida, Indonesia; Busuanga, Philippines) and four
virtual islands (Puerto Leguizamo, Colombia; Las
Terrenas, Dominican Republic; Hola, Kenya; Basse
Santa Su, Gambia) far from national or other regional power grids. They were deliberately chosen
to take into account the heterogeneity and complexity of remote areas in different parts of the
world.
The sites represent a variety of grid sizes, number and
type of customers, diesel costs, and isolation levels
all factors that can affect the technical solution as
well as the economic and financial viability of the
hybrid mini-grid investment. The installed diesel
generation capacity ranges from 0.8 MW in Hola
to 9.5 MW in Las Terrenas. The number of customers (grid connection points) ranges from 1,700 in
Hola to 13,000 in Nusa P
enida. The type of customers can be classified into residential (at most sites),
commercial, and public categories, whereas a larger anchor customer plays a particularly important
role in Puerto Leguizamo. Yet, in order to ensure
a certain replication potential, the sites were selected to be representative within their respective
countries and regions.
This study does not include purely industrial sites,
which are characterised by a stronger demand
during daytime and a less significant (or no) evening peak. Nevertheless, the results of this analysis
underpin the assumption of an even stronger viability of hybridisation of such sites.
OVERVIEW
Diesel-powered grids can be hybridised by using

different types of system-integration technologies and RE sources. This analysis compares diesel
plants to a 100-percent-peak PV penetration hybrid technology, with which existing diesel generators can be switched off during peak availability
of solar radiation. The focus on this technology,
however, is illustrative only, and does not imply
its general advantage compared to other hybrid
technologies. Likewise, solar PV was selected as
only one of several options for hybridisation.
The aim of this study is to compare average generation costs of a RE hybrid to a diesel power plant
not to compare different hybrid technologies or
RE sources to each other. With PV electricity representing the still most expensive possible RE source
for hybridisation, this assessment provides a conservative view of the potential cost savings. While
PV certainly is the most obvious technology and
offers the benefit of reliable resource data a
more detailed site assessment could come up with
alternative RE sources that would further improve
the economic viability of hybridisation.
With the selected hybrid technology, and given a
suitable capacity and efficiency of PV installations
at the different sites, the power demand could be
fully met with PV for around four to seven hours
per day (yearly average). PV thereby could cover
about 30 to 40 percent of the total energy demand
leading to possible diesel savings in this range.
Nevertheless, since load patterns at the selected
sites are mainly residential (peak demand occurs in
the evenings at the low/no sun hours), most of the
electricity would have to be generated with diesel
power. On the one hand, this represents a major
difference to industrial sites where the overlap of
electricity demand and RE supply is more significant. On the other hand, it highlights the potential of hybridisation with non-PV RE technologies
with a different output pattern.
While a hybrid power plant can be operated with
significantly less diesel fuel, it also means relatively
high investment (and replacement) costs. To combine the diesel and PV electricity, technical components for system integration are required as well.
The average electricity generation costs (so-called
levelised cost of electricity, or LCOE) of a hybrid
system are a combination of PV and diesel LCOEs
weighted with their share in the total output plus

a cost component for system integration. The cost
of PV generation is averaged with the cost of the
remaining diesel generation. Since PV accounts for
only about one third of total generation, the full
comparative advantage of the PV portion is disguised in the average. By comparing LCOEs diesel
and hybrid power and, excluding financing costs
in the first step, the relative advantage of hybrid
plants is significant. The current generation costs
of diesel electricity as calculated for the purpose
of this analysis, including carbon costs of 50 USD/
tCO2 range from 34 USDc/kWh in Bequia to 48
USDc/kWh in Hola. In contrast, generation costs
for hybrids at the same sites are 27 USDc/kWh and
38 USDc/kWh, respectively (in other words: a 20
percent savings).
Financing costs play a crucial role in RE finance
and hybridisation projects. The first of two scenarios assumes that the utility and/or government
has the financial strength to deploy capital on its
own, remains owner of the assets (diesel only or
diesel/RE hybrid) and might only outsource the operation. For this scenario, a flat discount rate of 5
percent over the lifetime of the assets is assumed.
Such public capital costs can be achieved if, for
instance, the project is financed on the balance
sheet of the utility, and if it has access to concessional debt finance from international financial
institutions. Adding financing costs to the generation costs reduces the above-highlighted cost
advantage of hybrid systems. Generation costs can
be reduced from 34 USDc/kWh to 30 USDc/kWh in
Bequia and from 48 USDc/kWh to 42 USDc/kWh in
Hola (a 13 percent savings).
The second scenario assumes that the utility/
government does not want to be involved in the
financing (and operation) of the plants, and accepts higher generation costs that are a result of
the relatively higher financing costs of the private
sector. Such arrangements and PPA terms were observed during this analysis. As concessions for the
operation of a site are given to the private sector usually for a pre-defined period a project
finance capital structure was assumed. This further
increases the relative share of financing costs in
the total generation costs, and burdens in particular the more capital intensive hybrid projects.
The economic viability of the hybridisation is con-
OVERVIEW
sequently lower in this scenario, but the analysis

reveals that the hybrid projects continue to enjoy
a relative cost advantage at most of the sites.
The economic viability heavily depends on the
future oil price. The figures above are based on
the EIA reference scenario, released in spring
2014, which expects declining oil prices over the
next years, and a medium increase afterwards. It
remains to be seen whether the oil price decline
from 115 USD/barrel in June 2014 to less than 50
USD/barrel in February 2015 is only a short-term
shock, or if it will lead to an adjustment of longterm projections. Most analysts agree that the
price will increase again over the next years; there
are divergent expectations though on where the
trend will go. At the time of writing, no revised
long-term projections were available from EIA.
Only World Bank released an updated forecast in
which the mid-term trend levels off close to the
EIA reference in 2025. Although not directly implicating the most recent developments, different
diesel price scenarios are presented as part of the
sensitivity analysis.
The LCOE was chosen as the major indicator for
economic viability. While this is a common approach, it ignores the uncertainties with regard
to the diesel price development and its volatility,
and consequently does not value the advantage
of more predictable generation costs in the hybrid
cases. For instance, at Basse Santa Su EIA low and
high oil-price scenarios swing the LCOE from a 16
percent reduction to 31 percent increase in a diesel-only grid, but only from 10 percent reduction
to an 18 percent increase in a hybrid grid.
Among the investigated sites, the differences in
estimated cost savings are mostly due to the plant
size, diesel costs, and solar radiation. Large plants
achieve economies of scale by distributing the
fixed cost of the hybrid system over more units of
generated electricity. High diesel prices result in
high cost savings, whereas high solar radiation allows for the generation of relatively more (cheaper) PV electricity.
Despite relatively high local diesel prices and solar
radiation, hybridisation under rather conservative assumptions, including private sector finance
could result in a cost increase in Hola and Basse
10
Santa Su. The main reason is the small generation

capacity, i.e. missing economies of scale. In contrast, the cost advantage at the largest site (Las
Terrenas) is limited by relatively low diesel prices
and solar radiation. The most viable case for hybridisation is Nusa Penida a mid-sized plant with
the highest diesel prices and relatively high solar
radiation.
Demand growth has a positive effect on electricity generation costs of the hybrid system even
if only looking at a limited project lifetime of 20
years. To consider growth, additional PV capacity
needs to be installed during the projects lifetime.
However, the physical lifetime of these additional
modules, other new components, and possibly also
the initial equipment usually exceeds the 20-year
economic lifetime applied in the financial model.
The growth LCOEs do not consider electricity
generated after the 20th year, while additional
costs are distributed only over the output of the
remaining years (until year 20). To mitigate the effects, it was assumed that generation assets can be
sold at book value at the end of year 20.
This assessment underpins the requirement of
detailed and thorough cost analyses for the specific sites before the initiation of hybridisation
projects. Even though real diesel generation costs
were available from some sites, the breakdown
of the elements of costs was not fully known. For
this analysis it was required to calculate alternative values in order to ensure comparability to
the hybrid case. It has to be determined which elements of costs are ultimately included in diesel
generation costs, and which financing conditions
were applied. Once these aspects are known, the
hybrid generation costs have to be re-calculated,
based on the same assumptions. Moreover, this
analysis is limited to one hybrid technology and
one RE resource. Other technologies (e.g. fuel
saver, diesel spinning reserves, large battery banks
for energy storage) and resources (particularly
wind and biomass) should be taken into consideration when planning a real project. The results
described above should, however, be understood
as encouragement for stakeholders to invest in a
more detailed analysis.
Other further-reaching aspects must be considered
for project implementation. For instance, especial-
OVERVIEW
ly for countries with low-average, on-grid generation costs (and where an extension is not restricted
by geographical barriers), the hybridisation option
needs to be compared to the possibility of interconnecting the isolated grid with the national
grid. Nusa Penida is one site where this option is
currently assessed by the utility, and will serve as a
third scenario in addition to the status quo and a
hybridisation of the island grid.
Also, the operation and optimisation of isolated
grids is not necessarily at the top of the agenda of
national utilities and decision makers; the familiarity with hybrid technologies among relevant stakeholders is sometimes limited, and there might already be cost reduction potential from optimising
diesel-power operations and overall grid management. Fair communication is required with regard
to applied assumptions, actual achievable cost savings, and hence the benefits of hybridisation.
The transparent assumptions and calculation

methods in this study should help policy makers
and other stakeholders assess the hybridisation
option in their specific context, and to make a
well-founded decision that helps to increase access
in remote areas while not leaving the least-cost
energy sector development paths. The methodologies and analysis can be applied for other technologies accordingly. The results for hybridisation
with still relatively expensive PV as RE technology,
as described in this study, may encourage more detailed analyses by responsible stakeholders.
11
INTRODUCTION
1. INTRODUCTION
In the context of rural electrification efforts with a
focus on least-cost investment strategies, regional
grids with primarily diesel generation assets often referred to as mini-grids have been established in remote areas or island environments.
With continued technology progress on intelligent
grid management of hybrid generation systems, as
well as decreasing costs of renewable energy (RE)
components, the replacement of diesel generation
assets has become cost competitive. The addition
of RE generation capacity can provide a solid basis for further grid expansion or replacement of
diesel generation capacity while reducing the
consumption of diesel per unit of generated electricity.
This study assesses the economic and financial viability of RE-based hybridisation of existing so
called brownfield diesel power plants in seven
countries. The focus on brownfield assets offers
the advantage of an established operational structure and management, as well as an existing track
record of energy offtake and appears to present a
low-hanging fruit when it comes to hybridisation.1
The following of section 1 gives an overview about
the background of this analysis, the selected hybrid technology, and the applied technical and
financial models. Section 2 briefly presents the
characteristics of and key findings from the selected sites, before the main part of the study continues in a comparative manner. Section 3 outlines
the different sites potential for hybridisation by
presenting solar irradiance, RE generation potential, actual load profiles and demand patterns, as
well as potential demand growth and expansion
options.
Section 4 starts with an introduction to the overall
approach and assumptions applied in the economic
analysis. It then discusses the impact of hybridisation on the levelised cost of electricity (LCOE) by
presenting the breakdown to the elements of
costs, and hence the key cost drivers of diesel and
hybrid power generation. A base case including costs of carbon emissions, assuming EIA refer-
Completely newly set-up grids are referred to as greenfield assets.
12
ence oil price developments, and not considering

demand growth compares the impact of two
different ownership and financing structures on
the LCOE. It is argued that lower-than-commercial
public sector return expectations (financing on
balance-sheet of utility, concessional debt terms)
make the hybridisation viable at all sites, whereas
private sector return expectations (project finance structure, IPP) can burden the capital intensive hybrid systems with too high financing costs
to ultimately reduce generation costs. It is further
shown that besides financing costs sufficiently
large grid size, high fuel costs and solar radiation,
and the combination of these factors, respectively,
are key for making the hybrid investment viable.
A sensitivity analysis compares the base case to
alternative fuel price scenarios, different capital
costs and risk margins, changing equipment costs,
decreasing PV penetration levels, and increasing
customer demand.
Section 5 discusses the relevance of feed-in-tariffs,
avoided costs of diesel generation, and asset ownership for financial viability of hybridisation. Using
one case example, it presents cash flows, financing
structures and repayment profiles of the hybrid
investment, and assesses whether costs related to
the generation of electricity including financing
costs for debt and equity can be fully recovered
by future revenues.
Section 6 presents the key findings and conclusions,
and outlines possible implementation challenges as
well as areas for further discussion. A glossary in Annex 1 presents definitions of certain technical and
financial terminology. Annexes 2, 3, and 4 present
technical fact sheets of the selected sites, as well
as assumptions on system sizing and operations,
demand growth, and possible technical upgrades.
1.1. BASIS OF DECISION MAKING

The decision making processes for the hybridisation of existing diesel power plants will vary significantly, and depends on the current ownership
INTRODUCTION
and operating structure. In case of a utility-owned

island grid, also the financial strength of the utility, government budgets and access to financing
from development banks will play a role, and will
determine whether they can invest capital on their
own, or need to rely on private sector financing.
In this case, the initial decision needs to be taken
by the public sector which is expected to decide
based on economic viability. Thereafter, private
sector operators and investors will decide based
on the offered terms. In case the private sector
is already involved in the operation of the diesel
power plant, a hybridisation decision needs to be
taken by both parties as existing contracts are expected to include diesel electricity only.
The public sector is expected to assess different
development paths for a hybrid grid based on the
economic viability, i.e. minimising the overall generation costs. Investment decisions for power supply and rural electrification are not only based on
project-related cost-benefit calculations. Rather,
utilities have a mandate to ensure basic energy
needs, and governments (usually the main shareholder of public utility companies) have an interest in taking environmental and social aspects
into account. While social benefits are difficult to
quantify for the hybridisation of existing grids (for
instance since access to electricity is already given),
the analysis of the public sector should address
the question of whether hybridisation can reduce
average generation costs under consideration of
carbon emissions from diesel electricity generation.
Financing costs play a significant role and drive RE
generation costs. In a number of PPAs for sites licensed out to the private sector, nearly cost-plus
PPA terms were observed. The price per kWh paid
to the private sector concessionaire is adjusted to
diesel price developments, i.e. the diesel price risk
is allocated to the public sector, and the private
sector being compensated to appropriate financing costs (although having a minor impact in the
case of diesel only plants).
As a consequence, the cost per kWh depends also
on the decision on whether the national utility
continues to operate a plant, or whether the appropriate private sector financing costs need to be
considered. An analysis of the average generation
costs from the utilitys/societal perspective as key
criteria for the decision making follows this approach:

One
scenario assumes a private sector party investing into the plant and operating the plant,
resulting in return expectations of 15 percent
on equity and 8 percent on debt. Given a target
debt service cover ratio (DSCR) of 1.2, a maximum debt portion of 70 percent, a debt tenor of
12 years (1-year grace period) and different local
tax rates for each of the respective sites, the initial weighted average capital costs (WACC) are
assumed to range between 8.7 and 9.6 percent.
Since debt is repaid first and hence the capital
structure becomes more equity-dominated, average financing costs increase over the project
lifetime.
The
other scenario assumes a continued capital

allocation from the public sector, i.e. a realisation of a project on the balance sheet of the national utility, with financing costs of 5 percent
flat over the lifetime of the project.
As described above, there are diesel price adjustment clauses in the PPAs for the sites already being
outsourced to private sector operators. The risk of
adverse diesel price developments consequently
remains with the public sector in both scenarios.
The LCOE was chosen as major indicator for economic viability. While this is a common approach,
it ignores the uncertainties with regard to the diesel price development and its volatility, and consequently does not value the advantage of more
predictable generation costs in the hybrid cases.
Applying different oil price forecasts, a range of
LCOEs was calculated. This analysis reveals that
an investment in hybridisation reduces this LCOE
range significantly an advantage which is not
reflected in a LCOE-only assessment, but which
should be considered by the public sector. Section
4.4.1 provides more details on this aspect.
The financial viability of a hybridisation project
is the key determinant for making an investment
decision from a private investors perspective in
case their participation is requested. The financial viability depends on a framework and market
design which allows the hybrid plant operator to
realise sufficient revenues rather than the avoided costs. Against the background of the limited
13
INTRODUCTION
liquidity and low price levels on the compliance

carbon markets, reduced societal costs of carbon
emissions which play a role in the economic assessment, will not trigger revenues for the private sector investors. Regulators and stakeholders of the
energy sector can most likely be convinced to put
the required frameworks in place if the economic
viability of an investment is given, i.e. if the project
can help to create value for the overall economy.
Diesel power plants can be hybridised by using different types of system integration technologies
and RE sources. The decision to realise a hybridisation project as well as the technology choice
depend on various factors such as customer load
requirements, and the availability of alternative
energy sources. Decision makers in the target countries as well as potential international and local
investors can use this study as an initial reference
point for assessing the benefits of hybridisation.
The study should be understood as a starting point
for discussion and a tool for a site specific analysis.

Of course, other technology options (different RE
penetration levels and different RE technologies)
should be considered and compared to identify
the least cost option for the specific site.
The study discusses the questions if hybridisation
makes sense from a societal perspective, and if it
offers an attractive investment opportunity for
private sector investors. It compares the LCOEs of
diesel and hybrid, applying two different ownership- and financing structures: public sector return
expectations, assuming that the assets will be financed on the balance sheet of the utility, and
that the utility has access to concessional debt
terms; and private sector return expectations, assuming that an IPP will make the investment under
a project finance structure. For the latter, the study
continues with an analysis of cash flows, financing
structure, debt tranches, and payback periods.
Table 1: Economic vs. financial viability

Economic viability
Does the hybridisation make sense from a
societal perspective?

LCOE [consumed kWh] as key decision

criterion; LCOE range change depending
diesel price as proxy for increased stability of
hybrid option
Study compares two scenarios (real world

would need to consider other technology
options)

- Diesel only
- Hybridised scenario
Two different financing structures considered

depending on financial strength of utility/
government

14
Externalities taken into account
Financial viability
Does the hybridisation offer an attractive
investment opportunity for a private sector
investor?

EIRR, payback periods, possible debt tranches
Based on PPA terms
Considers risk profile of investment
INTRODUCTION
1.2. TECHNOLOGY SELECTION

The analysis compares LCOEs of current diesel assets and a 100 percent peak RE penetration hybrid technology. This means that the hybridised
plant is designed in a way that the existing diesel
generators can be switched off during peak availability of the intermittent RE source (e.g. four to
six hours during daytime for solar). The stability of
the overall system during peak hours is managed
by an automation tool and an integrated storage
device (batteries) for short-term interruptions of
the power supply.2 The automation tool manages
the complexity of diesel power installation with,
for example, intermittent PV sources. It ensures
high grid stability of PV with integrated energy
storage. It also maintains power quality, and optimises the generation units based on real-time fluctuation of RE and variable load. Despite relatively
high investment costs of this technology, it was
selected since it ensures the maximum amount of
diesel savings and carbon emission reduction during peak resource availability.
The focus on this technology, however, is illustrative only, and does not imply the general advantage of this technology compared to other hybrid
technologies.3 The study aims to demonstrate the
benefits of a selected hybrid solution compared to
diesel power plants. More detailed proposals and
feasibility studies might be required to determine
the most appropriate hybrid solution. It depends
on the individual circumstances which technical
configuration might be preferable.
The same applies to the selection of RE sources:
While other sources were initially considered in
the analysis, the main potential at all selected
sites seems to be for solar energy. This is not only
due to the resource availability, i.e. the relative
abundance of solar radiation compared to wind,

biomass, or hydro. It is also because solar data is
readily available, whereas there are no long-term
wind measurements or biomass supply projections
(run-of river hydropower is most likely not feasible
at any of the sites). Another advantage of PV compared to alternative RE technologies is the relatively low operation and maintenance (O&M) costs
and complexity, as well as the relatively simple and
quick installation and infrastructure requirements.
Biomass power generation, for instance, depends
on adequate and stable feedstock supply chains,
which do not yet exist, and are probably difficult
to create. Altogether, solar PV is the most commonly installed RE technology in islands and other remote sites today, and is presumably the first
choice for the majority of hybridisation projects in
the future. However, again, the aim of the analysis is to assess the economic and financial viability
of hybridising diesel plants with a RE technology
not to compare different RE technologies against
each other. Utilities are encouraged not to exclude
any type of RE technology (and RE source, respectively) in their analysis as alternatives to relatively
costly PV can significantly reduce generation costs.
1.3. TECHNICAL AND FINANCIAL

MODELLING
The sizing of the hybrid systems and its individual
technical components4 was modelled with the
Hybrid Optimisation of Multiple Energy Resources
(HOMER) software,5 which is one of the most commonly used tools worldwide for designing and analysing hybrid power systems. HOMER determines
how variable RE resources can be optimally integrated into hybrid systems by applying simplified
financial assumptions.
2
In this analysis, batteries are only considered for balancing of short-term interruptions of power supply (up to 15 minutes), but due to the
still prohibitively high investment costs not as longer-term storage devices (for instance three hours per day, to be used as electricity supply
source to the grid).
3
The study does not benchmark the 100% peak PV penetration technology with lower or higher penetration technologies. For instance,
fuel-saving technologies, operating with maximum PV power ratios of 20% to 60% of the generator capacity (depending on the utilisation
of batteries), achieve less diesel savings; at the same time they are less capital intensive. Further possible technical configurations are
spinning reserves and larger battery banks for energy storage. Spinning reserves are diesel generation capacity that is kept up and running
not for power output, but as a standby for sudden demand increases, in order to ensure system stability. On the one hand, this reserve
makes the automation tool and batteries dispensable. On the other hand, there is a need for additional diesel generation capacity (beyond
actual demand), and there are less diesel fuel and emission savings compared to the peak penetration layout. Battery banks would prolong
the period of PV electricity use, and could also make an automation tool unnecessary. At the same time, batteries are capital intensive, too,
and more PV capacity would be required to fill the storage device.
4
Technical fact sheets of the different hybrid power plants (including HOMER output) are presented in Annex 2.
5
www.homerenergy.com
15
INTRODUCTION
One of the simplifications in HOMER relates to the

financing costs: only a constant discount rate can
be assumed to calculate the NPVs of the different technical layouts as basis of decision making.
Also, HOMER does not properly consider fluctuating diesel price forecasts, revenue streams, tax effects, or changes of the financing structure over
the 20-year lifetime of the project components
that could influence financing conditions and investment decisions. Further, growth scenarios can
only be simulated by modelling the optimum seizing of the RE component on a year-on-year basis in
separate HOMER files.
The financial analysis of this study is hence based on
a fully-fledged financial model that builds upon
HOMER output and other input data (see figure 1).
As both models optimise based on LCOEs, this approach accepts some inaccuracy, as financial assumptions cannot be inserted into HOMER with the
same level of detail as they can in the financial model. However, cross-checks for specific sensitivities
have revealed that this inaccuracy remains limited.
Input data like the current (diesel) plant layout,
load profile, fuel consumption and costs, and RE
resource availability was gathered on site for each
individual case. Assumptions for i) initial capital
Fig. 1of the hybrid system, e.g. PV
expenditures (CAPEX)
modules, battery, battery converter, and automation tool; ii) component lifetime and replacement
costs for PV inverter, battery converter, and diesel generators; and iii) operational expenditures
(OPEX, excluding fuel) for diesel generators and

PV system were provided by Siemens, and verified
by IRENA. For each individual site, actual historic
fuel prices (including transportation costs to the
mostly remote areas) were indexed to different
crude oil price forecasts to predict future diesel
price scenarios case-by-case. Financing costs like
equity return expectations, interest on debt, transaction costs, contingencies, and debt service coverage ratio (DSCR) were determined in workshops
with international financial institutions (IFI) and
private sector financiers.
The breakdown to the actual elements of current
diesel LCOEs (like capital expenditures, operational expenses, fuel, financing costs, potential carbon
costs etc.) was not fully known at all sites. Therefore, in order to ensure comparability to the simulated hybrid LCOEs and among the sites, alternative values of diesel LCOEs were calculated for the
purpose of this analysis based on real data from
the ground, but partly using unified assumptions.
The LCOE is often defined as the total capital and
operating expenditures per unit of generated
electricity, discounted over the economic lifetime
of the investment. Discount factor is the Weighted
Average Cost of Capital (WACC); the investment
lifetime of a hybridisation project is assumed to be
20 years. However, for the purpose of this analysis,
it is essential to take financing cost and a changing
financing structure (over economic lifetime) into
account.
Fig. 1
Figure 1: Technical and financial modelling approach
Input

Current plant layout

Load data
Diesel consumption
RE resource
availability

16
CAPEX and OPEX

assumptions for
diesel, PV, hybrid
HOMER output

Sizing of hybrid
system and
individual technical
components
Diesel/PV split
Financial model

Cash flow analysis
Sensitivity analysis
Growth scenarios
Economic viability
analysis

Financial viability
analysis
INTRODUCTION
Fig. 2
100%
20%
90%
18%
80%
16%
70%
14%
60%
12%
50%
10%
40%
8%
30%
6%
20%
4%
10%
2%
0%
WACC
% of capital employed
Figure 2: Typical project finance structure, NUSA PENIDA Indonesia
0%
0
10
11
12
13
14
15
16
17
18
19
20
Year after installation

Debt ratio
In the traditional LCOE calculation, investment

costs, operating costs and fuel costs are discounted
with a stable WACC, and divided by the discounted
electricity output over the lifetime of the project.
However, this does not reflect the reality of a project finance structure with changing debt-to-equity ratios, loan tenors, and cost of debt and equity.
Figure 2 shows a typical project finance structure
for the example of Nusa Penida. It highlights that
the capital mix changes over time. That means the
average financing costs increase since debt is repaid first, and consequently, the capital structure
becomes more equity-dominated.
Nusa Penida for example would show an initial
WACC of 8.7 percent based on an initial 70/30
debt/equity split. The WACC rises as debt is repaid,
and reaches the remuneration level for equity (15
percent) after final debt repayment. Using a fixed
Equity ratio
WACC
WACC as discount rate is underestimating the financing costs and is hence leading to inaccurate
results in the LCOE calculation.
A different approach is used in this analysis to reflect the financing structure more accurately. The
yearly project cash flows are discounted with the
WACC of the respective year. This could also be expressed with the following formula. This formula
is solved for the Net Present Value (NPV) = 0 by
calculating the required electricity price under the
given set of financing assumptions.
From the financial model, the revenues per unit of
electricity required to reach the target equity IRR
of 15 percent are derived. The revenues resulting
from this calculation equal the LCOE (in nominal
terms, i.e. before inflation adjustment, which is
calculated in a separate step).
Figure 3: LCOE calculation
Elt = Electricity sold in kWh in t

Pt = Electricity Price in USD/kWh in t
It = Investment cost in t
Mt = O&M cost in t
Ft = Fuel cost in t
DSRA = Changes in debt service reserve account
Dt = Debt amount in t
Ct = Capital employed in t
rD = Interest rate on debt
= Tax rate
Et = equity amount in t
rE = equity return
17
SELECTED SITES
2. SELECTED SITES
The study analyses seven (initially eight) existing
sites from different parts of the world. It thereby
considers the heterogeneity and individual complexity of different remote areas. The sites were
selected to represent a variety of grid sizes as well
as number and type of customers determinants,

which have significant impact on the technical solution and economic viability of the hybrid investment.
Fig. 4
Figure 4: Selected sites Ownership, installed capacity and number of customers

LAS TERRENAS
Dominican Republic
Owner:
Private Company
Size:
9.5 MW
Customers: ~9,000
PUERTO LEGUIZAMO
Colombia
Owner:
IPSE, CEDENAR
(Public)
Size:
4.2 MW
Customers: ~3,000
BEQUIA
St. Vincent
Owner:
VINLEC (Public)
Size:
4.1 MW
Customers: ~2,300
MANGO
Togo
Owner:
CEET (Public)
Size:
1.6 MW
Customers: ~1,900
The installed diesel generation capacity ranges

from 0.8 MW in Hola to 9.5 MW in Las Terrenas.
Number of customers (grid connection points)
ranges from 1,700 in Hola to 13,000 in Nusa
Penida. The type of customers can be broadly classified into residential (prevailing at most sites),
commercial, and public categories, whereas a larger anchor customer plays a particularly important
role in Puerto Leguizamo; there are no purely industrial sites included. Last but not least, in order
to ensure a certain replication potential, the sites
were selected to be representative within their respective country and region.
BASSE SANTA SU
Gambia
Owner:
NAWEC (Public)
Size:
1.3 MW
Customers: ~3,700
HOLA
Kenya
Owner:
KPLC (Public)
Size:
0.8 MW
Customers: ~1,700
BUSUANGA ISLAND
Philippines
Owner:
NPC (Public)
Size:
3.6 MW
Customers: ~12,000
NUSA PENIDA
Indonesia
Owner:
PLN (Public)
Size:
3.7 MW
Customers: ~13,000
The following gives a brief introduction to each individual site including current status, operational
environment, as well as economic and financial viability of hybridisation. A detailed comparative
analysis of the sites (i.e. power demand patterns,
hybridisation potential and benefits, economic
and financial viability, sensitivities, growth scenarios, financial indicators) is presented in the subsequent sections.6 Technical fact sheets for each site
can be found in Annex 2.
6
Further, individual business cases for each site were developed in parallel to this study. The business cases include more detailed information
about project stakeholders, location, growth expectations, electricity tariffs, plant operation environment (e.g. organisational structure,
regulatory requirements), and the financial viability analysis itself.
18
SELECTED SITES
Puerto Leguizamo is a municipality and town in

the Department of Putumayo, Colombia. Being
located around 100km from the national electricity grid, and not being part of the governments
medium-term grid extension plan, it is the only
municipality in Putumayo (out of 13) that belongs
to the Non-grid Connected Areas (ZNI).7 The city
is supplied with electricity from an off-grid diesel
power plant. The plant is operated by the Electricity Company of Narino (CEDENAR); the Public Utility Company of Leguizamo (EMPULEG) is responsible for distribution and sales (both public entities).
Puerto Leguizamo has about 31,000 inhabitants,
one third of which live in the town. Among the
3,000 electricity customers are mainly households
(93 percent of customers; 35 percent of demand),
as well as some 200 businesses (hotels, restaurants,
banks, shops) and public facilities (e.g. hospital,
airport; 7 percent of customers; 22 percent of demand). The bulk of electricity, though, is consumed
by the Navy as single anchor client (42 percent of
demand).
Fig. 6
Fig. 5
Figure 5: Daily average load vs. possible PV

output (Puerto Leguizamo)
PV output from 2.75 MW
installed capacity
Load
0.500
PV
0.400
USD/kWh
2.4
1.8
0.424
0.300
0.200
0.100
1.2
0.000
Diesel Only
Private S
0.6
Cost of carb
0.0
00
:
01 30
:
02 30
:
03 30
:
04 30
:
05 30
:
06 30
:
07 30
:
08 30
:
09 30
:
10 30
:
11 30
:
12 30
:
13 30
:
14 30
:
15 30
:
16 30
:
17 30
:
18 30
:
19 30
:
20 30
:
21 30
:
22 30
:
23 30
:3
0
2.1. PUERTO LEGUIZAMO

COLOMBIA
There are five diesel generators with a maximum

possible capacity of 4.2 MW.8 In 2013, average demand was 1.4 MW, with a peak of 2.2 MW in the
evenings. There were frequent power cuts and
shortages from technical failures that interrupt the
24-hour service, though, ranging from a few minutes to several hours. The plant generated more
than 11,000 MWh per year consuming around
3.5 million litres of diesel fuel. The average diesel
price (including transportation) was 1.05 USD/litre.
Daily Average Load vs. PV Output

(MW)
The case of Mango, Togo, was initially considered

in the analysis. Mango is a town in the northern
Savannes region, where a 1.6 MW diesel power
plant supplies approx. 1,900 customers (predominantly households). In 2012, the plant generated
only 2,550 MWh, averaging to 5-6 hours daily
electricity service. Power generation is limited primarily by the availability and affordability of fuel.
Hybridisation of the power plant certainly makes
sense from an energy supply point-of-view; PV
could generate additional electricity, at least during daytime. The actual economic and financial
viability assessment, however, was hampered by
the availability of real data. In the course of this
research, the study team could not gather sufficient information from the ground to draw convincing conclusions, and to plausibly compare this
case to others, respectively. Mango is therefore
not further followed up in the actual analysis.
Hours
The HOMER simulation has shown that hybridising

the diesel plant with 2.75 MW solar PV can lead to
diesel savings of more than 1.1 million litres per
year, which translates into cost savings of nearly
USD 1.2 million at the diesel costs prevailing in
2013. In this case, diesel generators can be turned
Puerto Leguizamo
off for 4 hours per day, from around 9:30 to 13:30.
Over the course of an average 24-hour day, the
installed solar cells would generate about 31 percent of the sites electricity requirements.
Since the existing diesel assets are owned and
operated by the public sector (there is no private
sector involvement at all), hybridisation in the existing structure and involving further government
funds appears possible. At financing costs of 5 percent, and including carbon costs, hybridisation reduces the LCOE from 40.3 to 35.1 USDc/kWh at EIA
reference diesel prices, representing a decrease of
generation costs of 13 percent. At EIA high diesel
prices, the LCOE would rise to 54.1 USDc/kWh for
the fully-diesel grid, but just to 44.9 USDc/kWh for
the hybrid grid, boosting expected cost savings to
17 percent.
7
The ZNI account for 52% of the Colombian territory and are defined as municipalities, towns and single countryside houses which are not
connected to the National Electricity Grid of Colombia (SIN).
8
The actual installed capacity is 5.2 MW, but not all generators can be run simultaneously.
19
SELECTED SITES
Fig. 6
0.400
0.424
-2.8%
savings
0.412
0.403
-12.9%
savings
0.351
0.300
0.200
0.100
0.000
Diesel Only
Private Sector Case
Hybrid
CAPEX
Fuel
OPEX
Financing Costs
17 30
:
18 30
:
19 30
:
20 30
:
21 30
:
22 30
:
23 30
:3
0
Cost of carbon emmissions
Diesel Only
Hybrid
Public Sector Case
For the alternative structure involving private project finance, the initial WACC was estimated at 8.7
percent. At reference diesel prices, hybridisation
still reduces the LCOE from 42.4 to 41.2 USDc/kWh
including the costs of carbon emissions, or from
39.7 to 39.3 USDc/kWh without the costs of carbon
emissions implying a modest cost savings of 1 to 3
percent. Under a scenario of EIA high diesel prices,
the LCOE, including the costs of carbon emissions,
Puerto Leguizamo
would rise to 56.2 USDc/kWh for the diesel-only
grid, but just to 50.6 USDc/kWh for the hybrid grid,
so the cost savings would increase to 10 percent;
the savings would also rise to 10 percent excluding
carbon costs.
Among the selected sites, Puerto Leguizamo is the
only grid with a large anchor client. On the one
hand, anchor clients per se are characterised by
stable energy offtake on a relatively high level; on
the other hand, there is a risk that a large share of
energy offtake breaks away if the client gets lots.
The latter, however, seems unlikely. The Navy plans
an expansion of its facilities by four new blocks,
and there are no signs that it plans to provide electricity by other or own sources.
2.2. LAS TERRENAS DOMINICAN

REPUBLIC
Las Terrenas is a municipality and town in Samana
Province, Dominican Republic. It is one of only ten
locations outside the National Electric Interconnected Grid System (SENI).9 The off-grid power
plant is operated by a private company; another
private company is responsible for distribution
and sales.
Nine power generators are permanently connected.10 Eight operate regularly and simultaneously.
Besides four diesel generators, there are three
dual fuel generators (2/3 diesel, 1/3 natural gas),
and one run on heavy fuel oil (HFO). Another mere
natural gas generator is only rarely used due to its
low efficiency and relatively high operating cost.
The installed capacity is considered as the maximum possible capacity of the nine generators (9.5
MW).
In 2013, the peak demand reached about 5.8 MW
(in the evenings); average demand was 3.2 MW
(24/7 service, significant daytime load for commercial activities). The total generated electricity was
more than 27,000 MWh, consuming around 7.5
million litres diesel, 9,800 litres HFO, and 46,216
MMBTU natural gas. The average local diesel price
was 0.89 USD/litre.
Fig. 7
Fig. 8

output (Las Terrenas)
4.2

installed capacity
Load
PV
3.6
3.0
2.4
1.8
1.2
0.500
0.400
USD/kWh
0.500
PV
USD/kWh
Load
Las Terrenas has about 19,000 inhabitants. The local power supply system also connects El Limon,
where another 7,000 people live. The region is one
of the most famous tourist destinations of the Dominican Republic. Among the approx. 9,000 electricity customers are mostly low-income residents
but also high-income residents, including holiday
homes (24 percent of customers; 28 percent of demand), as well as resorts, hotels, hospitals, banks,
and other businesses (14 percent of customers;
48 percent of demand).

(MW)
00
:3
01 0
:
02 30
:
03 30
:
04 30
:
05 30
:
06 30
:
07 30
:
08 30
:
09 30
:
10 30
:3
11 0
:
12 30
:
13 30
:
14 30
:
15 30
:
16 30
:
17 30
:
18 30
:
19 30
:
20 30
:
21 30
:
22 30
:
23 30
:3
0
Figure 6: LCOE breakdown for private vs. public

financing costs (Puerto Leguizamo)
0.300
0.200
0.100
0.000
0.6
0.0
Hours
The Dominican Republic is mainly served by the SENI, which provides access to electricity to 96% of the population, and reaches all provinces
in the country.
There are another five generators as back-up power. These are, if ever, only connected though during high-peak demand periods such as
LasinTerrenas
holiday season in July and August. Their share is less than 0.5% of the total annual electricity generation. Hence they were not considered
this analysis.
10
20
SELECTED SITES
The HOMER simulation has shown that, with a hybrid solution, installing 6.75 MW PV, diesel generators can be turned off for 3.5 hours per day.
Per year this saves more than 2.5 million litres of
fuel or costs of USD 2.2 million, given 2013 diesel prices.11 Over the course of an average 24-hour
day, PV would generate about 31 percent of Las
Terrenas electricity needs.
Hybridisation reduces average electricity generation costs from 39.5 to 39.0 USDc/kWh (at reference diesel price developments; including costs of
carbon emissions) if the project has to be financed
on commercial terms (assumed 8.6% initial WACC).
The LCOE raises from 36.3 to 37.1 USDc/kWh if one
does not consider carbon costs. Assuming EIA high
oil price developments, the diesel LCOE including
carbon costs would come in at 50.7 USDc/kWh,
whereas hybrid electricity could be produced at
46.8 USDc/kWh (8 percent cost savings); savings
without carbon costs would still be 5 percent.
Fig. 8

financing costs (Las Terrenas)
PV
0.500
0.400
0.395
-1.2%
savings
0.390
0.376
-12.1%
savings
USD/kWh
0.330
0.300
0.200
0.100
0.000
Diesel Only
Private Sector Case
Hybrid
Diesel Only
Hybrid
Public Sector Case
CAPEX
Fuel
OPEX
tricity generation or the sales tariff in off-grid areas. In 2013, the grid lost one of its major hotel
clients that started generating its own electricity,
and residents have been increasingly concerned
about high tariffs. There is an apparent need for
lowering electricity generation costs and tariffs
which can be achieved through hybridisation. The
political framework can play a crucial role the feasibility of a hybridisation project.
2.3. BEQUIA ST. VINCENT & THE

GRENADINES
St. Vincent and the Grenadines (SVG) is an island
state in the Caribbean, comprised of the main island St. Vincent and several Grenadine islands. The
largest Grenadine island is Bequia, a popular tourist destination with approx. 4,300 inhabitants.12
Bequia is supplied with electricity from an offgrid diesel power plant operated by state-owned
VINLEC (responsible for generation, distribution
and sales of electricity).

The islands electrification rate is almost 100 percent. VINLEC has approx. 2,300 customers, whereas electricity demand is almost equally distributed
between 87 percent domestic and 13 percent commercial customers. There is no industrial client;
two existing public street light systems only have
neglectable demand.
Financing Costs
20 0
:
21 30
:
22 30
:
23 30
:3
0
oad
Savings would be substantially greater at 5 percent WACC (public sector finance). In this case,
including carbon and under medium diesel price
developments, hybridisation reduces the LCOE
from 37.6 to 33.0 cents per kWh, for cost savings
of 12 percent. The cost advantage even increases
to 16 percent (from 49.2 down to 41.2 USDc/kWh)
if the high oil price scenario occurs albeit from a
Las Terrenas
much higher base.
End-user electricity tariffs in Las Terrenas are the
highest among the investigated sites. One reason
is that there are no government subsidies for elec-
There are six diesel generators with a total of 4.1

MW installed capacity. Demand in 2013 averaged
0.9 MW, reaching a peak of 1.5 MW in the evenings. Total generation exceeded 7,500 MWh,13
consuming about 2.14 million litres of diesel at an
average cost of 0.90 USD per litre.
Hybridising the plant with 1.5 MW PV could bring
diesel savings of more than 700,000 litres per year;
diesel generators could be turned off for around 5
hours per day, translating into a cost reduction of
over USD 0.6 million per annum, assuming diesel
costs remain at the 2013 level. On average, about
34 percent of electricity could be generated by solar power.
11
For this analysis it was assumed that all generators run exclusively with diesel fuel. The cost variation between combined-fuel generation
costs and diesel-only generation costs is marginal since the share of other fuels in electricity generation was only less than 10 percent in
2012-13.
12
The estimated population of SVG is approx. 110,000 people, with almost 100,000 living on the main island St. Vincent.
13
Another 175 kWp solar PV panels, which are connected with the Bequia grid, add to the yearly demand, but only have a negligible energy
share in the grid (less than 1%). These small-scale PVs are privately owned, scatteredly placed and mainly used for self-consumption by the
owners with the provision of feeding excess electricity, if any, into the grid.
21
SELECTED SITES
Fig. 9
Fig. 10

installed capacity
1.2
a state-owned corporation responsible for generation, distribution and sales of electricity.
Load
PV
0.8
0.6
0.4
0.2
0.0
Hours
Assuming a public sector 5 percent WACC, savings

of generation costs would be substantially higher.
In this case, hybridisation reduces the LCOE from
34.3 to 29.7 USDc/kWh at reference diesel prices
(cost savings of 13 percent), and from 44.9 USDc/
kWh to 36.9 USDc/kWh (18 percent) if diesel price
Bequia
increase according to the EIA high scenario.
Fig. 10

financing costs (Las Terrenas)
0.500
0.371
-0.3%
savings
-13.3%
savings
0.370
0.343
0.297
0.300
0.200
Fig. 11
0.100
0.000
Diesel Only
Private Sector Case
Hybrid
Diesel Only
Hybrid
Public Sector Case
CAPEX
Fuel
OPEX
Financing Costs
2.4. NUSA PENIDA INDONESIA

Nusa Penida is a small island southeast of Bali,
Indonesia. The nearest connection to the national grid (on Bali) is separated by sea. The islands
off-grid diesel power plant is operated by PLN,
22
Hours
The LCOE does not decrease significantly under

private sector finance (8.4 percent initial WACC)
and reference diesel price assumptions, where
hybridisation reduces generation costs from 37.1
to 37.0 USDc/kWh (including carbon costs). In a
high diesel price case, though, the LCOE including
carbon costs would rise to 47.5 USDc/kWh for the
diesel grid but just to 44.0 USDc/kWh for a hybrid
Bequia
grid, for cost savings of 7 percent (savings without
carbon costs would still be 5 percent).
Fig. 1

output (Nusa Penida)
PV output from 3 MW
installed capacity
Load
PV
0.500
2.5
0.400
0.300
1.5
1
0.5
USD/kWh
USD/kWh
0.400
The total installed capacity of nine diesel generators is 3.65 MW. There are also some existing wind
turbines (800kW) and PV panels (80kW) but none
are in working condition. In 2012, the peak demand reached about 2.9 MW (in the evenings); average demand was about 1.7 MW, and total generation exceeded 14,000 MWh, consuming about
4.1 million litres of diesel. The average diesel price,
including transportation to the site, was relatively
high at 1.16 USD per litre.

(MW)
00
:3
01 0
:
02 30
:
03 30
:
04 30
:
05 30
:
06 30
:
07 30
:
08 30
:
09 30
:
10 30
:3
11 0
:
12 30
:
13 30
:
14 30
:
15 30
:
16 30
:
17 30
:
18 30
:
19 30
:
20 30
:
21 30
:
22 30
:
23 30
:3
0
PV
17 30
:
18 30
:
19 30
:
20 30
:
21 30
:
22 30
:
23 30
:3
0
Load
0.500
Nusa
Penida -0.3%
has an estimated population
of
-13.3%
savings
savings
0.400
0.371
0.370
48,000
inhabitants.
The vast majority
of
the
esti0.343
0.297
0.300
mated 13,000 electricity customers are households;
0.200
there
are only a handful of shops, small resorts,
0.100
government
offices, a gas station and a local bank,
0.000
Diesel Only
Hybrid
Diesel Only
Hybrid
Private Sector Case
Public Sectoris
Case
adding relatively
little demand. There
no unmet
CAPEX Fuel
OPEX
Financing Costs
demand from the connected customers. However,
approx. 10 percent of the population do not yet
have access to electricity; around 1,500 unelectrified households are planned to be connected
within the next years. In addition, increasing tourism on Nusa Penida is expected to add demand.
USD/kWh
1.0
00
:
01 30
:
02 30
:
03 30
:
04 30
:
05 30
:
06 30
:
07 30
:
08 30
:
09 30
:
10 30
:3
11 0
:
12 30
:
13 30
:
14 30
:
15 30
:
16 30
:
17 30
:
18 30
:
19 30
:
20 30
:
21 30
:
22 30
:
23 30
:3
0

(MW)

output (Bequia)
0.200
0.100
0.000
Hours
Hybridising the diesel plant with 3 MW of PV could

allow the diesel generators to be completely shut
off for roughly 6 hours per day. Diesel savings of
1.2 million litres and cost savings of USD 1.4 million (given 2012 prices) could be achieved per year.
Over the course of an average 24-hour day, the inNusa Penida
stalled PV capacity would generate about 32 percent of the islands electricity requirements.
SELECTED SITES
Given Indonesias good access to donor funds, a 5

percent WACC case (public sector finance) seems
likely. Including carbon costs, hybridisation reduces the LCOE from 38.1 to 32.1 cents per kWh at
reference diesel prices, for cost savings of 16 percent. At higher diesel prices, the LCOE would rise
to 51.5 USDc/kWh for the diesel grid but just 41.5
USDc/kWh for a hybrid grid, boosting cost savings
to 19 percent or 10 USDc/kWh produced, although
from a higher level.
Fig. 12

financing costs (Nusa Penida)
PV
0.500
USD/kWh
0.400
0.395
-7.6%
savings
0.381
0.365
-15.8%
savings
installations on Nusa Penida, the island could actually become an exporter of electricity in a sea cable
scenario.
The weak maintenance and resulting non-performance of the existing RE installations on Nusa
Penida is a good example for minor RE additions
not receiving enough attention from management. While those installations can help to build
an early track record, a lacking importance of the
assets compared to the diesel generators, and consequently, lacking focus of the management teams
on proper maintenance of the RE assets was recognised. In the suggested hybrid scenario, the RE
component would be more dominant.
0.321
0.300
2.5. BUSUANGA PHILIPPINES
0.200
0.100
0.000
Diesel Only
Private Sector Case
Hybrid
20 30
:
21 30
:
22 30
:
23 30
:3
0
oad
Diesel Only
Hybrid
Public Sector Case
CAPEX
Fuel
OPEX
Financing Costs
The private sector initial WACC was assumed to be

8.7 percent. At reference diesel prices, hybridisation reduces the LCOE from 39.5 to 36.5 USDc/kWh
including the costs of carbon emissions or from
36.5 to 34.6 USDc/kWh without the costs of carbon
emissions, implying a cost savings of 5 to 8 percent.
Under a scenario of higher diesel prices, the LCOE
including carbon costs would rise to 52.3 USDc/
Nusa Penida
kWh for the diesel-only grid but just 45.6 USDc/
kWh for the hybrid grid, so cost savings would rise
to 13 percent; savings without carbon costs would
be 11 percent.
Since August 2013, there is an interconnection
through submarine power cables from Bali to
Nusa Penida and two other adjacent islands, Nusa
Lembongan and Nusa Ceningan. The cables were
initially supposed to supply a total of 20 MW to
the three islands (breakdown to each island unknown). However, due to strong undercurrents of
the deep sea, the cable system broke during installation, disconnecting the island from the national
grid. PLN considers the replacement of the cable
system and assesses this option as third option.
Given private sector interest in financing larger PV
Busuanga is the second largest island in the Province of Palawan, Philippines. It is located around
400 km from the Palawan island grid. The isolated
diesel power plant is owned and operated by the
state-owned National Power Corporation (NPC or
NAPOCOR);14 the private utility company Busuanga
Island Electric Cooperative (BISELCO) is responsible
for distribution and sales.
The power plant serves the municipalities of
Busuanga and Coron, which together have around
66,000 inhabitants. Among the 12,000 electricity customers are mainly households (89 percent
of customers; 30 percent of demand), businesses
public facilities including street lights (2 percent
of customers; 14 percent of demand), and some
industry (0.04 percent of customers; 11 percent of
demand).
The seven diesel generators have a maximum possible capacity of 3.58 MW.15 Demand in 2013 averaged 1.6 MW, with a peak of 2.6 MW in the evenings. The plant generated more than 13,800 MWh
over the course of the year, consuming around 5.8
million litres of diesel fuel at an average price of
0.96 USD per litre.
14
A new concession with private operator CIPC (the Calamian Islands Power Corporation) is in progress.
CIPC is expected to expand the net-dependable generation capacity to 7.7 MW by purchasing new diesel generators. Nevertheless, this
hybridisation analysis was done for the existing gen-sets, not least due to the availability of real historic data for load, customer demand,
and fuel consumption.
15
23
SELECTED SITES
PV output from 3 MW
installed capacity
Load
PV

(MW)
00
:
01 30
:
02 30
:
03 30
:
04 30
:
05 30
:
06 30
:
07 30
:
08 30
:
09 30
:
10 30
:3
11 0
:
12 30
:
13 30
:
14 30
:
15 30
:
16 30
:
17 30
:
18 30
:
19 30
:
20 30
:
21 30
:
22 30
:
23 30
:3
0
2.5
2.0
1.5
1.0
0.5
0.0
Hours
Hybridising the diesel plant with 3 MW of solar PV

could reduce the diesel consumption by more than
1.2 million litres per year (nearly 1.2 million cost
savings at current fuel prices). Diesel generators
could be turned off from around 9:30 to 14:30. On
an average day, about 33 percent of the islands
electricity requirements could be generated by PV.
Busuanga
Cost savings would be significant if public sector
financing costs can be applied. Hybridisation reduces the LCOE from 34.7 to 29.8 USDc/kWh (14
percent) at 5 percent WACC, reference diesel prices, and considering carbon emissions. At EIA high
diesel prices, the LCOE would rise to 46.0 USDc/
kWh for the fully diesel grid but to just 37.6 USDc/
kWh for the hybrid grid, boosting expected cost
savings to 18 percent.
Fig. 14

financing costs (Busuanga)
PV
0.500
USD/kWh
0.400
0.364
-1.3%
savings
-14.1%
savings
0.359
0.347
0.300
0.298
0.200
0.100
0.000
Diesel Only
Private Sector Case
Hybrid
Diesel Only
Hybrid
Public Sector Case
CAPEX
Fuel
OPEX
Financing Costs
18 30
:
19 30
:
20 30
:
21 30
:
22 30
:
23 30
:3
0
Load
For an alternative case, the private sector initial

WACC was assumed to be relatively high at 9.4
percent. In this case, given reference diesel price
developments and including carbon costs, average
electricity generation costs would reduce from
36.4 to 35.9 USDc/kWh, for a slight cost decline
of 1 percent; the LCOE would rise from 33.5 to
34.1 USDc/kWh without consideration of carbon
Busuanga
24
costs.
If one assumes high oil price developments,
Fig. 14
hybridisation results in a more significant cost advantage of 9 percent; the LCOE rises to 47.3 USDc/
0.500
kWh
for the diesel
grid, but just to 42.8
USDc/kWh
-1.3%
-14.1%
savings
savings
0.400
0.364
0.359
0.347
for
the hybrid.
USD/kWh
Figure
13: Daily average load vs. possible PV
Fig. 13

output (Busuanga)
0.300
0.298
0.200
A0.100
new concession with private operator CIPC (the
Calamian
Islands Power Corporation) is in pro0.000
Diesel Only
Hybrid
Diesel Only
Hybrid
Private Sector Case
Public Sector Case
gress. It is understood
that they are
in the process
CAPEX Fuel
OPEX
Financing Costs
of installation new generation assets. The existing diesel generators owned by NPC will be relocated to another island. The new PPA with CIPC is
based the assumption that the electricity will be
produced by diesel generators. CIPC is compensated for their financing costs. Under this PPA, CIPC
would not have the option to replace diesel with
PV electricity but would require an amendment to
the PPA. While it appears unlikely that CIPC will
change their plans regarding generation assets
and the technical layout of the plant, there seems
potential for hybridisation of comparable sites in
the Philippines. Financial viability would require a
restructuring of existing PPAs and/or a negotiation
of an appropriate new PPA in case of the issuance
of new concessions to allow the concessionaires to
combine PV and diesel.
2.6. HOLA KENYA

Hola is the capitol town of the Tana River County,
Kenya. Although the closest connection point is
only some 50km away, there is no interconnection
plan to the national electricity grid. Instead, the
Hola power plant is one of seven off-grid stations
in Kenya that has been hybridised already (very little, though) and that is planned for further expansion of diesel and RE-generation capacity. The
power station is operated and managed by Kenya Power and Lighting Company (KPLC), a stateowned company responsible for transmission, distribution and retail supply of electrical energy to
end users.
Hola has an estimated population of 7,000. Its
electricity grid also connects through transmission
lines two nearby towns (Masalani and Bura, with
a combined population of 45,000) and an agricultural irrigation scheme. The latter requires around
10 percent of the total generated electricity, and
operates day and night. Yet there are no notewor-
SELECTED SITES
thy commercial or industrial facilities connected. A

nearby juice factory operates its own diesel generator. So far the grid only supplies some 1,700
customers (mostly households) due to its limited
generation capacity, amongst other things. Most
of the customers pay the bottom-of-the-pyramid
electricity tariff which is cross-subsidised by other
ratepayers. As a consequence, the Hola grid itself is
heavily loss-making and the financial understandFig.and
15 awareness of its managers is very limited.
ing
Fig. 16

financing costs (Hola)

(MW)
00
:
01 30
:
02 30
:
03 30
:
04 30
:
05 30
:
06 30
:
07 30
:
08 30
:
09 30
:
10 30
:3
11 0
:
12 30
:
13 30
:
14 30
:
15 30
:
16 30
:
17 30
:
18 30
:
19 30
:
20 30
:
21 30
:
22 30
:
23 30
:3
0
The existing diesel

capacity of 800 kW is provided
Load
PV
installed capacity In 2012, there were
two 400 kW generators.
0.4
60kW PV added, providing around 4 percent to
0.3
the electricity mix. In 2013, average demand was
0.2
300kW (peak of 600 kW) however, the current
0.1
load profile does not necessarily reflect the po0.0
tential customer demand in and around Hola. The
installation of another 500kV diesel generator is
Hours
already in progress; Government
and KPLC are
planning to upgrade the PV capacity, i.e. to maximise the PV penetration.
Savings would be substantial if public sector financing costs can be applied. At 5 percent WACC,
including carbon costs, hybridisation lowers the
LCOE from 47.9 to 41.7 USDc/kWh at EIA reference
diesel prices, and from 63.8 to 52.4 USDc/kWh at
EIA high diesel prices. Depending on fuel price developments, cost savings of 13 to 18 percent can
be achieved.
0.5
by

installed capacity
Load
PV
0.4
0.3
0.2
0.1
0.0
Hours
Total electricity generation in 2013 was about

2,460 MWh, consuming some 700,000 litres of diesel at an average price of 1.12 USD per litre. Hybridisation with another 500 kW PV system could
lead to diesel savings of around 300,000 litres per
year; HOMER simulates that diesel generators
could be turned off for as long as 5 hours per day.
This would mean cost savings of over USD 0.3 million per year at the diesel costs prevailing in 2013.
During an average day, solar cells would generate
about 34 percent of Holas electricity.
USD/kWh
0.479
+1.6%
increase
-13.0%
savings
0.417
0.300
0.200
0.100
0.000
Diesel Only
Private Sector Case
Hybrid
Diesel Only
Hybrid
Public Sector Case
CAPEX
Fuel
OPEX
Financing Costs
USD/kWh
0.5
0.400
0.513
0.505
The private sector WACC was assumed to be 8.8

percent initially. At reference diesel prices, hybridisation then increases the LCOE from 50.5 to 51.3
Fig. 16
USDc/kWh
including the costs of carbon emissions,
or from 47.2 to 49.5 USDc/kWh without carbon
costs, implying a cost increase of 2 to 5 percent.
0.513
0.479 prices, however,
0.500
Under
a 0.505
scenario
of higher diesel
+1.6%
-13.0%
0.417
increase
savings
0.400
the
LCOE including carbon costs would rise to 65.8
0.300
Hola USDc/kWh for the diesel-only grid but just 61.6
0.200
USDc/kWh
for a hybrid grid, bringing cost savings
0.100
to
6
percent;
without carbon costs, savings would
0.000
Diesel Only
Hybrid
Diesel Only
Hybrid
Private Sector Case
Public Sector Case
be 4 percent.

(MW)
00
:3
01 0
:
02 30
:
03 30
:
04 30
:
05 30
:
06 30
:
07 30
:
08 30
:
09 30
:
10 30
:3
11 0
:
12 30
:
13 30
:
14 30
:
15 30
:
16 30
:
17 30
:
18 30
:
19 30
:
20 30
:
21 30
:
22 30
:
23 30
:3
0
Figure
15: Daily average load vs. possible PV
Fig. 15

output (Hola)
0.500
CAPEX
Fuel
OPEX
Financing Costs
Beyond Hola, there is a national strategy for hybridisation, including a pipeline of 24 existing
and under-construction mini-grids, as well as 44
greenfield sites. Financing from international donors can most likely be secured. For instance, the
French Development Agency AFD has committed
EUR 30 million to fund the retrofitting of existing
mini-grids, including expansion of existing hybrids.
Hola
25
SELECTED SITES
Basse is the major trading centre for the upper

reaches of the Gambia River. The region has an
estimated population of 230,000.16 The 100 km
transmission network connects the communities
of Basse, Fatoto, Sabi, and Koima. The number of
electricity customers, though, is limited to 3,660.
Amongst them are mainly households and a few
(larger) commercial customers like bank, health
centre, ice plant, bakery and cement factory all
of which have additional own generation capacity.
The UKs Medical Research Council has a research
station in Basse which is not connected to the regional grid since power fluctuations would not allow their sensitive equipment to operate reliably.
There is no anchor load or large industry largely
because of the limited power supply.

(MW)
00
:3
01 0
:
02 30
:
03 30
:
04 30
:
05 30
:
Load Shedding
06 30
:
07 30
:
08 30
:
09 30
:
10 30
:3
11 0
:
12 30
:
13 30
:
14 30
:
15 30
:
16 30
:
17 30
:
18 30
:
19 30
:
20 30
:
21 30
:
22 30
:
23 30
:3
0
There are 6 diesel generators with a total capacity of 5.3 MW, but 4 are not operational, bringing dependable capacity down to 1.3 MW. In 2012,
potential demand was estimated at around 6 MW,
Fig. 17
requiring significant load shedding at nights and
in the afternoons.17 Due to high costs and limited
fuel,18 the plant normally
operates
for onlyLoad
9 to 12PV
1.4
installed
capacity
1.2
hours a day.

Fig. 17

output (Basse Santa Su)
PV
0.500
1.0
0.400
0.8
0.300
0.6
0.100
0.2
0.000
0.0
Hours
The absence of reliable power is restricting economic growth and employment in both manufacturing and services. Since a hybridisation project,
through extended access to electricity, would
come along with significant social benefits, International Financial Institutions might possibly provide concessional financing. If so, at a 5 percent
Basse Santa Su
WACC, and considering carbon costs, hybridisation
reduces the LCOE from 36.2 to 30.6 USDc/kWh at
reference diesel prices for cost savings of 15 percent or 5.6 USDc/kWh produced. At higher diesel
prices, the LCOE would rise to 48.3 USDc/kWh for
the fully-diesel grid, but just to 38.5 USDc/kWh for
a hybrid grid, boosting expected cost savings to 20
percent or 9.8 USDc/kWh.
Fig. 18

financing costs (Basse Santa Su)
0.500
0.300
USD/kWh
0.8
0.379
+0.7%
increase
-15.4%
savings
0.382
0.362
0.306
0.200
0.100
0.000
Diesel Only
Private Sector Case
Hybrid
Diesel Only
Hybrid
Public Sector Case
CAPEX
Fuel
OPEX
Financing Costs
It is estimated that the population has grown from 183,000 in 2003 (last census) to 230,000 in 2014.
The afternoon load shedding is not shown in figure 17 since, for this analysis, it was assumed that the (certainly existing) customer demand
at this time of the day can be mostly met by PV. Further, in the mornings, generators are turned off completely and much quicker than
visible from the load curve. The seemingly long periods and remaining load are owed to the fact that the shut-down times can vary, and
that the curve presents a yearly average.
18
Basse
Santa Su costs for fuel delivery in Gambia.
Basse is the furthest grid from the coast so also has the highest
transportation
17
26
0.200
0.4
0.400
16
Load
1.2
1.0
In 2012, total electricity generation was around

0.6
4,800 MWh, consuming about 1.3 million litres
0.4
of diesel fuel at a cost of 1.10 USD per litre. The
0.2
HOMER analysis shows that hybridising the plant
0.0
with 1.3 MW of PV could allow the diesel generators to be turned off forHours
around 6 hours per day.
Assuming that afternoon load shedding could be
avoided, there could be fuel savings of more than
500,000 litres per year, with annual cost savings of

installed capacity
1.4
Fig. 1
USD/kWh
Basse Santa Su is located 375km east of Banjul,

in the Upper River Region of Gambia the least
developed administrative area of the country. The
Basse region has the second-largest of the six regional diesel-powered mini-grids in the country.
The power plant is operated by the National Water
and Electricity Company (NAWEC), a state-owned
company responsible for generation, transmission
and distribution of electricity.
well over USD 0.5 million. Solar cells, on average,

would produce about 37 percent of Basses electricity requirements.

(MW)
00
:3
01 0
:
02 30
:
03 30
:
04 30
:
05 30
:
Load Shedding
06 30
:
07 30
:
08 30
:
09 30
:
10 30
:3
11 0
:
12 30
:
13 30
:
14 30
:
15 30
:
16 30
:
17 30
:
18 30
:
19 30
:
20 30
:
21 30
:
22 30
:
23 30
:3
0
2.7. BASSE SANTA SU GAMBIA
Di
SELECTED SITES
If the project had to be financed on private sector

terms (assumed 9.6 percent initial WACC), at reference diesel prices, hybridisation raises the LCOE
from 37.9 to 38.2 USDc/kWh (including costs of
carbon) and from 35.1 to 36.5 USDc/kWh (without
carbon costs), respectively raising costs by 1 to 4
percent. Under a scenario of higher diesel prices,
the picture looks different as the LCOE including
carbon costs would raise to 49.5 USDc/kWh for the
diesel grid but just to 44.9 USDc/kWh for a hybrid
grid (9 percent cost savings; without carbon costs,
the savings would still be 7 percent).
27
H Y B R I D I S AT I O N : P O T E N T I A L A N D B E N E F I T S
3. HYBRIDISATION: POTENTIAL AND

BENEFITS
The potential to replace parts of the diesel with PV
is mainly determined by solar irradiance, demand
(and how these two overlap), design and costs
of the hybrid system, and cost savings that result
from reduced diesel consumption. Diesel savings
is probably the most tangible and substantial argument for utilities that consider a hybrid investment. High diesel costs often make the operation
of a power plant uneconomic, and jeopardise the
security of electricity supply.
during
the day, e.g. fluctuating demand for business activities, cooling, and other inconstant energy needs;
for
individual days, e.g. less economic activities

on the weekend; fluctuating household demand
due to travel (work, family visits) and other inconstant energy needs;
between
months, due to changing temperatures

or tourist season;
This section presents for each of the selected sites:

according
The
current electricity demand and supply,

showing that the actual customer demand is not
always met by the power generated;
to load management, e.g. load shedding at certain days or times of the day to save
fuel costs;
due
The
solar irradiance and seasonal climate conditions as key determinants for the expected output and sizing of a PV-hybrid system;
The
PV generation potential and PV/diesel electricity mix based on the HOMER simulation, as
well as possible diesel savings and number of
hours when there is no diesel power required.
3.1. STATUS QUO: CURRENT

DEMAND AND SUPPLY
Figure 19 presents the current load profiles (i.e.
the variation of power demand over one day,
yearly averages) of the existing diesel generators
at the selected sites.19 The average demand over
a longer term is one of the most important input
factors for the HOMER tool to design an appropriate hybrid system, i.e. to determine the size of
the PV component. It goes without saying that, in
general, the actual load can differ:
19
28
to technical problems, power cuts, and grid

instability.
There are two main drivers for the shape of the

load curves: a) the level of economic activity and,
consequently, the mix of customers (residential vs.
commercial, industrial, possible anchor customers);
b) the (non-) availability and affordability of diesel
fuel that can lead to power shortages and load
shedding. There is not a standard load pattern for
residential, commercial or industrial customers.
However, typically residential load patterns reach
their peak at the evening hours and have a relatively low load factor (ratio between average and
peak power demand) throughout the day. On the
other hand, commercial loads tend to be higher
during daytime (08:00 to 18:00). Typical industrial
loads tend to run continuously (depending on the
local working time), have a higher average demand and, consequently, a higher load factor. An
industrial load pattern follows the economic activity, and shows a peak and relatively stable demand
during the day.
Load profiles were available for the following periods: Nusa Penida (January December 2012), Hola (January November 2013), Basse
Santa Su (January December 2012), Puerto Leguizamo (April 2011 April 2014), Las Terrenas (January 2011 December 2013), Busuanga
(January December 2013), Bequia (January 2011 December 2013). The analysis of average loads was done based on output data of the
diesel generation assets. Only for selected sites was it possible to cross-check the output data with actually billed electricity. Assuming some
technical losses as well as overproduction, the actual LCOE per kWh supplied would come in at a higher level. This would, however, not
distort this relative analysis. In the following it is assumed that the output is equal to the demand.
1.61.6
1.41.4
1.21.2
1.01.0
1.6
0.80.8
1.4
0.60.6
1.2
0.40.4
1.0
0.20.2
0.8
0.00.0
0.6
0.4
0.2
0.0
00
0010:00
:0
0021:000
:0
0032:000
:0
0043:000
:0
0054:000
:0
0065:000
:0
0076:000
:0
0087:000
008::0000
9:0
1009:000
110::0000
1:0
1121:000
:
1132:0000
:0
1143:000
:0
1154:000
:0
1165:000
:0
1176:000
:0
1187:000
:0
1198:000
:0
2109:000
:0
2210:000
:0
2221:000
:0
2232:000
23::0000
:0
0
0:
0
10::00
00
21::00
00
32::00
00
43::00
00
54::00
00
65::00
00
76::00
00
87::00
00
98::00
190:000
110:0000
1:0
1121:000
:
1132:0000
:0
1143:000
:0
1154:000
:0
1165:000
:0
1176:000
:0
1187:000
:0
1198:000
:0
2109:000
:0
2210:000
:0
2221:000
:0
2232:000
23::0000
:0
0
3.03.0
2.52.5
2.02.0
3.0
1.51.5
2.5
1.01.0
2.0
0.50.5
1.5
0.00.0
1.0
00
Fig.
Fig.
1919
BB
Fig. 19 B
Load (average, min, max)
BEQUIADaily
St.
Vincent and the Grenadines
DailyLoad
Load(average,
(average,min,
min,max)
max)
Daily
Daily
Load
(average,
max,
min)
Daily
Load
(average,
max,
min)
Daily Load (average, max, min)
0.5
0.0
3.5
3.0
2.5
2.0
3.5
3.5
1.5
3.0
3.0
1.0
2.5
2.5
0.5
2.0
2.0
0.0
1.5
1.5
1.0
1.0
0.5
0.5
0.0
0.0
MW
0.5
0.5
0:
00
1::000
10
2::000
20
3::000
30
4::000
40
5::000
50
6::000
60
7::000
70
8::000
80
9::000
190:000
10:00
11 :00
1121::000
1 0
132::0000
1
143::0000
1
154::0000
1
165::0000
1
176::0000
1
187::0000
1
198::0000
1
209::0000
2
210::0000
2
221::0000
2
232::0000
23:0 0
:00
0
MW
MW
MW
DailyLoad
Load(average,
(average,min,
min,max)
max)
Daily
MW
0:
0
1: 0
00: 0
2: 00
10
3::000
20
4::000
30
5::000
40
6::000
50
7::000
60
8::000
70
9::000
1080:00
: 0
119:000
10:0 0
12 :00
1: 0
1310:00
1: 0
1420:00
1: 0
1530:00
1: 0
1640:00
1: 0
1750:00
1: 0
1860:00
1: 0
1970:00
1: 0
2080:00
1: 0
2190:00
2: 0
2200:00
2: 0
2310:00
22:0 0
:0
23 00
:0
0
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
MW
MW
MW
1.5
2.5 1.5
2.5
1
212
0.5
0.5
1.5
1.5
0
101
(average,
DailyDaily
LoadLoad
(average,
min,min,
max)max)
0:
00
1::000
10
2::000
20
3::000
30
4::000
40
5::000
50
6::000
60
7::000
70
8::000
80
9::000
190:000
1:0
110:000
1
121::0000
1:
132:0000
1:
143:0000
1:
154:0000
1:
165:0000
1:
176:0000
1:
187:0000
1:
198:0000
1:
209:0000
2:
210:0000
2:
221:0000
2:
232:0000
23:0 0
:00
0
1.8
1.6
1.4
1.2
1.8
1.8
1.0
1.6
1.6
0.8
1.4
1.4
0.6
1.2
1.2
0.4
1.0
1.0
0.2
0.8
0.8
0.0
0.6
0.6
0.4
0.4
0.2
0.2
0.0
0.0
MW
MW
2.5 2.5
0.40.4
0.6
0.30.3
0.5
0.20.2
0.4
0.10.1
0.3
0 0
0.2
00
0010:00
:
0021:0000
:
0032:0000
:
0043:0000
:
0054:0000
:
0065:0000
:
0076:0000
:
0087:0000
:
0098:0000
:
1009:0000
110::0000
1:
1121:0000
:
1132:0000
:
1143:0000
:
1154:0000
:
1165:0000
:
1176:0000
:
1187:0000
:
1198:0000
:
2109:0000
:
2210:0000
:
2221:0000
:
2232:0000
:
23:0000
:0
0
00
01:00
0
020:0:00
0
031:0:000
0
042:0:000
0
053:0:000
0
064:0:000
0
075:0:000
0
086:0:000
0
097:0:000
0
108:0:000
0
119:0:000
1
120::0000
1131:0:000
1
142:0:000
1
153:0:000
1
164:0:000
1
175:0:000
1
186:0:000
1
197:0:000
1
208:0:000
1
219:0:000
2
220:0:000
2
231:0:000
22:0 0
0
23:00
:0
0
00
01:00
0
020:0:00
0
031:0:000
0
042:0:000
0
053:0:000
0
064:0:000
0
075:0:000
0
086:0:000
0
097:0:000
0
108:0:000
0
119:0:000
1
120:0:000
1
131:0:000
1
142:0:000
1
153:0:000
1
164:0:000
1
175:0:000
1
186:0:000
1
197:0:000
1
208:0:000
1
219:0:000
2
220:0:000
2
231:0:000
22:0 0
0
23:00
:0
0
MW
MW
MW
7.0
6.0
5.0
7.0
4.0
7.0
6.0
3.0
6.0
5.0
2.0
5.0
4.0
1.0
4.0
3.0
0.0
3.0
2.0
2.0
1.0
1.0
0.0
0.0
0:
0
1: 0
00
2::000
10
3::000
20
4::000
30
5::000
40
6::000
50
7::000
60
8::000
70
9::000
1080:00
0
119::000
1
120::0000
1131:0: 00
1 0
142:0:000
1
153:0:000
1
164:0:000
1
175:0:000
1
186:0:000
1
197:0:000
1
208:0:000
1
219:0:000
2
220:0:000
2
231:0:000
22:0 0
0
23:00
:0
0
Fig.1919AA
Fig.
MW
MW
00
0
010::000
0
021::0000
0
032::0000
0
043::0000
0
054::0000
0
065::0000
0
076::0000
0
087::0000
0
098::0000
0
109::0000
1
110::0000
1121::000
1 0
132::0000
1
143::0000
1
154::0000
1
165::0000
1
176::0000
1
187::0000
1
198::0000
1
209::0000
2
210::0000
2
221::0000
2
232::0000
23:0 0
:00
0
MW
00
0
010::000
0
021::0000
0
032::0000
0
043::0000
0
054::0000
0
065::0000
0
076::0000
0
087::0000
0
098::0000
0
109::0000
1
110::0000
1121::0000
1
132::0000
1
143::0000
1
154::0000
1
165::0000
1
176::0000
1
187::0000
1
198::0000
1
209::0000
2
210::0000
2
221::0000
2
232::0000
23:0 0
:00
0
Fig.Fig.
19 A19 A
MW
MW
MW
MW
The load profiles for the selected sites vary in

terms of demand (average, min, max), fluctuation,
and shape. The Las Terrenas power station, for instance, has an average demand of 2.9 MW, compared to 0.3 MW in Hola. However, each site shows
00
01:00
02:00
03:00
04:00
05:00
06:00
07:00
08:00
09:00
10:00
11:00
12 :00
13:00
14:00
15:00
16:00
17:00
18:00
19:00
20:00
21:00
22:00
23:00
:0
0
0:
0
1: 0
0
2: 0
0
3: 0
0
4: 0
0
5: 0
0
6: 0
0
7: 0
0
8: 0
0
9: 0
10 00
11:00
12 :00
13:00
14:00
15:00
16:00
17:00
18:00
19:00
20:00
21:00
22:00
23:00
:0
0
MW
MW
2
00
01:00
02:00
03:00
04:00
05:00
06:00
07:00
08:00
09:00
10:00
11:00
12 :00
13:00
14:00
15:00
16:00
17:00
18:00
19:00
20:00
21:00
22:00
23:00
:0
0
MW
MW
MW
basic characteristics of a residential load pattern.

Peak demand occurs in the early evening hours
between 18:00 to 20:00, which means during the
very low irradiance (or no sun) hours.
Figure 19: Load profiles (daily average, min, max)
PUERTO LEGUIZAMO Colombia

LAS TERRENAS Dominican Republic
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
Daily Load (average, min, max)
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
BUSUANGA Philippines
0.60.6
0.50.5
Load(average,
DailyDaily
Load(average,
max,max,
min)min)
DailyLoad(average,
Load(average,max,
max,min)
min)
Daily
Daily Load(average, max, min)

NUSA PENIDA
Indonesia
DailyLoad(average,
Load(average,max,
max,min)
min)
Daily
HOLA Kenya
Daily
Load
(average,
min,
max)
Daily
Load
(average,
min,
max)
0.1
Daily
Load
(average,
min,
max)
Daily
Load
(average,
max)
BASSE
SANTA
SU min,
Gambia
29
In Basse Santa Su, the limited availability and affordability of fuel requires significant load shedding. The plant normally operates for only 9 to
12 hours a day; diesel generators are shut down
for several hours in the early mornings and late
afternoons.20 The afternoon load shedding is not
shown in the curve though since, for this analysis,
it was assumed that the (certainly existing) customer demand at this time of the day can be met
by PV.21 Furthermore, the actual demand (average and peak) is assumed to be much higher than
shown in the graph; it is suppressed though due
to the limited dependable generation capacity of
1.3 MW.
can be more accidental or sporadic instances that

determine the demand like temporarily broken
household appliances or travel.
Figure 20: Daily average load variation per month
Fig. 20
NUSA PENIDA Indonesia

3.0
2.5
2.0
1.5
1.0
0.5
0.0
00
01:30
02:30
03:30
04:30
05:30
06:30
07:30
08:30
09:30
10:30
11:30
12 :30
13:30
14:30
15:30
16:30
17:30
18:30
19:30
20:30
21:30
22:30
23:30
:3
0
Monthly Average Load

(MW)
Despite this common (residential) trend, some

sites also have noteworthy demand from other
customers. In Puerto Leguizamo, a significant
share of electricity is consumed from the commercial and public sectors (22 percent) as well as the
Navy (42 percent). Compared to the other sites,
there is relatively high demand during daytime
(1.53 MW in the afternoon, compared to 1.67 MW
in the evening). The load profiles for Las Terrenas
and Bequia, both famous tourist destinations, also
show relatively high demand in the morning and
afternoon compared to Nusa Penida and Hola,
where basically all demand comes from private
households, and where the evening peak is much
more distinct.
Jan
Aug
Feb
Sep
Mar
Oct
Apr
Nov
May
Dec
Jun
Avg.
Jul
Hours
On the contrary, more predictable factors like

seasonality do not seem to play a significant role.
Looking at Nusa Penida, there is hardly any tourism (except few guest houses), and temperatures
do not change enough throughout the year to argue that people need different levels of heating
or cooling. Solar radiation differs greatly between
November and December. The power production
in these two months was almost equal though.
The pattern of the load curves varies very little between days and months. In other words, the shape
of the curves over a 24-hour interval usually looks
very similar. What differs between months though
is the total demand (at all sites). For example, the
load profile of Nusa Penida (figure 20) shows the
monthly variation of total demand, while the pattern remains unchanged.
In any case, most people at the target sites do

not have heating or air conditioning. The range
of household appliances is rather limited and so
is the load per household. In Nusa Penida, most
households pay the lowest electricity tariff, which
in turn puts a cap of 450W on their power demand. This cap does not appear to be reached by
most households who only use some lighting (e.g.
5 x 10 W), a fan (15 W), a small TV (50 W) and
maybe a small water pump (50 W).
It is difficult to determine the reasons and influencing factors behind this monthly variation. It can be
assumed that it is mostly load management on the
part of the utility (e.g. availability and affordability of diesel fuel), power failures, and fluctuating
household demand that more or less randomly
determine the load. Household demand does not
necessarily fluctuate according to seasonality. It
Load management, i.e. the shift of loads from the

evening peak to times with high solar radiation
and, consequently, lower generation costs, can be
a driver for the economic viability of a hybridisation. During this assessment, however, no obvious
loads were found that have significant size and
that could be actively managed at a reasonable
cost (e.g. water pumping stations with storage).
20
Generators are turned off completely and much quicker than visible from the load curve. The seemingly long periods and remaining load
are owed to the fact that the shut-down times can vary, and that the curve presents a yearly average only.
21
Hence, contrary to the other sites, the case of Basse Santa Su is not a mere status quo analysis, but goes one step further in order to
facilitate the analysis of PV generation potential in section 3.3.
30
Demand profiles were therefore not adjusted in

this analysis (expect for Basse Santa Su where the
afternoon load shedding was avoided).
3.2. SOLAR RADIATION AND

SEASONALITY
The actual PV generation potential mainly depends
on the solar radiation at the location and other atmospheric conditions (e.g. ambient temperature,
dust, shading, etc.) throughout the seasons. Solar
radiation varies from one place to another and
changes throughout the year. Although all target
countries are located in the tropical climate zone,
there are varieties in terms of precipitation22 and
sun hours.
Figure 2123 shows the global radiation levels, with
the dark red areas highlighting the regions with
the highest radiation. Among the selected sites,

Bequia receives the highest annual solar radiation
(2,102 kWh/m2/year). Puerto Leguizamo, despite
receiving the lowest annual solar radiation (1,477
kWh/m2/year), is still favourable for PV power production.
Daily average solar radiation differs between
months; the month-wise daily average global horizontal solar radiation (kWh/m2/day) at each site is
as follows: Puerto Leguizamo: 3.3 to 4.8 (4.1 average); Las Terrenas: 3.0 to 5.4 (4.3 average); Bequia:
4.9 to 6.3 (5.8 average); Nusa Penida: 4.4 to 6.5 (5.6
average); Busuanga: 4.3 to 6.8 (5.4 average); Hola:
4.9 to 5.9 (5.5 average); Basse Santa Su: 4.8 to 6.6
(5.6 average). The following charts show the seasonal variation of daily average solar radiation24
at the selected sites for each month of the year.
HOMER considers these seasonalities when analysing the most appropriate technical layout.
Fig. 21
Figure 21: Global horizontal radiation map
Bequia
ST. VINCENT
Las Terrenas
DOMINICAN REPUBLIC
Yearly sum
in kWh/m2
2500
2000
1500
1000
500
Puerto Leguizamo
COLOMBIA
Basse Santa Su
GAMBIA
Busuanga
PHILIPPINES
Hola
KENYA
Nusa Penida
INDONESIA
22
This includes rain, snow, dew, etc., formed by condensation of water vapour in the atmosphere.
Source: http://www.creativhandz.co.za/images/solar_radiation.jpg
24
Data for solar radiation at the target sites is taken from the HOMER tool, which is based on data from the National Renewable Energy
Laboratory (NREL) of the United States Department of Energy. Actual PV electricity production data is available for Hola where a 60 kW
system is already installed by the utility. In Hola, the actual PV generation sometimes varies from the expected output due to technical
problems with the inverter. A limited focus on maintenance, cleaning of the modules, and monitoring could be additional reasons for the
under performance. In Bequia, a total of 175 kW PV systems exist which are all privately owned and distributed all over the island. These PV
systems are mainly used for self-consumption, and excess energy is fed into the grid by the user.
23
31
Figure 22: Global horizontal radiation at selected sites
LEGUIZAMO Colombia
7.0
7.0
7.0
6.0
6.0
6.0
5.0
5.0
5.0
4.0
4.0
4.0
3.0
3.0
3.0
2.0
2.0
2.0
1.0
1.0
1.0
0.0
0.0 Jan Feb Mar
0.0
Mar Apr
Apr May
May Jun
Jun Jul
Jul Aug
Aug Sep
Sep Oct
Oct Nov
Nov Dec
Dec
Jan Feb
Feb Mar
Mar Apr
Apr May
May Jun
Jun Jul
Jul Aug
Aug Sep
Sep Oct
Oct Nov
Nov Dec
Dec
Jan
Global
Horizontal
Global
Horizontal
Global
Horizontal
Solar
Radiation
Solar
Radiation
Solar
Radiation
2 2
(kWh/m
2/day)
/day)
(kWh/m
/day)
(kWh/m
Global
Horizontal
Global
Horizontal
Solar
Radiation
Solar
Radiation
2 2
/day)
(kWh/m
/day)
(kWh/m
Fig. 22 A
Fig. 22 A
PUERTO
7.0
7.0
7.0
7.0
6.0
6.0
6.0
6.0
5.0
5.0
5.0
5.0
4.0
4.0
4.0
4.0
3.0
3.0
3.0
3.0
2.0
2.0
2.0
2.0
1.0
1.0
1.0
1.0
0.0
0.0
0.0 Jan
0.0
Jan Feb
Feb Mar
Mar Apr
Apr May
May Jun
Jun Jul
Jul Aug
AugSep
Sep Oct
Oct Nov
NovDec
Dec
Jan Feb
Feb Mar
Mar Apr
Apr May
May Jun
Jun Jul
Jul Aug
Aug Sep
Sep Oct
Oct Nov
Nov Dec
Dec
Jan
7.0
7.0
7.0
6.0
6.0
6.0
5.0
5.0
5.0
4.0
4.0
4.0
4.0
3.0
3.0
3.0
3.0
2.0
2.0
2.0
2.0
1.0
1.0
1.0
1.0
0.0
0.0
0.0 Jan
0.0
Jan Feb
Feb Mar
Mar Apr
Apr May
May Jun
Jun Jul
Jul Aug
Aug Sep
Sep Oct
Oct Nov
Nov Dec
Dec
Jan Feb
Feb Mar
Mar Apr
Apr May
May Jun
Jun Jul
Jul Aug
Aug Sep
Sep Oct
Oct Nov
Nov Dec
Dec
Jan
7.0
7.0
6.0
6.0
5.0
5.0
4.0
4.0
3.0
3.0
2.0
2.0
1.0
1.0
0.0
0.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Global
Horizontal
Global
Horizontal
Solar
Radiation
Solar
Radiation
2 2/day)
(kWh/m
/day)
(kWh/m
BASSE SANTA SU Gambia
32
7.0
7.0
6.0
6.0
5.0
5.0
4.0
4.0
3.0
3.0
2.0
2.0
1.0
1.0
0.0
0.0
7.0
7.0
7.0
7.0
6.0
6.0
6.0
6.0
5.0
5.0
5.0
5.0
4.0
4.0
4.0
4.0
3.0
3.0
3.0
3.0
2.0
2.0
2.0
2.0
1.0
1.0
1.0
1.0
0.0
0.0
0.0 Jan
0.0
Jan Feb
Feb Mar
Mar Apr
Apr May
May Jun
Jun Jul
Jul Aug
AugSep
Sep Oct
Oct Nov
NovDec
Dec
Jan Feb
Feb Mar
Mar Apr
Apr May
May Jun
Jun Jul
Jul Aug
Aug Sep
Sep Oct
Oct Nov
Nov Dec
Dec
Jan
Philippines
HOLA Kenya
Global
Horizontal
Global
Horizontal
Solar
Radiation
Solar
Radiation
2 2/day)
(kWh/m
/day)
(kWh/m
Global
Horizontal
Global
Horizontal
Solar
Radiation
Solar
Radiation
2 2/day)
(kWh/m
/day)
(kWh/m
Fig. 22 B
Fig. 22 BUSUANGA
B

Global
Horizontal
Global
Horizontal
Global
Horizontal
Solar
Radiation
Solar
Radiation
Solar
Radiation
2 22/day)
(kWh/m
/day)
(kWh/m
/day)
(kWh/m
Global
Horizontal
Global
Horizontal
Global
Horizontal
Solar
Radiation
Solar
Radiation
Solar
Radiation
2 22
/day)
(kWh/m
(kWh/m
/day)
/day)
(kWh/m
BEQUIA St. Vincent and the Grenadines
7.0
7.0
6.0
6.0
5.0
5.0
4.0
4.0
3.0
3.0
2.0
2.0
1.0
1.0
0.0
0.0
3.3. DEMAND AND

PV-GENERATION POTENTIAL
smaller-size solution) can result in lower average

electricity generation costs.
The PV generation potential and PV/diesel electricity mix in this section were calculated over a
project lifetime of 20 years, without consideration
of future demand growth. It is a mere status quo
analysis, in line with the actual methodology of
the HOMER tool that designs the hybrid system
according to the present load profile and other
current conditions. Demand growth is discussed
in sections 3.4 (assumptions and technical options)
and 4.4.6 (financial sensitivity analysis).
Given a suitable capacity and efficiency of PV installations at the different sites, the demand could
be fully met with PV power for around four to six
hours per day. In terms of energy, PV power meets
approx. 30 to 40 percent of the total energy demand. It has to be noted that the load pattern of
the sites are mainly residential types, where peak
demand occurs in the evening hours (or at the
low/no sun hours), which means diesel generators shall fully operate to meet the evening peak
demand. The benefits of the analysed technology
are higher the more the blue area and the green
curve overlap. All load occurring outside the sunshine hours or possibly exceeding the amount of
electricity produced by the PV system needs to be
covered by diesel generators.27
The study assesses the viability of a 100 percent

peak PV penetration technology. Depending on
power demand, the PV component is sized in a
way that the diesel generator can be switched off
during peak solar availability. Figure 23 presents
the current load profiles25 of the existing diesel
generators (blue area), and the PV generation
potential (green curve) at the selected sites (per
day, yearly average). Both were modelled with the
HOMER tool.
The blue area under the green curve shows the
amount of PV electricity that can actually be supplied to meet the given demand (again, all values
have to be understood as yearly averages). The PV
capacity has to be sufficiently large to ensure that
during peak sun hours solar power can fully
replace diesel power.
Theoretically, there can be excess electricity from
PV generation (white area under the green curve)
which can neither be utilised nor stored.26 However, in reality, this excess is usually quite limited.
PV modules degrade over time, and there are wiring and electrical losses. Also, the system needs
to cater to seasonal fluctuations of PV radiation,
leading to a certain amount of excess electricity in
times of higher radiation, while in times of lower
radiation the excess electricity will be lower. Furthermore, even a presumably over-sized PV solution can be cost-effective; additional diesel savings
in the mornings and afternoons (compared to a
At all selected sites there is a mismatch between

maximum resource availability and maximum demand, leading to lower than expected benefits for
the hybrid solution. This would be different if industrial sites would have been analysed. Assuming
that the major part of the load cannot be shifted
(i.e. the evening peak will always be in the evening, since electricity for lighting is required when
the sun is not shining), that mismatch represents a
major burden for the attractiveness of the technical solution described in this study, since the system is still dominated by the share of the diesel
electricity.
In Nusa Penida, for example, a PV system of 3 MW
capacity could supply approx. 12.7 MWh per day
(blue area under green curve) enough electricity
to shut down the diesel generators from roughly
9:00 to 15:00 During these 6 hours, the PV produces 12.7 MWh, compared to 10.7 MWh demand
(18.0 percent excess). The average daily PV generation is 1.3 MW (peak at 2.1 MW, whereas only for
a few minutes on certain days, depending on the
irradiance, the system can generate up to almost
the installed capacity of 3 MW).28 Nusa Penida
has a total electricity demand of 14,692 MWh per
25
A special case in Basse Santa Su, where power demand during the afternoon load shedding time was modelled as a result of the availability of
PV electricity. Load shedding in the early mornings was kept in the analysis due to non-availability of PV electricity in the early hours of the day.
26
With the considered technology, the installed batteries do not extend the period of availability of PV-generated electricity; they only
bridge short-term reduction in PV production (up to 15 minutes), as for instance driven by cloud movements.
27
Alternatively, more storage capacity could be added to match the peak PV output with the peak load. However, given the high prices for
batteries, this aspect was not included in the analysis.
28
Yet, the 3 MW PV capacity was chosen since i) it can adequately meet the peak load on the days and hours of the highest demand (the peak
load between the sun hours of 06:30 to 18:30 varies from 1.76 MW to 2.47 MW), and ii) the average electricity generations costs of the
hybrid system are lowest at this capacity.
33
Daily Average Daily

Load Average
vs. PV Output
Load vs. PV Output
Daily Average Daily
Load Average
vs. PV Output
Load vs. PV Output
(MW)
(MW)
(MW)
(MW)
Daily0 Average Load vs. PV Output
Daily0 Average Load vs. PV Output00
0
00
:
:3
0:
(MW)
(MW)
:
3
01 30
00 01: 0
01 30
:
00 01: 0
:3 0 30
:
02 30
:3 0 30
0
2
0
02 30
:
:3
1:
01 0 2:
:
3
03 30
:
02 30 03: 0
03 30
:3
02 30 03: 0
:3 0 30
:3
0
3
0
:
4:
03 0 4:
04 0
03 30 04: 0
3
:
:
30
05 30
:
04 30 05: 0
05 30
:3
04 30 05: Load
:3 0 30
:3
Shedding
Load Shedding
0
3
0
:3 0 0
0
6
6
0
06 0
0
:
:3
5:
6:
05
:
3
07 30
:
Load Shedding
07 30
06 30 07: 0
:
06 30 07: 0
:
:3 0 30
08 30
:3 0 30
0
08 30
8
0
:
:3
7:
07 0 8:
:
3
09 30
:
09 30
08 30 09: 0
:
08 30 09: 0
:
:3 1 30
10 30
:3 1 30
0
10 30
0
0
:3
:3
09 0 0:
9:
:3
3
11 0
:
10 30 11: 0
11 0
10 30 11: 0
:3
:3 1 30
:3
3
0
1
:
3
12 0
2:
11 0 2:
11 0 12: 0
3
:
:
3
13 30
:
13 30
12 30 13: 0
12 30 13: 0
:3
:3
:3 1 30
3
0
1
:3 1 0
0
14 0
4
4
1
0
4:
13
:
:3
3:
:
3
15 30
:
15 30
14 30 15: 0
14 30 15: 0
:
:
:3 1 30
16 30
:3 1 30
0
16 30
6
1
15 0 6:
:
:3
5:
:
3
17 30
:
17 30
16 30 17: 0
16 30 17: 0
:
:
:3 1 30
18 30
:3 1 30
0
18 30
8:
17
17 0 8:
:
3
:
:
3
19 30
:
19 30
18 30 19: 0
18 30 19: 0
:3
:3
:3 2 30
3
0
2
:
20 0
0:
19 0 0:
19 30 20: 0
3
:
:
3
21 30
:
21 30
20 30 21: 0
20 30 21: 0
:3
3
:3
:
3
0
2
:3 2 0
22 0
2:
21 30 22: 0
0
2
2
:
:3
1:
:3 2 30
23 30
0
3
2
23 30
0
3
2
22 0 3:
:3
:3
2:
:3
30
0
0
:
0
23 30
23 30
:3
:3
0
0
Daily Average Daily
Load Average
vs. PV Output
Load vs. PV Output
(MW)
(MW)
00
00
(MW)
:
:3
01 30
00 01: 0
:3
:
30 02 30
02 0
0
:
:3
1:
03 30
02 30 03: 0
:
:3 0 30
04 30
03 0 4:
:
3
:
05 30
04 30 05: 0
:
:3 0 30
06 30
05 0 6:
:
3
:
07 30
06 30 07: 0
:
:3 0 30
08 30
0
8
0
:
:3
7:
09 30
08 30 09: 0
:
:3 1 30
10 30
0
0
0
:3
:3
9:
11 0
10 30 11: 0
:
:3 1 30
12 30
0
2
11
:
:3
:
13 30
12 30 13: 0
:
:3 1 30
14 30
13 0 4:
:
3
:
15 30
14 30 15: 0
:
3
:
16 30
15 30 16: 0
:3
:3 1 30
17 0
0
7
1
:
:3
6:
18 30
17 30 18: 0
:
:3 1 30
19 30
0
9
1
:
:3
8:
20 30
19 30 20: 0
:
:3 2 30
21 30
0
1
2
:
:3
0:
22 30
21 30 22: 0
:
:3 2 30
23 30
22 0 3:
:3
30
:
0
23 30
:3
0
Load vs. PV Output

Load vs. PV Output
Daily AverageDaily
LoadAverage
vs. PV Output
Daily AverageDaily
LoadAverage
vs. PV Output
(MW)
(MW)
(MW)
(MW)
Daily
Average
Load vs. PV Output
Daily
Average
Load vs. PV Output
Daily
Average
Load
vs.
PV
Output
Average
Load
vs.
PV
Output
0
0Daily
0
0:
:3
(MW)
(MW)
0(MW)
00
0
0(MW)
0:
0 30
:
00 1:3
001:3
01 30
01 30
0:230 0
02:3 0
0
00 :3
01 :3
00: :30
01 :30
0: 0
0: 0
0: 0
01 23:03
012:330
02 33:03
023:330
0:33 0
03:3 0
:
0
0
:
0
0
3
0
02 :30
20: :030
03 4:03
034:330
0: 0
03 43:03
0:530 0
05:3 0
034:330
0
0
04 :3
0: 0
0: 0
4: :30
04 53:03
0
045:330
0: 0
05 63:03
056:330
0: 0
0: 0
05 63:03
056:330
0:730 0
07:3 0
06 :3
0: 0
06 :30
0: 0
06 73:03
067:330
0:830 0
08:3 0
07 :3
0: 0
0: 0
07 :30
07 83:03
078:330
0:930 0
09:3 0
08 :3
0: 0
0: 0
08 :30
08 93:03
089:330
1:030 0
10:3 0
1: 0
09 :3
10:3 0
09 :30
09 03:03
0
0
:
:
0
0
:
3
3
1
1
1: 0
191:3 0
10 1:0
101:330
10 13:03
3
0
1
:
:
0
13
1 :3 0
1:23 0
102:330
112:03
112:30
1
0
1
:
11: :030
1: 0
1:0
11:30
12 33:03
123:330
12 33:03
123:330
1:430 0
14:3 0
1: 0
0
1
:
13 :3
13 :30
13 43:03
134:330
1: 0
1: 0
1:53 0
15:3 0
14 53:03
145:330
1
0
1
:
41: :030
1: 0
1: 0
146:330
63
15 63:03
1
156:330
0
1
:
51: :030
1: 0
1: 0
15: 30
16 73:03
16 73:03
167:330
167:330
1: 0
1: 0
1: 0
1: 0
17 83:03
17 83:03
178:330
178:330
1:93 0
19:3 0
1:930 0
19:3 0
1
1
0
0
1
18 :3
:
82: :030
8: :30
280:330
2030
20:3 0
03
1
1
0
19 :3
19 :30
92: :030
9: :30
2: 0
2
2: 0
20 13:03
201:330
20 13:03
201:330
:
2 0
2: 0
2: 0
2: 0
21 23:03
212:330
21 23:03
212:330
2:33 0
23:3 0
2:330 0
23:3 0
2
22 :30
22 :3
2: :030
22 :30
: 0
: 0
: 0
23 30
23 30
23 30
23 30
:3
:3
:3
:3 AverageDaily
0
0 AverageDaily
Load vs. PV Output
Daily
Load
vs. PV Output
0 Average
Average
Load vs. PV Output
Daily
Load
vs. PV Output
0
(MW)
(MW)
(MW)
(MW)
Daily
Average
Load vs. PV Output
Daily
Average
Load
vs. PV Output
Average
Load
vs.
PV
Output
0
0
0Daily
0
Daily
Average
Load
vs.
PV
Output
0:
0:
0:
0:
30
(MW)
(MW)
(MW)
0(MW)
0 30
0 30
0 30
00 1:3
00 1:3
001:3
001:3
0: 0
0: 0
0: 0
0: 0
01 23:03
01 23:03
012:330
012:330
0: 0
0: 0
0: 0
0: 0
02 33:03
02 33:03
023:330
023:330
0:430 0
0:43 0
04:3 0
04:3 0
0
0
0
0
03 :3
03 :3
3: :30
3: :030
0530
053
05:3 0
05:3 0
0
0
04 :30
04 :30
4: :30
4: :030
0
0
0: 0
0: 0
05 63:03
05 63:03
056:330
056:330
0: 0
0: 0
0: 0
0: 0
06 73:03
06 73:03
067:330
067:330
0: 0
0: 0
0: 0
0: 0
07 83:03
07 83:03
078:330
078:330
0: 0
0: 0
0: 0
0: 0
08 93:03
08 93:03
089:330
089:330
1: 0
1: 0
1: 0
1: 0
09 03:03
09 03:03
090:330
090:330
1:130 0
1:3 0
11:3 0
11:3 0
1
1
0
0
10 :3
10 :3
0: :3
0:1:03
1230 0
1230 0
12:3 0
12:3 0
1
1
11:30
11:30
1: :30
1: :30
1
1
1:0
1:0
12 33:03
12 33:03
123:330
123:330
0
1:430 0
:
1: 0
14:3 0
1
3
13 :3
13 43:03
13 :30
134:30
1: 0
1: 0
1: 0
1: 0
14 53:03
14 53:03
145:330
145:330
1: 0
1: 0
1: 0
1: 0
15 63:03
15 63:03
156:330
156:330
1: 0
1: 0
1: 0
1: 0
16 73:03
16 73:03
167:330
167:330
1:830 0
1:83 0
18:3 0
18:3 0
1
1
0
0
17 :3
17 :3
7: :30
7: :030
1930
193
19:3 0
19:3 0
1
1
18 :30
18 :30
8: :30
8: :030
2
2
2: 0
2: 0
19 03:03
19 03:03
190:330
190:330
2: 0
2: 0
2: 0
2: 0
20 13:03
20 13:03
201:330
201:330
2: 0
2: 0
2: 0
2: 0
21 23:03
21 23:03
212:330
212:330
2: 0
2: 0
2: 0
2: 0
22 33:03
22 33:03
223:330
223:330
: 0
: 0
: 0
: 0
23 30
23 30
23 30
23 30
:3
:3
:3
:3
0
0
0
0
Figure 23: Daily average load vs. possible PV output
Fig.Fig.
23 A
PUERTO
23 A
1.2 1.2
0.0 0.0
1.0 1.0
0.8 0.8
0.6
1.2 0.6
1.2
2.5
Fig.
2.523 Teil B
2.0
1.5 2.0
2.5 1.5
1.0
0.5
0.0
1.4
1.2 1.4
1.0 1.2
0.8
1.4
0.6
1.2
0.4
1.0
0.2
0.8
0.0
0.6
0.4
0.2
0.0
34
1.0
0.8
LEGUIZAMO Colombia
2.4 2.4
1.2
2.4 1.2
2.4
0.6 0.6

installed capacity
installed capacity
PV output
from from
1.5 MW
PV output
1.5 MW
installed
capacity
installed
capacity
0.2 0.2
BUSUANGA
Fig. 23 Teil
B
BASSE SANTA SUHours

Gambia
0.6
0.4
0.2
0.0
Hours
Hours
Hours
1.8 1.8
Fig. Fig.
23 A23 A

installed capacity
installed capacity
LoadLoad PV PV
PV output
from from
2.75 MW
PV output
2.75 MW
installed
capacity
installed
capacity
LoadLoad PV PV
0.6
1.8 0.6
1.8
0.0
1.2 0.0
1.2
Hours
Hours
LoadLoad PV PV
BEQUIA St. Vincent

and the Grenadines
Hours
Hours
LoadLoad PV PV
0.4 0.4
Hours
Hours
0.0 0.0
0.3 0.4
PV output from 3 MW
installed capacity
PV output from 3 MW
installed capacity
Load
PV output from 3 MW
installed capacity
Load
Load
Hours

installed capacity
installed capacity
Load

installed capacity
Load
PV
PV
PV
2.0 1.0
0.5
1.5 0.5
0.0
1.0 0.0
Hours
Load
PV
PV
4.2 4.2
3.6 3.6
3.0 3.0
2.4 2.4
4.2 4.2
1.8
1.8
3.6 3.6
1.2
1.2
3.0
3.0
0.6 0.6
2.4 2.4
0.0
0.0
1.8 1.8
1.2 1.2
0.6 0.6
0.0 0.0
0.1
0.0
2.5 2.5
1.5
3 1.53
0.4
1.0 0.4
1.0
1 2.5
2.5
1
0.2
0.8 0.2
0.8
0.5
2 0.52
0.0
0.6 0.0
0.6
0 1.5
1.5
0
0.5 0.5
Philippines
0.5
0.4 0.5
0.2
0.5 0.3

installed capacity
installed capacity
LoadLoad PV PV
PV output
from from
6.75 MW
PV output
6.75 MW
installed
capacity
installed
capacity
LoadLoad PV PV
Hours
Hours
Hours
PV output from
3 MW
PV output from 3 MW
installed capacity
installed capacity
Hours
Hours
NUSA PENIDA
Hours
Indonesia
PV output
from from
3 MW3 MW
PV output
installed
capacity
installed
capacity
Hours
Hours
Hours
Hours
0.1
0.4 0.2
0.0
0.3 0.1
0.2 0.0
Hours
Hours
PV
Hours
LoadLoad PV PV
LoadLoad PV PV
Hours
Hours
Hours
Hours
Fig. 23 Teil B
HOLA Kenya

installed capacity
installed capacity
Load

installed capacity
Load
Load
PV
PV
PV
year of which 4,649 MWh (32 percent) could be

provided by PV. Hence, hybridisation could lead to
yearly diesel savings of 1.2 million litres.
As mentioned in the status quo analysis (section
3.1), special case is Basse Santa Su, where the utility turns off the diesel generators for several hours
in the early mornings and late afternoons. PVelectricity could not only replace diesel-generated
electricity (5.9 MWh per day, blue area under the
green curve); the PV system could generate additional electricity in the late afternoon to increase
the total power output of the plant. Hence, for
this analysis, the PV system was sized larger in order to also meet the currently suppressed demand.
Furthermore, the historic load profile might not
necessarily be a good basis to assess the actual
demand and design of an appropriate PV system.
However, as mentioned above, the HOMER analysis and initial sizing of hybrid systems, respectively is generally based on historical data of diesel-generated electricity. In Basse Santa Su, power
demand during the afternoon load shedding time
was modelled as a result of the availability of PV
electricity.
Table 2: Energy demand, PV share, and possible savings of hybridisation
100% PV
penetration per day
(~hours)
Possible
diesel
savings
(litres/
year
Possible cost
savings30
31%
4
(9:30- 13:30)
1,114,775
(29%)
854,000 1,924,000
23.6
31%
3.5
(11:00-14:30)
2,584,002
(30%)
1678,000
3,780,000
7,554
7.0
34%
5
(9:30-14:30)
702,830
(32%)
461,000
1,040,000
6.1
(3.1/3.0)
14,693
12.7
32%
6
(9:00- 15:00)
1,239,320
(30%)
1,049,000
2,363,000
Busuanga
6.36
(3.36/3.0)
13,864
12.4
33%
5
(9:30-14:30)
1,224,073
(31%)
857,000
1,931,000
Hola
1.3
(0.8/0.5)
2,458
2.3
34%
5
(9:30-14:30)
274,101
(32%)
224,000
505,000
Basse
Santa Su
2.8
(1.5/1.3)
5,789
5.9
37%
6
(10:00-16:00)
542,388
(35%)
434,000 977,000
Total
generation
capacity29
(MW;
diesel/PV)
Total
energy
demand
(MWh/
year)
Avg. daily
PV supply
(MWh/
day)
PV share
of total
demand
Puerto
Leguizamo
6.95
(4.2/2.75)
11,810
10.0
Las Terrenas
16.25
(9.5/6.75)
27,703
Bequia
5.6
(4.1/1.5)
Nusa Penida
Town/Island
(USD/year)
29
Slightly higher/lower diesel generation capacities were used for Basse Santa Su, Nusa Penida and Busuanga, sufficient to meet the current
demand (not considering demand growth).
30
Depending on the selected diesel price forecast (see section 4.1).
35
Figure 24: Diesel/PV split (capacity and output)

Fig.
Fig.24
24AA
Fig.
Fig.24
24AA
Diesel
Diesel
Hybridisation
Hybridisation
Installed
InstalledCapacity
Capacity
(MW)
(MW)
Hybridisation
Hybridisation
Installed
InstalledCapacity
Capacity
Output
Output
(MW)
(MW)
(GWh/year)
(GWh/year)
4.30
4.30
PV
PV
Hybridisation
Hybridisation
Installed
InstalledCapacity
Capacity
(MW)
(MW)
8.35
8.35
3.46
3.46
Hybridisation
Hybridisation
Installed
InstalledCapacity
Capacity
Output
Output
(MW)
(MW)
(GWh/year)
(GWh/year)
8.35
8.35
3.46
3.46
Output
Output
(GWh/year)
(GWh/year)
4.30
4.30
Output
Output
(GWh/year)
(GWh/year)
2.75
2.75
Diesel
Diesel
PV
PV
2.75
2.75
Diesel
Diesel PV
PV
Hybridisation
Hybridisation
Installed
InstalledCapacity
Capacity
(MW)
(MW)
4.13
4.13
1.50
1.50
Diesel PV
PV
Diesel
5.12
5.12
2.43
2.43
Hybridisation
Hybridisation
Installed
InstalledCapacity
Capacity
Output
Output
(MW)
(MW)
(GWh/year)
(GWh/year)
Output
Output
(GWh/year)
(GWh/year)
5.12
5.12
2.43
2.43
Output
Output
(GWh/year)
(GWh/year)
1.50
1.50
9.50
9.50
PV
PV
6.75
6.75
Diesel
Diesel
PV
PV
6.75
6.75
19.53
19.53
8.18
8.18
19.53
19.53
8.18
8.18
Hybridisation
Hybridisation
Installed
InstalledCapacity
Capacity
(MW)
(MW)
Hybridisation
Hybridisation
Installed
InstalledCapacity
Capacity
Output
Output
(MW)
(MW)
(GWh/year)
(GWh/year)
4.13
4.13
9.50
9.50
Diesel
Diesel
3.10
3.10
3.10
3.10
Diesel
Diesel
PV
PV
3.00
3.00
Diesel
Diesel
PV
PV
3.00
3.00
10.30
10.30
4.39
4.39
10.30
10.30
4.39
4.39
Fig.
Fig. 24
24 B
B
HOLA Kenya
Fig. 24 B
Hybridisation
Hybridisation
Installed Capacity
Capacity
Installed
(MW)
(MW)
3.36
3.00
Hybridisation
Output
Output
Installed
Capacity
(GWh/year)
(GWh/year)
(MW)
3.36
9.60
3.00
4.27
4.27
9.60
4.27
Output
(GWh/year)
BASSE
Hybridisation
Hybridisation
Installed Capacity
Capacity
Installed
(MW)
(MW)
Hybridisation
Output
Output
Installed
Capacity
(GWh/year)
(GWh/year)
(MW)
Output
(GWh/year)
36
Hybridisation
Hybridisation
Installed
InstalledCapacity
Capacity
(MW)
(MW)
SANTA SU Gambia
Hybridisation
Output
Output
Installed
Capacity
(GWh/year)
(GWh/year)
(MW)
Output
(GWh/year)
Power source
1.50
1.50
1.30
1.30
1.50
3.77
3.77
1.30
2.02
2.02
3.77
2.02
Diesel
PV
0.80
0.80
0.50
0.50
0.80
1.66
1.66
0.50
0.80
0.80
1.66
0.80
Figure 24 illustrates the installed capacity and output of the PV and diesel component. Both bars are
normalised to 100 percent. Although the installed
PV capacity comes in most cases close to the level
of the installed diesel capacity, the capacity factor
of the PV comes in lower than for the diesel (there
is no radiation at night and variation from low to
high radiation throughout the day). The capacity
factor of the PV system ranges from 17.1 percent
in Las Terrenas to 23.6 percent in Basse Santa Su,31
whereas the capacity factor of diesel generators
comes in much higher. A new diesel generator can
reach up to 80 percent. However, in the plant layout, the existing diesel generators were kept as
currently installed on-site (in terms of number and
size), leading to lower-than-usual capacity factors
(approx. 30-50 percent). At some sites, especially
in Bequia, the existent generators are oversized,
considering the current demand. Approx. 30-40
percent of the electricity output is derived from
PV, which reduces the diesel consumption by approx. the same rate. The fraction of solar PV power
to current demand would range from 31 percent
to 37 percent at the selected sites.
Figure 25 (page 38) shows the most cost-efficient
load share (and hence electricity mix) between diesel generators and PV systems in different months.
The monthly average power production is based
on real (historic) load data from the respective
site. At each site, the possible monthly average
PV production (in green, including excess electricity) clearly follows the trend of monthly average
solar radiation (see section 3.2). The blue part of
the bars presents the diesel power requirement to
provide the total demand.
While the monthly load profiles show that there is
fluctuation in demand, one should not overvalue
the significance of these trends. In most cases, the
monthly profiles are based on historical load data
from one year; it is not proven that there is a clear
monthly (or seasonal) demand pattern behind
these numbers. The relevance of these graphs is
rather the possible share of PV in average power

production (bar on the right). This share is the basis for designing and sizing the hybrid system, and
one of the main inputs for the economic analysis
(section 4).
3.4. DEMAND GROWTH AND

EXPANSION OPTIONS
The analysis above (and most of the cost analysis
in section 4) is based on status quo assumptions,
i.e. it neglects future growth of electricity demand. This is owed to the fact that the HOMER
tool (as other common hybrid design and sizing
softwares) designs the hybrid system according to
the present load profile and other current conditions. Yet, some of the sites have shown considerable demand growth during recent years.
Demand growth during the sun hours can be covered by the hybrid system, whereas growth outside
the sun hours requires more diesel power. For the
selected sites, peak demand occurs in the evening
hours, during no sun or very low solar irradiance
periods. With the exception of Nusa Penida, it
was assumed that demand growth will not affect
the shape of the load curve (i.e. it will not shift
evening demand towards daytime), and that the
requirements for diesel and PV power generation
will increase at an equal level (not exponentially
more for diesel to cover above-average growing
evening peaks).
Growth assumptions are primarily based on historical load developments, population growth
(country level), and, if available, the utilities own
demand projections and plans for new connection
points. For all sites, it was assumed that the growth
rate being relatively high in initial years will
decrease over project lifetime. Forecasts were derived by factoring the growth rate assumed from
historical growth at every 30-minute intervals.
31
Variation is due to differences in sun hours and radiation levels at the locations. For Puerto Leguizamo, average (historic) load is 1.35 MW,
the select 2.75 MW PV can provide a mean output of 0.513 MW (capacity factor 18.7 percent). For Las Terrenas, average (historic) load is
3.16 MW, the select 6.75 MW PV can provide a mean output of 1.15 MW (capacity factor 17.1 percent). For Bequia, average (historic) load is
0.92 MW, the select 1.5 MW PV can provide a mean output of 0.336 MW (capacity factor 22.4 percent). For Nusa Penida, average (historic)
load is 1.67 MW, the select 3 MW PV can provide a mean output of 0.650 MW (capacity factor 22 percent). For Busuanga, average (historic)
load is 1.58 MW, the select 3 MW PV can provide a mean output of 0.631 MW (capacity factor 21 percent). For Hola, average (historic) load is
0.31 MW, the select 0.5 MW PV can provide a mean output of 0.105 MW (capacity factor 21 percent). For Basse Santa Su, average (historic)
load is 0.66 MW, the select 1.3 MW PV can provide a mean output of 0.307 MW (capacity factor 23.6 percent). Mean output is the average
power output from a PV system at the given solar radiations over the year (8760 hours). Capacity factor is the ratio between PV mean out
put and rated capacity. In case of PV power, only day-time availability of solar radiation limits the capacity factor of PV.
37
Figure 25: Diesel/PV load share in different months
Monthly Average
MonthlyPower
Average Power
Power
Monthly
Average
Monthly Average
Power
ProductionProduction
(MW)
(MW)
Production
(MW)
Production
(MW)
Monthly Average
MonthlyPower
Average Power
Power
Monthly
Average
Monthly Average
Power
(MW)
(MW)
Production
(MW)
Production
(MW)
1.0
1.0
0.8
0.8
1.2
1.2
0.6
0.6
1.0
1.0
0.4
0.4
0.8
0.8
0.2
0.2
0.6
0.6
0.0
0.0
Jan Feb
Feb Mar
MarApr
AprMay
May Jun
Jun Jul
Jul Aug
AugSep
Sep Oct
Oct Nov
NovDec
DecAvrg.
Avrg.
0.4 Jan
0.4
Diesel
(MW)
PV
(MW)
Diesel
(MW)
PV
(MW)
0.2
0.2
0.0
0.0
Jan
JanFeb
FebMar
MarApr
AprMay
MayJun
JunJul
Jul Aug
AugSep
SepOct
OctNov
NovDec
DecAvrg.
Avrg.
Diesel(MW)
(MW) PV
PV(MW)
(MW)
Diesel
Monthly Average Power

Monthly Average
MonthlyPower
Average Power
Production (MW)
(MW)
(MW)
Fig.
Fig.25
25BB
BUSUANGA
2.0
2.0

Monthly Average
MonthlyPower
Average Power
Production (MW)
(MW)
(MW)
38
1.5
1.5
2.0
1.0
1.0
1.5
0.5
0.5
0.5
0.0
1.0
1.0
0.8
0.8
Jan
Jan Feb
FebMar
MarApr
AprMay
MayJun
JunJul
Jul Aug
AugSep
SepOct
OctNov
NovDec
DecAvrg.
Avrg.
Diesel
Diesel(MW)
(MW) PV
PV(MW)
(MW)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Avrg.
Diesel (MW) PV (MW)
0.6
0.6
1.0
0.4
0.4
0.8
0.2
0.2
0.6
0.0
0.0
0.4 Jan
Jan Feb
FebMar
MarApr
AprMay
MayJun
JunJul
Jul Aug
AugSep
SepOct
OctNov
NovDec
DecAvrg.
Avrg.
0.2
0.0
4.2
4.2
3.6
3.6
3.0
3.0
2.4
4.2
4.2
2.4
1.8
3.6
3.6
1.8
1.2
3.0
3.0
1.2
0.6
2.4
2.4
0.6
0.0
1.8
1.8
0.0
Jan
Jan Feb
Feb Mar
MarApr
AprMay
May Jun
Jun Jul
Jul Aug
AugSep
Sep Oct
Oct Nov
NovDec
DecAvrg.
Avrg.
1.2
1.2
Diesel
Diesel(MW)
(MW) PV
PV(MW)
(MW)
0.6
0.6
0.0
0.0
2.0
2.0
Diesel
Diesel(MW)
(MW) PV
PV(MW)
(MW)
Diesel (MW) PV (MW)
Jan
JanFeb
FebMar
MarApr
AprMay
MayJun
JunJul
Jul Aug
AugSep
SepOct
OctNov
NovDec
DecAvrg.
Avrg.
Diesel
Diesel(MW)
(MW) PV
PV(MW)
(MW)
1.6
1.6
1.2
1.2
2.0
2.0
0.8
0.8
1.6
1.6
0.4
0.4
1.2
1.2
0.0
0.0
0.8 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Avrg.
0.8
Diesel
Diesel(MW)
(MW) PV
PV(MW)
(MW)
0.4
0.4
0.0
0.0
Philippines
Fig. 25 B
1.0
0.0
0.0
Monthly Average
MonthlyPower
Average Power
Power
Monthly
Average
Monthly Average
Power
(MW)
(MW)
Production
(MW)
Production
(MW)
1.8
1.6
1.4
1.4
1.2
1.2
1.0
1.8
1.8
1.0
0.8
1.6
1.6
0.8
0.6
1.4
1.4
0.6
0.4
1.2
1.2
0.4
0.2
1.0
1.0
0.2
0.0
0.8
0.8
0.0
Jan Feb
Feb Mar
MarApr
AprMay
May Jun
Jun Jul
Jul Aug
AugSep
Sep Oct
Oct Nov
NovDec
DecAvrg.
Avrg.
0.6
0.6 Jan
Diesel
0.4
0.4
Diesel(MW)
(MW) PV
PV(MW)
(MW)
0.2
0.2
0.0
0.0
Jan
JanFeb
FebMar
MarApr
AprMay
MayJun
JunJul
Jul Aug
AugSep
SepOct
OctNov
NovDec
DecAvrg.
Avrg.
Diesel
Diesel(MW)
(MW) PV
PV(MW)
(MW)
1.2
1.2 BEQUIA St. Vincent and the Grenadines
1.825
Fig.
Fig.
25AA
1.6

Monthly Average
MonthlyPower
Average Power
Power
Monthly
Average
Monthly Average
Power
(MW)
(MW)
Production
(MW)
Production
(MW)
LEGUIZAMO Colombia
Jan
JanFeb
FebMar
MarApr
AprMay
MayJun
JunJul
Jul Aug
AugSep
SepOct
OctNov
NovDec
DecAvrg.
Avrg.
Diesel
Diesel(MW)
(MW) PV
PV(MW)
(MW)
HOLA Kenya
Monthly Average
MonthlyPower
Average Power
Production (MW)
(MW)
(MW)
PUERTO
Fig.
AA
Fig.25
25
0.4
0.4
0.3
0.3
0.3
0.3
0.2
0.2
0.4
0.2
0.2
0.3
0.1
0.1
0.3
0.1
0.1
0.2
0.0
0.0
0.2
0.1
0.1
0.0
Jan
Jan Feb
FebMar
MarApr
AprMay
MayJun
JunJul
Jul Aug
AugSep
SepOct
OctNov
NovDec
DecAvrg.
Avrg.
Diesel
Diesel(MW)
(MW) PV
PV(MW)
(MW)
Diesel (MW) PV (MW)
Power source
Diesel (MW)
PV (MW)
Along with the growth of electricity demand over

20 years, the required technical upgrades (i.e. the
installation of additional PV, battery, inverter, and
diesel generators) should be done in phases.32 This
will ensure an optimal share of PV in power supply
over economic project life time. Phase-wise technology upgrading will also ensure optimised O&M
costs, diesel savings, and proper utilisation of the
generation assets. Generator replacement considers 48,000 operating hours after which each generator needs to be replaced in order to maintain
the efficiency and operating costs at an optimum
level. At some sites it would also be required to
expand the diesel generation capacity along with
the PV-upgrades.33
Figure 26 shows the load curves of the growth scenario (changes from year 1 to 20) compared to the
zero-growth case (dark blue line at the bottom of
each graph).
Accordingly, as shown in figure 27, the expected
demand growth (in blue) was taken as basis to
simulate the phase-wise PV-upgrade (in green)
and the fuel savings (in yellow, average in red)
over project life time. Due to the upgrades, longterm average fuel savings remain between 29%
(Las Terrenas) to 34% (Hola).
32
The base case, assuming constant demand over the next 20 years, allows calculating a single optimum (sizing of hybrid, diesel PV split). For
considering growth in HOMER, one could model 20 scenarios with 1 year project lifetime, and yearly changing demand to find the
respective optimum. However, suggesting 20 investments, one per each year, is of course not a rational choice. Therefore, in this study, a
longer period of growing demand was approximated to shorter sequences of time with constant demand. This allows for a decent balance
between precision of the optimum and reduction of transaction costs, typically opting for 1 to 3 expansions over 20 years. Supposing that
the initial hybrid layout (year 0) results in a PV share of 32% as an average over the first 5 years, the same layout will only contribute a PV
share of 21% in year 10 if demand grows constantly. This share, though, is far below the HOMER optimum for a base case scenario. A
number of system expansions keep the overall PV share as close as possible to the HOMER optimum. It is important to note that the auto-
mation tool (as part of the assessed hybrid technology, managing the power generated from different sources) does not need to be up
graded for expansions of PV and diesel capacity.
33
Assumptions for demand growth and technical upgrades at each site are presented in Annex 4.
39
Average
Load (MW)
Daily Daily
Average
Load (MW)
40
Zero Growth
Growth
Zero
Year 11
Year
Zero Growth
Year 1
00
01:30
02:30
03:30
04:30
05:30
06:30
07:30
08:30
09:30
10:30
:
11 30
12 :30
13:30
14:30
15:30
16:30
17:30
18:30
19:30
20:30
21:30
22:30
23:30
:3
0
1.8
1.8
1.6
1.6
1.4
1.4
1.8
1.2
1.2
1.6
1.0
1.0
1.4
0.8
0.8
1.2
0.6
0.6
1.0
0.4
0.4
0.8
0.2
0.2
0.6
0.0
0.0
0.4
0.2
0.0
00
01:30
02:30
03:30
04:30
05:30
06:30
07:30
08:30
09:30
10:30
:
11 30
12 :30
13:30
14:30
15:30
16:30
17:30
18:30
19:30
20:30
21:30
22:30
23:30
:3
0
Zero Growth
Growth
Zero
00
01:30
02:30
03:30
04:30
05:30
06:30
07:30
08:30
09:30
10:30
:
11 30
12 :30
13:30
14:30
15:30
16:30
17:30
18:30
19:30
20:30
21:30
22:30
23:30
:3
0
00
01:30
02:30
03:30
04:30
05:30
06:30
07:30
08:30
09:30
10:30
:
11 30
12 :30
13:30
14:30
15:30
16:30
17:30
18:30
19:30
20:30
21:30
22:30
23:30
:3
0
Average
Load (MW)
Daily Daily
Average
Load (MW)
Zero Growth
Year 1
Fig. 26
26 BUSUANGA
Fig.
BB
Hours
Year 5
Year 10
7.0
7.0
6.0
6.0
7.0
5.0
5.0
6.0
4.0
4.0
5.0
3.0
3.0
4.0
2.0
2.0
3.0
1.0
1.0
2.0
0.0
0.0
1.0
0.0
Year 11
Year
Year 55
Year
Year 1
Hours
Year 5
Year 10
Hours
Hours
Year 10
10
Year
Hours
Hours
Year 55
Year 10
10
Year
Year
Hours
Year 5
Year 10
Year 15
Year 15
15
Year
Year 15
Year 20
Hours
Hours
Zero
Growth Year
Year
Year
Year
Year
Year
Zero
Growth
1 1 Year
5 5 Year
10 10 Year
15 15 Year
20 20
Year 20
Fig. 26 B
Year 20
20
Year
Year 20
Year 15
15
Year
Year 20
20
Year
Year 15
Year 20
7.0
6.0
5.0
7.07.0
4.0
6.06.0
3.0
5.05.0
2.0
4.04.0
1.0
3.03.0
0.0
2.02.0
1.01.0
0.00.0
Hours
Hours
Zero
Growth Year
Year
Year
Year
Year
Year
Zero
Growth
1 1 Year
5 5 Year
10 10 Year
15 15 Year
20 20
00
01:30
02:30
03:30
04:30
05:30
06:30
07:30
08:30
09:30
10:30
:
11 30
12 :30
13:30
14:30
15:30
16:30
17:30
18:30
19:30
20:30
21:30
22:30
23:30
:3
0
Year 15
Zero Growth
Hours
Hours
Zero
Growth Year
Year
Year
Year
Year
Year
Zero
Growth
1 1 Year
5 5 Year
10 10 Year
15 15 Year
20 20
00
010:30
021:30
032:30
043:30
054:30
065:30
076:30
087:30
098:30
1009:30
:
110 30
1121:30
132::3300
143:30
154:30
165:30
176:30
187:30
198:30
2109:30
210:30
221:30
232:30
23:30
:3
0
Hours
Year 5
Year 10
00
01:30
02:30
03:30
04:30
05:30
06:30
07:30
08:30
09:30
10:30
:
11 30
12 :30
13:30
14:30
15:30
16:30
17:30
18:30
19:30
20:30
21:30
22:30
23:30
:3
0
Year 1
Zero Growth
Hours
Hours
Zero
Growth Year
Year
Year
Year
Year
Year
Zero
Growth
1 1 Year
5 5 Year
10 10 Year
15 15 Year
20 20
00
010:30
021:30
032:30
043:30
054:30
065:30
076:30
087:30
098:30
1009:30
:
110 30
1121:30
132::3300
143:30
154:30
165:30
176:30
187:30
198:30
2109:30
210:30
221:30
232:30
23:30
:3
0
10.0
9.0
8.0
7.010.0
10.0
6.0
9.09.0
5.0
8.08.0
4.0
7.07.0
3.0
6.06.0
2.0
5.05.0
1.0
4.04.0
0.0
3.03.0
2.02.0
1.01.0
0.00.0
00
01:30
02:30
03:30
04:30
05:30
06:30
07:30
08:30
09:30
10:30
:
11 30
12 :30
13:30
14:30
15:30
16:30
17:30
18:30
19:30
20:30
21:30
22:30
23:30
:3
0
Daily Average
Load (MW)
Daily Average
Load (MW)
Daily Average Load (MW)
00
01:30
02:30
03:30
04:30
05:30
06:30
07:30
08:30
09:30
10:30
:
11 30
12 :30
13:30
14:30
15:30
16:30
17:30
18:30
19:30
20:30
21:30
22:30
23:30
:3
0
Fig.
Fig.
2626
AA
Daily Average
Load (MW)
Daily Average
Load (MW)
Zero Growth
00
010:30
021:30
032:30
043:30
054:30
065:30
076:30
087:30
098:30
1009:30
:
110 30
1121:30
132::3300
143:30
154:30
165:30
176:30
187:30
198:30
2109:30
210:30
221:30
232:30
23:30
:3
0
4.5
4.0
3.5
4.54.5
3.0
4.04.0
2.5
3.53.5
2.0
3.03.0
1.5
2.52.5
1.0
2.02.0
0.5
1.51.5
0.0
1.01.0
0.50.5
0.00.0
Zero Growth
Growth
Zero
00
01:30
02:30
03:30
04:30
05:30
06:30
07:30
08:30
09:30
10:30
:
11 30
12 :30
13:30
14:30
15:30
16:30
17:30
18:30
19:30
20:30
21:30
22:30
23:30
:3
0
1.8
1.6
1.4
1.81.8
1.2
1.61.6
1.0
1.41.4
0.8
1.21.2
0.6
1.01.0
0.4
0.80.8
0.2
0.60.6
0.0
0.40.4
0.20.2
0.00.0
00
01:30
02:30
03:30
04:30
05:30
06:30
07:30
08:30
09:30
10:30
:
11 30
12 :30
13:30
14:30
15:30
16:30
17:30
18:30
19:30
20:30
21:30
22:30
23:30
:3
0
Daily Average
Load (MW)
Daily Average
Load (MW)
Fig.PUERTO
26 A
Average
Load (MW)
Daily Daily
Average
Load (MW)
Zero Growth
00
010:30
021:30
032:30
043:30
054:30
065:30
076:30
087:30
098:30
1009:30
:
110 30
1121:30
132::3300
143:30
154:30
165:30
176:30
187:30
198:30
2109:30
210:30
221:30
232:30
23:30
:3
0
Daily Average
Load (MW)
Daily Average
Load (MW)
Figure 26: Load profiles for growth scenario
LEGUIZAMO Colombia
Philippines
Zero Growth
Year 1
Hours
Year 5
Year 10
Year 1
0.8
0.8
0.7
0.7
0.6
0.6
0.8
0.5
0.5
0.7
0.4
0.4
0.6
0.3
0.3
0.5
0.2
0.2
0.4
0.1
0.1
0.3
0.0
0.0
0.2
0.1
0.0
Year 15
Hours
Year 5
Year 10
Year 15
Load in respective year
Zero Growth
Year 10
Year 1
Year 15
Year 5
Year 20
Year 20
Year 20
HOLA Kenya
Year 11
Year
Year 55
Year
Hours
Hours
Year 10
10
Year
Year 15
15
Year
Year 20
20
Year
Year 1
Hours
Year 5
Year 10
Year 15
Year 20
Figure 27: Growth and expansion plan
Fig.27
27AA
Fig.
40%
40%
35%
35%
40%
40%
30%
30%
7.0
7.0
5.0
5.0
6.0
6.0
4.0
4.0
35%
35%
25%
25%
30%
30%
20%
20%
5.0
5.0
3.0
3.0
4.0
4.0
2.0
2.0
25%
25%
15%
15%
20%
20%
10%
10%
3.0
15%
3.0
15%
1.0
5%
1.0
5%
2.0
10%
2.0
10%
0.0
0%
0.0
0%
1011
1112
1213
1314
1415
1516
1617
1718
1819
1920
20 5%
1.0 11 22 33 44 55 66 77 88 99 10
5%
1.0
Year
Year
0.0
0%
0.0
0%
Average
Demand
Installed
PV
%
Fuel
Saving
Average
Fuel
saving
Average
%12
Fuel
Saving
Average
Fuel
saving
9 10
1011
11
1213
13
1415
1516
16
1718
1819
1920
20
11 22 Demand
33 44 55 66Installed
77 88 9PV
14
17
Year
Year
AverageDemand
Demand
Average
2.5
2.5
InstalledPV
PV
Installed
FuelSaving
Saving
%%Fuel
16.0
16.0
14.0
14.0
16.0
16.0
12.0
12.0
30%
30%
35%
35%
25%
25%
30%
30%
20%
20%
25%
25%
15%
15%
10.0
10.0
6.0
6.0
20%
20%
10%
10%
8.0
8.0
4.0
4.0
15%
15%
6.0
6.0
5%
5%
2.0
2.0
10%
10%
4.0
4.0
0.0
0%
0.0
0%
1011
1112
1213
1314
1415
1516
1617
1718
1819
1920
20 5%
5%
2.0 11 22 33 44 55 66 77 88 99 10
2.0
Year
Year
0.0Average
0%
0.0
0%
AverageDemand
Demand Installed
InstalledPV
PV
%
Fuel
Saving
Average
Fuel
saving
% Fuel Saving
Average Fuel saving
1011
1112
1213
1314
1415
1516
16
1718
1819
1920
20
11 22 33 44 55 66 77 88 99 10
17
Year
Year
14.0
14.0
10.0
10.0
12.0
12.0
8.0
8.0
AverageFuel
Fuelsaving
saving
Average
AverageDemand
Demand
Average
InstalledPV
PV
Installed
FuelSaving
Saving
%%Fuel
MW MW
MW MW
MW MW
MW MW
2.0
2.0
2.5
2.5
AverageDemand
Demand
Average
AverageFuel
Fuelsaving
saving
Average
2.5
2.5
Average Fuel saving
35%
35%
30%
30%
35%
25%
25%
30%
1.5
2.0
1.5
20%
20%
25%
15%
15%
1.0
1.5
1.0
20%
10%
10%
15%
0.5
1.0
0.5
5%
5%
10%
0.0
0%
0.5
0.0
0%
1011
1112
1213
1314
1415
1516
1617
1718
1819
1920
20 5%
11 22 33 44 55 66 77 88 99 10
Year
Year
0.0
0%
Average
Demand
Installed
%12
Fuel
Saving
Average
Fuel
saving
Average
%
Fuel
Fuel
1 2 Demand
3
4 5 6Installed
7 8 PV
9PV10 11
13Saving
14 15 16 Average
17
18 19
20saving
Year
MW MW
MW
2.0
2.5
2.0
Average Demand
Installed PV
% Fuel Saving
MW MW
MW
MW MW
MW
Fig. 27 B
% Fuel Saving
AverageFuel
Fuelsaving
saving
Average
InstalledPV
PV
Installed
FuelSaving
Saving
%%Fuel
AverageFuel
Fuelsaving
saving
Average
HOLA Kenya
8.0
40%
8.0
40%
7.0
35%
7.0
35%
8.0
40%
6.0
30%
6.0
30%
7.0
35%
5.0
25%
5.0
25%
6.0
30%
4.0
20%
4.0
20%
5.0
25%
3.0
15%
3.0
15%
4.0
20%
2.0
10%
2.0
10%
3.0
15%
1.0
5%
1.0
5%
2.0
10%
0.0
0%
0.0
0%
1011
1112
1213
1314
1415
1516
1617
1718
1819
1920
20 5%
1.0 11 22 33 44 55 66 77 88 99 10
Year
Year
0.0
0%
Average
Demand
Installed
%12
Fuel
Saving
Average
Fuel
saving
Average
%
Fuel
Fuel
1 2 Demand
3
4 5 6Installed
7 8 PV
9PV10 11
13Saving
14 15 16Average
17 18 19
20saving
Year
Installed PV
FuelSaving
Saving
%%Fuel
9.0
40%
9.0
40%
8.0
8.0
35%
35%
7.0
7.0
9.0
40%
9.0
40%
30%
30%
6.0
6.0
8.0
8.0
35%
35%
25%
25%
5.0
5.0
7.0
7.0
30%
30%
20%
20%
4.0
4.0
6.0
6.0
25%
25%
15%
15%
3.0
3.0
5.0
5.0
20%
20%
10%
10%
2.0
2.0
4.0
4.0
15%
15%
5%
5%
1.0
1.0
3.0
3.0
10%
10%
0.0
0%
0.0
0%
2.0
2.0
1011
1112
1213
1314
1415
1516
1617
1718
1819
1920
205%
5%
1.0 11 22 33 44 55 66 77 88 99 10
1.0
Year
Year
0.0
0%
0.0
0%
Average
%Fuel
Fuel
Saving
Average
Fuel
saving
Average
%
Saving
Average
Fuel
saving
3 44 55 6Installed
6Installed
9 10
1011
11
1213
13
1415
1516
16
1718
1819
19
20
11 22Demand
3Demand
77 88 PV
9PV
12
14
17
20
Year
Year
AverageDemand
Demand
Average
Fig.27
27BB
Fig.
Average Demand
InstalledPV
PV
Installed
35%
35%
30%
30%
35%
35%
25%
25%
30%
30%
1.5
1.5
2.0
20%
2.0
20%
25%
25%
15%
15%
1.0
1.0
1.5
1.5
20%
20%
10%
10%
15%
15%
0.5
0.5
1.0
1.0
5%
5%
10%
10%
0%
0.0
0%
0.0
0.5
0.5
1011
1112
1213
1314
1415
1516
1617
1718
1819
1920
20 5%
5%
11 22 33 44 55 66 77 88 99 10
Year
Year
0%
0.0 Average Demand
0%
0.0
InstalledPV
PV
%Fuel
FuelSaving
Saving
AverageFuel
Fuelsaving
saving
Average
Demand
Installed
%
Average
1011
1112
1213
1314
1415
1516
1617
1718
1819
1920
20
11 22 33 44 55 66 77 88 99 10
Year
Year
35%
35%
MW MW
MW MW
MW MW
MW MW
Fig.27
27AA
8.0Fig.
8.0
7.0
7.0
8.0
8.0
6.0
6.0
40%
1.0
40%
1.0
0.9
0.9
35%
35%
0.8
40%
1.0
0.8
30%
30%
0.7
0.9
0.7
35%
25%
25%
0.6
0.8
0.6
30%
20%
0.5
0.7
20%
0.5
25%
0.4
0.6
0.4
15%
15%
0.3
20%
0.5
0.3
10%
10%
0.2
0.4
0.2
15%
5%
5%
0.1
0.3
0.1
10%
0.0
0%
0.2
0.0
0%
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
5%
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
0.1
Year
Year
0.0
0%
Average
Installed
PV10 11%
%
Fuel
Saving
Average
Fuel
saving
Average
Fuel
1 2 Demand
3Demand
4 5 6 Installed
7 8 9PV
12
13Saving
14 15 16 Average
17
18 19Fuel
20 saving
Year
Average Demand
Installed PV
% Fuel Saving
Average Fuel saving
Average demand, installed PV, and fuel savings
Average demand
Installed PV
% fuel saving
Average fuel saving
Average Fuel saving
41
ECONOMIC VIABILITY ASSESSMENT
4. ECONOMIC VIABILITY ASSESSMENT

4.1. APPROACH AND
ASSUMPTIONS
This section can be considered as the main part

of this study. It explains why it is misleading to
compare electricity generation costs of diesel and
PV only; why it is important to differentiate between electricity sold and produced; and what
cost components are included in the LCOE definition applied for this analysis. It then compares the
LCOEs of diesel-electricity and hybrid-electricity at
all sites demonstrating the impact of fuel savings, carbon emissions, and alternative financing
costs, and highlighting the relevance of plant
size, solar radiation, and diesel prices. Sensitivity
analyses were carried out for different diesel price
scenarios, lower-than-commercial financing costs
(so-called public sector or social discount rates),
Fig. 28
different risk margins for more capital-intensive
investments, varying PV penetration levels, changing capital and operational expenditures, as well as
growing customer demand and system expansion.
4.1.1. INVESTMENT NEEDS AND COST

STRUCTURE
To help understand the components of an LCOE
it is important to understand the cost structure
of both the diesel and hybrid systems. Investment
requirements and cost structure for diesel and hybrid differ significantly. An example from Nusa
Penida (figure 28) is representative for other sites
as well. While the diesel is characterised by a relatively low upfront investment, the hybrid system
is quite capital intensive. Some replacements of
diesel engines, inverters, converters and battery
take place during the assumed 20-year economic
lifetime of both systems.
Figure 28: Investment cash flows of diesel and hybrid (in USD 000)
Investing Cash Flow (in '000 USD)
0
10
11
12
13
14
15
16
17
18
19
20
-1,000
-3,000
thereof diesel gen set
-5,000
thereof solar PV (incl. inverter)
-7,000
thereof balance of system
-9,000
-11,000
100% Diesel
Hybrid
hybrid is burdened by diesel costs as well, although

to a lesser degree due to the achieved reduction in
diesel consumption.
Ongoing
expenditures over project lifetime also
Fig. 29
have to be considered (figure 29). The diesel system
suffers from very high expenditures on fuel. The
Figure 29: Operating costs of diesel and hybrid (in USD 000)
O&M and Fuel Costs (in '000 USD)
0
10
11
12
13
14
15
16
17
-1,000
-2,000
-3,000
-4,000
-5,000
-6,000
-7,000
-8,000
42
100% Diesel Fuel
100% Diesel O&M
Hybrid Fuel
Hybrid O&M
18
19
20
Table 3: Cost components of diesel and hybrid
Component
100% diesel case
Hybrid case
Initial and
replacement
investment in
equipment
Diesel
Diesel
O&M
Change
Diesel
Fuel consumption
generators; new investment and some replacement

required over 20-year economic lifetime.
of filters, spare parts,

lube oils, etc.
generators (new investment and

replacement)
PV-panels (replacement of inverters included in
O&M)
Converter (replacement required)
Battery (replacement required)
Automation tool (no replacement required)
generators: see left
cleaning, mowing lawn,
replacement of inverters, etc.
Converter
Battery
PV-panels:
Derived
from specific fuel consumption of diesel generators; based on

required output of diesel electricity
Table 3 shows the relevant cost components for

the 100 percent diesel and hybrid configurations.
For both cases, in order to ensure comparability, it
was assumed that all existing diesel generators are
replaced with new ones in year 0 of the investment (same generation capacity). Further diesel replacements are required over the project lifetime
earlier and possibly more often in the 100 percent
diesel case due to the more intensive utilisation.
Costs for the existing diesel electricity generation
and for the hybrid scenario are calculated based
on real economic costs. This is primarily relevant
for fuel costs, which are often subsidised, not fully
reflected in the utilities profit and loss statements,
and which need to be adjusted to real levels.
4.1.2. HYBRID LCOE = WEIGHTED DIESEL/PV

LCOE?
At the selected sites, the LCOE for PV-electricity
comes in between 16-22 USDc/kWh (if every single
kWh can be sold, and no specific demand curve
needs to be serviced). Keeping the relatively high
LCOE of diesel systems in mind (approx. 33-48 USDc/
kWh, excluding carbon costs), a significant decrease
in the LCOE of a hybrid system could be expected.
Figure 30 shows the LCOEs for the 100 percent diesel case and a 100 percent PV plant.
However, this approach is misleading, since hybrid

technologies still employ diesel generators for
a major share in the total electricity production.
Further, as hybridisation and integration of intermittent RE in an isolated grid requires additional
investments, the above-shown generation costs
of diesel and PV cannot be directly compared.
The inconsistent use of LCOE per kWh produced
(as an indicator to compare different renewable
and fossil fuel based technologies) often confuses
involved stakeholders, and raises unreachable expectations.
The LCOE of a hybrid system is a mix of PV and
Diesel LCOEs weighted with their share in the
total output. Since in order to derive the overall
LCOE of the hybridised system the specific cost of
PV-generation gets averaged with the cost of the
remaining diesel generation (approx. 1/3 to 2/3),
the full advantage of the PV portion is disguised
in the results.
This effect is shown in figure 31 for Nusa Penida,
where 32 percent of electricity demand can be covered by PV. In a 100 percent diesel-powered grid,
the LCOE comes in at 36.5 USDc/kWh. Weighted
with the residual 68 percent, the diesel has a share
of 24.8 USDc/kWh in the hybrid LCOE. In a 100 percent PV-powered grid, the LCOE per kWh produced
43
(BOS), including investment and replacement cost

for automation tool, battery, converter and the
corresponding O&M. The diesel LCOE includes the
fuel cost, investment and replacement CAPEX, and
O&M.
comes in at 16.1 USDc/kWh. While the LCOE for

the PV system comes in much lower, its relatively
small share in the overall output yields an equally low share in the hybrid LCOE (5.2 USDc/kWh).
The equipment needed for the system integration
of the hybrid is presented as balance of system
Fig. 30
0.351
0.163
0.181
0.185
0.335
0.365
0.161
0.200
0.172
0.199
USD/kWh
0.300
0.219
0.400
0.341
0.363
0.397
0.500
0.472
Figure 30: LCOEs Diesel vs. PV
0.100
0.000
Puerto Leguizamo
Las Terenas
Bequia
Nusa Penida
100% Diesel LCOE
Busuanga
Hola
Basse Santa Su
100% PV LCOE
ysis in this study focuses on average generation

costs of electricity sold, since the existing demand
curve needs to be covered by the hybrid system,
and since during daytime there is some excess PV
electricity which cannot be used if the demand
curve does not change.
It is important to differentiate between the LCOE

per kWh produced and sold. The LCOE per kWh
produced also includes excess electricity for which
the owner of the plant is not reimbursed by the
respective off-taker. The LCOE per kWh sold only
includes the electricity units that are sold, thus it is
higher than the LCOE of kWh produced. The analFig. 31
Figure 31: Simplified illustration of LCOE per kWh sold and produced (Nusa Penida)34
36.5
36.5
34.6
BOS*
32%
100%
68%
PV
4.6
5.2
24.8
24.8
16.1
5.15
Status Quo
Diesel
Hybrid
LCOE per kWh sold
Hybrid
Diesel
PV
LCOE per kWh produced
34
Balance of System (BOS) includes: cost of automation solution, batteries, converters, lower diesel efficiency, excess electricity from PV, and
changes in capital structure.
44
4.1.3. FINANCIAL ASSUMPTIONS

The following table presents the financial assumptions applied in the project finance structure of the
financial model. It is important to note that equity
return expectations (15 percent) and interest on
debt (8 percent) although already on the lower
end reflect private sector market conditions. Yet,
lower-than-commercial financing costs (and other
changes in financial assumptions) are discussed in
section 4.2 and as part of the sensitivity analysis.
The debt capacity was derived based on the available net operating cash flow and a target debt service coverage ratio (DSCR) of 1.2 and capped at
a maximum portion of 70 percent. A debt tenor of
12 years with a 1-year grace period was assumed.
Different local tax rates were considered for each
of the respective sites (see Annex 3). For the base
case, the capital costs were not varied between diesel and hybrid systems, except for the debt/equity
split as determined by the debt capacity. All calculations are based on a project lifetime of 20 years.
Table 4: Financing assumptions
Component
Assumption
Transaction cost (legal documentation,

due diligence, set-up of SPVs etc.)
2% of total initial CAPEX
Contingencies (buffer for changes in

equipment costs)
5% of total initial CAPEX
Interest
8% on debt, 2% on cash (nominal cost)
Equity IRR
15% (nominal cost)
Debt/equity split
Debt capacity to meet DSCR of 1.2, based on net operating

cash flow, capped at max. debt portion of 70%35
Debt tenor
12 years + 1 year grace period
DSRA
6 months debt service
Inflation, cost escalation
2% assumed inflation on revenues and cost components (including cost of carbon), similar to inflation in the US since the
whole model is based on USD
Project lifetime
20 years
Currency
All values are based in USD, to avoid unnecessary currency mismatches and make different sites comparable
4.1.4. DIESEL PRICE ASSUMPTIONS

The development of diesel prices for the individual sites are based on real prices from the site
(including transportation) and indexed with crude
oil price forecasts of EIA36 and World Bank37. EIA
uses three scenarios low (1), reference/medium
(3), and high (5) of which the reference scenario

was taken as base case for the following LCOE
and sensitivity analyses. Another projection (4)
was added, removing the decrease of oil prices as
it is predicted over the next few years in the EIA
reference scenario. Prices in nominal terms were
used to consider inflation.
35
Resulting in a minimum WACC of 0.7*8%+0.3*15% = 10.1% before consideration of tax shield of debt. The tax shield can lower the WACC
to 8.4% (like in the case of Bequia). In general, lower debt portions lead to higher WACC.
36
EIA World Energy Outlook 2014; http://www.eia.gov/forecasts/aeo/er/index.cfm
37
At the time of the analysis, the World Bank price forecast for crude oil (October 2013) was available only until 2015, and was further
projected until 2040
45
The significant oil price decline towards end of

2014 (down to around 50 USD/barrel) is not reflected in the applied forecasts. At the time of
writing, no revised long-term projections were
available from EIA. Only World Bank released an
updated mid-term forecast in which the price is
expected to reach 74 USD/barrel by 2020 and 103
USD/barrel by 2025 i.e. in the range between EIA
low- and reference scenarios.
Figures 32 and 33 show the five crude oil price

forecasts and the adjustment to the site-specific diesel price in Nusa Penida, and the current local diesel prices at all sites, respectively.
The current difference between local diesel
price and crude oil price (2014 data) is kept stable for projecting future on-site diesel prices.
Fig. 32
Figure 32: Crude oil and local diesel price forecasts

Adjusted to local diesel price
of USD 1.16/litre
3.00
200
2.50
150
100
50
1.50
1.00
0.50
0.00
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2.00
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
adjusted USD/litre
USD/barrel
Crude oil price forecast

250
(1) EIA Low (nominal)
(2) World Bank (nominal)
(1) EIA Low (nominal)
(2) World Bank (nominal)
(3) EIA Reference (nominal)
(4) Adjusted EIA Reference
(3) EIA Reference (nominal)
(4) Adjusted EIA Reference
(5) EIA High (nominal)
Updated World Bank Forecast (nominal)
(5) EIA High (nominal)
Fig. 33
Current Local Diesel Price
4.2. LEVELISED COST OF

ELECTRICITY BASE CASE
This section presents the starting point for the
comparison of levelised generation costs. It includes initially decreasing diesel prices (EIA reference), and does not consider demand growth.
The sensitivity analyses in the subsequent sections
present diesel and hybrid LCOEs under different
Nusa Penida
(3 MW)
Busuanga
(3 MW)
1.096
Bequia
(1.5 MW)
0.960
1.160
Las Terenas
(6.75 MW)
1.120
Puerto Leguizamo
(2.75 MW)
0.900
1.050
1.30
1.20
1.10
1.00
0.90
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.00
0.890
USD/liter
Figure 33: Current local diesel prices and EIA reference crude oil price
Hola
(0.5 MW)
Basse Santa Su
(1.3 MW)
Current Crude Oil Price (EIA Reference)
assumptions (most importantly other fuel price

developments), and under the consideration of
demand growth.
Figure 34 illustrates the cost components of hybrid
and diesel LCOE (with/without carbon costs38, and
for different financing costs), and help identifying
the respective cost drivers. At each site, there are
two obvious and opposite effects.39
38
Costs of carbon were assumed at 50 USD/tCO2; carbon emissions depend on the efficiency degree of diesel generators; the average for
existing generators at the selected sites was calculated at 0.75 tCO2/MWh diesel electricity.
39
Figure 53 presents the LCOE breakdown for a project finance structure excluding costs of carbon.
46
Figure 34: LCOE breakdown with/without carbon and financing costs
Hybrid
Hybrid
Hybrid
Hybrid
Capex
Capex
Capex
Diesel
Diesel
Diesel
Diesel
Fuel
Fuel
Fuel
OPEX
OPEX
OPEX
Hybrid
Hybrid
Hybrid
Hybrid
USD/kWh
USD/kWh
USD/kWh
USD/kWh
0.351
0.351
0.351
0.351
0.412
0.412
0.412
0.412
Diesel
Diesel
Diesel
Diesel
Hybrid
Hybrid
Hybrid
Hybrid
0.550
0.550
0.550
0.550
0.500
0.500
0.500
0.500
0.450
0.450
0.450
0.450
0.400
0.400
0.400
0.400
0.350
0.350
0.350
0.350
0.300
0.300
0.300
0.300
0.250
0.250
0.250
0.250
0.200
0.200
0.200
0.200
0.150
0.150
0.150
0.150
0.100
0.100
0.100
0.100
0.050
0.050
0.050
0.050
0.000
0.000
0.000
0.000
0.340
0.340
0.340
0.340
Diesel
Diesel
Diesel
Diesel
Financing Costs
Financing
Financing Costs
Costs
Capex
Capex
Hybrid
Hybrid
Hybrid
Hybrid
0.298
0.298
Hybrid
Hybrid
0.364
0.364
0.359
0.359
Diesel
Diesel
Hybrid
Hybrid
Financing Costs
Costs
Financing
USD/kWh
USD/kWh
0.355
0.355
0.278
0.278
Diesel
Diesel
Diesel
Diesel
Hybrid
Hybrid
Hybrid
Hybrid
Diesel
Diesel
Diesel
Diesel
0.278
0.278
0.278
0.278
Hybrid
Hybrid
Hybrid
Hybrid
0.374
0.374
0.374
0.374
Diesel
Diesel
Diesel
Diesel
0.297
0.297
0.297
0.297
Hybrid
Hybrid
Hybrid
Hybrid
Capex
Capex
Capex
0.381
0.381
0.381
0.381
Diesel
Diesel
Diesel
Diesel
Fuel
Fuel
Fuel
OPEX
OPEX
OPEX
0.321
0.321
0.321
0.321
Hybrid
Hybrid
Hybrid
Hybrid
0.395
0.395
0.395
0.395
0.365
0.365
0.365
0.365
Diesel
Diesel
Diesel
Diesel
Hybrid
Hybrid
Hybrid
Hybrid
0.505
0.505
0.513
0.513
Diesel
Diesel
Hybrid
Hybrid
Financing Costs
Financing
Financing Costs
Costs
0.550
0.550
0.500
0.500
0.450
0.450
0.400
0.400
0.350
0.350
0.300
0.300
0.250
0.250
0.200
0.200
0.150
0.150
0.100
0.100
0.050
0.050
0.000
0.000
0.477
0.477
0.444
0.444
0.359
0.359
Diesel
Diesel
0.377
0.377
Hybrid
Hybrid
Diesel
Diesel
Cost of
of carbon
carbon
Cost
Hybrid
Hybrid
Capex
Capex
Fuel
Fuel
0.479
0.479
0.417
0.417
Diesel
Diesel
OPEX
OPEX
Hybrid
Hybrid
Financing Costs
Costs
Financing
LCOE elements of costs
0.362
0.362
0.306
0.306
project finance terms
5%
5% flat
flat financing
financing cost
cost
0.260
0.260
carbon
carbon cost
cost
0.326
0.326
0.344
0.344
0.344
0.344
Cost of carbon
Cost
Cost of
of carbon
carbon

0.550
0.550
0.500
0.500
0.450
0.450
0.400
0.400
0.350
0.350
0.300
0.300
0.250
0.250
0.200
0.200
0.150
0.150
0.100
0.100
0.050
0.050
0.000
0.000
USD/kWh
USD/kWh
USD/kWh
USD/kWh
Diesel
Diesel
Diesel
Diesel
USD/kWh
USD/kWh
USD/kWh
USD/kWh
USD/kWh
USD/kWh
USD/kWh
USD/kWh
0.347
0.347
OPEX
OPEX
0.390
0.390
0.390
0.390
HOLA Kenya
Diesel
Diesel
Fuel
Fuel
Hybrid
Hybrid
Hybrid
Hybrid
0.395
0.395
0.395
0.395
Financing Costs
Financing
Financing Costs
Costs
project
project finance
finance terms
terms
Cost of
of carbon
carbon
Cost
Hybrid
Hybrid
OPEX
OPEX
OPEX
project
finance
terms
project
finance
terms
project
project
finance
finance
terms
terms
0.273
0.273
Diesel
Diesel
0.370
0.370
0.370
0.370
5% flat financing cost
0.342
0.342
0.330
0.330
0.330
0.330
Diesel
Diesel
Diesel
Diesel
Fuel
Fuel
Fuel
carbon
carbon cost
cost
Hybrid
Hybrid
Hybrid
Hybrid
Hybrid
Hybrid
0.371
0.371
0.371
0.371
0.550
0.550
0.550
0.550
0.500
0.500
0.500
0.500
0.450
0.450
0.450
0.450
0.400
0.400
0.400
0.400
0.350
0.350
0.350
0.350
0.300
0.300
0.300
0.300
0.250
0.250
0.250
0.250
0.200
0.200
0.200
0.200
0.150
0.150
0.150
0.150
0.100
0.100
0.100
0.100
0.050
0.050
0.050
0.050
0.000
0.000
0.000
0.000
Financing Costs
Financing
Financing Costs
Costs
project
project finance
finance terms
terms
Diesel
Diesel
OPEX
OPEX
OPEX
Hybrid
Hybrid
Hybrid
Hybrid
Capex
Capex
Capex
0.376
0.376
0.376
0.376
Philippines
5%
5% flat
flat financing
financing cost
cost
0.255
0.255
carbon
carbon cost
cost
0.313
0.313
Diesel
Diesel
Diesel
Diesel
Fuel
Fuel
Fuel
0.304
0.304
0.304
0.304
5%
flat
financing
cost
5%
flat
financing
cost
5%
5%
flat
flat
financing
financing
cost
cost
Fig. 34
34 Teil
Teil B
BBUSUANGA
Fig.
0.550
0.550
0.500
0.500
0.450
0.450
0.400
0.400
0.350
0.350
0.300
0.300
0.250
0.250
0.200
0.200
0.150
0.150
0.100
0.100
0.050
0.050
0.000
0.000
Hybrid
Hybrid
Hybrid
Hybrid
Capex
Capex
Capex
0.297
0.297
0.297
0.297
Diesel
Diesel
Diesel
Diesel
carbon
cost
carbon
cost
carbon
carbon
cost
cost
Diesel
Diesel
Diesel
Diesel
Cost of carbon
Cost
Cost of
of carbon
carbon
0.267
0.267
0.267
0.267
0.343
0.343
0.343
0.343
project
project
finance
finance
terms
terms
project
project
finance
finance
terms
terms
Hybrid
Hybrid
Hybrid
Hybrid
0.335
0.335
0.335
0.335
5%
5%
flat
flat
financing
financing
cost
cost
5%
5%
flat
flat
financing
financing
cost
cost
Diesel
Diesel
Diesel
Diesel
0.249
0.249
0.249
0.249
carbon
carbon
cost
cost
carbon
carbon
cost
cost
0.305
0.305
0.305
0.305
Hybrid
Hybrid
Hybrid
Hybrid
0.372
0.372
0.372
0.372
Cost of carbon
Cost
Cost of
of carbon
carbon

0.550
0.550
0.550
0.550
0.500
0.500
0.500
0.500
0.450
0.450
0.450
0.450
0.400
0.400
0.400
0.400
0.350
0.350
0.350
0.350
0.300
0.300
0.300
0.300
0.250
0.250
0.250
0.250
0.200
0.200
0.200
0.200
0.150
0.150
0.150
0.150
0.100
0.100
0.100
0.100
0.050
0.050
0.050
0.050
0.000
0.000
0.000
0.000
0.285
0.285
0.285
0.285
project
finance
terms
project
finance
terms
project
finance
terms
project
finance
terms
Diesel
Diesel
Diesel
Diesel
Cost of carbon
Cost
Cost of
of carbon
carbon
0.323
0.323
0.323
0.323
0.424
0.424
0.424
0.424
5%
flat
financing
cost
5%
flat
financing
cost
5%
flat
financing
cost
5%
flat
financing
cost
Hybrid
Hybrid
Hybrid
Hybrid
0.391
0.391
0.391
0.391
carbon
cost
carbon
cost
carbon
cost
carbon
cost
Diesel
Diesel
Diesel
Diesel
0.303
0.303
0.303
0.303
0.403
0.403
0.403
0.403
project
project
finance
finance
terms
terms
project
project
finance
finance
terms
terms
0.364
0.364
0.364
0.364
LEGUIZAMO Colombia
5%
5%
flat
flat
financing
financing
cost
cost
5%
5%
flat
flat
financing
financing
cost
cost
0.550
0.550
0.550
0.550
0.500
0.500
0.500
0.500
0.450
0.450
0.450
0.450
0.400
0.400
0.400
0.400
0.350
0.350
0.350
0.350
0.300
0.300
0.300
0.300
0.250
0.250
0.250
0.250
0.200
0.200
0.200
0.200
0.150
0.150
0.150
0.150
0.100
0.100
0.100
0.100
0.050
0.050
0.050
0.050
0.000
0.000
0.000
0.000
carbon
carbon
cost
cost
carbon
carbon
cost
cost
USD/kWh
USD/kWh
USD/kWh
USD/kWh
Fig. 34 Teil APUERTO

Fig. 34 Teil A
Cost of carbon
0.379
0.379
0.382
0.382
CAPEX
Fuel
OPEX
Diesel
Diesel
Hybrid
Hybrid
Diesel
Diesel
Cost of
of carbon
carbon
Cost
Hybrid
Hybrid
Capex
Capex
Fuel
Fuel
Diesel
Diesel
OPEX
OPEX
Hybrid
Hybrid
Diesel
Diesel
Hybrid
Hybrid
Financing costs
Financing Costs
Costs
Financing
47
terms. However, under private sector return expectations (assumed 15 percent on equity, 8 percent
on debt), financing costs become a significant cost
driver of the hybrid LCOE (two right bars), lowering the relative cost advantage (compared to the
diesel) in five of seven cases, and even overcompensating the positive effect of fuel savings in
Hola and Basse Santa Su. Private sector financing
costs can be expected if an IPP will make the investment under a project finance structure.
On the one hand, although diesel generators still

represent the major share in total electricity production, hybridisation leads to significant fuel
savings. The hybrid LCOE comes in much lower
than the diesel LCOE if only capital expenditures
(CAPEX, including PV equipment, system integration, and replacement), operational expenditures (OPEX), and fuel costs are considered (two
left bars). The reduction of fuel costs (approx. 30
percent) over-compensates the relatively higher
CAPEX of the hybrid. The cost advantage of the
hybrid even increases if carbon costs are taken into
account (two bars second from left), which, obviously, are higher for the 100 percent diesel case.40
Figure 35 summarises the relative cost advantage of hybridisation. At 5 percent financing

costs, generation cost savings of 12.1 to 15.8
percent can be achieved at the different sites. If
the projects have to be financed on commercial
(project finance) terms, only Nusa Penida could
achieve relevant savings, while savings at other
sites are moderate and negative, respectively. In
Hola and Basse Santa Su, hybridisation would increase electricity generation costs with or without consideration of carbon costs. These two
relatively small grids are affected stronger by fix
costs of hybrid system integration components,
and on-site diesel prices are not sufficiently high
to over-compensate this effect (see next section
for the relevance of plant size and diesel prices).
On the other hand, due to the higher capital intensity, generation costs of hybrid electricity include a higher portion of financing costs. The hybrid requires longer repayment periods and thus
higher interest expenses. Still, for all sites, the
hybrid LCOE is lower than the diesel LCOE if the
project can be financed at public sector return expectations (assumed 5 percent flat; two bars second from right). Lower-than-commercial financing
costs can be achieved, for instance, through balance sheet finance and borrowing at concessional
Fig. 35
20.3%
21.8%
15.4%
21.0%
1.3%
Puerto Leguizamo
Las Terrenas
@ project finance terms
Bequia
@ 5% flat financing cost
Nusa Penida
Busuanga
including carbon cost
-0.7%
-1.6%
0%
-5%
19.1%
13.0%
20.1%
18.6%
14.1%
19.2%
7.6%
0.3%
1.2%
2.8%
10%
5%
15.8%
20.2%
18.3%
18.3%
16.2%
13.3%
15%
12.1%
12.9%
20%
16.7%
17.5%
25%
20.5%
Figure 35: Relative cost advantage of hybridisation
Hola
Basse Santa Su
excluding carbon & financing cost
40
Not all of the diesel-produced electricity can be replaced by PV, though; PV electricity can cover around 30-40 percent of the annual demand
(different for each site). That means the hybrid scenario also leads to carbon emissions, but in a reduced amount (approx. 70 percent of the
diesel-only case).
48

Fig. 37
4.3. RELEVANCE OF PLANT SIZE,

SOLAR RADIATION AND

DIESEL PRICES
Under private sector financing conditions (project finance case), and applying EIA reference
oil price forecasts, the relative cost advantage
of PV-hybridisation can greatly depend on plant
size, solar radiation, and local diesel price premium. Figures 36 to 38 show that a certain
trend can already be observed from looking
at the impact of each determinant separately.
% of cost advantage incl. carbon cost
Figure 37: Relation of solar radiation and LCOE

8%
Nusa Penida
6%
4%
Puerto
Lequizamo
2%
Las Terrenas
0%
3.50
Busuanga
Bequia
4.00
-2%
4.50
5.00
5.50
6.00
Basse Santa Su
Hola
6,50
Solar Radiation in kWh/m2/day
Fig. 36
Figure 36: Relation of PV size and LCOE
% of cost advantage incl.

carbon cost
8%
Nusa Penida
6%
4%
Puerto
Lequizamo
2%
Busuanga
Bequia
0%
0.00
-2%
Basse Santa Su
1.00
2.00
3.00
Hola
4.00
Las Terrenas
5.00
6.00
7.00
8.00
One reason why Las Terrenas does not achieve the

highest cost savings is its relatively little solar radiation. Nusa Penida benefits from relatively high
radiation. However, it can also be seen that even
at sites with high radiation Hola, Basse Santa Su
and Bequia hybridisation does not necessarily (or
only slightly) reduce generation costs, due to the
above mentioned missing scale effects, amongst
other things.
PV Size in MW
Fig. 38
Given the hybridisation technology applied in this

analysis (100 percent peak PV penetration, including automation tool and an integrated storage device), hybridisation gets more attractive
with increasing plant size. The cost advantage is
bigger for larger plants, where, consequently,
more PV gets installed, and where the fixed cost
of the automation tool is spread over more units
of electricity produced (kWh). Accordingly, for
smaller sites, the cost advantage of hybridisation
is smaller or even negative, since fixed costs are
spread over fewer units of electricity.
The three smallest sites (Hola, Basse Santa Su
and Bequia) show no or only a small cost advantage, whereas the four larger sites show a relatively high cost advantage. However, it can also
be observed that the largest site Las Terrenas
does not show the highest benefit. It is the medium-sized sites Nusa Penida and Puerto Leguizamo that achieve the largest LCOE reduction.
% of cost advantage incl. carbon cost
Figure 38: Relation of local diesel price and LCOE

8%
Nusa Penida
6%
4%
2%
Puerto
Lequizamo
Las Terrenas
Busuanga
0%
0.20
-2%
Bequia
0.25
0.30
0.35
0.40
0.45
0.50
0.55
Basse Santa Su
Hola
0.60
Local Oil Price Premium in USD/l
A third factor has to be considered to get a clearer picture. It goes without saying that high local
diesel prices imply high potential for diesel cost
savings. For instance, despite relatively little radiation, Puerto Leguizamo shows a higher cost benefit than the similarly large Busuanga. This is due
to the higher diesel prices in Puerto Leguizamo.
However, figure 38 also shows that hybridisation
at two sites with high diesel prices (Hola and Basse
Santa Su) does not automatically lead to a lower
LCOE.
49
Consequently, one needs to analyse the correlation of the three and possibly more factors to
determine their combined impact on generation
costs. The two sites where hybridisation under
rather conservative assumptions could result
in a cost increase (Hola and Basse Santa Su) have
by far the smallest generation capacity, and even
relatively high local diesel prices and solar radiation cannot compensate the missing scale. On the
contrary, the cost advantage at the largest site (Las
Terrenas) is limited by relatively low diesel prices
and solar radiation. The most viable case for hy-
bridisation is Nusa Penida a mid-sized plant with

the highest diesel prices and relatively high solar
radiation.
Figures 39 and 40 put the LCOEs (decrease or increase, resulting from hybridisation) in context
with two of these three influencing factors at a
time. The boxes for each site show the impact of
hybridisation on the LCOE, e.g. a cost reduction of
7.6 percent in the case of Nusa Penida (incl. carbon
externalities).
Figure 39: Correlation of PV size and solar radiation

Average Daily
Radiation in
kWh/m2/day
Hola
LCOE +1.6%
Basse Santa Su
LCOE +0.7%
6.0
Bequia
LCOE -0.3%
4.5
5.0
5.5
Nusa Penida
LCOE -7.6%
Increasing size
reduces relative
costs of system
integration
Busuanga
LCOE -1.3%
Increasing solar
radiation reduces PV
LCOE
Las Terrenas
LCOE -1.2%
Puerto Leguizamo
LCOE -2.8%
Average Daily Radiation
in Frankfurt/Germany: [3.3]
PV Size in MW
50
Figure 40: Correlation of PV size and local diesel price
Nusa Penida
+0.54 USD
Hola
+0.50 USD
0.5
0.6
Local Oil Price

Premium (USD)
0.4
Busuanga
+0.34 USD
Las Terrenas
+0.27 USD
Basse Santa Su
+0.48 USD
0.3
Puerto Leguizamo
+0.43 USD
0.2
Bequia
+0.28 USD
PV Size in MW
1
4.4. SENSITIVITY ANALYSIS

The project finance case (private sector return expectations) and the EIA reference oil price forecast
were also used as starting point for the following
sensitivity analysis.
4.4.1. IMPACT OF DIESEL PRICE DEVELOPMENT

A major driver for economic viability is the expectations for crude oil, and hence, diesel price development. Figure 41 shows the LCOE (incl. carbon
externality) of the hybrid and diesel-only case for
the different diesel price scenarios introduced in
section 4.1.4 (EIA low, reference, high, EIA adjusted, and World Bank).
Scenario 1 shows the LCOEs for the EIA low
crude oil price projection. In this scenario, except
for Nusa Penida, diesel prices will not increase sufficiently to justify the hybrid investment (hybrid
LCOE > diesel LCOE). The base case (EIA reference,
as discussed in the sections above) is framed in red.
For the highest plausible diesel price development
assumed (scenario 5, EIA high) other assumptions
remaining constant hybridisation results in LCOE
reductions ranging from 3.5 USDc/kWh in Bequia
to 6.7 USDc/kWh in Nusa Penida.
51
Figure 41: LCOEs for different diesel price scenarios
(5)
(4)
(5)
Diesel Only
Hybrid Hybrid
Diesel Only
(2) (3)
(3) (4)
(4)
(1)
(2)
(5)
0.000
(5)
(2)
(2)
(3)
(4)
(2)
DieselDiesel
Only Only
HybridHybrid
(3)
(4)
Diesel Price Scenarios

Diesel Only
Hybrid
0.449
0.449
0.495
0.495 0.393
0.495
(4)
(5)
DieselDiesel
Price Scenarios
Price Scenarios
(1)
0.468
0.468
0.468
0.507
0.404
0.507 0.404
0.507
0.404
0.415
0.390
0.415
0.404
0.415
0.390
0.415
0.390
0.395
0.377
0.395
0.456
0.456
0.3820.523
0.3820.523
0.382
0.417
0.365
0.417
0.382
0.417
0.365
0.417
0.365
0.395
0.365
0.395
0.349
0.395
0.349
0.395
0.310
0.374 0.310
0.374
0.310
0.323
0.310
0.323
(2)
(3)
(5)
(5)
(5)
(5)
(4)
(1)
(2)
DieselDiesel
Only Only
HybridHybrid
(3)
(4)
Diesel only
Hybrid
0.616
0.616
0.658
0.6580.5310.658
(4)
(5)
DieselDiesel
Price Scenarios
Price Scenarios
Hybrid
(5)
0.531
0.533
0.513
0.533
0.533
(3)
0.531
0.513
0.505
0.513
0.496
0.505
0.496
0.481
0.496
0.451
0.481
0.451
0.427
0.427
0.427
0.451
0.481
(2)
Power source Diesel Only
0.449
0.393
0.400
0.382
0.400
0.400
(3)
0.393
0.382
0.379
0.382
0.373
0.379
0.379
0.373
0.363
0.373
0.345
0.363
(1)
0.100
(1)
Diesel Only
Hybrid
SANTA
SU Gambia
0.363
0.345
0.321
0.345
0.321
0.321
USD/kWh
0.500 0.500
0.700
0.400 0.400
0.600
0.300 0.300
0.500
0.200 0.200
0.400
0.100 0.100
0.300
0.000 0.000
(1)
0.200
(5)
(4)
Diesel Only
Hybrid Hybrid
Diesel Only
(2) (3)
(3) (4)
(4)
(2)
0.100
DieselDiesel
Only Only
HybridHybrid
(3)
(4)
0.600 0.600
0.500 0.500
0.700
0.400 0.400
0.600
0.300 0.300
0.500
0.200 0.200
0.400
0.100 0.100
0.300
0.000 0.000
(1)
0.200
USD/kWh
0.428
(5)
(4)
0.428
0.428
0.473
0.473 0.370
0.473
0.370
0.384
0.359
0.384
0.370
(4)
(3)
0.600 0.600
USD/kWh USD/kWh
(3)
(2)
0.384
0.359
0.364
0.350
0.364
0.359
0.364
0.350
0.348
0.323
0.348
BASSE
0.700 0.700
(4)
HOLA Kenya
USD/kWh USD/kWh
0.323
Philippines
0.350
0.348
0.323
0.309
0.309
USD/kWh
0.309
USD/kWh USD/kWh
0.323
(2)
(3)
Diesel Only
Diesel Only
HybridHybrid
DieselDiesel
Price Scenarios
Price Scenarios
(1)
(3)
Diesel Only
Diesel Only
HybridHybrid
(2)
(1)
0.100
52
(1)
0.700 0.700
0.500 0.500
0.700
0.400 0.400
0.600
0.300 0.300
0.500
0.200 0.200
0.400
0.100 0.100
0.300
0.000 0.000
(1)
0.200
0.000
0.323
0.000 0.000
(1)
(5)
(5)
(2)
DieselScenarios
Price Scenarios
Diesel Price
0.600 0.600
(5)
(5)
Diesel Price
DieselScenarios
Price Scenarios
DieselScenarios
Price Scenarios
Diesel Price
Fig. 41
B
0.700
0.700
0.000
(2)
(1)
0.100 0.100
Diesel Only
Hybrid Hybrid
Diesel Only
(2) (3)
(3) (4)
(4)
Fig. 41
B 41 B
BUSUANGA
Fig.
(5)
0.616
(2)
USD/kWh
USD/kWh
0.440
(5)
USD/kWh
0.440
0.440
0.475
0.440
0.475
(5)
(4)
0.500 0.500
0.700 0.700
0.400 0.400
0.600 0.600
0.300 0.300
0.500 0.500
0.200 0.200
0.400 0.400
0.100 0.100
0.300 0.300
0.000 0.000
0.200 0.200 (1)
0.505
(1)
Diesel Only
Hybrid Hybrid
Diesel Only
(2) (3)
(3) (4)
(4)
0.600 0.600
Diesel Price
DieselScenarios
Price Scenarios
0.000 0.000
(1)
(5)
Diesel Only
Hybrid
Only
NUSADiesel
PENIDA
Hybrid
Indonesia
0.700 0.700
USD/kWh
(4)
(3)
0.382
0.475 0.382
0.475
0.382
0.390
0.370
0.390
0.382
0.390
0.370
0.371
(3)
(2)
0.370
0.390
0.370
0.371
0.358
0.371
0.358
0.371
0.358
0.354
0.358
0.354
0.327
0.354
0.327
0.354
0.327
0.314
0.327
0.314
0.314
0.314
USD/kWh
USD/kWh
USD/kWh
USD/kWh
(2)
(1)
0.100 0.100
(4)
DieselScenarios
Price Scenarios
Diesel Price
Diesel Only
Hybrid
Only
Hybrid
Diesel
St. Vincent
and
the Grenadines
0.600 0.600
0.500 0.500
0.700 0.700
0.400 0.400
0.600 0.600
0.300 0.300
0.500 0.500
0.200 0.200
0.400 0.400
0.100 0.100
0.300 0.300
0.000 0.000
0.200 0.200 (1)
(4)
(3)
0.456
0.523 0.456
0.523
DieselScenarios
Price Scenarios
Diesel Price
BEQUIA
0.700 0.700
0.377
0.395
0.377
0.377
0.342
0.377
0.377
0.377
0.342
0.377
0.342
0.332
0.332
0.342
0.332
0.332
USD/kWh
0.000 0.000
(1)
(5)
(5)
0.349
0.374
(2)
(3)
(2)
Diesel Price
DieselScenarios
Price Scenarios
0.349
0.374
(1)
(2)
(1)
0.100 0.100
Diesel Price
DieselScenarios
Price Scenarios
0.000 0.000
(1)
0.500 0.500
0.700 0.700
0.400 0.400
0.600 0.600
0.300 0.300
0.500 0.500
0.200 0.200
0.400 0.400
0.100 0.100
0.300 0.300
0.000 0.000
0.200 0.200 (1)
0.390
0.395
0.506
0.600 0.600
USD/kWh
USD/kWh
(4)
(3)
0.506
0.429
0.451
0.4290.562
0.4290.562
0.412
0.451
0.429
0.451
0.412
0.424
0.412
0.451
(3)
(2)
0.700 0.700
USD/kWh
(2)
(1)
0.100 0.100
0.412
0.424
0.396
0.424
0.396
0.402
0.396
0.402
0.355
0.402
0.355
0.354
0.354
0.355
0.354
0.354
USD/kWh
USD/kWh
USD/kWh
USD/kWh
0.500 0.500
0.700 0.700
0.400 0.400
0.600 0.600
0.300 0.300
0.500 0.500
0.200 0.200
0.400 0.400
0.100 0.100
0.300 0.300
0.000 0.000
0.200 0.200 (1)
0.355
0.402
0.600 0.600
0.396
0.424
Fig.
Fig. 41
A 41 A
0.700
0.700
0.468
0.507
LEGUIZAMO Colombia
0.506
0.562 0.506
0.562
Fig. 41Fig.
A 41 A
PUERTO
(5)
(5)
The diesel price forecasts used above show a relatively stable trend. Apart from that, unexpected
short-term diesel price shocks might occur. Figure
42 shows the impact of a diesel price increase of 20
percent over 2 years at the beginning, the middle,
and the end of project lifetime in Nusa Penida. The
difference is relatively low, due to the fact that this
short-term shock is averaged by the remaining 18
years of project lifetime. Due to the discounting effect, shocks in the near future burden the viability
more than shocks in later years.
Fig. 42
Figure 42: Impact of diesel price shocks on LCOE
As mentioned above, the LCOE concept does not

properly reflect the advantage of a reduced exposure to diesel price volatility. Starting from the
base case (scenario 3) figure 43 shows the percentage range of LCOE changes from the lowest (1) to
the highest diesel price scenario (5). Among the
sites, the range of changes for the hybrid LCOE is
between 27.2 in Basse Santa Su and 40.1 percent
in Nusa Penida, whereas the range of the diesel
LCOEs is higher, from 43.3 percent in Bequia to
51.0 percent in Puerto Leguizamo. These numbers
Fig. 44
again highlight
that the hybrid systems are less vulnerable against diesel price changes and serve as a
natural partial hedge against diesel price changes.

5
0.366
0.397
0.368
0.399
0.373
0.409
0.400
0.365
0.300
0.200
0.100
0.000
Base Case
Shock in year Shock in year Shock in year

2015/16
2024/25
2031/32
Diesel Only
Hybrid
0.523
0.500
USD/kWh
USD/kWh
0.500
0.395
0.550
REDUCED
VOLATILITY
(range
between
extreme
scenarios)
0.456
5
0.450
50.6%
4
0.400
4
3
2
40.1%
2
0.350
1
0.300
0.323
Diesel Only
0.310
Hybrid
53
Figure 43: Volatility of LCOEs for different diesel price scenarios
+ 34%
+ 32%
+ 30%
+ 28%
+ 26%
+ 24%
+ 22%
+ 20%
+ 18%
+ 16%
+ 14%
+ 12%
+ 10%
Diesel Case - High
+ 8%
+ 4%
- 4%
- 8%
- 10%
- 12%
- 14%
- 16%
- 18%
- 20%
- 22%
- 24%
- 26%
- 28%
- 30%
- 32%
- 34%
+ 2%
Base Case
Diesel Case - Low
- 2%
100% Diesel
Town/Island
Hybrid
Public sector case

18.1%
Puerto
Leguizamo
51%
36.5%
= 14.5%
Las
Terrenas
44.3%
32.1%
= 12.2%
Bequia
43.3%
30.5%
= 12.8%
Nusa
Penida
50.6%
40.1%
= 10.5%
Busuanga
45.1%
29.4%
= 15.7%
45.8%
32.2%
= 13.6%
46.0%
27.2%
= 18.8%
Hola
Basse
Santa Su
13.9%
22.6%
16.0%
28.3%
12.2%
19.9%
15.4%
27.9%
11.5%
19.0%
18.2%
32.4%
15.2%
24.9%
15.2%
29.9%
10.2%
19.2%
15.5%
30.3%
12.1%
20.1%
15.5%
Following the same logic, figure 44 shows the

detailed LCOE ranges in USD/kWh for hybrid and
diesel for the example of Nusa Penida under the
5 diesel price scenarios (incl. cost of carbon). The
lower end of the bar indicates the LCOE for the
lowest diesel price scenario, whereas the upper
end of the bar shows the LCOE for the highest diesel price scenario.
54
32.9%
30.5%
9.7%
17.5%
Figure 45 shows the range of cost benefits between hybrid and diesel system from the lowest
(1) to the highest (5) diesel price scenario, further
depicting the increasing cost benefit of a hybrid
over a diesel system under higher diesel prices.
The upper end of the bar indicates the cost benefit under the highest diesel price scenario whereas
the lower end of the bar indicates that most cases
show no benefit over current generation cost at
the lowest diesel price scenario.
0.523
USD/kWh
0.500
15%
REDUCED
VOLATILITY
(range
between
extreme
scenarios)
10%
0.456
5
0.450
50.6%
4
0.400
4
3
2
40.1%
2
0.350
1
0.300
Figure 45: LCOE ranges for different diesel price

scenarios
0.323
0.310
Diesel Only
% cost benefit
0.550
15%
12.8%
10.0%
9.4%
7.7%
7.3%
9.3%
6.4%
% cost benefit
Figure 44: LCOE volatility for different diesel price

scenarios (Nusa Penida)
0.366
year
2
Fig. 45
Fig. 44
5%
4.2%
0%
-5%
For the calculation of financing cost, the debt capacity was derived based on the available net operating cash flow and a target debt service coverage ratio (DSCR) of 1.2 and capped at a maximum
portion of 70 percent. Different local tax rates
were considered for each of the respective sites.
Based on these assumptions the following initial
WACCs were derived and applied as the base case.
As described above, the average financing costs
increase as debt is repaid and the capital structure
becomes more equity dominated.
Figure 46 shows the impact of financing costs on
the hybrid and diesel LCOEs (including carbon
costs), assuming an initial 70/30 debt-equity split.
-3.2%
0%
-10%
-4.4%
-4.4%
-5.6%
-7.7%
-10%
Puerto
Las
Leguizamo Terenas
Bequia
Nusa Busuanga Hola

Penida
Le
Basse
Santa Su
The red line indicates the break even, that is the

initial WACC for which both LCOEs match. The hybrid investment is viable if financing costs less than
the respective break-even WACC can be secured.
The maximum financing costs for making the hybrid investment viable vary from site to site. As
already demonstrated in the base case analysis of
section 4.2, in most cases (except Hola and Basse
Santa Su) even commercial return expectations can
be applied to make the hybrid case viable (since
they are lower than the break-even initial WACCs
presented in the graphs below). In Nusa Penida, viability is given for initial financing costs up to 12.7
percent, whereas there is particularly little scope
in Hola with a maximum initial WACC of 8 percent.
Table 5: Financing costs at selected sites

Tax Rate
WACC @ 70/30 D/E
D/E split based on debt capacity
Resulting WACC
Puerto Leguizamo
25%
8.7%
70/30
8.7%
Las Terrenas
27%
8.6%
63/37
9.3%
Bequia
30%
8.4%
60/40
9.3%
Nusa Penida
25%
8.7%
60/40
9.6%
Busuanga
30%
8.4%
51/49
10.2%
Hola
30%
8.4%
61/39
9.3%
Basse Santa Su
31%
8.4%
51/49
10.1%
Town/Island
5%
-5%
-0.2%
Hybrid
4.4.2. IMPACT OF FINANCING COSTS
10%
55
Figure 46: LCOE as a function of financing costs (break-even WACC)
LEGUIZAMO Colombia
LCOE
LCOEininUSD/kWh
USD/kWh
LCOE
LCOEininUSD/kWh
USD/kWh
0.800
0.800
0.800
0.800
0.700
0.700
0.700
0.700
0.600
0.600
0.600
0.600
0.500
0.500
0.500
0.500
0.400
0.400
0.400
0.400
0.300
0.300
0.300
0.300
WACC:9.77%
9.77%
WACC:
0.200
0.200
WACC:9.77%
9.77%
WACC:
0.200
0.200
LCOE: 0.426
0.426
LCOE:
LCOE: 0.426
0.426
LCOE:
0.100
0.100
0.100
0.100
0.000
0.000
0.000
0.000
0% 2%
2% 4%
4% 6%
6% 8%
8%10%
10%12%
12%14%
14%16%
16%18%
18%20%
20%
0%
0% 2%
2% 4%
4% 6%
6% 8%
8%10%
10%12%
12%14%
14%16%
16%18%
18%20%
20%
0%
Capital
Cost
(Initial
WACC)
Capital
Cost
(Initial
WACC)
CapitalCost
Cost(Initial
(InitialWACC)
WACC)
Capital
100%
Diesel
Hybrid
100%
Diesel
Hybrid
100%Diesel
Diesel
Hybrid
100%
Hybrid

0.800
0.800
0.800
0.800
0.700
0.700
0.700
0.700
0.600
0.600
0.600
0.600
0.500
0.500
0.500
0.500
0.400
0.400
0.400
0.400
0.300
0.300
0.300
0.300
WACC:9.07%
9.07%
WACC:
WACC:9.07%
9.07%
0.200
WACC:
0.200
LCOE: 0.396
0.396
LCOE:
0.200
0.200
LCOE: 0.396
0.396
LCOE:
0.100
0.100
0.100
0.100
0.000
0.000
0.000
0.000
0% 2%
2% 4%
4% 6%
6% 8%
8%10%
10%12%
12%14%
14%16%
16%18%
18%20%
20%
0%
0% 2%
2% 4%
4% 6%
6% 8%
8%10%
10%12%
12%14%
14%16%
16%18%
18%20%
20%
0%
Capital
Cost
(Initial
WACC)
Capital
Cost
(Initial
WACC)
CapitalCost
Cost(Initial
(InitialWACC)
WACC)
Capital
100%
Diesel
Hybrid
100%
Diesel
Hybrid
100%Diesel
Diesel
Hybrid
100%
Hybrid
LCOE
LCOEininUSD/kWh
USD/kWh
LCOE
LCOEininUSD/kWh
USD/kWh
PUERTO
Fig.4646
Fig.
AA
Fig.4646AA
Fig.
Philippines
LCOE
LCOEininUSD/kWh
USD/kWh
LCOE in USD/kWh
0.800
0.800
0.800
0.700
0.700
0.700
0.600
0.600
0.600
0.500
0.500
0.500
0.400
0.400
0.400
0.300
0.300
0.300
WACC:9.57%
9.57%
WACC:
0.200
0.200
WACC:
LCOE: 9.57%
0.367
LCOE:
0.367
0.200
LCOE: 0.367
0.100
0.100
0.100
0.000
0.000
0.0000%
0% 2%
2% 4%
4% 6%
6% 8%
8%10%
10%12%
12%14%
14%16%
16%18%
18%20%
20%
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%
Capital
Cost
(Initial
WACC)
Capital
Cost
(Initial
WACC)
Capital Cost (Initial WACC)
100%
Diesel
Hybrid
100%
Diesel
Hybrid
100% Diesel
Hybrid

LCOE
LCOEininUSD/kWh
USD/kWh
LCOE in USD/kWh
0.800
0.800
0.800
0.700
0.700
0.700
0.600
0.600
0.600
0.500
0.500
0.500
0.400
0.400
0.400
0.300
0.300
0.300
WACC:8.78%
8.78%
WACC:
0.200
0.200
WACC:
LCOE: 8.78%
0.381
LCOE:
0.381
0.200
LCOE: 0.381
0.100
0.100
0.100
0.000
0.000
0.0000%
0% 2%
2% 4%
4% 6%
6% 8%
8%10%
10%12%
12%14%
14%16%
16%18%
18%20%
20%
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%
Capital
Cost
(Initial
WACC)
100%
Diesel
Hybrid
100%
Diesel
Hybrid
100% Diesel
Hybrid
56
HOLA Kenya
0.800
0.800
0.800
0.700
0.700
0.700
0.600
0.600
0.600
0.500
0.500
0.500
0.400
0.400
0.400
0.300
0.300
WACC:8.03%
8.03%
WACC:
0.300
WACC:
0.200
0.200
LCOE: 8.03%
0.503
LCOE:
0.503
0.200
LCOE: 0.503
0.100
0.100
0.100
0.000
0.000
0.0000%
0% 2%
2% 4%
4% 6%
6% 8%
8%10%
10%12%
12%14%
14%16%
16%18%
18%20%
20%
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%
Capital
Cost
(Initial
WACC)
Capital
Cost
(Initial
WACC)
100%
Diesel
Hybrid
100%
Diesel
Hybrid
100% Diesel
Hybrid
LCOE
LCOEininUSD/kWh
USD/kWh
LCOE in USD/kWh
BUSUANGA
Fig.4646
Fig.
BB
Fig. 46 B

0.800
0.800
0.800
0.800
0.700
0.700
0.700
0.700
0.600
0.600
0.600
0.600
0.500
0.500
0.500
0.500
0.400
0.400
0.400
0.400
0.300
0.300
0.300
0.300
WACC:12.74%
12.74%
WACC:
0.200
0.200
WACC:12.74%
12.74%
WACC:
0.200
0.200
LCOE: 0.404
0.404
LCOE:
LCOE: 0.404
0.404
LCOE:
0.100
0.100
0.100
0.100
0.000
0.000
0.000
0.000
0% 2%
2% 4%
4% 6%
6% 8%
8%10%
10%12%
12%14%
14%16%
16%18%
18%20%
20%
0%
0% 2%
2% 4%
4% 6%
6% 8%
8%10%
10%12%
12%14%
14%16%
16%18%
18%20%
20%
0%
Capital
Cost
(Initial
WACC)
Capital
Cost
(Initial
WACC)
CapitalCost
Cost(Initial
(InitialWACC)
WACC)
Capital
100%
Diesel
Hybrid
100%
Diesel
Hybrid
100%Diesel
Diesel
Hybrid
100%
Hybrid
LCOE
LCOEininUSD/kWh
USD/kWh
LCOE
LCOEininUSD/kWh
USD/kWh
LCOE
LCOEininUSD/kWh
USD/kWh
LCOE
LCOEininUSD/kWh
USD/kWh
0.800
0.800
0.800
0.800
0.700
0.700
0.700
0.700
0.600
0.600
0.600
0.600
0.500
0.500
0.500
0.500
0.400
0.400
0.400
0.400
0.300
0.300
0.300
0.300
WACC:8.64%
8.64%
WACC:
WACC:8.64%
8.64%
WACC:
0.200
0.200
LCOE: 0.372
0.372
LCOE:
0.200
0.200
LCOE: 0.372
0.372
LCOE:
0.100
0.100
0.100
0.100
0.000
0.000
0.000
0.000
0% 2%
2% 4%
4% 6%
6% 8%
8%10%
10%12%
12%14%
14%16%
16%18%
18%20%
20%
0%
0% 2%
2% 4%
4% 6%
6% 8%
8%10%
10%12%
12%14%
14%16%
16%18%
18%20%
20%
0%
Capital
Cost
(Initial
WACC)
Capital
Cost
(Initial
WACC)
CapitalCost
Cost(Initial
(InitialWACC)
WACC)
Capital
100%
Diesel
Hybrid
100%
Diesel
Hybrid
100%Diesel
Diesel
Hybrid
100%
Hybrid
Power source
Diesel only
Hybrid
Perhaps, as discussed already in section 4.2, the

WACC at individual sites can be lowered for instance by i) financing the hybrid project on the
balance sheet of the utility, with presumably lower
equity return expectations than an IPP which was
assumed at 15 percent in the financial model; ii)
concessional debt finance with interest rates lower
than the assumed 8 percent. Figure 47 compares
for each site the cost benefit of diesel and hybrid
for the private sector case (project finance struc-
ture, WACC changing over project lifetime as debt

is repaid) to a public sector case with an assumed
WACC of 5 percent over the entire project lifetime.
In the 5 percent case, average generation costs can
be lowered from 12.1 percent in Las Terrenas to as
much as 15.8 percent in Nusa Penida. The lower
discount rate results in a significant reduction of
financing costs as part of the hybrid LCOE.
Fig. 47
15.4%
7.6%
13.0%
14.1%
15.8%
13.3%
11%
9%
-3%
Puerto Leguizamo
Las Terenas
Bequia
5% case
Financing costs are driven by the interest rate on

debt (including risk margin), the loan tenor, the
initial debt/equity ratio as well as the equity return
expectations. The base case analysis kept margin
and loan tenor stable, and calculated the debt capacity (i.e. the initial debt/equity ratio) based on
the debt service cover ratio (DSCR). As a result, the
safety cushion for the commercial lender remained
stable in different scenarios, and the risk margin
did not need to be adjusted. The hybrid system,
however, is burdened by higher capital intensity,
and thus a longer payback period. Due to this loss
of flexibility (i.e. increased capital commitment),
it can be perceived as financially more risky, resulting in a higher risk margin.41
Nusa Penida
Busuanga
Hola
-0.7%
-1%
-1.6%
1%
1.3%
3%
0.3%
5%
1.2%
7%
2.8%
% cost benefit
13%
12.1%
15%
12.9%
Figure 47: Cost advantage of hybridisation with private and public financing costs
Basse Santa Su
private sector case
Figure 48 therefore compares the hybrid LCOEs under consideration of increasing risk margins (plus
2 percent, 4 percent, 6 percent) to a constant diesel case. The initial WACC results from the given
private sector financing assumptions, and differs
for each site due to local tax rates. The scenarios
show the effect of increasing financing costs for
the hybrid case (diesel remains stable). Financing
costs for the hybrid system can be increased up
to the intersecting WACC; for higher financing
costs, economic viability of the hybrid investment
is no longer given. Contrary to the intersecting
WACC, the break-even WACC (discussed above)
is based on the assumption that financing costs
for both diesel and hybrid increase equally at the
same level.
41
Besides reduced financial flexibility, the hybrid system, in general, also comes along with a limited flexibility to react to decreasing demand.
Output and hence variable costs of diesel generators can easily be reduced (close to zero), whereas the hybrid always (at least) produces
the PV share of electricity. At the selected sites, however, it is not expected that the demand will decrease to a level where the PV-generated
electricity exceeds the actual demand, i.e. where there are operational and financing costs without revenues.
57
Figure 48: Impact of different risk margins on LCOE

Fig. 48 A
0.700
0.600
0.700
0.500
0.600
0.400
0.500
0.300
0.400
0.200
0.300
0.100
0.200
0.000
0.100 8.7%
0.000 Diesel
8.7%
Diesel
USD/kWh
USD/kWh
USD/kWh
USD/kWh
USD/kWh
USD/kWh
Fig. 48 A
8.7%
10.7%
12.7%
14.7%
9.5%
Intersecting
Hybrid WACC+2% WACC+4% WACC+6% Intersecting
WACC
8.7%
10.7%
12.7%
14.7%
9.5%
Other components
Financing Cost WACC
Other components
Financing Cost
WACC
USD/kWh
USD/kWh
USD/kWh
USD/kWh
USD/kWh
USD/kWh
Financing Cost
WACC
USD/kWh
USD/kWh
USD/kWh
USD/kWh
8.4%
10.4%
12.4%
14.4%
9.3%
WACC
8.4%
10.4%
12.4%Financing
14.4%
Other components
Cost 9.3%
Financing Cost
WACC
USD/kWh
USD/kWh

0.700
0.600
0.700
0.500
0.600
0.400
0.500
0.300
0.400
0.200
0.300
0.100
0.200
0.000
0.100 8.4%
0.000 Diesel
8.4%
Diesel
58
WACC
8.7%
10.7%
12.7%
14.7%
11.8%
Intersecting
WACC
8.7%
10.7%
12.7%
14.7%
11.8%
Other components
Financing Cost WACC
Financing Cost
WACC
HOLA Kenya
Fig. 48 B
Other components
0.700
0.600
0.700
0.500
0.600
0.400
0.500
0.300
0.400
0.200
0.300
0.100
0.200
0.000
0.100 8.7%
0.000 Diesel
8.7%
Diesel
Other components
Fig. 48 B
0.700
0.600
0.700
0.500
0.600
0.400
0.500
0.300
0.400
0.200
0.300
0.100
0.200
0.000
0.100 8.4%
0.000 Diesel
8.4%
Diesel
Financing Cost
8.4%
10.4%
12.4%
14.4%
8.5%
Intersecting
WACC
8.4%Other 10.4%
14.4%Cost WACC
8.5%
components12.4% Financing
Other components
8.6%
10.6%
12.6%
14.6%
8.9%
Intersecting
WACC
8.6%
10.6%
12.6%
14.6%
8.9%
Other components
Financing Cost WACC
Other components

0.700
0.600
0.700
0.500
0.600
0.400
0.500
0.300
0.400
0.200
0.300
0.100
0.200
0.000
0.100 8.4%
0.000 Diesel
8.4%
Diesel
0.700
0.600
0.700
0.500
0.600
0.400
0.500
0.300
0.400
0.200
0.300
0.100
0.200
0.000
0.100 8.6%
0.000 Diesel
8.6%
Diesel
0.700
0.600
0.700
0.500
0.600
0.400
0.500
0.300
0.400
0.200
0.300
0.100
0.200
0.000
0.100 8.4%
0.000 Diesel
8.4%
Diesel
8.4%
10.4%
12.4%
14.4%
8.1%
WACC
8.4%
10.4%
12.4%Financing
14.4%
Other components
Cost 8.1%
Other components
LCOE - elements of costs
Other components
Financing cost
8.4%
10.4%
12.4%
14.4%
8.7%
8.4%
10.4%
12.4%
14.4%
8.7%
Other components
Financing Cost WACC
WACC
Other components
Financing Cost
Financing Cost
WACC
Table 6: Increase of financing costs at intersection
Town/Island
WACC increase
at intersection
Puerto Leguizamo
1.4%
Las Terrenas
0.3%
Bequia
0.1%
Nusa Penida
3.1%
Busuanga
0.9%
Hola
-0.3%
Basse Santa Su
0.3%
Figure 49 shows the hybrid LCOE under reduced

PV penetration levels (minus 5%, 10%, and 15%).
Although the solar irradiance level is well predicable over one year and the project lifetime, respectively, externalities like dirt, clouds, or losses in cables can decrease the PV output. Accordingly, the
diesel generators have to be utilised to a larger
extent, reducing diesel savings.
Fig. 49
Figure 49: Impact of PV penetration on LCOE

0.500
-7.6%
-4.3%
-0.7%
+2.8%
32% PV
Hybrid Base
Case
27% PV
Hybrid
(-5% )
22% PV
Hybrid
(-10%)
17% PV
Hybrid
(-15%)
1,239,320
1,093,985
937,536
781,086
The same effect is shown in table 6. Among the

selected sites, depending on the base-case cost
advantage of the hybrid system, a WACC increase
between 0.1 percent and 3.1 percent for the hybrid system could be tolerated for retaining a cost
advantage. This highlights again that a different
set of financing assumptions for diesel and hybrid
system can have a major impact.
USD/kWh
0.450
0.400
0.350
0.300
0.250
100% Diesel
Base Case
Diesel Savings
(in liters)
4.4.4. IMPACT OF CAPEX AND OPEX CHANGES

4.4.3. IMPACT OF ACHIEVED PV PENETRATION
LEVEL
The (economic) viability of a hybrid system furthermore depends on the achieved PV penetration
level. For Nusa Penida, the HOMER tool calculated
a PV penetration of 32 percent, or 4,649 MWh of
14,692 MWh annual electricity generation.
The impact of a 10 percent increase/decrease of

CAPEX and OPEX (other than diesel) is shown in
table 7. A variance of 10 percent in equipment cost
in each of the components only leads to changes
in the overall LCOE by up to 2 percent. Also a 10
percent change in operational expenses influences
the LCOE only marginally by maximum 1.5 percent.
59
Table 7: CAPEX and OPEX sensitivities
Town/Island
Current assumptions
Impact of +10% on LCOE
Impact of -10% on LCOE
Puerto Leguizamo
5.61m/2.75MW
2.04m/1MW
1.7%
-1.7%
Balance of System
3.02m
0.7%
-0.7%
Average OPEX p.a.
0.49m
1.0%
-1.0%
13.77m/6.75MW
2.04m/1MW
1.9%
-1.9%
Balance of System
5.78m
0.6%
-0.6%
Average OPEX p.a.
1.65m
1.5%
-1.5%
3.06m/1.5MW
2.04m/1MW
1.8%
-1.8%
Balance of System
2.2m
1.0%
-1.0%
Average OPEX p.a.
0.31m
1.1%
-1.1%
6.12m/3MW
2.04m/1MW
1.6%
-1.6%
Balance of System
3.22m
0.7%
-0.7%
Average OPEX p.a.
0.6m
1.1%
-1.1%
6.12m/3MW
2.04m/1MW
2.0%
-2.0%
Balance of System
3.03m
0.7%
-0.7%
Average OPEX p.a.
0.59m
1.2%
-1.2%
1.02m/0.5MW 2.04m/1MW
1.3%
-1.3%
Balance of System
1.65m
1.9%
-1.9%
Average OPEX p.a.
0.15m
1.2%
-1.2%
2.652m/1.3MW
2.04m/1MW
2.0%
-2.0%
Balance of System
2.22m
1.2%
-1.2%
Average OPEX p.a.
0.22m
1.0%
-1.0%
PV Costs
Las Terrenas
PV Costs
Bequia
PV Costs
Nusa Penida
PV Costs
Busuanga
PV Costs
Hola
PV Costs
Basse Santa Su
PV Costs
60
Figure 50: Summary of sensitivities
+ 30%
+ 28%
+ 26%
+ 24%
+ 22%
+ 20%
+ 18%
+ 16%
+ 14%
+ 12%
+ 10%
+ 8%
+ 4%
+ 2%
- 2%
- 4%
- 6%
- 8%
- 10%
- 12%
- 14%
- 16%
- 18%
- 20%
- 22%
- 24%
- 26%
- 28%
- 30%
+ 6%
Downside Case (LCOE Increase)
Upside Case (LCOE Reduction)
Town/Island
PV Costs
(-10%/+10%)
System
Integration
(-10%/+10%)
O&M Costs
(-10%/+10%)
Fuel Price
(EIA High/
EIA Low)
PV
Penetration
(-10%)
Financing
Cost
EIA Low
EIA High
Public sector
case
4.4.5. SUMMARY OF SENSITIVITIES

Figure 50 shows the ranges of sensitivities across all
sites. As described above, changes in the fuel and
financing costs have the largest impact.
4.4.6. IMPACT OF DEMAND GROWTH

To consider demand growth, additional PV capacity needs to be installed over project lifetime
(see section 3.4 for details on system sizing). The
lifetime of these additional modules (and other
new components), however, exceeds the 20 year
timeframe applied in the financial model. The
growth LCOEs do not consider electricity generated after year 20, while additional costs are distributed only over the output of the remaining
years (until year 20).
Further, the approach for modelling growth (i.e.

the regulatory framework) was simplified in a
way that no residual values of PPAs were considered. Concessions are typically provided over 20
years. When installing additional components in
later years, PPAs actually had to be revised (i.e. extended). In the financial model, though, it was assumed that PPAs end after 20 years lifetime of the
initial investment. To mitigate the effects, it was
assumed that the generation assets can be sold at
book value at the end of year 20.
Figure 51 shows that even over the limited 20
years project lifetime demand growth already
has a positive effect on most hybrid LCOEs. For instance, in Las Terrenas, the relative cost advantage
of hybridisation increases from 1.2% (no growth
case) to 4.6% (growth case) again ceteris paribus.
The actual growth LCOEs (considering output of
additional PV after year 20) are most likely lower
than the ones shown in the graph, with an additional relative cost-advantage of the hybrid.
61
9.8%
Fig. 51
Figure
51: Cost advantage of hybridisation with and without growth
3.7%
4.2%
1.3%
0.0%
2%
0.3%
1.2%
4%
2.8%
0%
-4%
-1.6%
-2%
Puerto Leguizamo
Las Terenas
Bequia
No Growth
62
-0.7%
% cost benefit
6%
4.6%
5.9%
8%
6.7%
7.6%
10%
Nusa Penida
Busuanga
Growth
Hola
Basse Santa Su
A detailed breakdown of the different sites LCOEs

with and without demand growth is shown in
figure 52.
Figure 52: LCOEs with/without demand growth
PUERTO
Fig. 52
52
A
Fig.
A
LEGUIZAMO Colombia
Fig. 52 A
0.424
0.424
0.424
0.424
USD/kWh
USD/kWh
USD/kWh
0.300
0.300
0.400
0.400
-2.8%
-2.8%
savings
savings
0.412
0.412
-2.8%
-2.8%
savings
savings
0.412
0.412
0.412
0.412
-5.9%
-5.9%
savings
savings
0.412
0.412
-5.9%
-5.9%
savings
savings
0.500
0.500
0.388
0.388
0.388
0.388
0.200
0.200
0.300
0.300
0.000
0.000
0.300
0.300
0.400
0.400
DieselOnly
Only
Diesel
NoGrowth
Growth
No
Hybrid
Hybrid
DieselOnly
Only
Diesel
Growth
Growth
0.000
0.000
0.100
0.100
Hybrid
Hybrid
Diesel
Hybrid
Diesel
Only
Hybrid
CostOnly
of carbon
carbon
emmissions
Cost
of
emmissions
No
No Growth
Growth
Capex
Capex
Fuel
Hybrid
Hybrid
Financing
Costs
OPEX Growth
Financing
Costs
Growth
Capex
Fuel
OPEX
0.000
0.000
Diesel
Diesel Only
Only
Fuel
OPEX
Financing Costs
0.371
0.371
-0.3%
-0.3%
savings
savings
0.300
0.300
0.400
0.400
0.371
0.371
-0.3%
-0.3%
savings
savings
USD/kWh
USD/kWh
USD/kWh
0.390
0.390
0.384
0.384
-4.6%
-4.6%
savings
savings
0.395
0.395
-1.2%
-1.2%
savings
savings
0.390
0.390
0.384
0.384
-4.6%
-4.6%
savings
savings
0.366
0.366
0.366
0.366
0.370
0.370
0.366
0.366
0.370
0.370
0.366
0.366
-4.2%
-4.2%
savings
savings
-4.2%
-4.2%
savings
savings
DieselOnly
Only
Diesel
NoGrowth
Growth
No
0.200
0.200
0.300
0.300
DieselOnly
Only
Diesel
Growth
Growth
Hybrid
Hybrid
Capex
Capex
Fuel
Hybrid
Hybrid
Financing
Costs
OPEX Growth
Financing
Costs
Growth
Capex
Fuel
OPEX
0.500
0.500
0.400
0.400
0.500
0.500
0.351
0.351
0.351
0.351
Hybrid
Hybrid
Diesel
Hybrid
Diesel
Only
Hybrid
CostOnly
of carbon
carbon
emmissions
Cost
of
emmissions
No
No Growth
Growth
Diesel
Diesel Only
Only
Fuel
OPEX
Financing Costs
0.300
0.300
0.400
0.400
USD/kWh
USD/kWh
USD/kWh
0.500
0.500
0.400
0.400
0.500
0.500
0.395
0.395
-7.6%
-7.6%
savings
savings
0.395
0.395
-7.6%
-7.6%
savings
savings
0.365
0.365
0.365
0.365
0.397
0.397
-9.8%
-9.8%
savings
savings
0.397
0.397
-9.8%
-9.8%
savings
savings
0.358
0.358
0.358
0.358
0.200
0.200
0.300
0.300
0.100
0.100
0.200
0.200
0.000
0.000
-1.2%
-1.2%
savings
savings
0.100
0.100
0.200
0.200
0.000
0.000
0.100
0.100
0.395
0.395
0.200
0.200
0.300
0.300
0.100
0.100
0.200
0.200
0.000
0.000
0.100
0.100
0.400
0.400
0.500
0.500
USD/kWh
USD/kWh
USD/kWh
0.500
0.500
0.400
0.400
0.500
0.500
0.100
0.100
0.200
0.200
DieselOnly
Only
Diesel
NoGrowth
Growth
No
Hybrid
Hybrid
DieselOnly
Only
Diesel
Growth
Growth
Diesel
Hybrid
Diesel
Only
Hybrid
CostOnly
of carbon
carbon
emmissions
Cost
of
emmissions
No
No Growth
Growth
Capex
Capex
Fuel
Hybrid
Hybrid
Financing
Costs
OPEX Growth
Financing
Costs
Growth
Capex
Fuel
OPEX
Fig. 52
B
BUSUANGA
0.000
0.000
0.100
0.100
Hybrid
Hybrid
0.000
0.000
Diesel
Diesel Only
Only
Fuel
OPEX
Financing Costs
Philippines
DieselOnly
Only
Diesel
NoGrowth
Growth
No
Hybrid
Hybrid
DieselOnly
Only
Diesel
Growth
Growth
Hybrid
Hybrid
Diesel
Hybrid
Diesel
Only
Hybrid
CostOnly
of carbon
carbon
emmissions
Cost
of
emmissions
No
No Growth
Growth
Diesel
Diesel Only
Only
Fuel
OPEX
Capex
Capex
Fuel
Hybrid
Hybrid
Financing
Costs
OPEX Growth
Financing
Costs
Growth
Capex
Fuel
OPEX
Financing Costs
HOLA Kenya
Fig. 52 B
USD/kWhUSD/kWh
0.400
0.500
0.300
0.400
0.364
0.364
-1.3%
savings
-1.3%
savings
0.359
0.362
0.359
0.362
0.500
-6.7%
savings
0.337
-6.7%
savings
0.337
0.200
0.300
0.100
0.200
0.000
0.100
0.000
Diesel Only
No Growth
Hybrid
Diesel Only
CostOnly
of carbon emmissions
Diesel
Hybrid
No Growth
Capex
Fuel
OPEX
Diesel Only
Capex
Fuel
OPEX
Growth
Hybrid
Financing
Costs
Hybrid
Growth
Financing Costs

0.500
USD/kWhUSD/kWh
0.400
0.500
0.300
0.400
0.379
+0.7%
increase
0.382
0.379
+0.7%
increase
0.513
+1.6%
increase
0.505
0.489
+1.6%
increase
0.300
0.400
0.489
0.489
0.513
0%
savings
0.489
0%
savings
0.200
0.300
0.100
0.200
0.000
0.100
0.000
Diesel Only
No Growth
Hybrid
Diesel Only
CostOnly
Diesel
Hybrid
No Growth
Capex
Fuel
OPEX
Diesel Only
Capex
Fuel
0.376
-3.7%
savings
0.362
0.376
-3.7%
savings
Cost of carbon emissions
0.382
0.362
CAPEX
Hybrid
Diesel Only
OPEX
Growth
Hybrid
Financing
Costs
Hybrid
Growth
Financing Costs
Fuel
0.100
0.200
0.000
0.505
LCOE - elements of costs
0.200
0.300
0.000
0.100
0.400
0.500
USD/kWhUSD/kWh
0.500
Diesel Only
No Growth
CostOnly
Diesel
Hybrid
No Growth
Capex
Fuel
OPEX
Diesel Only
Capex
Fuel
OPEX
Growth
Hybrid
Financing
Costs
Hybrid
Growth
OPEX
Financing costs
Financing Costs
63
FINANCIAL VIABILITY ASSESSMENT
5. FINANCIAL VIABILITY ASSESSMENT

Financial viability is given if a hybridisation project offers an attractive investment opportunity
for the private sector, i.e. if revenue streams are
high enough to generate sufficient cash flows to
pay for all costs, including cost of capital. The requested risk margins will be heavily influenced by
the risk profile of the investment opportunity. The
required regulatory frameworks for hybrid minigrids are still to be created, to enable crowding
in of private sector financiers. Financial indicators
like project return42 and equity return43 expectations, payback periods and possible debt tranches
are calculated based on the revenues generated
from the sale of the electricity, and provide a basis for investment decisions. If the remuneration
per kWh is lower than the LCOE, the project is not
financially viable, since the project owner would
incur ongoing losses. As a consequence a PPA or
other framework needs to ensure sufficient revenues that allow for cost recovery.
a hybridisation is not given. Also, existing FiT regimes cannot be applied, and FiT levels would not
be sufficient to compensate not only for the PV
output but also the system integration costs. Nevertheless, there is a chance that PPAs could be renegotiated to create financial viability.
Considering externalities in the economic viability
assessment is best practice. From the perspective
of a potential private sector investor, this effect
needs to be excluded as carbon emissions are public goods rather than private ones (not triggering
concrete cash flows) and it is unlikely that the
existing carbon market mechanism result in sufficient cash flows. Governments would consequently price in this market failure.
Revenues in the amount of the hybrid LCOE (excluding carbon cost), represent the minimum required remuneration under the given financing
assumptions. This analysis can be used to illustrate
debt repayment schedules and equity cash flow
profiles. The EIRR will come in at the target level. If
the hybrid LCOE comes in below the current LCOE,
which is the case for most systems, this should be
the basis for price discussions. In the case of a utility-owned system, the utility could accrue the cost
savings to itself and reduce required subsidies.
In case of an IPP, the operator has entered into a

PPA and/or concession agreement with the government, which guarantees them a predictable
cash flow. Diesel price risk is absorbed by the
public sector which makes the risk profile for the
IPP more appealing. It is understood that under
the current PPAs/concession agreements, none
of the IPPs could switch directly from diesel to a
hybrid generation asset, i.e. financial viability of
Fig. 53
0.200
0.100
0.100
0.000
Puerto
Leguizamo
0.300
USD/kWh
0.400
0.26
0.20
0.200
0.362
0.500
0.365
0.495
0.23
0.300
0.600
0.346
0.341
0.376
0.25
0.346
0.353
0.352
0.376
0.405
0.371
0.400
0.32
LCOE in USD/kWh
0.500
0.393
0.600
0.487
0.54
Figure 53: LCOE for hybrid systems excluding cost of carbon under no-growth scenario
Las Terenas
CAPEX
Bequia
Fuel
OPEX
Nusa Penida
Financing costs
Busuanga
Hola
Avoided costs + emission reduction
Basse Santa Su
0.000
FiT
42
Only the project cash flows (i.e. the net operating and investing cash flow before financing cash flows -disbursement of debt, debt service)
are considered in the calculation of the IRR.
43
Financing cash flows are also included in the calculation.
64
Revenues can also be based on current LCOE of the

diesel scenario plus the cost for the reduced carbon
emissions (the avoided cost), i.e. the hybrid system
would be compared to the costs that are currently
incurred by the 100 percent diesel system plus an
additional top up for the emission reduction.
Figure 53 shows the LCOE excluding carbon cost

and also the avoided cost of diesel (diesel LCOE
plus top up for emission reduction). Five out of
seven sites are viable at avoided cost, Hola and
Basse Santa Su show a gap of 7.8 USDc/kWh and
2.8 USDc/kWh, respectively.
Table 8: Asset ownership

All assets under one ownership
PV under separate ownership
All generation assets and associated equipment

are owned by a single entity and financed by
the owner - in most cases the utility. However,
there might also be cases in which the utility
sells all of the existing diesel generators to an
IPP, which then generates electricity and sells
it to the utility under a PPA. Depending on
whether the assets are owned by the utility or a
private sector IPP, the financing costs vary.
In this scenario, a new (private sector) investor

owns the PV plant only, while the utility owns
the balance of system equipment and diesel
generators. The PV IPP would finance the PV
modules only, whereas the utility would have to
finance the remaining parts.
The majority of grids are owned by public utilities. Private finance sector investment would
require the implementation of IPP laws and
a sale of the existing diesel generator to the
hybrid IPP under the single ownership model.
In most cases the current PPAs or available FiT
regimes do not adequately address the specifics of hybrid grids nor incentivise owners to
reduce generation costs. For initial projects the
negotiation of such a framework would involve
additional transaction costs (and transaction
risk). The technology introduced in this study
requires an integrated management of the diesel and renewable energy generation capacity.
As a result, existing diesel assets would need to
be sold or leased to the private sector player in
case of an IPP structure.
It is expected that private sector investors would
demand a risk premium as a consequence of the
longer payback period and the given level of
technology risk which could, in principle, make
it unattractive for the public sector to enter into
IPP contracts. Rather the public sector might
want to outsource the operation only and make
use of attractive international concessional financing for the initial projects.
The PV IPP and utility would enter into a takeor-pay contract, in which the utility would
pay for every kWh of electricity produced by
the PV plant, regardless of whether or not it is
used. The price would be the PV LCOE since it
comes in far below the avoided cost of diesel.
The utility could then reduce the production
from diesel-based electricity by the amount of
electricity received from the PV IPP and incur
respective cost savings (price paid to PV IPP vs.
avoided cost of diesel).
Local FiT for PV electricity could be the basis for
price discussions for the cases were the PV portion of the plant is split out.
Since the PV IPP would not be burdened by the
high diesel costs nor the capital costs of the balance of system equipment, it may prove more
attractive to private sector investors. The utility,
however, would incur additional costs for the
remaining portion of the hybridisation equipment as well as the cost for the purchased electricity. These added costs need to be weighed
against the savings from reducing the dieselbased electricity. To get the full picture and to
not over-estimate the viability of this solution,
both views need to be analysed together.
65
5.1. OWNERSHIP STRUCTURES

A hybridisation project can be financed by the utility, currently owning the brownfield asset (most
likely a public body) or by the private sector. The
operational structure is somewhat independent
from the financing structure, and the implementation and operation of a hybrid plant can be tendered out even if the assets remain in the ownership of the public sector.
The different ownership structures - as outlined in
table 8 - impact the projects key performance indicators and hence the willingness of different types
of financiers to offer funding. The party owning
(though not necessarily operating) the equipment
would have to seek financing. Only electricity generation not distribution is considered. Acknowledging that the 100 percent peak penetration
technology requires a combined and aligned management of both generation assets, this study focuses on structures with all assets under one ownership, either owned by the utility or an IPP.
5.2. CASH FLOW ANALYSIS

NO-GROWTH CASE
Using the example of Nusa Penida, this section
analyses the cash flows of the hybrid project for
both no-growth and growth cases. All other sites
show similar investment profiles and financing
structures. The project IRR for all sites is presented
in table 9.
For Nusa Penida, not considering growth, the total
initial investment is USD 10.3 million, with additionally required replacements of USD 2.7 million
and USD 0.4 million in years 10 and 12, respectively
(see table 10). The net operating cash flow is the
revenues (based on hybrid LCOE of 34.6 USDc/
kWh, excluding carbon costs) less fuel costs, other
operational expenditures, and taxes.
Considering a project finance structure and its
related transaction costs (for instance for due diligence and setting up a special purpose vehicle),
the total investment volume of USD 10.3 million
(translating in a lending volume of USD 6.2 mil44
66
Table 9: Project IRR with/without growth

Project IRR no
growth
Project IRR
growth44
Puerto
Leguizamo
13.0%
12.4%
Las Terrenas
13.0%
12.4%
Bequia
13.0%
13.1%
Nusa Penida
13.3%
11.0%
Busuanga
13.6%
12.0%
Hola
13.0%
12.9%
Basse Santa Su
13.5%
12.8%
Town/Island
lion) represents a relatively low ticket size. Similarly, the investment volume of the other sites
ranging from USD 3.0 million in Hola to USD 22.8
million in Las Terrenas, would only result in a relatively low ticket size for a project finance transaction (maximum lending volume of USD 14.3 million for Las Terrenas).
For the base case, the net operating cash flow
increases in the initial years as the diesel price is
expected to decline (EIA reference scenario), while
revenues remain stable on a real basis (see figure
54). Taking capital investments into account, the
project reaches simple payback in year 7 (project
IRR = 13.3 percent).
Project finance structures require predictable cash
flows. The project finance terms as applied in this
model would require a hedging of the diesel price
risk or allocation of this risk to the public sector.
Diesel price increases above the projected increase
would reduce the cash flow available for debt service, leading to lower initial loan amounts or a requirement for longer loan tenors.
Based on stable revenues, above mentioned
private sector return expectations, and taking into
account the minimum DSCR of 1.2, the debt capacity comes in at 60.5 percent (excluding carbon costs).
To consider demand growth, additional generation capacity needs to be installed in later years. The lifetime of these additional
components, however, exceeds the 20 year timeframe applied in the financial model. The growth project IRRs do not consider electricity
generated after year 20, while additional costs are distributed only over the output of the remaining years (until year 20). To mitigate the
effects, it was assumed that the generation assets can be sold at book value at the end of year 20. Hence, the actual project IRRs under
growth assumptions are expected to be higher than shown in the table.
The initial investment would be financed with USD

6.2 million debt and USD 4.1 million equity (figure
56). The debt ratio goes down over the lifetime of
the project; the project remains 100 percent equity-
financed once the debt is fully repaid after the assumed 12 years loan tenor (1 year grace period).
Any requirements for an accelerated repayment of
debt are not considered.
Table 10: Hybrid investment costs (in USD, Nusa Penida)

Initial Costs
Replacement
Costs Year 10
Replacement
Costs Year 12
Diesel Gen-Sets
1,475,600
734,400
367,200
PV-Panels
6,120,000
Balance of system (converter, battery, automation

tool)
1,999,200
1,985,600
Capital Investment
9,594,800
2,720,000
Contingencies (5%)
479,740
Transaction Costs (2%)
191,896
Total Initial Investment
10,266,436
Components
367,200
Fig. 55
Fig. 54
Figure 54: Net operating cashflow (in USD 000,

Nusa Penida)
Figure 55: Net operating & investing cashflow

(in USD 000, Nusa Penida)
25,000
2,500
20,000
2,000
15,000
10,000
1,500
5,000
1,000
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
-5,000
500
-10,000
0
9 10 11 12 13 14 15 16 17 18 19 20
After debt service (figure 57), the remaining cash

flows are distributed to equity investors (figure
58). Dividend payments are suspended in year 1
and 2 due to minimum cash requirements and beginning of debt repayment; they start in year 3 at
a relatively low level. Also, equity investors are not
paid dividends in year 10 due to replacement investments of USD 2.7 million. Once the debt is fully
repaid, and all replacements have been installed,
the dividend level increases towards end of the
-15,000

Cumulative
Net operating and investing cash flow
project lifetime. Equity investors achieve simple

payback in year 8. The chosen financing structure
incentivises the equity investor to properly manage and operate the project over the loan tenor
and beyond, since the equity return reaches attractive levels only after debt is repaid. The equity
IRR increases after the loan is repaid, stays flat in
year 10 due to replacement investments and then
increases further until reaching the targeted 15
percent in year 20.
67

Fig. 56
Figure 56: Debt/equity ratio over project lifetime (in USD 000, Nusa Penida)
12,000
100%
90%
10,000
80%
8,000
60%
6,000
50%
40%
('000 USD)
70%
4,000
30%
20%
2,000
10%
0%
10
11
12
13
14
15
16
17
18
19
20

Capital Employed
Fig. 57
Debt ratio
Equity ratio
Fig. 58
Figure 57: Debt repayment

7,000
6,000
Figure 58: Equity payback

20,000
20%
15,000
15%
5,000
5%
3,000
5,000
2,000
0%
1,000
0
10%
10,000
4,000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
-5,000
0 1 2 3 4
5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
-15%

Cumulative
Cash flow to equity holders
EIRR up to respective year
5.3. CASH FLOW ANALYSIS

GROWTH CASE
present the net operating and investing cash flow.

Project IRR is 13.5 percent.
Project financing typically focusses on one concrete project. The growth case could be considered
as a series of several projects, which is a more entrepreneurial approach. For each increase in generation capacity, the existing underlying contracts
would need to be amended or separate contracts
for the additional capacity need to be negotiated.
For the purpose of this study, it was assumed that
additional debt can be sourced during the expansion of the project.
As shown in figure 61, the initial investment (USD

14.1 million) would be financed with 56.7 percent
debt (USD 7.96 million) and 43.3 percent equity
(USD 6.1 million). Besides replacement investments
in years 14 (USD 1.6 million), new debt and equity
injections are required to finance additional (extension) investments in years 7 (USD 5.8 million
only equity), 13 (USD 2.6 million) and 14 (USD 3.6
million). The second and third debt tranches are
assumed to be paid back at the end of the 20-year
project lifetime (figure 62). Any requirements for
an accelerated repayment of debt are not considered.
Taking demand growth into account, it is assumed

that revenues equal the hybrid LCOE of 34.1 USDc/
kWh (excluding carbon costs). Figures 59 and 60
68
-10%
-10,000
-5%

Fig. 59
Fig. 60
Figure 59: Net operating cashflow; growth case

Figure 60: Net operating & investing cashflow;

growth case (in USD 000, Nusa Penida)
6,000
60,000
5,000
50,000
40,000
4,000
30,000
3,000
20,000
2,000
10,000
0
1,000
-10,000
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
-20,000
9 10 11 12 13 14 15 16 17 18 19 20

Cumulative
Figure 63 shows that equity investors are not paid

dividends in year 1 and 2 due to minimum cash
requirements and beginning of debt repayment.
Net operating and investing cash flow
Payback of equity is in year 11. The equity IRR increases as debt is repaid, reaching the targeted
EIRR of 15 percent in year 20.
Fig. 61
100%
20,000
90%
18,000
80%
16,000
70%
14,000
60%
12,000
50%
10,000
40%
8,000
30%
6,000
20%
4,000
10%
2,000
0%
10
11
12
13
14
15
16
17
18
19
20
('000 USD)
Figure 61: Debt/equity ratio over project lifetime; growth case (in USD 000, Nusa Penida)

Capital Employed
Debt ratio
Fig. 63
Equity ratio
Fig. 62
Figure 62: Debt repayment; growth case

Figure 63: Equity payback; growth case

9,000
50,000
20%
8,000
40,000
15%
7,000
10%
30,000
6,000
5%
20,000
5,000
0%
10,000
4,000
3,000
2,000
-10,000
-5%
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
1,000
-10%
-15%

Cumulative
Cash flow to equity holders
EIRR up to respective year
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
69
CONCLUSIONS
6. CONCLUSIONS
Based on case studies in seven countries, hybrid
mini-grids that combine electricity generation
from RE sources with existing diesel generation
have potential to reduce energy costs and boost
energy security in a wide variety of situations
around the world.
The current diesel-only average generation costs
at the chosen sites (without carbon externalities
and financing costs) range from 31 to 44 USDc/
kWh. They are driven mainly by the high cost of
diesel fuel in particular in island settings today.
Often, end-customer tariffs do not come in at a
cost-reflective level, and the operation of remote
grids represent a burden to the national utilities
and hinder accelerated grid expansion. In addition, the current reliance on diesel fuel exposes
utilities and governments to diesel price volatility,
with diesel-only generating costs increasing by up
to 33 percent in case of EIA high oil price projections. Hybridisation projects can help to reduce
average generation costs and exposure to diesel
price volatility.
PV power can generate electricity at much lower
costs at all sites studied, which are located in regions with high solar radiation. The average generation cost for PV assuming that every kWh produced can be used is 16 USDc/kWh to 23 USDc/
kWh. Where biomass and/or wind resources can
be utilised, the average generation costs may be
even lower.
Because the hybridisation and integration of intermittent RE in an isolated grid require additional
investment, the above-stated generation costs
(diesel vs. PV) cannot be directly compared. The
inconsistent use of LCOE per kWh produced (as
an indicator to compare different renewable and
fossil-fuel based technologies) rather than system
LCOEs (LCOEs per kWh sold) confuses stakeholders and raises unrealistic expectations. In a hybrid
system, investors swap a part of the costs for diesel
with financing costs and depreciation of the initial investment in renewables capacity. This margin
drives economic viability. Not taking into account
70
financing costs, the average generation cost in the

hybrid systems come in below the current generation costs in all cases.
Financing costs are a major driver of achievable
cost savings. Among other things, the level of financing costs is determined by the chosen ownership structure. Assuming a hybridisation project
is financed on the balance sheet of the utility,
and access to concessional finance is given, the
assumption of a 5-percent flat discount rate appears realistic. In this case, the hybridisation of
diesel grids with PV would yield significant cost
savings. Savings at the seven sites (including costs
of carbon emissions) range from 12 to 16 percent
under a mid-case scenario for oil prices, and from
16 to 20 percent at high-case oil price projections
although PV at the sites accounts for just 31 to
40 percent of overall electricity generation. And,
since PV is more costly than other renewable options such as wind, hydro, or geothermal power
that may be available, these estimates of savings
are conservative.
If hybridisation is financed by the private sector
through an IPP, the PPA needs to compensate for
higher financing costs (owing to higher refinancing costs as well as a mix of real and perceived risks
associated with investing in power generation assets in developing countries). Since hybrid grids
are more capital intensive than diesel grids, this
decreases the attractiveness of the hybrid solution.
Nevertheless, even with private finance, hybridisation reduces electricity generation costs at five of
the seven sites.
The appetite of private-sector lenders for hybrid
mini-grid investments is likely limited by their
small size, which results in high transaction costs
relative to anticipated revenues (of course varying
from market to market). In many developing countries, it is hard to obtain commercial financing
even for medium-scale RE projects on larger grids.
Hybrid mini-grids are small and more complex. For
the initial transactions it is therefore believed that
concessional financing from international finan-
CONCLUSIONS
cial institutions will be required to leverage private investments in mini-grids at least until more
experience is gained, risks are better understood,
and private financing costs decline.
utilitys balance sheet, they should support the

creation/change of PPAs/concessions in a way that
the relative cost advantage of hybrid plants can be
realised by the private sector.
Among the investigated sites, the differences in

estimated cost reduction are mainly due to differences in plant size, on-site diesel costs, and solar
radiation. Larger plants can achieve economies of
scale by distributing the fixed cost of the hybrid
system (like the automation tool required for the
hybrid technology applied in this study) over more
units of generated electricity. High diesel prices result in high cost savings and allow hybrid systems
to offer partial insurance against the risk of rising
fuels costs. Higher solar radiation allows each unit
of PV capacity to produce more (cheaper) electricity. The two sites where hybridisation could result in a cost increase (Hola and Basse Santa Su)
have by far the smallest generation capacity, and
even relatively high local diesel prices and solar
radiation cannot compensate the missing scale.
In contrast, the cost advantage at the largest site
(Las Terrenas) is limited by relatively low diesel
prices and solar radiation. The most viable case for
hybridisation is Nusa Penida, a mid-sized plant
with the highest diesel prices and relatively high
solar radiation.
Some additional observations relate to potential

implementation challenges:
There is limited evidence that significant load management can easily take place that could reshape
the demand curve in a way that it becomes more
compatible with the PV output curve. Realising
economic potential from such load management
would require some on-site activity and appropriate incentive structures. It remains, however, an
upside potential that should not be ignored when
preparing for a concrete project.
The risk of adverse diesel-price developments
remains with the public sector, irrespective of
whether the sites are operated by the public sector
or outsourced to private sector operators (through
PPAs with diesel-price-adjustment clauses). Hybrid
systems mitigate the public sectors exposure to
diesel-price volatility and serve as a natural partial hedge against diesel price changes. Given the
results of this analysis, public sector stakeholders
should be encouraged to analyse the potential for
hybridisation also with other technologies in
more detail. If realisation is not possible on the
The absence of up-to-date and reliable cost and

performance data for RE technologies is often a
significant barrier to their uptake. This can lead to
inefficient policy making, and undermine public
support for renewables and hence hybrid power
systems. Accurate, transparent, and reliable data
would ensure that decision makers and the public
are adequately informed, as well as help convince
investors and financial institutions that the risks of
RE investments are limited.
Before implementing the hybrid project at any
of the sites, another more thorough cost analysis
needs to take into account all site-specific details
(to be disclosed by the utilities). It has to be determined, for instance, which elements of costs are
ultimately included in current diesel generation
costs, and which financing conditions were applied. Once these aspects are known, the hybrid
generation costs have to be re-calculated, based
on the same assumptions.
Analysis should be performed of alternate technical configurations for hybridisation as well as
different mixes of RE resources and potential connection to the main grid. This study compares electricity generating costs of existing diesel power
plants to those of simulated PV-diesel hybrid grids,
applying a 100-percent peak PV penetration solution. At particular sites, however, another hybrid configuration and other renewable resources
might be even more cost-effective. Other hybrid
system configurations for example using diesel
spinning reserves or larger battery banks to balance fluctuations in solar power output could be
the subject of follow-up analyses. And for sites not
far from the main grid, where generating costs
are generally lower than in isolated areas because
there is a wider mix of generating options, analysis
of extending the grid is critical.
The level of familiarity with hybrid technologies
among stakeholders, in particular in environments
71
CONCLUSIONS
dominated by residential consumption, is often

limited. Technology providers need to develop appropriate technology-guarantee mechanisms, for
example with regard to possible RE penetration,
which heavily impacts the relative cost advantage
of a hybrid solution. The latter, however, is not
straightforward as PV penetration is also heavily dependent on the underlying demand patterns. Smart risk allocation would aim to allocate
demand-pattern-related risks to the public sector,
and technology-related risks to original equipment manufacturers as well as engineering, procurement and construction-management companies.
A significant increase in understanding RE and hybrid business models, and a higher level of transparency among technology providers, will be necessary to create mutual trust (required to allocate
resources for project assessment) and to implement
such innovative projects. This also calls for fair
communication with regard to achievable cost savings and financing assumptions. This analysis has
revealed that findings from the commercial application of hybrid technologies (for example in the
mining industry) can only partially be transferred
to primarily residential applications. Nevertheless,
they are often used to convince stakeholders on
the ground, who then become disappointed at a
later stage. Also, one has to distinguish clearly between generation costs (and cost savings) per kWh
sold and kWh produced.
The operation and optimisation of isolated grids is
not necessarily at the top of the agenda of national utilities, as they are often too small to receive
much attention in the national context. Even if isolated grids are heavily loss-making, their low relative contribution to the overall (financial) utility
results rarely triggers significant management attention. Also, operators on the ground often lack
the broader perspective and awareness to drive a
discussion around hybridisation. Required data to
properly analyse the economic viability of a hybrid
project needs to be compiled from different stakeholders. For instance, local contacts (on-site at the
isolated grid) often lack access to data on the volume of electricity sold or actual diesel spending.
On the other hand, experts and managers at the
utility headquarters are rarely aware of optimisation potential on site. Private-sector operators of
72
isolated grids are regularly compensated on a costplus basis, which does not create significant incentive to consider hybrid solutions.
The limited scalability and replication potential
(driven by a required site-specific technical layout
of hybrid plants) represents a barrier for implementation. There are few countries with a significant number of (comparable) isolated grids. Consequently, countries with a large number of similar
isolated grids might be particularly interesting to
look at. This is the case in Kenya, where although
the expected cost advantage of hybridisation is
relatively limited in Hola a pipeline of similar
brownfield projects for hybridisation already exists.
For many sites, the current, diesel-dominated operation is not yet optimised, and cost-reduction
potential can also be expected on this side. Furthermore, in the current environment, a (factbased and highly accurate) approach towards economic viability of hybridisation might be rational,
but not necessarily convincing for local stakeholders.
Given the site-specific nature of the hybridisation
technology, and the relatively marginal emission
savings (from a global perspective), it may prove
difficult to access climate funds, which prefer to
focus on low-hanging fruits that will contribute
to rapid emissions reductions. This kind of climate
finance may be better classified as development
intervention.
Reality is more complex and less rational than a
financial model. Walking the talk will be challenging for projects at first, and will involve significant additional (and in this study not reflected)
transaction costs for setting up an appropriate
framework. Nevertheless, the learning-curve can
be steep, and additional initial efforts will pay off
if a pipeline of projects is ready for realisation.
73
ANNEX
ANNEX 1: Glossary
100% Peak Renewable

Energy Penetration
Technology
A Hybrid Power System designed with a 100 percent peak penetration of

renewable is a system that is allowed to rely totally on the renewable energy
source at any moment this source is available at sufficient level. On the example
of a PV-Diesel hybrid system designed this way, the operator is allowed to switch
off the diesel engines when the sun is shining at peak.
Average solar radiation

(kWh/m2/day)
Amount of electromagnetic energy (solar radiation) incident on the surface of

the earth. Also referred to as total or global solar radiation.
Average PV supply
Amount of PV energy supplied to the grid on a daily average basis.
Avoided costs
The avoided cost of electricity produced in the current diesel grid.
Capacity factor
The ratio of the total amount of energy the plant produces during a period of
time, to the amount of energy the plant would have produced at full capacity.
Carbon externalities/cost
of carbon emissions
An estimate of the economic damages associated with a small increase in carbon

dioxide (CO2) emissions, conventionally one metric ton, in a given year. In the
study, cost of carbon emissions of 50 USD/tCO2 was considered. It is derived from
the diesel consumption and multiplied with cost of carbon emissions.
Converter (inverter)
An electronic device that takes DC input from the solar module and converts it
into AC electricity.
Debt capacity
It refers to an assessment of the amount of debt that the hybrid project can
repay within a specified period of time. Based on the available net operating
cash flow and a target debt service cover ratio (DSCR) of 1.2, the debt capacity
for private sector debt was derived, but capped at a maximum debt portion of
70 percent
Debt Service Cover Ratio

(DSCR)
It is defined as the earnings before interest, taxes, depreciation and amortisation

divided by the debt service (the payment of interest and repayment of principal).
It needs to be 1 to provide some safety cushion for the lenders.
Economic LCOE
Economic Levelised Cost of Electricity that also considers cost of carbon emissions
over the investment lifetime.
Economic viability
It considers hybridisation from a pure economic perspective. It takes into account

whether hybridisation can reduce average generation costs, considering carbon
emissions from diesel electricity generation as a component of the economic
levelised cost of electricity (LCOE). Costs for the existing diesel electricity
generation and for the hybrid scenario are calculated based on real economic
costs.
74
ANNEX
EIA
U.S. Energy Information Administration. It is the principal energy agency of

the U.S. Federal Statistical System and a part of U.S. Department of Energy
responsible for collecting, analysing and disseminating information.
Equity IRR
Rate of return on equity invested in the project. When using the Equity IRR as a
discount rate, the Net present Value of the equity cash flows would equal 0.
Feed-in-Tariff (FiT)
A policy mechanism designed to accelerate investment in renewable energy

technologies. It offers long-term contracts to renewable energy producers,
typically based on the cost of generation of each technology.
Financial LCOE
Financial Levelised Cost of Electricity that does not consider costs of carbon
emissions over the investment lifetime.
Financial viability
It considers the perspective of equity investors and commercial lenders, i.e.

whether the respective project presents an attractive investment/lending
opportunity. Financial viability depends inter alia on stability/riskiness of cash
flows, achievable revenues/returns and payback periods of the project.
Fully-fledged financial
model
A comprehensive excel based financial model that assesses the viability of a

hybrid project. The model analyses how a hybrid project will react to different
economic situations or events, and estimates the outcome of financial decisions.
It includes cash flow projections, depreciation schedules, debt service, balance
sheet, income statement, growth scenarios etc. over the lifetime of the project. It
provides all the key assumptions and allows the user to run sensitivity analysis by
changing one or several assumptions at one time and see the overall results on
the projected numbers.
HOMER
Hybrid optimisation modelling software, developed by National Renewable

Energy Laboratory (NREL), USA.
Hybridisation
The 'Hybridisation' combines at least two different kinds of technologies for

power generation and distributes electricity to several customers through an
independent grid. Thus, the hybrid technology is supplied by a mix of renewable
energy sources, and a generator, generally supplied with diesel, used as a
back-up/base load.
IPP
Independent Power Producer, a company owning and operation electricity

generation facilities and selling the output to the local utility or the end users.
75
ANNEX
Investment lifetime
The total lifetime of the project starting from construction until end of
operation. In this study the investment lifetime of a hybridisation project is
assumed to be 20 years.
Levelised Cost Of
Electricity (LCOE)
The LCOE is the total capital, operating (incl. fuel) costs and financing cost per
unit generated electricity, discounted over the investment lifetime. Typically, the
discount factor is the Weighted Average Costs of Capital (WACC). In the financial
model used in this study, the LCOE is calculated with a goal seek on the required
revenues per unit of electricity to reach a certain equity IRR. Thus the financing
structure is reflected much more accurate than in the traditional LCOE
calculation.
The LCOE is the price per unit electricity that makes an investment break even,
i.e. if the revenues per unit electricity is below the LCOE, the owner of the
facility will not be able to recover its cost from the electricity production without
subsidies.
LCOE produced
The levelised cost of produced electricity i.e. total capital and operating costs per
unit generated electricity over the investment lifetime. Excess electricity is included here. Thus the LCOE per kWh produced is lower that the LCOE per kWh sold.
LCOE sold
The levelised cost of sold electricity i.e. total capital and operating costs per unit
sold electricity over the investment lifetime. Excess electricity which cannot be
sold, is exluded here. Thus the LCOE per kWh sold is higher than the LCOE per
kWh produced.
Load pattern
It exhibits electricity consumption behaviour into various customer classes

(residential, commercial, and industrial).
Load profile
Total energy demanded from a power system over a specific period of time
(e.g. hours, days, etc).
Load shedding
A power blackout/failure condition that occurs when the site is forced to shut
down due to limitations in fuel supply, maintenance of the generators, or inadequate supply of power demand.
PPA
Power Purchase Agreement. It is a contract defining the terms of electricity sale

between the buyer and seller of electricity.
PV mean output
Average power output from a PV system at the given solar radiations over the
year (8760 hours).
PV penetration
It is defined as the ratio of total peak PV power to the peak load power of the
grid.
76
ANNEX
Suppressed demand
Unmet power demand caused by the enforcement of load shedding by the

power utility.
System integration
Electrical systems with multi-functional features that control voltage, frequency,

power of a grid and regulate operation of the energy sources (PV, generator,
battery) in it. It continuously monitors the grid, determines the cost-optimal
working condition for each energy source and gives the necessary set points,
calculates necessary operating reserve and allocates this to the different energy
sources.
Weighted Average Costs

of Capital (WACC)
It is defined as the sum of the cost of each capital component (debt, equity)
multiplied by its proportional weight and adjusted by the tax shield on debt. It is
the average expected return on the entire project.
77
ANNEX
ANNEX 2: Technical fact sheets

Fig. 19 A
Technical data
Daily Load Profile

2.5
ENERGY DEMAND
HYBRIDIZATION POTENTIAL (NO GROWTH)
1.5
MW
MW
Present energy demand: 11,810 MWh/year

Growth of demand: 6% in year 1-10; 4% in year 11-20.
1
0.5
2.75 MW PV
4.2 MW diesel generators
1.2 MW converter (DC-AC/AC-DC)
170 kWh battery (10-15 minutes emergency backup)
Control system
00
01:00
02:00
03:00
04:00
05:00
06:00
07:00
08:00
09:00
10:00
11:00
12:00
13:00
14:00
15:00
16:00
17:00
18:00
19:00
20:00
21:00
22:00
23:00
:0
0
Fig. 22 A
Daily Load
(average, min, max)
Global Horizontal Solar
Radiation
1.8
1.6
7.0
1.4
1.26.0
1.05.0
0.8
0.64.0
0.43.0
0.2
2.0
0.0
MW
1.0
0.0
Jan Feb Mar Apr May Jun
0.6
0.0
Fig. 26 A
5.0
4.0
3.0
2.0
1.0
0.0
Zero Growth
Year
Year20
20
Fig. 25 A
7.0
3.6
6.0
3.0
5.0
2.4
4.0
1.8
3.0
1.2
2.0
0.6
1.0
0.0
Load
installed capacity
PV
Diesel
4.30
2.75
8.35
Year 1
Diesel Hours
PV
0.0
3.46
PV
Year Hours
5
Year 10
Year 15
2.5
Hybridisatio
2
Installed Capa
1.5 (MW)
0.5 Output
(GWh/year
0
Year 20
30%
15%
MW
25%
20%
10%
5%
0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Year
Average
Demand
PVPV Hours
%%
Fuel
Saving
Fuel
saving
Average
Demand Installed
Installed
Fuel
Saving Average
Average
Fuel
saving
Zero Growth
Year 1
Year 5
Year 10
Year 15
Year 20
35%
30%
25%
20%
Diesel
PV 35%
1.8
1.6
14.0
Hybridisation
30%
7.0
4.13
1.50
1.4Capacity
Installed
12.0
25%
6.0
1.2
(MW)
10.0 5.0
1.0
20%
8.0 4.0
0.8
15%
0.6
6.0 Output
3.0
5.12
2.43
0.4
10%
(GWh/year)
2.0
4.0
0.2
5%
2.0 1.0
0.0
0.0 0.0
0%
1 2 3 4 5 6 7 Diesel
8 9 10
11
12
13
14
15
16
17
18
19
20
(MW) PV (MW)
Year
Diesel
(MW)
PV (MW)
Average Demand
Installed PV
% Fuel Saving
Average Fuel saving
Hours
Zero Growth
Year 1
Year 5
Year 10
Year 15
Year 20
16.0
9.0
8.0
7.0
6.0
5.0
4.2
3.6
Hybridisatio
Installed Capa
3.0
(MW)
2.4
1.8
Output
1.2
(GWh/year
0.6
0.0
00
01:30
02:30
03:30
04:30
05:30
06:30
07:30
08:30
09:30
10:30
:
11 30
12 :30
13:30
14:30
15:30
16:30
17:30
18:30
19:30
20:30
21:30
22:30
23:30
:3
0
35%
Power
DailyMonthly
AverageAverage
Load (MW)
Production (MW)
40%
7.0
1.8
6.0
1.6
1.4
5.0
1.2
4.0
1.0
3.0
0.8
0.6
2.0
0.4
1.0
0.2
0.0
0.0
ly Average Power
duction (MW)
8.0

Production (MW)
Diesel-PV Load Share in Different Months
1.2
1.0
0.8
0.6
0.4
40%
35%
30%
25%
20%
ly Average Power
duction (MW)
Expansion Plan
4.2
Hours
1.2
10.0
1.09.0
8.0
Hybridisation
0.87.0
Installed
6.0 Capacity
0.65.0
(MW)
4.0
0.43.0
2.0
1.0
0.2Output
0.0
(GWh/year)
0.0
00
01:30
02:30
03:30
04:30
05:30
06:30
07:30
08:30
09:30
10:30
:
11 30
12 :30
13:30
14:30
15:30
16:30
17:30
18:30
19:30
20:30
21:30
22:30
23:30
:3
0
MW
W
Aug Sep Oct Nov Dec

(MW)Load (MW)
Daily Average
00
:3
01 0
:0
020300:3
:1 0
03030:30
:2
04030:30
:3
050340:30
: :
060350 30
: :3
070360 0
: :3
080370: 0
:0 30
09 380:3
:0 0
10 390:3
:130 0
111 0:30
:1
12130:30
:2
131330:30
: :
141340 30
: :3
151350 0
: :3
161360: 0
:1 3
17 370:30
:1 0
18 380:3
:1 0
192390:3
:0 0
20230:30
:1
21230:30
: 2:
222330 30
: :
23 30 30
:3
0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
1.5
Jul
Diesel-PV Split (Capacity

and
PV output
fromOutput)
1.5 MW
00
01:30
02:30
03:30
04:30
05:30
06:30
07:30
08:30
09:30
10:30
:
11 30
12 :30
13:30
14:30
15:30
16:30
17:30
18:30
19:30
20:30
21:30
22:30
23:30
:3
0
Load Profile for Growth Scenario
2.0
PV
6.0
Fig. 24 A
78
Load

(MW)
00
Global Horizontal
:
Solar Radiation
01 30
:
(kWh/m2/day)
02 30
:
03 30

installed capacity
7.0

(MW)
1.2
Diesel savings of 1,114,775 litre/year

Average Savings of 2,596 tCO2/year
2.5
0.0
00
:
01 30
:
02 30
:
03 30
1.8
EMISSIONS AND SAVINGS
Fig. 27
A
Growth
and
1.0
Aug Sep Oct Nov Dec

Global Horizontal
(MW)
Solar Radiation
(kWh/m2/day)
00
:
01 30
:
02 30
:
03 30
:
04 30
:
05 30
:
06 30
:
07 30
:
08 30
:
09 30
:
10 30
:
11 30
:
12 30
:
13 30
:
14 30
:
15 30
:
16 30
:
17 30
:
18 30
:
19 30
:
20 30
:
21 30
:
22 30
:
23 30
:3
0
2.4
Year
Year15
15
2.0
1.5
4.0
1.0
3.0
0.5
2.0
0.0
5.0
Fig. 23 A
Daily generator power production: 22.32 MWh/day

Specific fuel consumption: 0.322 litre/kWh
Mean electrical efficiency: 31.8%
Hours
Year
Year
Year55
Year10
10
Jul
2.5
6.0
Daily Average Load Vs. Possible PV Output
DIESEL GENERATOR POWER SUPPLY
Year
Year11
Global Horizontal
Solar Radiation
(kWh/m2/day)
Global Horizontal
Solar Radiation
/day)
(kWh/m2MW
Daily average radiation: 4.05 kWh/m2/day

Average daily PV power production:
12.32 MWh/day
Average daily PV power consumption: 10 MWh/day
31% fraction of PV in the actual demand
Peak PV output: 3.4 MW
Average PV output: 1.03 MW
Mean PV output: 0.51 MW
Yearly sun hours: 4,358 hours/year
Capacity factor: 18.7%
3.5
3.0
7.0
00
01:00
02:00
03:00
04:00
05:00
06:00
07:00
08:00
09:00
10:00
11:00
12 :00
13:00
14:00
15:00
16:00
17:00
18:00
19:00
20:00
21:00
22:00
23:00
:0
0
PV POWER SUPPLY AND CONSUMPTION
Zero
ZeroGrowth
Growth
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
2.0
1.6
1.2
0.8
ANNEX
Fig. 19 A
Technical data
2.5 ENERGY
Daily Load Profile
DEMAND
energy demand: 27,703 MWh/year

of demand: 7% in year 1-3; 6% in year 4-7; 5%
1 in year 8-11; 4% in year 12-15; 3% in year 16-19; 2% in
year 20
MW
0.5
0:
0
1: 0
0
2: 0
0
3: 0
0
4: 0
0
5: 0
0
6: 0
0
7: 0
0
8: 0
0
9: 0
10 00
11:00
12 :00
13:00
14:00
15:00
16:00
17:00
18:00
19:00
20:00
21:00
22:00
23:00
:0
0
POTENTIAL (NO GROWTH)
00
01:00
02:00
03:00
04:00
05:00
06:00
07:00
08:00
09:00
10:00
11:00
12:00
13:00
14:00
15:00
16:00
17:00
18:00
19:00
20:00
21:00
22:00
23:00
:0
0
0 HYBRIDIZATION
6.75 MW PV
Fig. 22 A
Load
(average, min,
max)
455 kWh batteryDaily
(10-15
minutes
emergency
backup)
1.8
1.6 7.0 system
Control
Global Horizontal Solar

Radiation max, min)
Daily Load(average,
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Global Horizontal
Solar
Radiation
Daily Average
Load
vs. PV Output
(kWh/m
(MW) 2/day)
6.0
5.0
4.0
3.0
2.0
1.0
0.0

A
YearlyFig.
sun23hours:
4,367 hours/year
Load
PV
DIESEL
GENERATOR POWER SUPPLY
6.0
Daily1.8
generator power production: 52.25 MWh/day
5.0
4.0 fuel consumption: 0.316 litre/kWh
Specific
1.2
Mean3.0
electrical efficiency: 31.68%
2.0
0.6
1.0
4.2
7.0
3.6
6.0
3.0
5.0
2.4
4.0
1.8
3.0
1.2
0.6
0.0
Diesel
of Mar
2,584,002
0.0savings
Jan Feb
Apr Maylitre/year
Jun Jul Aug Sep Oct Nov Dec
00
:
01 30
:
02 30
:
03 30
:
04 30
:
05 30
:
06 30
:
07 30
:
08 30
:
09 30
:
10 30
:
11 30
:
12 30
:
13 30
:
14 30
:
15 30
:
16 30
:
17 30
:
18 30
:
19 30
:
20 30
:
21 30
:
22 30
:
23 30
:3
0
0.0
Average
of 6,131 tCO2/year
Fig.Savings
24 A
2.0
1.0
0.0
PV
2.75
3.46
Year
Year1 1
Hours
Year
Year
Year5 5 Hours
Year10
10
Year
Year15
15
Year
Year20
20
Growth and Expansion Plan
15%
10%
5%
0%
21 30
22:30
23:30
:3
0
8 19 20
Average
Demand
Average
Demand
ge Fuel saving
Year 20
Zero Growth
35%
30%
20%
25%
9.0
8.0
7.0
6.0
5.0
1.2
1.0
0.8
0.6
0.4
Installed
InstalledPV
PV
Year 1
%%Fuel
FuelSaving
Saving
Hours
Year 5
Year 10
Load
Diesel
9.50
1
Output
0.5
(GWh/year)
PV
PV
6.75
19.53
8.18
Diesel
PV
Hours
4.2
Hybridisation
3.6
Installed Capacity
3.0
(MW)
2.4
1.8
Output1.2
(GWh/year)
0.6
0.0
Year 15
Diesel
3.10
PV
3.00
10.30
4.39
Diesel (MW) PV (MW)
Diesel (MW)
Average
AverageFuel
Fuelsaving
saving
PV (MW)
Year 20
40%
35%
30%
25%
20%
ly Average Power
duction (MW)
20%
2.5
Hybridisation
2 Capacity
Installed
(MW)
1.5
00
01:30
02:30
03:30
04:30
05:30
06:30
07:30
08:30
09:30
10:30
:
11 30
12 :30
13:30
14:30
15:30
16:30
17:30
18:30
19:30
20:30
21:30
22:30
23:30
:3
0
25%
Diesel
PV
35%
1.8
14.0
Hybridisation
30%
1.6
7.0
4.13
1.50
Installed
Capacity
12.0 1.4
25%
6.01.2
(MW)
10.05.0
20%
1.0
8.0 4.00.8
15%
6.0Output
3.00.6
5.12
2.43
10%
(GWh/year)
2.00.4
4.0
0.2
5%
2.0 1.0
0.0
0.0 0.0
0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Diesel
(MW) PV (MW)
Year
Production (MW)
30%
PV output from 3 MW
installed capacity
16.0
ly Average Power
duction (MW)
35%
MW
Daily
Average
Load (MW)
Monthly
Average
Power
40%
PV

Production (MW)
Fig. 25 A
Aug Sep Oct Nov Dec

(MW)
00
:3
01 0
:
02 30
:
03 30
:
04 30
:
05 30
:
06 30
:
07 30
:
08 30
:
09 30
:
10 30
:3
11 0
:
12 30
:
13 30
:
14 30
:
15 30
:
16 30
:
17 30
:
18 30
:
19 30
:
20 30
:
21 30
:
22 30
:
23 30
:3
0
Diesel
0.0
Zero
ZeroGrowth
Growth
Jul
Hours
Load

(MW)
00 00
:3 :3
0
0
01 1 0
: :3
02 3002 0
: :3
03 3003: 0
:0 3
04 304:30
:0 0
05 305:3
:0 0
06 3006:3
: 7 0
07 300 :30
: 8
08 300 :30
: 9:
09 3100 30
: :
10 3101 30
:3 :3
11 102: 0
:1 3
12 303: 0
: 1 30
13 304:3
:1 0
14 3105:3
: 6 0
15 310 :30
: 7
16 310 :30
: 8
17 3109:30
: :
18 3200 30
: :3
19 3201 0
: :3
20 3202: 0
: 2 30
21 303:3
:
0
22 30
:
23 30
:3
0
21 30
22:30
23:30
:3
0
Year 20
PV
Diesel-PV Split (Capacity and Output)

installed capacity
8.35
Load
Hours
4.30
Aug Sep Oct Nov Dec

installed capacity
Hours
1.2
10.0
9.01.0
8.0
Hybridisation
7.00.8
Installed
6.0 Capacity
(MW)
5.00.6
4.0
3.0
2.00.4
Output
1.0
0.00.2
(GWh/year)
Jul

installed capacity
2.4
7.0
7.0
Global Horizontal
MW
Solar Radiation
(kWh/m2/day)
0:
00
1:
0
2: 0
0
3: 0
0
4: 0
0
5: 0
0
6: 0
0
7: 0
0
8: 0
0
9: 0
10 00
:
11 00
12 :00
:
13 00
:
14 00
:
15 00
:
16 00
:
17 00
:
18 00
:
19 00
:
20 00
:
21 00
:
22 00
:
23 00
:0
0
02:00
03:00
04:00
05:00
06:00
07:00
08:00
09:00
10:00
11:00
12 :00
13:00
14:00
15:00
16:00
17:00
18:00
19:00
20:00
21:00
22:00
23:00
:0
0
MW
Global Horizontal
00 Solar Radiation
2
(kWh/m /day)
01:00
1.4
6.0
1.2
PV
SUPPLY AND CONSUMPTION
1.0 POWER
5.0
0.8
4.0
Daily
average radiation: 4.34 kWh/m2/day
0.6
3.0 daily PV power production: 27.68 MWh/day
0.4
Average
0.2
2.0
0.0
Average daily PV power consumption: 23.64 MWh/day
1.0
31% fraction
of PV in the actual demand
0.0
Jan Feb 6.7
Mar MW
Apr May Jun Jul Aug Sep Oct Nov Dec
Peak PV output:

Global Horizontal
(MW)
Solar Radiation
00
2
:3
/day)
(kWh/m
01 0
:
02 30
:
03 30
:
04 30
:
05 30
:
06 30
:
07 30
:
08 30
:
09 30
:
10 30
:3
11 0
:
12 30
:
13 30
:
14 30
:
15 30
:
16 30
:
17 30
:
18 30
:
19 30
:
20 30
:
21 30
:
22 30
:
23 30
:3
0
MW
2 Present
1.5 Growth
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
2.0
1.6
1.2
0.8
79
Fig. 19 A
ANNEX
2.5
1.5
MW
MW
1
0.5
00
01:00
02:00
03:00
04:00
05:00
06:00
07:00
08:00
09:00
10:00
11:00
12:00
13:00
14:00
15:00
16:00
17:00
18:00
19:00
20:00
21:00
22:00
23:00
:0
0
Fig. 22 A
Daily Load Profile

Growth of demand: 3% in year 1-10; 2% in year 11-20
0.0
1.0
1.2
Jul
Aug Sep Oct Nov Dec
0.0
0.6
0.0
00
:
01 30
:
02 30
:
03 30
:
04 30
:
05 30
:
06 30
:
07 30
:
08 30
:
09 30
:
10 30
:
11 30
:
12 30
:
13 30
:
14 30
:
15 30
:
16 30
:
17 30
:
18 30
:
19 30
:
20 30
:
21 30
:
22 30
:
23 30
:3
0
Hours
PV
Diesel
4.30
2.75
8.35
Year 1
PV
3.46
Hours
Year 5
Year 10
Hours
Year 15
Year 20
Diesel
35%
PV 30%

(MW)
Load
2.5
2Hybridisa
Installed Ca
1.5
(MW)
1
0.5
0
Outpu
(GWh/ye
00
:
01 30
:
02 30
:
03 30

installed capacity
Average Fuel saving
Year15
15
Year
Year20
20
Year
7.0
1.8
12.0
Hybridisation
25%
6.0
1.6
4.13
1.50
Installed
10.0
1.4Capacity
5.0
20%
(MW)
1.2
8.0 4.0
15%
1.0
6.0 3.0
0.8
10%
2.0
4.0 Output
0.6
5.12
2.43
5%
1.0
2.0(GWh/year)
0.4
0.2
0.0 0.0
0%
10.02 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Year
Jan Feb Mar Apr May
Jun Jul Aug Sep Oct Nov Dec Avrg.
Average Demand
Installed
PV (MW)
% Fuel
Average Fuel saving
Diesel
PVSaving
(MW)
Diesel
Hours
PV
Zero Growth
Year 1
Year 5
Year 10
Year 15
Year 20
00
01:30
02:30
03:30
04:30
05:30
06:30
07:30
08:30
09:30
10:30
:
11 30
12 :30
13:30
14:30
15:30
16:30
17:30
18:30
19:30
20:30
21:30
22:30
23:30
:3
0
MW
0%
Monthly
Average
Power
Daily Average
Load
(MW)
Production (MW)
14.0
4.2
Hybridisa
3.6
Installed Ca
3.0
(MW)
2.4
Production (MW)
16.0
00
01:30
02:30
03:30
04:30
05:30
06:30
07:30
08:30
09:30
10:30
:
11 30
12 :30
13:30
14:30
15:30
16:30
17:30
18:30
19:30
20:30
21:30
22:30
23:30
:3
0
1.8
Outpu
1.2
(GWh/ye
0.6
0.0
35%
30%
20%
1.0
15%
10%
0.5
5%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Year
0%
Average
Fuel
saving
Average
Fuel
saving
MW
25%
1.5
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
40%
35%
1.0
30%
0.8
25%
20%
0.6
15%
0.4
10%
0.2
5%
0.0
0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Diesel (MW) PV (MW)
Year
1.2
Average Demand
Diesel (MW)
Installed PV
PV (MW)
% Fuel Saving
Average Fuel saving

Production (MW)

Production (MW)
MW
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Year
2.0
MW
2.0
Fig. 25 A
2.5
80
3.0
1.8
40%
5%
%%
Fuel
Saving
Fuel
Saving
0.0
4.0
2.4
Zero Growth
10%
Average
Demand
PVPV
Average
Demand Installed
Installed
1.0
5.0
3.0
1.2
10.0
9.0
1.0
8.0
7.0
0.8
Hybridisation
6.0
5.0 Capacity
Installed
0.6
4.0
(MW)
3.0
0.4
2.0
1.0
0.0
0.2
Output
(GWh/year)
0.0
0.0
2.0

(MW)
00
Global Horizontal
:
01 30
Solar Radiation
:3
(kWh/m2/day)
0
02
:3
0 0
(kWh/m2/day)
Daily Average Load

vs.Horizontal
PV Output
Global
(MW)
Solar Radiation
Year 20
15%
Year10
10
Year
3.0
6.0
3.6
Fig. 24 A
20%
Year55
Year
4.0
25%
Year11
Year
5.0
7.0
4.2
0.0
30%
ZeroGrowth
Growth
Zero
PV
0.6 0.0
35%
Installed PV Hours
% Fuel Saving
Load
1.2 2.0
1.0
00
01:30
02:30
03:30
04:30
05:30
06:30
07:30
08:30
09:30
10:30
:
11 30
12 :30
13:30
14:30
15:30
16:30
17:30
18:30
19:30
20:30
21:30
22:30
23:30
:3
0
Year 15
Load
Profile for Growth Scenario
8.0
Average Demand
Aug Sep Oct Nov Dec

installed capacity
Fig. 27 A
7.0
1.8
6.0
1.6
5.0
1.4
1.2
4.0
1.0
3.0
0.8
0.6
2.0
0.4
1.0
0.2
0.0
0.0
Jul

Daily Average
(MW) Load (MW)
00
:
01 300
: 0
02 300 :30
: 1
03 3002:30
: :
04 3003 30
: :3
05 3004 0
: :3
06 3005: 0
: 0 3
07 30 6:30
: 0 0
08 30 7:3
: 0 0
09 3008:3
: 9 0
10 301 :30
:3 0
11 01 :30
: 1:
12 3012 30
: :3
13 3013 0
: :3
14 3014: 0
: 1 3
15 30 5:30
: 1 0
16 30 6:3
: 1 0
17 3017:3
: 8 0
18 301 :30
: 9
19 302 :30
: 0
20 3021:30
: :
21 3022 30
: :3
22 3023 0
: :3
23 30 0
:3
0
1.0
1.8 4.0
3.0
4.0
Daily
3.5 generator power production: 13.67 MWh/day
3.0
Specific
fuel consumption: 0.289 litre/kWh
2.5
2.0
Mean
1.5 electrical efficiency: 34.9%
1.0
0.5
EMISSIONS
AND SAVINGS
0.0
Year 10
2.0
7.0
4.5
DIESEL
Year 5
3.0
2.4 6.0
5.0

Average daily PV power production: 8.06 MWh/day
Fig.factor:
26 A 22.4%
Capacity
Year 1
4.0
6.0
Global
Horizontal
Solar Radiation
Fig. 23
A
Diesel savings of 702,830 litre/year

Hours
Average Savings of 1,823 tCO
/year
2
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
5.0
00
01:00
02:00
03:00
04:00
05:00
06:00
07:00
08:00
09:00
10:00
11:00
12 :00
13:00
14:00
15:00
16:00
17:00
18:00
19:00
20:00
21:00
22:00
23:00
:0
0
1.5 MW PV
114 kWh battery
(10-15 minutes emergency backup)
Control system
7.0
6.0
0:
0
1 0
ENERGY DEMAND
Global
MWHorizontal
Solar Radiation
(kWh/m2/day)
7.0
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
Global Horizontal
MW
Solar
Radiation
(kWh/m2/day)
Technical data
Zero Growth
0:
0
1: 0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
2.0
1.6
1.2
0.8
0.4
0.0
Fig. 19 A
1
0.5
PENIDA Indonesia
00
01:00
02:00
03:00
04:00
05:00
06:00
07:00
08:00
09:00
10:00
11:00
12:00
13:00
14:00
15:00
16:00
17:00
18:00
19:00
20:00
21:00
22:00
23:00
:0
0
NUSA
Fig. 22 A
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
Technical data
Daily Load Profile
7.0
7.0
Global
MWHorizontal
Solar Radiation
(kWh/m2/day)
MW
Global Horizontal
Solar Radiation
(kWh/m2/day)

6.0
1.8
ENERGY
DEMAND
1.6
5.0
Present
energy demand: 14,693 MWh/year
1.4
4.0
1.2
Growth
3.0 of demand: 8% in year 1-5; 6.5% in year 6-10;
1.0
0.8
4.5%2.0
in year 11-20.
0.6
1.0
0.4
HYBRIDIZATION
POTENTIAL (NO GROWTH)
0.2
0.0
0.0
3.0 MW PV
00
01:00
02:00
03:00
04:00
05:00
06:00
07:00
08:00
09:00
10:00
11:00
12 :00
13:00
14:00
15:00
16:00
17:00
18:00
19:00
20:00
21:00
22:00
23:00
:0
0
5%
20 30
21:30
22:30
23:30
:3
0
0%
ge Fuel saving
Year 20
8 19 20
5%
0%
ge Fuel saving
Aug Sep Oct Nov Dec

installed capacity
6.0
Load
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
40%
35%
1.0
30%
0.8
25%
20%
0.6
15%
0.4
10%
0.2
5%
0.0
0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Diesel
(MW)
PV
(MW)
Year
1.2
Average
Demand
Average
Demand
Installed
InstalledPV
PV
%%Fuel
FuelSaving
Saving
Average
AverageFuel
Fuelsaving
saving
PV
5.0
4.0
3.0
2.4 2.0
1.8 1.0
1.2 0.0
0.6
Jul
Aug Sep Oct Nov Dec
0.0
Hours

Hours

(MW)
00
:
01 30
:
02 30
:
03 30
:
04 30
:
05 30
:
06 30
:
07 30
:
08 30
:
09 30
:
10 30
:
11 30
:
12 30
:
13 30
:
14 30
:
15 30
:
16 30
:
17 30
:
18 30
:
19 30
:
20 30
:
21 30
:
22 30
:
23 30
:3
0
Daily Average
Load vs.Load
PV Output
Daily Average
(MW)
(MW)
00
:
01 30 00:
: 0 3
02 30 1:30
: 0 0
03 30 2:3
: 0 0
04 30 03:3
: 4 0
05 30 0 :30
: 5
06 30 0 :30
: 6:
07 30 07 30
:3
:
08 30 08 0
:3
:
09 30 09: 0
: 1 3
10 30 0:30
:3 1 0
11 0 1:3
: 1 0
12 30 12:3
:3 3 0
13 0 1 :30
: 4
14 30 1 :30
: 5
15 30 16:30
:
:
16 30 17 30
:3
:
17 30 18 0
:3
:
18 30 19: 0
:3 20 30
0
19
:
: 2 30
20 30 1:3
:3 22 0
21 0 2 :30
: 3
22 30 :30
:
23 30
:3
0
MW
25%
10%
Jul
PV output from 3 MW
installed capacity
Load
2.5
Diesel
2
Hybridisation
Installed Capacity
1.5
(MW)
1
9.50
0.5
Output
(GWh/year)
0
PV
PV
6.75
19.53
8.18
Hours
30%
15%

35%
20%
3.0

Production (MW)
10%
3.6
1.8
Output
1.2
(GWh/year)
0.6

Production (MW)
15%
0.0
4.2
Hybridisation
3.6
Installed Capacity
3.0
(MW)
2.4
00
01:30
02:30
03:30
04:30
05:30
06:30
07:30
08:30
09:30
10:30
:
11 30
12 :30
13:30
14:30
15:30
16:30
17:30
18:30
19:30
20:30
21:30
22:30
23:30
:3
0
20%
1.0
Diesel
PV 30%
7.0
1.8
12.0
25%
6.0
Hybridisation
1.6
4.13
1.50
10.0 5.0
Installed
Capacity
1.4
20%
(MW)
8.0 4.0
1.2
15%
1.0
6.0 3.0
0.8
10%
4.0 2.0
Output
0.6
1.0
5%
5.12
2.43
2.0
(GWh/year)
0.4
0.2
0.0 0.0
0%
10.02 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Year
Jan Feb Mar Apr May
Average Demand
Installed
PV (MW)
%
Fuel
Average Fuel saving
Hours
Diesel
PVSaving
(MW)
Zero
ZeroGrowth
Growth Year
Year1 1 Year
Year5 5 Year
Year1010 Year
Year1515 Year
Year2020
MW
25%
35%
14.0

Production (MW)
30%
16.0
2.0
Daily Average Load

vs. PV
Output
Global
Horizontal
(MW)
Solar Radiation
00
(kWh/m2/day)
:
01 30
:3
02 0
:
03 30
:
04 30
:
05 30
:
06 30
:
07 30
:
08 30
:
09 30
:
10 30
:3
11 0
:
12 30
:
13 30
:
14 30
:
15 30
:
16 30
:
17 30
:
18 30
:
19 30
:
20 30
:
21 30
:
22 30
:
23 30
:3
0
4.2
Load
PV
installed capacity
1.2
10.0
9.0
DIESEL
GENERATOR
POWER
SUPPLY
1.0
8.0
Diesel
PV
7.0
Daily
generator power production: 27.5 MWh/day
6.0
0.8
Hybridisation
5.0
4.30
2.75
Installed
Capacity
Specific
4.0
(MW)
3.0
Mean2.0
electrical efficiency: 36.3%
0.4
1.0
0.0
0.2
Output
EMISSIONS
AND SAVINGS
8.35
3.46
(GWh/year)
0.0
Hours
Zero Savings
Growth of
Year
1
Year 5/year
Year 10
Year 15
Year 20
Average
3,295
tCO
2 Hours

Production (MW)
35%
PV
3.0
7.0
Load
Fig. 25 A
40%
4.0
Global Horizontal Solar Radiation
Daily4.0
1.8
3.0
2.0
1.2
Average
1.0 daily PV power consumption: 12.7 MWh/day
32% 0.0
fraction of PV in the actual demand
0.6
Feb Mar
Apr May Jun Jul Aug Sep Oct Nov Dec
Peak PV Jan
output:
3.0 MW
0.0 PV output: 1.3 MW
Average
Fig. 24 A
Hours
Capacity factor: 21.7% PV output from 1.5 MW
Year 20
5.0
00
:
01 30
:
02 30
:
03 30
:
04 30
:
05 30
:
06 30
:
07 30
:
08 30
:
09 30
:
10 30
:3
11 0
:
12 30
:
13 30
:
14 30
:
15 30
:
16 30
:
17 30
:
18 30
:
19 30
:
20 30
:
21 30
:
22 30
:
23 30
:3
0
Global Horizontal
Solar Radiation
(kWh/m2/day)
(MW)
PV

installed capacity
6.0
0:
0
1: 0
0
2: 0
0
3: 0
0
4: 0
0
5: 0
0
6: 0
0
7: 0
0
8: 0
0
9: 0
10 00
:
11 00
12 :00
:
13 00
:
14 00
:
15 00
:
16 00
:
17 00
:
18 00
:
19 00
:
20 00
:
21 00
:
22 00
:
23 00
:0
0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0

227 kWh battery
23 A emergency backup)
(10-15Fig.
minutes
Control
7.0 system
6.0
2.4
POWER
5.0
ANNEX
0:
0
1: 0
0
2: 0
0
3: 0
0
4: 0
0
5: 0
0
6: 0
0
7: 0
0
8: 0
0
9: 0
10 00
:
11 00
12 :00
13:00
14:00
15:00
16:00
17:00
18:00
19:00
20:00
21:00
22:00
23:00
:0
0
8 19 20
1.5
MW
MW
20 30
21:30
22:30
23:30
:3
0
2.5
0.0
Diesel
3.10
PV
3.00
10.30
4.39
Diesel

PV
Diesel (MW)
PV (MW)
2.0
1.6
1.2
0.8
0.4
0.0
Diesel (MW) PV (MW)
Diesel (MW)
PV (MW)
81
ANNEX
Fig. 19 B
Technical data
Daily Load Profile


2.5
0.6
0.5
2.0
0.4
MW
3.0
MW
ENERGY DEMAND
1.5
1.0
0.2
0.5
0.1
0.0
00
0:
0
1: 0
0
2: 0
0
3: 0
0
4: 0
0
5: 0
0
6: 0
0
7: 0
0
8: 0
0
9: 0
10 00
11:00
12 :00
13:00
14:00
15:00
16:00
17:00
18:00
19:00
20:00
21:00
22:00
23:00
:0
0
3.0 MW PV
170 kWh battery
Control system
0.3
Fig. 22 B
DIESEL GENERATOR POWER SUPPLY
7.0
6.0
6.0
Global Horizontal
Solar Radiation
(kWh/m2/day)
7.0
5.0
4.0
3.0
2.0
1.0
0.0
Jul
2.0
1.0
0.0
Aug Sep Oct Nov Dec
PV output from 3 MW
installed capacity
Load
PV
Daily Average
Load
vs. PV Output
Global
Horizontal
(MW)
Solar
Radiation
00
:
(kWh/m2/day)
01 30
:
02 30
:
03 30
:
04 30
:
05 30
:
06 30
:
07 30
:
08 30
:
09 30
:
10 30
:3
11 0
:
12 30
:
13 30
:
14 30
:
15 30
:
16 30
:
17 30
:
18 30
:
19 30
:
20 30
:
21 30
:
22 30
:
23 30
:3
0
1.5
1.0
0.5

3.0
Fig. 23 Teil B
2.0
4.0

2.5
Daily generator power production: 25.62 MWh/day

Specific fuel consumption: 0.287 litre/kWh
Mean electrical efficiency: 35.13%
5.0
0.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
Fig. 24 B
Jul
Aug Sep Oct Nov Dec

(MW)
00
:3
01 0
:
02 30
:
0 30

1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
00 Solar Radiation
2
01:00 (kWh/m /day)
02:00
03:00
04:00
05:00
06:00
07:00
08:00
09:00
10:00
11:00
12 :00
13:00
14:00
15:00
16:00
17:00
18:00
19:00
20:00
21:00
22:00
23:00
:0
0
MW
Global Horizontal
Global Horizontal
Solar
Radiation
Daily Load
(average,
min, max)
0.5
0.4
0.3
0.2
0.1
0.0
Hours
Fig. 26 B
Diesel-PV Split (Capacity

and from
Output)
PV output
1.3 MW
Hours
Zero
Growth
1 1 Year
5 5 Year
10 10 Year
15 15 Year
20 20
Zero
Growth Year
Year
Year
Year
Year
Year
Zero Growth
Fig. 25 B
3.00
9.60
Year 1
4.27
Diesel Hours
PV
Year 5 Hours
Year 10
Year 15
Hybridisa
Installed Ca
(MW)
Outpu
(GWh/ye
Year 20
30%
20%
15%
10%
5%
0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Year
Average
Demand
PV PV Hours
% Fuel
Saving
Fuel
saving
Average
Demand Installed
Installed
% Fuel
Saving Average
Average
Fuel
saving
Zero Growth
Year 1
Year 5
Year 10
Year 15
Year 20
35%
30%
25%
20%
MW
25%
2.0
40%
1.0
0.9
Hybridisation
35%
1.50
1.30
0.8
Installed
Capacity
1.5
30%
0.7 (MW)
25%
0.6
1.0
20%
0.5
0.4 Output
15%
0.5
3.77
2.02
0.3
(GWh/year)
10%
0.2
5%
0.1
0.0
0.0
0%
1 2 3 4 5 6 7 Diesel
8 9 10
11
12
13
14
15
16
17
18
19
20
(MW) PV (MW)
Year
Diesel
(MW)
PV (MW)
Average Demand
1.0
0.8
0.6
0.4
Installed PV
% Fuel Saving
Average Fuel saving

Production (MW)
35%
1.5
3.36

Production (MW)
40%
7.0
1.8
6.0
1.6
1.4
5.0
1.2
4.0
1.0
0.8
3.0
0.6
2.0
0.4
0.2
1.0
0.0
0.0
ly Average Power
duction (MW)
8.0
2.0
PV
00
01:30
02:30
03:30
04:30
05:30
06:30
07:30
08:30
09:30
10:30
:
11 30
12 :30
13:30
14:30
15:30
16:30
17:30
18:30
19:30
20:30
21:30
22:30
23:30
:3
0
MW
82
installed capacity
1.20.8
0.7
1.00.6
Hybridisation
Installed
Capacity
0.80.5
(MW)
0.4
0.60.3
0.40.2
Output
0.1
0.2
(GWh/year)
0.0
0.0
Fig. 27and
B Expansion Plan
Growth
2.5
Load

(MW) Load (MW)
Daily Average
00
:
01 030
:0
02 030:30
:1
03 030:30
:2
04 0330:30
: :
05 0340 30
: :3
Load Shedding
06 0350 0
: :3
07 0360: 0
:0 3
08 370:30
:0 0
09 380:3
:0 0
10 1390:3
:30 0
11 1 0:30
:1
12 130:30
:2
13 1330:30
: :
14 1340 30
: :3
15 1350 0
: :3
16 1360: 0
:1 3
17 370:30
:1 0
18 380:3
:1 0
19 2390:3
:0 0
20 230:30
:1
21 230:30
:2
22 2330:30
: :
23 30 30
:3
0
1.4
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
00
01:30
02:30
03:30
04:30
05:30
06:30
07:30
08:30
09:30
10:30
:
11 30
12 :30
13:30
14:30
15:30
16:30
17:30
18:30
19:30
20:30
21:30
22:30
23:30
:3
0
0.4
0.3
0.3
0.2
0.2
0.1
0.1
0.0
ANNEX
HOLA Kenya
Fig. 19 B
Technical data
3.0ENERGY
2.5
Daily Load Profile
0.5

1.5
MW
0.4
MW
2.0
1.0
0.5
MW PV
170Fig.
kWh
battery
22 B
1.6Control system
00
01:00
02:00
03:00
04:00
05:00
06:00
07:00
08:00
09:00
10:00
11:00
12 :00
13:00
14:00
15:00
16:00
17:00
18:00
19:00
20:00
21:00
22:00
23:00
:0
0
0:
0
1: 0
0
2: 0
0
3: 0
0
4: 0
0
5: 0
0
6: 0
0
7: 0
0
8: 0
0
9: 0
10 00
11:00
12 :00
13:00
14:00
15:00
16:00
17:00
18:00
19:00
20:00
21:00
22:00
23:00
:0
0

Global Horizontal
Solar Radiation
(kWh/m2/day)
MW
Global Horizontal
00
Solar Radiation
01:00
(kWh/m2/day)
02:00
:
0
03 0
04:00
05:00
06:00
07:00
08:00
09:00
10:00
11:00
12 :00
13:00
14:00
15:00
16:00
17:00
18:00
19:00
20:00
21:00
22:00
23:00
:0
0
7.0
PV
1.5
3.0
AND SAVINGS
Aug Sep Oct Nov Dec
Hours
2.0
1.0

installed capacity
3.36
Load
3.00
9.60
4.27
20%
15%
10%
5%
21 0
22:30
23:30
:3
0
0%
ge Fuel saving
Year 20
35%
30%
25%
20%
MW
Production (MW)
25%
Hours
40%
1.0 2.0
0.9
35%
Hybridisation
0.8 1.5Capacity
1.50
1.30
Installed
30%
0.7 (MW)
25%
0.6
1.0
20%
0.5
0.4Output
15%
0.5
0.3
3.77
2.02
(GWh/year)
10%
0.2
5%
0.1 0.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Avrg.0%
0.0
1 2 3 4 5 6 7Diesel
8 9(MW)
10 11 12
13
14
15
16
17
18
19
20
PV (MW)
Year
Average
AverageDemand
Demand
hly Average Power

duction (MW)
30%
PV
0.4
0.3
0.2
0.1
0.0
Hours
PV
Hybridisation
Installed Capacity
(MW)
Output
(GWh/year)
0.80
0.50
1.66
Installed
InstalledPV
PV
%%Fuel
FuelSaving
Saving
Average
AverageFuel
Fuelsaving
saving
Diesel
0.80
PV

Production (MW)

35%
Load
0.2
Fig. 25 B
40%
Aug Sep Oct Nov Dec

installed capacity
0.5
0.0
Hours
Zero
Growth
1 1 Year
5 5 Year
10 10 Year
15 15 Year
20 20
Zero
Growth Year
Year
Year
Year
Year
Year
Year 20
Jul

(MW)
00
00
:3
:3
0
1 0
01 0
:
02:30
02 30
03:30
:3
03 0
0 :30
:
04 30 04:3
:3
5 0
05 0 0 :30
6
:3
Load Shedding
0
06
07:30
:
07 30 08:30
:
:
08 30 09 30
:3
:
09 30 10 0
:3
:
10 30 11: 0
:3
12 30
11 0
13:30
:
12 30
1 :30
:
13 30 14:3
:
5 0
14 30 1 :30
6
:3
15 0 1 :30
7
:
16 30 18:30
:
:
17 30 19 30
:3
:
18 30 20 0
:3
:
19 30 21: 0
:
22 30
20 30
23:30
:
21 30
:3
0
:3
0
22
:3
23 0
:3
0
21 0
22:30
23:30
:3
0
3.0

(MW)
00
:
01 30
:
02 30
:
03 30
:
04 30
:
05 30
:
06 30
:
07 30
:
08 30
:
09 30
:
10 30
:3
11 0
:
12 30
:
13 30
:
14 30
:
15 30
:
16 30
:
17 30
:
18 30
:
19 30
:
20 30
:
21 30
:
22 30
:
23 30
:3
0
Load
Global Horizontal
Solarvs.Radiation
Daily Average Load
PV Output
(kWh/m2/day)
(MW)
00
:
01 30
:
02 30
:
03 30
:
04 30
:
05 30
:
06 30
:
07 30
:
08 30
:
09 30
:
10 30
:3
11 0
:
12 30
:
13 30
:
14 30
:
15 30
:
16 30
:
17 30
:
18 30
:
19 30
:
20 30
:
21 30
:
22 30
:
23 30
:3
0
installed capacity
Daily2.5
generator power production:
4.41 MWh/day
6.0
5.0
Specific
Mean4.0electrical efficiency: 28.7%
8 19 20
4.0
DIESEL
GENERATOR POWER
SUPPLY
7.0
PV output from 3 MW
0.3
0.8
0.2
0.6
Output
0.1
(GWh/year)
0.0
0.4
5.0
Fig. 23 Teil B
0.8
1.4
0.7
Hybridisation
0.6
1.2
Installed
0.5 Capacity
1.0
(MW)
0.4
6.0
0.0

0.0
0.2
0
1.4
7.0
1.2
PV POWER
6.0
1.0
0.8Daily 5.0
0.6
4.0
0.4Average daily PV power production: 2.52 MWh/day
3.0
0.2Average daily PV power consumption: 2.30 MWh/day
2.0
0.0
34% 1.0
fraction of PV in the actual demand
Peak 0.0
PV output: 0.47 MW
Diesel
0.0savings of 274,101 litre/year
0.5
Jan Feb Mar
Apr tCO
May /year
Jun Jul
Average
of 579
2
Fig. 24 Savings
B
0.3
0.1
0.00.5
2.0
1.0
EMISSIONS
1.0
0.6
DEMAND
0.4
0.3
0.3
0.2
0.2
0.1
0.1
0.0
Diesel (MW) PV (MW)
Diesel (MW)
PV (MW)
1.0
0.8
0.6
0.4
83
Fig. 19 B
ANNEX
3.0
0.6
0.4
MW
0.5
2.0
MW
2.5
1.5
1.0
0.1
0.0
Daily Load Profile

7.0
MWHorizontal
Global
Solar Radiation
(kWh/m2/day)

Growth of demand: 5.5% in year 1-10; 4.5% in year
11-20.
3.0
2.0
1.0
0.0
Jul
3.0
2.0
1.0
Aug Sep Oct Nov Dec
1.5
1.0
0.5
3.0
2.0
1.0
0.0
Fig. 24 B
0.2
0.1
0.0
Hours

installed capacity
Load
PV

(MW)
Daily Average
Load (MW)
00
:
01 30 0
:
0
02 30 0 :30
1
:
03 30 0 :30
2
:
04 30 03:30
:3
:
05 0 04 30
:3
:
Load Shedding
06 30 05 0
:3
:
07 30 06: 0
: 0 3
08 30 7:30
: 0 0
09 30 8:3
: 0 0
10 30 9:3
:3 10 0
11 0 1 :30
1
:
12 30 1 :30
2
:
13 30 13:30
:
:
14 30 14 30
:3
:
15 30 15 0
:3
:
16 30 16: 0
: 1 3
17 30 7: 0
: 1 30
18 30 8:3
: 1 0
19 30 9:3
: 20 0
20 30 2 :30
1
:
21 30 2 :30
2
:
22 30 23:30
:
:3
23 30
0
:3
0
1.40.8
0.7
1.2
0.6
1.00.5
0.4
Hybridisation
0.8
0.3 Capacity
Installed
0.6(MW)
0.2
0.40.1
0.0
0.2Output
(GWh/year)
0.0
Zero Growth
3.36
Year 1
3.00
9.60
Hours
Year 5
Year 10
4.27
Year 15
Hybridis
Installed C
(MW)
Outpu
(GWh/ye
Year 20
10%
5%
00
01:30
02:30
03:30
04:30
05:30
06:30
07:30
08:30
09:30
10:30
:
11 30
12 :30
13:30
14:30
15:30
16:30
17:30
18:30
19:30
20:30
21:30
22:30
23:30
:3
0
0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Year
Average Demand
Installed PV Hours
% Fuel Saving
Average Fuel saving
Zero
Year
Year
Year
Year
ZeroGrowth
Growth Year
Year11
Year55
Year10
10
Year15
15
Year20
20

35%
30%
25%
1.5
20%
1.0
15%
10%
5%
0%
% Fuel
Saving Average
Average
Fuel
saving
% Fuel
Saving
Fuel
saving

Production (MW)
40%
0.9
35%
2.0
0.8
30%
0.7
25%
Hybridisation
0.6
1.5
1.50
1.30
Installed
Capacity
20%
0.5
(MW)
0.4
15%
1.0
0.3
10%
0.2
0.5
5%
0.1 Output
3.77
2.02
(GWh/year)
0.0
0%
10.02 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Jan Feb Mar Apr MayYear
Average Demand
Installed
PV (MW)% Fuel
Average Fuel saving
Diesel
PV Saving
(MW)
Diesel

PV
1.0
0.8
0.6
0.4
0.2
0.0
Diesel (MW) PV (MW)
Diesel (MW)
PV (MW)

Production (MW)
15%
Diesel-PV
Split (Capacity and Output)
1.0
MW
Production (MW)
20%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Year
0.3
Fig. 25 B
40%
25%
0.5
0.4
Hours
30%
2.0
Aug Sep Oct Nov Dec
0.5
35%
2.5
Jul
0.0
Year 20
7.0
1.8
6.0
1.6
1.4
5.0
1.2
4.0
1.0
3.0
0.8
0.6
2.0
0.4
1.0
0.2
0.0
0.0
PV
4.0
Fig. 27 B
Load
8.0 Profile for Growth Scenario
Load
5.0

(MW)
00
:3
01 0
:
02 30
:
0 30
2.0
00
01:30
02:30
03:30
04:30
05:30
06:30
07:30
08:30
09:30
10:30
:
11 30
12 :30
13:30
14:30
15:30
16:30
17:30
18:30
19:30
20:30
21:30
22:30
23:30
:3
0
Year 15
PV output from 3 MW
installed capacity
6.0
Daily Average Load

vs. PV
Output
Global
Horizontal
(MW)
Solar Radiation
00
:
(kWh/m2/day)
01 30
:3
02 0
:
03 30
:
04 30
:
05 30
:
06 30
:
07 30
:
08 30
:
09 30
:
10 30
:3
11 0
:
12 30
:
13 30
:
14 30
:
15 30
:
16 30
:
17 30
:
18 30
:
19 30
:
20 30
:
21 30
:
22 30
:
23 30
:3
0
2.5
MW
Daily Average
Load (MW)
4.0
0.0
7.0
7.0
6.0
DIESEL
5.0
4.0 generator power production: 10.0 MWh/day
Daily
3.0
Specific
fuel consumption: 0.269 litre/kWh
2.0
Mean
1.0 electrical efficiency: 36.8%
0.0
MW
5.0
Fig. 23 Teil B

Fig. sun
26 B hours: 4,387 hours/year
Yearly
4.0
6.0
Diesel savings of 542,388 litre/year

Hours
Zero Growth
Year 1
Year 5
Year 10
5.0
00
01:00
02:00
03:00
04:00
05:00
06:00
07:00
08:00
09:00
10:00
11:00
12 :00
13:00
14:00
15:00
16:00
17:00
18:00
19:00
20:00
21:00
22:00
23:00
:0
0
1.3 MW PV
114 kWh battery
Control system
7.0
6.0
Global Horizontal
Solar Radiation
(kWh/m2/day)
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
ENERGY DEMAND
84
00
Fig. 22 B
Technical data
Average
Demand Installed
Installed
Average
Demand
PV PV
0.2
0.5
0:
0
1: 0
0
2: 0
0
3: 0
0
4: 0
0
5: 0
0
6: 0
0
7: 0
0
8: 0
0
9: 0
10 00
11:00
12 :00
13:00
14:00
15:00
16:00
17:00
18:00
19:00
20:00
21:00
22:00
23:00
:0
0
BASSE SANTA SU The Gambia
0.0
0.3
0.4
0.3
0.3
0.2
0.2
0.1
0.1
0.0
ANNEX
85
ANNEX
ANNEX 3: Technical assumptions
Town/Island
Initial
CAPEX
Diesel GenSets
(USD)
Initial CAPEX
PV panels
(USD)
Initial CAPEX
other
components
(USD)
Replacement
CAPEX
Hybrid Case
(USD)
Replacement
CAPEX
Diesel Case
(USD)
Puerto
Leguizamo
2.05m/4.3MW
0.48m/1MW
5.61m/2.75M
2.04m/1MW
Balance of
RE systems
1,897,200
Diesel Genset:
1.142m (yr 12)
Diesel Genset
1.142m (yr 10)
Balance of
RE systems
3,026,000
Diesel Genset:
3.876m (yr 12)
Balance of
RE systems
1,557,200
Diesel Genset:
0.367m (yr 10),
0.261m (yr 12)
Las Terrenas
Bequia
4.52m/9.5MW
0.48m/1MW
1.96m/4.125 MW
0.48m/1MW
13.77m/6.75MW
2.04m/1MW
3.06m/1.5MW
2.04m/1MW
Balance of
RE Systems:
1.815m (yr 10)
Balance of
RE Systems:
4.318m (yr 10)
Balance of
RE Systems:
1.075m (yr 10)
Nusa Penida
1.48m/3.1MW
0.48m/1MW
6.12m/3.0MW
2.04m/1MW
Balance of
RE systems
1,999,200
Diesel Genset:
0.734m (yr 10),
0.367m (yr 12)
Diesel Genset
0.612m (yr 10),
3.264m (yr 12)
Diesel Genset
0.293m (yr 7),
0.404m (yr 10),
0.489m (yr 13
Diesel Genset
0.696m (yr 7),
0.367m (yr 12)
Balance of
RE Systems:
1.985m (yr 10)
Busuanga
Hola
Basse Santa Su
86
1.6m/3.36MW
0.48m/1MW
0.38m/0.8MW
0.48m/1MW
0.71m/1.5MW
0.48m/1MW
6.12m/3.MW
2.04m/1MW
1.02m/0.5MW
2.04m/1MW
2.652m/1.3M
2.04m/1MW
Balance of
RE systems
1,802,000
Diesel Genset:
1.37m (yr 11)
Balance of
RE systems
1,445,000
Diesel Genset:
0.326m (yr 10)
Balance of
RE systems
1,509,600
Diesel Genset:
0.612m (yr 12)
Balance of
RE Systems:
1.836m (yr 10)
Balance of
RE Systems:
0.510m (yr 10)
Balance of
RE Systems:
0.911m (yr 10)
Diesel Genset
0.653m (yr 7),
0.718m (yr 12),
0.653m (yr 14)
Diesel Genset
0.326m (yr
6,10,12)
Diesel Genset
0.367m (yr 10),
0.245m (yr 12
ANNEX
OPEX
Hybrid
Case
(USD)
OPEX
Diesel Case
(USD)
Diesel
Consumption
(Liter/MWh)
Current
Local Diesel
Price
(USD/Liter)
Corporate
Tax Rate
Diesel:
401,570
547,948
322
1.05
25%
1,968,853
316
0.89
27%
373,599
289
0.90
30%
707,443
282
1.16
25% (if Revenues <

USD 417000;12.5%)
693,280
287
0.96
30%
168,161
344
1.12
30%
282,487
269
1.096
31%
RE Systems:
88,672
Diesel:
1,429,189
RE Systems:
215,832
Diesel:
265,362
RE Systems:
49,368
Diesel:
501,673
RE Systems:
97,376
Diesel:
493,831
RE Systems:
94,112
Diesel:
124,554
RE Systems:
21,012
Diesel:
179,145
RE Systems:
43,248
87
ANNEX
ANNEX 4: Assumptions for growth and technical upgrades
Site
Growth and Technical Upgrade Assumptions
Puerto
Leguizamo
Growth:
Las Terrenas
Growth:
Bequia
Growth:
decreasing from 6% to 4%; 6% p.a. for the first 10 years, 4% in the following
years.
Electricity demand: Increases from present annual ~11,000 MWh to ~30,000 MWh in year
20. Average demand increases from present 1.3 MW to 3.3 MW by end of project lifetime.
Technical upgrades: PV capacity can be gradually upgraded from initially 3.25 MW in the
beginning to 6.75 MW in year 13. For diesel generators, 0.9 MW capacities need to
installed in year 11, in addition to existent 4.2 MW, thus increasing the the net capacity to
5.1 MW.
Replacements: The 4.2 MW generators need to be replaced with the same capacity over
the project lifetime of the generators.
decreasing from 7% to 2%; 7% in year 1-3; 6% in year 4-7; 5% in year 8-11;
4% in year 12-15; 3% in year 16-19 and 2% in year 20.
Electricity demand: Increases from present annual ~27,000 MWh to ~70,000 MWh in
year 20. The average demand would increase from present 3.3 MW to 8.0 MW by end of
project lifetime.
Technical upgrades: PV capacity can be gradually upgraded from initially 7.5 MW in the
beginning to 15 MW in year 14. For diesel generators, the existing 9.5 MW capacity shall
be sufficient to meet the demand for the first 7 years. The net diesel generator capacity
needs to increase to 10.5 MW in year 8 and further to 11.2 MW in year 12 sufficient to
meet the demand for 20 years.
Replacements: in year 8, old diesel generators of 2 MW capacity need to be replaced
with 3 MW capacity and in year 12, another 2.8 MW old generators need to be replaced
with new 3.5 MW generators.
decreasing from 3% to 2%, 3% in year 1-10; 2% in year 11-20.
demand: Increases from present annual 7,554 MWh to 12,482 MWh in year 20.
The average demand would increase from present 0.9 MW to 1.4 MW.
Technical upgrades: PV capacity can be gradually upgraded in three phases from initially
1.55 MW in the beginning to 1.7 MW in year 7 and 2 MW in year 13. For diesel generators,
the existing 4.15 MW capacity shall be sufficient to meet the growing demand over 20
years.
Replacements: 0.9 MW old diesel generators need to be replaced with the same capacity
in year 13, keeping the net installed capacity at the same level.
Electricity
88
ANNEX
Site
Nusa Penida
Growth:
Busuanga
Growth:
decreasing from 8% to 4.5%, 8% in year 1-5; 6.5% in year 6-10; 4.5% in year
11-20. Plus demand shift towards daytime due to some expected economic growth from
new guest houses. The demand shift forecasts two different rates of (decreasing) demand
growth during day and night, which is modelled for every 30 minutes interval for each
year. For day time (06:30-18:30), 8% increase in year 1-5, 7% increase in year 6-10, and
5% increase in year 11-20 is modelled. For night/early morning time (18:30 to 06:30) 8%
increase in year 1-5, 6% increase in year 6-10, and 4% increase in year 11-20 is modelled.
Electricity demand: Increases from present annual ~14,000 MWh to ~42,500 MWh in year
20. The average demand would increase from present 1.7 MW to 4.8 MW.
4 MW in the beginning to 6 MW in year 7 and 8 MW in year 14. For diesel generators, a
total 4.1 MW generators are recommended to be installed in the beginning to meet the
growing demand for the first 6 years. The net diesel generator capacity needs to increase
to 7.1 MW in year 7 and further to 9 MW in year 12 -sufficient to meet the demand for
20 years.
Replacements: In year 12, the 4.1 MW old generators, installed in the beginning, need to
be replaced and upgraded with new 6 MW generators.
decreasing from 10% to 5%,10% in year 1-5; 5% in year 6-20.
demand: Increases from present annual ~13,800 MWh to ~42,200 MWh in
project lifetime.
3.75 MW in the beginning to 5 MW in year 7 and 7 MW in year 12. For diesel generators,
a total 4.4 MW generators are recommended to be installed in the beginning to meet the
growing demand for the first 6 years. The net diesel generator capacity needs to increase
to 4.6 MW, 6.1 MW, 7.1 MW, 8.3 MW in year 7, 8, 13 and 14 -sufficient to meet the
demand for 20 years.
Replacements: 6.9 MW old generators, need to be replaced over the project life time of
20 years (48,000 operating hours per generator).
Electricity
Hola
Growth:
decreasing from 5% to 2%, 5% in year 1-9; 2% in year 10-20.

demand: Increases from present annual 2,460 MWh in 2013 to 4,438 MWh in
year 20.
Technical upgrades: PV capacity can be gradually upgraded in two phases from initially
0.75 MW in the beginning to 0.95 MW in year 10. For diesel generators, 0.5 MW capacities
need to installed in year 7, in addition to existent 0.8 MW, thus increasing the net capacity
to 1.3 MW.
Replacements: The 1.3 MW generators need to be replaced with the same capacities in
year 12 and 14.
Electricity
89
ANNEX
Site
Basse Santa Su
Growth:
decreasing from 5.5% to 4.5%,5.5% in year 1-10; 4.5% in year 11-20. Plus
demand shift towards daytime and afternoon due to availability of solar radiation.
Electricity demand: Increases from present annual 5,789 MWh to 11,186 MWh in year 20.
The average demand would increase from present 0.7 MW to 1.3 MW.
Technical upgrades: PV capacity can be gradually upgraded in three phases from
initially 1.5 MW in the beginning to 1.75 MW in year 7 and 2.1 MW in year 13. For diesel
generators, 0.3 MW capacities need to installed in year 7 and 13, in addition to existent
1.6 MW, thus increasing the net capacity to 1.9 MW.
Replacements: The 1.9 MW generators need to be replaced with the same capacity as soon
as each generators operation exceeds 48,000 hours.
UNEP Collaborating Centre

Frankfurt School of Finance & Management
Sonnemannstrasse 911
60314 Frankfurt am Main
http://fs-unep-centre.org
www.frankfurt-school.de
E-Mail: fs_unep@fs.de
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Fax: +49 (0)69 154008-4647

Hybridgrids-Economic Benefits

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Hybridgrids-Economic Benefits

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RENEWABLE ENERGY IN

HYBRID MINI-GRIDS AND

Sponsored and supported by:

Thanks also to Professor Dr. Michael Klein and

To ensure that global

Diesel-powered grids can be hybridised by using

weighted with their share in the total output plus

sequently lower in this scenario, but the analysis

Santa Su. The main reason is the small generation

The transparent assumptions and calculation

Completely newly set-up grids are referred to as greenfield assets.

ence oil price developments, and not considering

1.1. BASIS OF DECISION MAKING

and operating structure. In case of a utility-owned

criteria for the decision making follows this approach:

other scenario assumes a continued capital

liquidity and low price levels on the compliance

for discussion and a tool for a site specific analysis.

Table 1: Economic vs. financial viability

LCOE [consumed kWh] as key decision

Study compares two scenarios (real world

Two different financing structures considered

Externalities taken into account

EIRR, payback periods, possible debt tranches

Based on PPA terms

Considers risk profile of investment

1.2. TECHNOLOGY SELECTION

abundance of solar radiation compared to wind,

1.3. TECHNICAL AND FINANCIAL

One of the simplifications in HOMER relates to the

(OPEX, excluding fuel) for diesel generators and

Current plant layout

CAPEX and OPEX

Cash flow analysis

Figure 2: Typical project finance structure, NUSA PENIDA Indonesia

Year after installation

In the traditional LCOE calculation, investment

Figure 3: LCOE calculation

Elt = Electricity sold in kWh in t

as number and type of customers determinants,

Figure 4: Selected sites Ownership, installed capacity and number of customers

The installed diesel generation capacity ranges

Puerto Leguizamo is a municipality and town in

Figure 5: Daily average load vs. possible PV

2.1. PUERTO LEGUIZAMO

There are five diesel generators with a maximum

Daily Average Load vs. PV Output

The case of Mango, Togo, was initially considered

The HOMER simulation has shown that hybridising

Cost of carbon emmissions

2.2. LAS TERRENAS DOMINICAN

Figure 7: Daily average load vs. possible PV

PV output from 6.75 MW

Daily Average Load vs. PV Output

Figure 6: LCOE breakdown for private vs. public

Figure 8: LCOE breakdown for private vs. public

Cost of carbon emmissions

2.3. BEQUIA ST. VINCENT & THE

and sales of electricity).

There are six diesel generators with a total of 4.1

PV output from 1.5 MW

a state-owned corporation responsible for generation, distribution and sales of electricity.

Assuming a public sector 5 percent WACC, savings