See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/272498910

Techno-economic Analysis of a Stand-alone Hybrid System

Article · December 2013

CITATIONS READS

2 82

3 authors, including:

Zdravko Milovanovic
University of Banja Luka
137 PUBLICATIONS   37 CITATIONS   

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

PRIJEDLOG MJERA I AKTIVNOSTI NA UVOĐENJU OPTIMALNOG UPRAVLJANJA POKAZATELJIMA KONKURENTNOSTI ENERGETSKIH I PROCESNIH
POSTROJENJA (UVOĐENJE ASSET MANAGEMENT-A NA NAJVIŠEM NIVOU)"-FAZA I View project

All content following this page was uploaded by Zdravko Milovanovic on 20 February 2015.

The user has requested enhancement of the downloaded file.

 COMMUNICATIONS
IN
DEPENDABILITY AND
QUALITY
MANAGEMENT
CDQM, Volume 16, Number 4, 2013, pp. 17-23
An International Journal

UDC 004.032.26

Techno-economic Analysis of a Stand-alone

Hybrid System
Svetlana Dumonjic-Milovanovic R.1, Zdravko Milovanovic N.2
and Jovan Skundric B.2
1
Parner engineering Ltd, Kralja Nikole 25, Banja Luka, Republic of Srpska, BiH
E-mail: svetlanadm@ymail.com
2
University of Banja Luka, Faculty of Mechaical Engineering Banja Luka, Department of Hydro
and Thermal Energy, Stepe Stepanovica 71, Republic of Srpska, Bosnia and Herzegovina,
E-Mail: zdravko.milovanovic@unibl.rs; jovan.skundric@gmail.com
accepted October 26, 2013
Summary
This paper performes an techno-economic analys of hybrid PV/Wind/Diesel system. The
economic viability of a hybrid PV/Wind/Diesel system has been analysed using life cycle-cost
computation. The performed method for techno-economic analys has confirmed construction
justifiability of systems based on wind and Sun energy.
Key words: Stand-alone Hybrid System, techno-economic Analysis, technical terms of interest, Banjaluka
region.

1. INTRODUCTION

Hybrid energetic systems are designed for the electricity production. Autonomous (stand-alone)
systems are used in distant areas where no electric grid is available (for instance base stations of
"telecommunications" operators, private properties etc.). Such systems the most often include
components based on renewable energy sources such as small wind turbines, photovoltaic panels,
micro-hydro turbines together with other components such as fossil fuel driven generators, fuel-
cells, etc. Besides that, stand-alone hybrid systems contain batteries for accumulation of the energy
together with certain electronic devices responsible for system functionality and safety. Inside this
paper, subject of analysis was autonomous hybrid system for the electricity production based on
Sun and wind energy. The main purpose of the system would be supplying users with average daily
energy consumption in amount of 18 kWh . Configuration of the system is composed of

5
photovoltaic panels with installed power of 6,02 kW , wind turbine with installed power of 4 kW ,
batteries, hybrid controller, inverter and other accessories. Simplified schema of the system is given
on Figure 1.

Figure 1. General diagram of a hybrid system for electricity production based

on wind and Sun energy conversion

2. TECHNO-ECONOMIC ANALYS
For techno-economic evaluation of stand-alone hybrid systems have been used the technical terms
of interest, [2]: Deficiency of Power Supply Probability (DPSP), Relative Excess Power Generated
(REPG), Energy to Load Ratio (ELR), Life Cycle Cost (LCC), Capital Recoveri Factor (CRF) and
Levelised Energy Costs (LEC).
The LCC can be calculated according to the formula

LCC = IC + C RPV + C OPV& M ,

where IC is initial capital cost ( IC of this project can be calculated from the system configuration
given in Table 1 and the components costs given in Table 2), C RPV is the present value of
replacement costs (including costs through the lifetime) and COPV& M is the present value of operation
and maintenance costs (including costs through the lifetime).

Table 1. Cost, efficiencies and lifetimes of stand-alone system components

Component Cost O&M (%) Lifetime (year)

PV 1.9 (€/W) 2 25
VAWT 1.7 (€/W) 2 25
Inverter 0.6 (€/W) 1 15
Hybrid controller 0.4 (€/W) 1 15
Battery storage bank 2 (€/Wh) 1 12.5

6
Diesel generator 0.7 (€/W) 1 15
specific fuel efficiency 0.4 (l/kWh)
fuel unit price 1.2 (€/l)

Table 2. Hybrid system configuration

Component Unit Nominal capacity

PV kW 6,02
VAWT kW 4
Inverter kW 4
Hybrid controller kW 8
Battery storage bank Ah /2 V 6 x 1500
Diesel generator kW 4

Calculating of C RPV and COPV& M has been carried out according to the annual real interest rate of
d = 8% and the inflation rate of f = 4% , [52] . On the basis of adopted parameters of nominal rate
and inflation rate, the discount rate (i ) is further calculated as:

d− f
i= .
1+ f

Discount factors are then calculated for each year according to the equation:

1+ f 
n
1
DFn = =  ,
(1 + i )  1 + d 
n

where n represents ordinal number of the year.

Current value of working and maintenance expenses ( COPV& M ) is calculated on the basis of
previously calculated equal annual investment costs ( C Oy & M ) using the formula:

1   1  
 = C Oy & M ⋅ 1 + f
 1+ f N 
N N

C OPV& M = C Oy &M ⋅ ∑ DFn = C Oy & M ⋅ ⋅ 1 −   ⋅ 1 −  ,

i   1 + i   d−f   1 + d  
n =1   

while current value of the equipment replacing costs ( C RPV ) is calculated on the basis of equipment
value ( C R ) together with the discount rate for annual investments.
The rate of refunding, which is used for calculation of distributed annual amounts of the present
value of entire investment during the life span is dependent on discount rate and is calculated by:

i ⋅ (1 + i )
N

CRF = ,
(1 + i ) N −1

where N represents overall number of years of the life span (since the start of investing).

7
In previous equation the sum of geometric array can be recognized, where following equality was
found
N
 1 
  −1 N
1 1 1+ i 
= ⋅ = ∑ DFn .
CRF 1 + i 1
−1 n =1
1+ i

Levelized energy costs (LEC ) represents the present value of produced energy ( € / kWh ) , and are
calculated by the equation:

LCC ⋅ CRF
LEC = ,
365 ⋅ Eload

where Eload is daily mean energy consumption for autonomous systems.

For the investment project, overall business income includes any income of funds no matter of its
origin. Annual business income for autonomous systems is generated on the basis of entire energy
spent calculated through the price of the energy produced using the diesel set C F = 0,8 € kWh
with addition of incomes from abetment payouts calculated through the guaranteed price for the
energy from renewable sources inside the program of mandatory redemption – PV generation
(presence of 89%) C PV = 0,186 € kWh and WT generation (presence of 11%)
CWT = 0,0845 € kWh , [5] .

Table 3. Basic techno-economic indicators for chosen autonomous hybrid system by mean
consumption of 6570 kWh/year

Unit of
Parameter / characteristic Value
Measure

Deficiency of power supply probability

902,80
(DPSP) kWh/year
(13,74%)
832,28
Relative excess power generated (REPG)
kWh/ year Not usable due to accumulation capacity limit

Photovoltaic panel:
5043,81 (76,77%)
kWh/ year
Energy to load ratio ( ELR)
(%)
Wind turbine: 623,39 (9,49%)

Life Cycle Cost (LCC)

€ for 25 83442,24
years

For the hybrid system configured as shown in Table 3 on Banjaluka region and on the micro
location with average wind speed of 3m / s (chosen micro location can refer on mounts and other
configurations of terrain which are characterized with average wind speed values higher than

8
average Banjaluka region wind speed) the simulation of operating has been carried out and so the
basic operating indicators were acquired.
Through the simulation annual values of the energy produced by the diesel set were acquired (ELR)
and so was the surplus of the energy (REPG), which was remained unused due to limited capacities
of the accumulation. Variations of those indicators on the interval of one year (365 days) are given
on Figure 2.

Figure 2. Evaluation of DPSP, ELR and REGP for hybrid system with one day
of battery autonomy, [1]

Inside the analysis the portion of individual funds in amount of 20% of initial investment
( IC 0 = 60223,62 € ) was adopted while remaining portion is considered to be a loan from a bank
on period of 15 years. In Table 3 the insight into dynamics and structure of financing of both the
autonomous and the grid connected systems is given.

Table 3. Dynamics and structure of financing of the project

Year: I II
Caracterstics Total, €
Percentage by years of realization, % 30,0% 70,0% 100,0%
Own funds (15-25%) 3613,42 8431,31 12044,72
Assigned dividends, 5% od SS 180,67 421,57 602,24
Total own funds, € 3794,09 8852,87 12646,96
Percentage by years of realization, % 0,0% 100,0% 100,0%
Credit loan 0,00 48178,90 48178,90
Bank commissions 0,00 481,79 481,79
Intercalary interest 0,00 2890,73 2890,73
Total credit funds, € 0,00 51551,42 51551,42
TOTAL, € : 3794,09 60404,29 64198,38

Annual rates in amount of 3436,76 € are foreseen during the payback period which is presented as
a expense inside the money flow analysis (Table 4).

9
Table 4. Money-flow analyisis for the period of entire life span

Cumulative disc. expense

Cumulative disc. income
Operative expenses, water
tax, concession fee, credit
energy KM/year or given
Income from electrical

Investment refund
Cumulative disc. balance
Discounted expenses
Discounted incomes

Discounted balance
Discount rate

credit funds

Balance
Year

B C B/C
I 1,000 0,00 3794,09 -3794,09 0,00 3794,09 -3794,09 0,00 3794,09 -3794,09 0,00
II 0,963 0,00 8852,87 -8852,87 0,00 8524,99 -8524,99 0,00 12319,08 -12319,08 0,00

1 0,927 6246,8436 4845,40 1401,44 5792,68 4493,13 1299,55 5792,68 16812,21 -11019,52 0,34
2 0,893 6246,8436 4845,40 1401,44 5578,14 4326,72 1251,42 11370,82 21138,93 -9768,10 0,54
3 0,860 6246,8436 4845,40 1401,44 5371,54 4166,47 1205,07 16742,37 25305,40 -8563,03 0,66
4 0,828 6246,8436 4845,40 1401,44 5172,60 4012,16 1160,44 21914,96 29317,55 -7402,59 0,75
5 0,797 6246,8436 4845,40 1401,44 4981,02 3863,56 1117,46 26895,98 33181,11 -6285,13 0,81
6 0,768 6246,8436 4845,40 1401,44 4796,54 3720,46 1076,07 31692,52 36901,57 -5209,06 0,86
7 0,739 6246,8436 4845,40 1401,44 4618,89 3582,67 1036,22 36311,40 40484,24 -4172,84 0,90
8 0,712 6246,8436 4845,40 1401,44 4447,82 3449,98 997,84 40759,22 43934,22 -3175,00 0,93
9 0,686 6246,8436 4845,40 1401,44 4283,08 3322,20 960,88 45042,30 47256,42 -2214,11 0,95
10 0,660 6246,8436 4845,40 1401,44 4124,45 3199,16 925,30 49166,75 50455,57 -1288,82 0,97
11 0,636 6246,8436 4845,40 1401,44 3971,69 3080,67 891,02 53138,44 53536,24 -397,79 0,99
12 0,612 6246,8436 4845,40 1401,44 3824,59 2966,57 858,02 56963,04 56502,81 460,23 1,01
13 0,590 6246,8436 11886,39 -5639,55 3682,94 7007,84 -3324,90 60645,98 63510,65 -2864,67 0,95
14 0,568 6246,8436 4845,40 1401,44 3546,54 2750,89 795,64 64192,52 66261,54 -2069,02 0,97
15 0,547 6246,8436 4845,40 1401,44 3415,18 2649,01 766,18 67607,70 68910,55 -1302,85 0,98
16 0,526 6246,8436 17055,28 -10808,44 3288,69 8978,87 -5690,18 70896,39 77889,42 -6993,03 0,91
17 0,507 6246,8436 1408,64 4838,20 3166,89 714,12 2452,77 74063,28 78603,54 -4540,26 0,94
18 0,488 6246,8436 1408,64 4838,20 3049,60 687,67 2361,93 77112,88 79291,22 -2178,33 0,97
19 0,470 6246,8436 1408,64 4838,20 2936,65 662,20 2274,45 80049,53 79953,42 96,11 1,00
20 0,453 6246,8436 1408,64 4838,20 2827,89 637,68 2190,21 82877,42 80591,10 2286,32 1,03
21 0,436 6246,8436 1408,64 4838,20 2723,15 614,06 2109,09 85600,57 81205,16 4395,41 1,05
22 0,420 6246,8436 1408,64 4838,20 2622,29 591,32 2030,97 88222,86 81796,48 6426,38 1,08
23 0,404 6246,8436 1408,64 4838,20 2525,17 569,42 1955,75 90748,03 82365,89 8382,14 1,10
24 0,389 6246,8436 1408,64 4838,20 2431,65 548,33 1883,32 93179,68 82914,22 10265,45 1,12
25 0,375 6246,8436 1408,64 4838,20 2341,58 528,02 1813,57 95521,26 83442,24 12079,02 1,14

3. CONCLUSIONS
Analysis related to financial money flow with calculated discount rate of i = 3,8% indicates positive
business of the system on the very end of its life span with repayment rate of CRF = 0,0615 . In case of
autonomous hybrid system which was the subject of analysis the positive cumulative balance was
registered after 18th year (Table 4). Levelized energy cost for the period of 25 years is
LEC = 0,781 € / kWh , which is less than price of the energy produced by the diesel set only.
Declared profit for analyzed configurations is relatively small which investments like this does not
make attractive from simply investment point of view. But, if the investment is observed from
somewhat wider aspect which considers improvement of the life quality through the use of
ecologically acceptable, widely accessible and available energy source, then besides financial
profit, the gain in qualitative sense can also be the subject.

10
REFERENCES

[1] Dumonjic-Milovanovic S. (2013). Contribution to Optimization of Hybrid System for the

Electricity Production Based on Primary Sun and Wind Energy with Analysis of Applicability
on Banjaluka Region, Master thesis, University of Banja Luka, Faculty of Mechaical
Engineering Banja Luka.
[2] Muralikrishna M.; Lakshminarayana V. (2008). Hybrid (Solar and Wind) Energy Systems for
Rural Electrification, ARPN Journal of Engineering and Applied Sciences.
[3] Abdolrahimi H.; Karegar H.K. (2012). Optimization and Sensitivity Analysis of a Hybrid
System for a Reliable Load Supply in Kish_Iran, International Juornal of Advanced Renewable
Energy Reserch, Vol. 1, Issue.4 , pp. 217-225.
[4] Kohle M.; Kohle S.; Joshi J.C. (2002). Economic viability of stand-alone solar photovoltaic
system in comparasion with diesel-powered system for India, Energy Economics 24, Elsevier
Science Ltd,.
[5] Regulatory committee for energetic of Republic of Srpska (2013). Decision concerning
guaranteed redemption prices and premiums for the electrical energy produced from renewable
energy sources or inside effective cogeneration Official Gazette of the Republic of Spska
No.116.

11

View publication stats