Mini grid and Solar home system

• 1. Solar PV andMini Grids
  • May 3rd 2011

• Seminar Rural Energy Supply

• Postgraduate Programme

• Renewable Energy (PPRE)

• Anita, Corinna, Dirk,

• Esther, Rangini, Tuong

2. What will the future look like? Source: Siemens, 2009 Source: Solarprojekt Freilassing 3. Table of contents

• Motivation and problem

• Introduction to solar powered mini-grid and SHS

• Solar Home System (SHS)

• • 3.1 technical aspects

• • 3.2 economic aspects

• • 3.3 social and environmental aspects

• Case Study

• Conclusion and outlook

4. Motivation

• Source:http://www.mhi.co.jp/en/earth/issue/history/future/renewable/solar.html

5. What is the problem?

• Rural areas with no electricity,grid connection might not be suitable

• Necessity of low cost energy supply

• Different sources of energy-> solar PV might be a solution

6. Table of contents

• 1. Motivation and problem

• 2. Introduction to solar powered Mini-grid and SHS

• 3. Solar Home System (SHS)

• • 3.1 technical aspects

• • 3.2 economic aspects

• • 3.3 social and environmental aspects

• 4. Case Study

• 5. Conclusion and outlook

7. What is solar powered Mini grid? 8. Solar powered mini grid Components: 1. Solar generator, 2. SUNNY BOY (Solar Inverter),3. SUNNY ISLAND (Battery Inverter), 4. Batteries, 5. Diesel generator, 6. Wind power plant http://www.youtube.com/watch?v=H0cpjqudoQM 9. What is Solar Home System (SHS) ? 10. Solar home system overview Photo: solarenergylive.com 11. Solar home system overview Photo: SEC Lt, Nepal 12. Solar home system overview Photo: hqweb.unep.org 13. Table of contents

• 1. Motivation and problem

• 2. Introduction to solar powered mini-grid and SHS

• 3. Solar Home System (SHS)

• • 3.1 technical aspects

• • 3.2 economic aspects

• • 3.3 social and environmental aspects

• 4. Case Study

• 5. Conclusion and outlook

14. Technical aspects of SHS design

• Basic aspects

• Necessity of easy operation

• DC system and appliances

• Different systems available

Source: Sovacool et al. 2011 15. Technical aspects of SHS design

• Size of system(PV module/battery) depends on specificlocal conditions:

• Solar radiation, site conditions

• Electricity service expectations (appliances/loads)

• Energy expenditure patterns

• General socio-economic situation

W p : peak power load: daily energy consumed by load inWh/day battery : battery efficiency installation :installation efficiency Gmean : mean irradiation of worst month 16. Technical aspects of SHS training andmaintenance

• Before installation:

• Training of users

• • Information about prices, product performance

• • Communication about necessity of maintenance

• • Explanation of PV technology and operation

• Training of skilled technicians and access to sites

Source: Rural21/C. Kropke 2010 17. Technical aspects of SHS training andmaintenance

• After installation:

• Regular maintenance

• of key components

• • Performance checks

• • Cleaning of PV modules

• • Water additions in batteries

• • Corrosion control

• • Replacement of broken elements

Source: Sovacool et al. 2011 18. Technical aspects of SHS quality andavailability

• Guaranteeing access to well-functioning SHS

• Quality and compatibility of components

• Easy replacement

• of components

• Local entrepreneurs,

• technicians,

• manufactures

Source: Afircan Electrification Initiative/Youngreen 2010 19. Table of contents

• 1. Motivation and problem

• 2. Introduction to solar powered Mini-grid and SHS

• 3. Solar Home System (SHS)

• • 3.1 technical aspects

• • 3.2 economic aspects

• • 3.3 social and environmental aspects

• 4. Case Study

• 5. Conclusion and outlook

20. Cost Analysis: Methodology

• Aim

• Calculate electricity price per kWh generated by a SHS

• annual costs/ annual electricity generation

• Annualized-Life-Cycle-Costs (ALCC)

• all initial and future costs are calculated over the operational lifetime of a system

• total investment costs converted into uniform annual costs

• Capital Recovery Factor (CRF)

• accounts for the cost of financing a project (interest)

• formula: i (1+i) n/ [(1+i) n-1]

• i=discount rate, n=lifetime

• annuities = individual payments * CRF

21. Methodology (2)

• Levelized Unit Cost Of Electricity (LUCE)

• W p= peak Watt capacity of PV module

• EHFS = Equivalent Hour of Full Sunshine

• CUF = Capacity Utilization Factor

22. Example of cost analysis (India) Source: based on Chaurey, Kanpal (2010) ) Components Capital cost (USD) Life (years) CRF Annualised cost (USD) PV Module (70 Wp) 296.72 20 0.1339 39.73 Battery (12 V, 40 Ah) 107.88 5 0.2774 29.93 Charge Controller 11.24 5 0.2774 3.12 Appliances (4*9 W) 67.44 10 0.1770 11.94 Balance-of-systems 44.98 10 0.1770 7.96 Annual O&M costs 3.39 Total annualised costs 528.26 96.07 Annual electricity generation (kWh) 114.98 kWh LUCE (USD/ kWh) 0.84 Assumptions: Discount rate 12% EHFS 5 Days of operation in year 365 Capacity utilization factor 0.9 23. Comparison to costs for mini-grid

• In general:Cost reductions ($/kWh) as sizes and volumes of PV modules and batteries increase

• cost-advantage of mini-grid

• But: Costs for mini-grid depend on:

• Length of total distribution line

• Number + spatial distribution of households connected via mini-grid

• Geographical factors

• may offset cost-advantage!

24. Comparison to costs for mini-grid Source: Chaurey, Kandpal (2010) 25. Financing Models for SHS 26. Cash Sales

• PV supplier distributes PV systems directly or through a dealer network to the end-users, who pay in cash

• +

• minimal number of stakeholders

• low transaction costs

• high flexibility in consumer choice

• -

• limited market as a result of the high up-front investment needed

• incentive to buy under-sized systems and cheap replacement components to save money

• installation and maintenance/ after-sales service are problematic

27. Credit Sales The end-user acquires the PV system on credit

• +

• main barrier of the high initial investment is lowered

• investment costs are spread over a number of years

• Dealer credit

• one institution handles both the financial and the technical work

• -

• high rural credit risk

• ability and willingness torepay the credit often limited

• dealer cash-flow often as constraint

• high interest rates due to expensive capital through dealer re-finance

28.

• End-user credit

• +

• PV company avoids financial risks and can concentrate on sales and after-sales services

• credit institutions are much better equipped to manage a credit scheme

• -

• market is restricted to customers that the credit institution deems creditworthy

• high interest rates and down-payments

• geographically restricted because of the infrastructure needed for the collection of the payments and possible retrieval of the collateral

29. Donation Hardware is provided for free (or almost free) by a sponsor

• +

• low initial costs for end-user

• potential for cost reductionthrough economies of scale

• rapid deployment

• -

• user less involved/ feel less responsible

• mostly limited to the hardware

30. Lease/ Hire-Purchase arrangements PV supplier/dealer or a financial intermediary leases the PV system to the end-user

• +

• spreading of costs for the user over a long period

• cost reductions due to economies of scale

• maintenance can be kept at a high standard because of the professional care for the system

• good-quality products are selected because of the long repayment period

• -

• End-users may not treat the systems with care, as initially the maintenance and ownership do not lie with them

• geographically restrictive (extensive infrastructure needed for the collection of the payments and the maintenance and repair of the systems)

31. Fee for service / fee for energy An energy service company (ESCO) owns the system, and provides an energy service to the end-user for a monthly fee

• +

• end-user does not have to invest in a solar system (only connection fee)

• maintenance and repair are organized centrallylower costs + high quality maintenance

• high-quality systems, components and installation are encouraged because of the inevitable long-term agreements

• proper collection and recycling of components (e.g. batteries) is possible

• -

• high risks and high transaction costs result in high monthly fees and reduce affordability for poor households

• end-user is not the owner of the systemmay not treat the system as carefully

• client is usually not allowed to miss a monthly payment

32. Table of contents

• 1. Motivation and problem

• 2. Introduction to solar powered mini-grid and SHS

• 3. Solar Home System (SHS)

• • 3.1 technical aspects

• • 3.2 economic aspects

• • 3.3 social and environmental aspects

• 4. Case Study

• 5. Conclusion and outlook

33. Social aspects of SHS: Benefits

• Increase in comfort

• Additional income/saving costs

• Education and employment

• Health and security

• Prevent rural-urban migration

Source: www.designthatmatters.org/k2 2005 34. Social aspects of SHS: Barriers

• Knowledge

• Peoples expectations

• Cultural barriers

Source: Sovacool et al. 2011 35. Social aspects of SHS: Barriers

• "Solar energy is very important, it is not that expensive and can last very long, 100 years.

• One SHS can create enough energy to power a computer, copy machine, lights in every room, television, and appliances, all from a pretty small device."

• • • (Sovacool et. al. 2011: 8)

36. Social aspects of SHS: Barriers

• Knowledge

• Peoples expectations

• Cultural barriers

Source: Sovacool et al. 2011 37. Environmental aspects of SHS: Pros & Cons

• Savings of C0 2

• Displacing dry cell batteries

• Little space consumption

• Recycling systems for lead-acid batteries required

• Resource exploitation and energy consumption for production, transport and recycling

• By-products and toxic components

Source: www.berlin.de/special/umwelt/batterien 38. Table of contents

• 1. Motivation and problem

• 2. Introduction to solar powered mini-grid and SHS

• 3. Solar Home System (SHS)

• • 3.1 technical aspects

• • 3.2 economic aspects

• • 3.3 social and environmental aspects

• 4. Case Study

• 5. Conclusion and outlook

39.

• Energy service provider and social enterprise in Bangalore

• Started in 1995 byHarish Handean Energy Engineer

• Today: 170 employees, 25 energy service centers

• Products: Solar lighting, Solar thermal, Cookstoves

SELCO India Solar Pvt. Ltd. 40.

• • To sell and service SHS in rural areas of India that lack access to electricity

• • Making affordable through financial instruments such as bank loans and micro finance credits

GOAL 41. ACHIEVEMENTS

• Won two times the ASHDEN awards

• (Green Oscar) in 2005 and 2007

• Installed 115,000 solar home systems in 15 year

• 75 local entrepreneurs created

• Two-thirds of its customers surviving on less than $3-4 per day

42. STRATEGY

• 4. After sales services

• • 1. Door to door s services

• • 2. Financial schemes

3. Selling experience http://www.youtube.com/watch?v=Gnkcs7icerk 43. 44. CONCLUSION

• SHS are a good option for rural electrification

• Encouragement of private local entrepreneurs needed

• Good financial instruments needed

• Necessity to carefully consider local conditions and customers needs prior to taking action

• Necessity to think furtherproduction and maintenance infrastructure needed

• Inequity in energy supply between rural and urban population remains

45. Are there any Questions? 46. Mini grid and SHS

• Mini Grid Design Manual, Allen R. Inversin, International Programs, National Rural Electric Cooperative Association

• http:// www.sma.de/en/news-information/videos-animations/videos-animations-sunny-island.html ( video on solar PV mini grid system by SMA )

• A techno-economic comparison of rural electrification based on solar home systems and PV micro grids A. Chaurey a,1, T.C.Kandpal b, Energy Policy.

REFERENCE 47. Technical aspect

• Nieuwenhout, F.D.J. et al, 2001: Experience with Solar Home Systems in Developing Countries: A Review. Progress in Photovoltais: Research and Applications 9: 455 474.

• Van der Vleuten, F. et al., 2007: Putting Solar Home System Programmes into Perspective: What lessons are relevant?Energy Policy 35: 1439 1451.

• Allicance Soleil SARL, ETC International Group, 2009: Training Manual for Domestic Solar Electricity Trainers

REFERENCE 48. Economic aspect

• www.energypedia.info

• Worldbank:http://data.worldbank.org/indicator/FR.INR.LEND

• Anisuzzaman, M.; Urmee, T.P. . Financing Mechanisms of Solar Home Systems for Rural Electrification in Developing Countries:http://www.aseanenergy.info/Abstract/32010680.pdf

• Chaurey, A.; Kandpal, T.C. ,2010. A techno-economic comparison of rural electrification based on solar home systems and PV microgrids. Energy Policy 38. 3118-3129

• Scheutzlich, T.; Klinghammer, W.; Scholand, M.; Wisniwski, S.; Pertz, K., 2001. Financing of solar home systems in developing countries. Volume I: Main Report. Environmental Management, Water, Energy, Transport Division 44 GTZ

REFERENCE 49. Social and Environmental aspects

• Baldwin, G., Childs, B., Hunter, C., Urrea V. 2007: Developing a Strategy to Improve Solar Home System Sustainability in Rural Thailand. Worcester Polytechnic Institute:http://www.wpi.edu/Pubs/E-project/Available/E-project-030107-003542/unrestricted/SOLAR_Final_Report.pdf25.04.2011

• Barua, D. C., Urmee, T. P., Kumar S., Bhattacharya S. C. 2001:A Photovoltaic Solar Home System Dissemination Model In: Progress In: Photovoltaics: Research And Applications 9: 313-322

• Kaufman S., 1999: Rural Electrification with Solar Energy as a Climate Protection Strategy.http://www.repp.org/repp_pubs/articles/resRpt09/index.htm25.04.2011

• Khan, H. J., Hugue, A. J., Andaleeb, S. S. : The Solar Home System: An Alternative Energy Source For Rural Households in Bangladesh:http://www.bdiusa.org/Publications/JBS/Volumes/Volume3/jbs3.2-3.pdf25.04.2011

• Posorski R., BussmannM., Menke, C. 2003: Does the use of Solar Home Systems (SHS) contribute to climate protection? In: Renewable Energy 28 (2003) 1061-1080.

• Sovacool B. K., DAgostino A. L., Bambawale M. J. 2011: The socio-technical barriers to Solar Home Systems (SHS) in Papua New Guinea: Choosing pigs, prostitutes, and poker chips over panels. In: Energy Policy 39 (2011) 15321542.

REFERENCE 50. Case-study

• http://www.selco-india.com/

• http://nexus.som.yale.edu/design-selco/ ( video for solar entrepreneur )

• http://www.ashdenawards.org/winners/selco07 http://money.cnn.com/magazines/business2/business2_archive/2006/12/01/8394996/index.html

REFERENCE