Optimal integration of photovoltaics in micro-grids that are dominated by diesel power plants

Recommendations for utilities and consulting engineers
26 Jun 2019

In this report the effects of PV integration into diesel driven micro-grids was investigated. The focus was set to the fuel saving potential due to the PV integration and the resulting economics for the system.
The report starts with a summary of the most relevant technical aspects that need to be considered for the integration of PV in a diesel driven micro-grid.
Then the report analyzed the different types of systems that are of interest for the integration of PV. From this analysis three case studies with quite different electric demand profiles were identified for which a detailed simulation was performed. The focus was on the effects of varying PV penetrations and the corresponding fuel saving potential and thus the economics of the system. The systems under investigation were typical diesel driven micro grid use cases, a Hospital complex in Haiti, a rural village in Nepal and a mine in South-Africa. To get comparable results for all systems the same specific component costs were assumed.
The simulations showed a reduction of fuel consumption and the levelized costs of electricity (LCOE) for all systems and all PV penetration levels based on peak power except for very high PV penetrations (> 150%) for the case of the rural village in Nepal. The benefits were particularly high for the Hospital case in Haiti where the demand fitted very well the PV production curve and the mine case in South-African where the load was extremely constant on a high level.
Concerning the minimum value of the LCOE the PV penetration levels for the three case studies were very different. For the hospital in Haiti a PV penetration level of 110% was found as optimum leading to a fuel saving of about 30% and a cost reduction of about 6 cents. For the rural village in Nepal the minimum was found at a penetration level of about 65% resulting in only about 12% of fuel saving and two cent price reduction. For the mine in South-Africa a minimum LCOE value was simulated for a PV penetration of 135% and a fuel saving reduction of about 27% and a LCOE reduction of about five cents.
By adding a battery to a PV diesel system, the LCOE remains the same or even decreases slightly in the case of the rural village were the demand does not fit well with the PV production curve, but allows for higher PV penetration and a higher overall share of renewable energy. As a rule of thumb, a battery capacity of 30% of the maximum load value could be assumed to be reasonable, depending on the battery system cost that was estimated with a conservative value of 800 Euro/ kWh.
For use-cases where the load is not well fitting the PV production, the integration of a storage system can be of even higher interest. Particularly if the battery prices are further reducing and the diesel prices are remaining on high levels.

Report IEA-PVPS T9-19:2019