Abstract
The aim of this research is to compare the economic benefits of various types of power generating technologies such as gas turbines, wind turbines and solar energy that is suitable for power producing plants in Nigeria. The study conducts economic assessment by developing a data-intensive spread-sheet-based model. The model estimates the unit cost of electricity generated by a 10MW capacity solar photovoltaic system (PV), Wind turbine and Gas Turbine. Comparison based on investment cost and capacity charge indicated that the levelized cost of electricity (LCOEsolar) by solar PV was found to be $0.05188 per kWh with a net present value of (-$3,520,003), (LCOEwind), by Wind turbine was found to be $0.0732per kWh or with a net present cost of (-$24,486,076), while (LCOEgas) by Gas turbine was found to be $10.07214 per kWh or with a net present value of ($11,813,136). Results obtained with reference to LCOE showed that solar PV has the lowest cost of power generation, followed by gas turbine, and then wind turbine. Consequently, comparison based on decision for economic and preferable energy to invest in as well as the annual return the investment is projected to generate indicated that the internal rate of return (IRR) for both solar PV and wind turbine was found to be negative with a simple payback period of 14 and 35 years respectively, while internal rate of return (IRR) for gas turbine was found to be 18.67% with 5 years payback period. Hence, result obtained with reference to IRR and SPBP showed that gas turbine is the most economic and preferable energy generating technology to invest in since it is projected to generate 18.67% annual return from the investment in a minimum of 5 years period as compared to solar PV and wind turbine. Although natural gas-based power generation has lower upfront costs but it is vulnerable to volatile fuel prices, whereas electricity generation from renewables has higher upfront costs but provides electricity at costs that are highly predictable.
Highlights
Electricity, which is accepted to mean the supply of electric power generally plays a vital role in the socioeconomic development of a nation
The model estimates the unit cost of electricity generated by a 10MW capacity solar photovoltaic system (PV), Wind turbine and Gas Turbine
Comparison based on investment cost and capacity charge indicated that the levelized cost of electricity (LCOEsolar) by solar PV was found to be $0.05188 per kWh with a net present value of (-$3,520,003), (LCOEwind), by Wind turbine was found to be $0.0732per kWh or with a net present cost of
Summary
Electricity, which is accepted to mean the supply of electric power generally plays a vital role in the socioeconomic development of a nation. The supply of electricity involves generation, transmission and distribution of the electric power to consumers. Electricity is one aspect of the utility sector that is very important and meaningful for the growth of every society. It promotes the economy and aids the well-being of individuals [1]. Electricity can be classified as the most important energy source and the most momentary, a source that must be consumed immediately it is produced. This makes economics of electricity production modelling more complex when compared with the same task for other products. In a developing country like Nigeria, high cost of exploration techniques and Naira devaluation have made power generation unattractive [2]
Sign-in/Register to view highlights & summary 
Published Version (
Free)
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: European Journal of Engineering Research and Science
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
