Economic Assessment of Standby Diesel Generator for Peak Reduction in Commercial and Industrial Buildings: A Case Study in Malaysia

Abstract

This paper outlines the barriers and potential benefits of using standby diesel generators in mitigating the peak demands for commercial and industrial customers. The feasibility of utilizing the standby diesel generators to reduce the electricity bills for customers is carried out by using the hybrid optimization model for electric renewable (HOMER) software. The size of the standby diesel generator and its operational duration are determined based on the lowest cost of electricity obtained from the evaluations. The economic assessments demonstrate that there is potential to reduce the electricity bills for commercial and industrial customers under the existing fuel price and tariffs. The commercial customers under the tariff C2 have the highest potential to save their electricity bills with the use of standby diesel generators for peak reduction. This study demonstrates the potential of the standby diesel generators in peak reduction.