Risk Analysis for Optimal Independent Renewable Energy System

Abstract

The deployment of renewable energy in off-grid systems is increasing steadily in both developed and developing countries. In particular, Small Island Developing States (SIDS) are keen to adopt renewable off-grid systems for power generation and transportation to reduce their heavy reliance on imported oil and fossil fuels. In addition, off-grid systems are deemed to be an important vehicle to boost the development of renewable-based grids because of their geographical constraints and costs for grid extension. With declining costs and increasing performance of solar photovoltaics (PV) as well as declining costs and technological improvements in electricity storage and control systems, adopting off-grid renewable energy systems could serve as an optimal option for SIDS to diversify the source of energy supply. In this respect, this paper identifies the most cost-efficient combination of renewable energy systems to assess the financial feasibility of the -grid renewable energy systems using HOMER. Moreover, based on @Risk simulations, uncertain factors, such as diesel cost, construction delays, and operating & maintenance (O&M) costs, will be considered to determine how those uncertainties in the future could affect the Levelized Cost of Energy (LCOE).