The Effects of Capital and Energy Subsidies on the Optimal Design of Microgrid Systems

Pablo Benalcazar,Adam Suski,Jacek Kamiński

doi:10.3390/en13040955

Abstract

Microgrids constitute an attractive solution for the electrification of areas where grid extension is not technically feasible or prohibitively expensive. In recent years, national governments have implemented various support policies to encourage the deployment of renewable energy systems (RES) and microgrid hybrid-powered systems. A fundamental aspect during the design and disposition of these types of units is the determination of the optimal configuration and sizing of each power generation component. Furthermore, the optimal design of microgrids is strongly dependent on technological parameters, local meteorological conditions, among other factors. In this context, this paper investigates the effects of different policy measures on the optimal configuration of microgrids functioning in islanded mode. A computable model is employed to carry out a set of sensitivity analyses and assess the impact of capital and fuel subsidies on the levelized cost of electricity of various systems. The model employed for this study minimizes the total life cycle costs (TLCC) over the 20-year lifetime of the microgrid project. Besides, as meteorological conditions are crucial parameters to consider while designing microgrids, a sensitivity analysis is conducted to examine the effect of wind speed and solar irradiation on the capacities of each distributed generation units. Our results indicate that capital subsidies, as well as fuel price variations, have a substantial effect on the final design of microgrid systems for rural electrification.

Highlights

In the decade, it is expected that the developing economies mainly located in sub-SaharanAfrica, Central and Southern Asia, and South America will face significant challenges in achieving the ambitious goals of providing access to clean energy to all people and delivering universal access to electricity [1,2]
Analogous to other microgrid decision support tools (e.g., HOMER and DER-CAM) the optimization model used in this study considers key technical, meteorological, and economic factors that have a major influence on the design and performance of microgrid projects for rural electrification
The main objective is to provide a quantitative understanding of how policy interventions like capital and fossil fuel subsidies affect the levelized cost of of electricity (LCOE), total CO2 emissions, total subsidy cost, and optimal configuration of microgrids for rural electrification

Summary

Introduction

It is expected that the developing economies mainly located in sub-SaharanAfrica, Central and Southern Asia, and South America will face significant challenges in achieving the ambitious goals of providing access to clean energy to all people and delivering universal access to electricity [1,2]. Despite the remarkable progress on the rural and urban electrification rates around the world [3,4], and on the increasing number of innovative technologies suitable for off-grid applications, there are various factors that have hampered the success of national and local electrification projects, namely infrastructure, technical, economic, market, policy, and regulatory barriers [5,6,7] In recent years, these issues have been at the forefront of the debate of clean energy, inequality, poverty, and climate change and have attracted the attention of intergovernmental organizations, policymakers, and other key stakeholders [8]. SDG7 promotes investment in energy infrastructure and clean energy technologies as Energies 2020, 13, 955; doi:10.3390/en13040955 www.mdpi.com/journal/energies

Methods

Results

Conclusion