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HomeMy WebLinkAboutHybrid Wind-Diesel Publications 2003Hybrid Wind-Diesel Publications Contents Hybrid Energy Systems (Encyclopedia Text) — J. Manwell Hybrid Systems Architecture and Control — lan Baring-Gould Designing a System Hybrid2 Users Manual HOMER Getting Started Guide Analysis of Renewable Energy Retrofit Options to Existing Diesel Mini-Grids Report of the Chiloe Islands Rural Electrification Project — lan Baring-Gould An Analysis of the Performance Benefits of Short-Term Energy Storage in Wind- Diesel Hybrid Power Systems — Mariko Shirazi, Steve Drouilhet Testing of a 50-kW Wind-Diesel Hybrid System at the National Wind Technology Center — Dave Corbus, April Allderdice, Jerry Bianchi Village Power Hybrid Systems Development in the United States — Larry Flowers, Mike Bergey Renewables for Sustainable Village Power — Larry Flowers, lan Baring Gould, Jerry Bianchi, David Corbus, et al Decentralized Wind Electric Applications for Developing Countries — Flowers, Bergey Diesel Plant Retrofitting Options to Enhance Decentralized Electricity Supply in Indonesia — Baring-Gould, Drouilhet, Flowers Sino/American Cooperation for Rural Electrification in China American Indian Reservations: A Showplace for Renewable Energy Indian Tribes: Their Unique Role in Developing the Nation’s Renewable Energy Resources DRAFT 5/5/03 Combined (Hybrid) Energy Systems J. F. Manwell 1. Introduction to Hybrid Energy Systems Over the last thirty years or so there has emerged a considerable interest in combined or ‘hybrid’ energy systems. In the context used here that refers to an application in which multiple energy conversion devices are used together to supply an energy requirement. These systems are often used in isolated applications, and normally include at least one renewable energy source in the configuration. Hybrid systems are used an alternative to more conventional systems, which typically are based on a single fossil fuel source. 1:1. Definitions Hybrid energy systems have been defined in a number of ways. The most general, and probably most useful is the following: “Hybrid energy systems are combinations of two or more energy conversion devices (e.g., electricity generators or storage devices), or two or more fuels for the same device, that when integrated, overcome limitations that may be inherent in either.” This definition is useful because in includes a wide range of possibilities, but includes the essential feature of the multiplicity of energy conversion. Note that this broad definition does not necessarily include a renewable energy based device, and also allows for transportation energy systems. In the present discussion, however, we focus on stationary power systems, where at least one of the energy conversion devices is powered by a renewable energy source. A common definition of renewable energy source is a one which is ultimately derived from the sun, and which is capable of being replenished on a reasonable time scale. Here, “reasonable” signifies a period of time on the order of a person’s life, or shorter. This definition then clearly includes solar energy, wind energy, wave energy, biomass energy and hydropower. Frequently two other sources are also considered to be renewable, although they do not originate primarily from the sun. They are tidal energy (derived from the motion of the moon) and geothermal energy (originating in the elevated temperatures below the earth’s surface. For the purpose of comparison, it useful to consider briefly the nature of conventional energy systems that are normally used where hybrid system might be used instead. There are basically three types of conventional systems of interest. These are (1) large utility networks, (2) isolated networks and (3) small electrical load with dedicated generator. Large utility networks consist of power plants, transmission lines, distribution lines and electrical consumers (“‘loads). These networks are based on alternating current AC, with constant frequency. Electrical loads are typically resistive and inductive in nature. Transformers change the voltage at different points on the network, but between transformers the voltage is nearly constant. Such networks are frequently assumed to have an “infinite bus”. This means that the voltage and frequency are unaffected by the presence of additional generators or loads. DRAFT 5/5/03 Isolated electrical networks are found on many islands or other remote locations. They are similar in many ways to large networks, but they are normally supplied by one or more diesel generators. Generally, they do not have a transmission system distinct from the distribution system. Isolated networks do not behave as an infinite bus, and may be affected by additional generators or loads. For many small applications it is common to supply an electrical load with a dedicated generator. This is the case, for example, at construction sites, highway signs, and vacation cabins. These systems are also normally AC, but have no distribution system. 1.2. Applications for Hybrid Energy Systems There are numerous possible applications for hybrid power systems. The most common examples are (1) remote AC network, (2) distributed generation applications in a conventional utility network and (3) isolated or special purpose electrical loads. The classic example of the hybrid energy system is the remote, diesel powered AC network. The basic goal is to decrease the amount of fuel consumed by diesel generators and to decrease the number of hours that they operate. The first addition to “hybridize” the system is to add another type of generator, normally using a renewable source. These renewable generators are most commonly wind turbines or photovoltaic panels. They can also be hydroelectric generators or biomass based generators. Experience has shown that simply adding another generator is not sufficient to produce the desired results. Accordingly, most hybrid systems also include one or more of the following: supervisory control system, short term energy storage, and load management. Each of these will be described in more detail below. An example of a typical hybrid energy system, in this case a wind/diesel system, is illustrated in Figure 1. g aN Wind Diesel Turbine Gensets =|_ >) Storage N System Primary Dump Load Load ma O ; ua 1 Figure 1 Schematic of Wind Diesel System with Storage Over the last 10 years, management of many large electrical networks has been changed, so that it is now possible for individuals or businesses to add generation in the DRAFT 5/5/03 distribution system of the utility. This is known as distributed generation and is often referred to as DG. Distributed generation can have a variety of purposes, but in any case, it is sometimes desirable to combine a number of energy conversion devices together with the distributed generator. This results in a hybrid energy system the distributed generation application. Hybrid systems can be of particular value in conjunction with an isolated or special purpose application. One example is that of using photovoltaic panels, together with some battery storage and power electronic converters to supply a small amount of energy to a load in a remote location. Other examples include water pumping or water desalination. In these applications electrical loads may take a range of forms. They may be conventional AC, DC or even variable voltage and variable frequency. 1.3. Impetus for Hybrid Energy Systems There are a variety of reasons why a hybrid system might be used. An important reason is the reduction of fossil fuel use. Fossil fuel can be costly, especially in remote locations where the cost of transporting the fuel to the site must be considered. In many remote locations fuel oil must be stored, often for an entire winter. Reducing the amount of fuel use can reduce storage costs. It will also reduce the number of trips to bring fuel to the site. An isolated hybrid power system can be an alternative to power line construction or power line upgrade. Hybrid power systems, because they include so many components, tend to be relatively expensive. When they can be used as an alternative to power line construction, the savings can help compensate for the cost of the hybrid system. Note that when the hybrid system is an alternative to power line construction, then the hybrid system must have the capability of supplying all the energy required, and must be able to provide good power quality. Under some conditions a power line already exists, but is not capable of carrying the desired current. This could occur, for example, when a new load is added. In this case the hybrid system would be a type of distributed generation. The hybrid system would only need to provide the difference between the total load and what the existing lines could carry. The presence of the existing line could simplify the design of the hybrid system, in that it need not necessarily be required to set the power line frequency and might not have either storage or dump loads (q.v.). As with the cost savings associated with avoidance of power line construction, savings from avoiding power line upgrade could help compensate for the cost of the hybrid system. Many rural areas of the world still do not have electric power. The most common method that has been employed until recently to electrify rural areas is extension of the central grid. For many locations that is impossible or prohibitively expensive. Installation of hybrid energy systems is an alternative for such situations. The systems themselves will have characteristics required for isolated operation. The distinguishing feature of systems used for rural electrification is that a number of systems will normally be designed and selected by single entity. Such a process can reduce the total costs and simplify operation and maintenance. Skilled personnel and spare parts will only be needed for a limited range of components. DRAFT 5/5/03 Distributed generation has advantages in a number of situations, and, in some cases, the overall benefit is enhanced by using a hybrid system of some sort. One common application for distributed generation is combined heat and power (CHP). In this case, waste heat associated with fossil fuel combustion is used for space or process heating, thereby increasing the overall energetic efficiency of the fuel use. Another case is the installation of one or more wind turbines or photovoltaic system on a distribution network. In situations such as these, it may be advantageous to add additional components, such as energy storage and power converters. This could be so where the value of energy changed over the time of day, or where there were power quality issues that needed correction. Use of hybrid systems can result in local environmental benefits. In particular, diesel generators (in isolated applications) should run less often and for shorter periods. This will reduce locally produced air pollution and should reduce noise as well. Transporting fuel to a remote location and transferring fuel to storage at the site is accompanied by a risk of accident, spill, or leakage. Reducing the amount of fuel transported will reduce these risks approximately in proportion to the fraction of fuel use that is avoided. 2. Characteristics of Hybrid Energy Systems The characteristics and components of a hybrid system depend greatly on the application. The most important consideration is whether the system is isolated or connected to a central utility grid. 2:1: Central Grid Connected Hybrid Systems If the hybrid system is connected to a central utility grid, as in a DG application, then the design is simplified to a certain degree and the number of components may be reduced. This is because the voltage and frequency are set by the utility system and need not be controlled by the hybrid system. In addition, the grid normally provides the reactive power. When more energy is required than supplied by the hybrid system the deficit can be in general be provided by the utility. Similarly, any excess produced by the hybrid system can in general be absorbed by the utility. In some cases, this is not true, however. The grid is then said to be “weak.” Additional components and control may need to be added. The grid connected hybrid system will then come to more closely resemble an isolated one. 2.2. Isolated Grid Hybrid Systems Isolated grid hybrid systems differ in many ways from most of those connected to a central grid. First of they must be able to provide for all the energy that is required at any time on the grid, or find a graceful way to shed load when they cannot. They must be able to set the grid frequency and control the voltage. The latter requirement implies that they must be able to provide “reactive power” as needed. Under certain conditions, renewable generators may produce energy in excess of what is needed. This energy must be dissipated in some way so as to introduce instabilities into the system. _ There are basically two types of isolated grid hybrid which include a renewable energy generator among their components. These are known as “low penetration” or “high penetration.” In this context “penetration” is defined as the instantaneous power from the DRAFT 5/5/03 renewable generator divided by the total electrical load being served. “Low penetration,” which is on the order of 20% or less, signifies that the impact of the renewable generator on the grid is minor, and little or no special equipment or control is required. “High penetration”, which is typically over 50% and may exceed 100% signifies that the impact of the renewable generator on the grid is significant, and special equipment or control is almost certainly required. High penetration systems may incorporate supervisory control, so-called “dump loads”, short term storage, and load management systems. Two important considerations in an isolated system are: (1) whether the system can at times run totally on the renewable source (without any diesel generator on) and (2) whether the renewable source can run in parallel with (i.e. at the same time as) the diesel generator. It is most common for one or the other to be possible (and normal). It is less common that both modes of operation are possible. This latter system offers the greatest fuel savings, but is more complicated. Generally speaking, in the smallest system the renewable generator will run separately from the diesel, and the load will be supplied by the one or the other. In larger, low penetration systems, the renewable generator will always run in parallel with at least one diesel generator. It is the higher penetration systems that switching between operating modes is likely to be an option. 23% Isolated or special purpose hybrid systems Some hybrid systems are used for a dedicated purpose, without use of real distribution network. These special purposes could include water pumping, aerating, heating, desalination, or running grinders or other machinery. Design of these systems is usually such that system frequency and voltage control are not major issues, nor is excess power production. In those where energy may be required even when renewable source be temporarily unavailable, a more conventional generator may be provided. Renewable generators in small isolated systems typically do not run in parallel with a diesel (or gasoline) generator. 3. Technology Used in Hybrid Energy Systems A wide range of technology may be used in a hybrid energy system. This section describes some of them in more detail than was done in previous sections. Devices to be discussed include energy consuming devices (“loads”), rotating electrical machinery, renewable energy converters, fossil fuel generators (often, but not always, diesels), energy storage devices, power converters, control systems, and load management devices. Some of the various possible devices and arrangements that may be found in hybrid energy system are illustrated in Figure 2. The primary focus here is on isolated network hybrid systems, but much of the technology applies to other types of hybrid systems as well. DRAFT 5/5/03 Clutch Diesel Enging—4 F-4 Shaft Bus J DC: Machine AC Machine Dc tere mei Bus DC GENERATORS i ine ‘ i i Wind Turb PV Array with MPPT hey PV Array Diesel Generators Diesel Generators Bi-directional Converter AC LOADS Primary DC LOADS Primary Deferrable Optional Dump Unidirectional Converter Deferrable Optional Dump DC Storage! 2 Figure 2 Devices and Arrangements in Hybrid Energy Systems 3.1. Energy consuming devices Hybrid energy systems typically use the same types of energy consuming devices that are found in conventional systems. These include lights, heaters, motors and electronic devices. Depending on the devices, the nature of the energy that must be provided will vary to some degree. Incandescent lights and heaters are The ener. used is all “real.” rely on the electrical network to which they are connected to provide the required magnetic field. Some of the energy required is known ‘as “reactive.” Electronic devices include switching elements. Operation of these elements may result in harmonic currents or voltages. The combined energy requirement of all the devices is know as the total load, or just load. The load will typically vary significantly over the day and over the year. An example of a load varying over a year on an isolated island is shown in Figure 3. Variations over a month for two different seasons for the same location are illustrated in Figure 3. DRAFT 5/5/03 Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec 160 140 120 = 100 = = 5 80 8 =a 00) 40 20 of 1 31 61 91 121 151 181 211 241 271 301 331 361 Day of Year bs 3. Figure 3 Daily Electrical Loads on Cuttyhunk Island, MA 250 Seta January (45.0 kW Avg) 7 A fe July (117 kW Avg) = > 10 os ° — e £ 100 = a . sot A NP AP aw uM ay 4 Map : sae l : Jeznd laa, il” Want ww Maui Mina Wah jv are teReeD as 0 0 100 200 300 400 500 600 700 Time (hours) 4 Figure 4 Hourly Electrical Loads Over Two Months on Cuttyhunk Island, MA 3.2. Rotating Electrical Machinery Rotating electrical machinery is found in many places in a hybrid energy system. Most such machines can function as either motors or generators, depending on the application. This section will focus on the generating function. 3.2.1. Induction Generators _ The induction generator has been the most common type of generator used in wind turbines. They are also occasionally used with other prime movers, such as hydro DRAFT 5/5/03 turbines or land fill gas fueled internal combustion engines. Induction generators are physically very similar to induction motors, which are widely used in industrial and commercial applications. Because they can be used as either motors or generators they are often referred to by the more general term “induction machines.” Induction machines come in a number of forms, but the most common has a “squirrel cage” rotor. the generator is connected. For this to take place the speed of the rotor has to be slightly different from the synchronous speed. Synchronous speed is the speed that the unloaded rotor would turn by virtue of being connected to an AC network of a particular frequency. It depends on the number of electrical poles in the machine. For example, an induction machine with four poles (2 pole pairs) has a synchronous speed of 1800 rpm in a 60 Hz AC network. The ratio between difference between synchronous speed and actual speed and synchronous speed is known as “slip”. Slip is positive for motors and negative for generators. Slip varies in proportion to the power being consumed or generated. Slip at rated power is in the range of 2%. Induction generators by their nature are simple and rugged. However, the induction of ic fi : hine’ asignifi , ; Z This is not a fatal problem, but it does affect the design of the system in a number of ways (to be discussed below). Another consideration has to do with starting. When an induction machine is brought a ht ; d . “af This can be important in a hybrid system. Special provision must be made to be sure that the system has the capability of starting any induction motors or generators that it may be required to. 3.2.2. ‘Synchronous Generators” Synchronous generators may also be used with a variety of prime movers. In hybrid system applications they are of one of two types: those with electromagnetic fields and those using permanent magnets. The traditional synchronous generator uses an electromagnetic field. The field is created on the rotor via DC currents flowing in the rotor winding. The rotor currents are in turn either supplied from an outside exciter via slip rings from a small, secondary generator on the rotor itself. In either case the rotor currents, and hence the magnetic field, and can be controlled from outside the mil This is done through the voltage regulator. The important result is that this t ae s chronous enerator, 0 eratin, with a voltage regulator, een a nehic the el ‘active power required by o vices in the system. ea A synchronous machine can be brought on line so that it will run in parallel with other generators. When this is done special attention must be taken to this connection so that the various generators are in phase with each other. A permanent magnet synchronous generator has its field supplied by permanent Permanent magnets rather than electromagnets. This has a number of advantages for some es nok applications. For example, the construction of a generator with a large number of poles is Sy nclvenve simpler when permanent magnets are used. This can eliminate the need for a gearbox, Gerth DRAFT 5/5/03 which might otherwise be needed with some prime movers (e.g. wind turbines). One the other hand such a generator cannot be used for network voltage control. For this reason ee cre converters. 3.3. Renewable Energy Generators Renewable energy generators are devices that convert energy from its original form in the renewable energy source into electricity. Renewable energy generators that are most likely to be found in hybrid energy systems include wind turbines and photovoltaic panels. Some hybrid energy systems use hydroelectric generators, biomass fueled generators, or fuel cells. It should be noted that many renewable energy generators include rotating electrical machines acting in the generating mode, which is also called a generator. It should be clear from the context what is meant. BSe4s Wind Turbines Wind turbines are devices that convert the energy in wind into electricity. A typical wind turbine is shown in Figure 5. The main parts of a wind turbine are the rotor, the drive train (including the generator), main frame, tower, foundation and control system. The rotor consists of the blades and a hub. The blades operate much as to sails on a ship, and serve to convert the force of the wind to a torque. The hub is attached to the main shaft, which the first part of the drive train. Other parts of the drive train include couplings, bearings, a gearbox, a brake, and the generator. The various parts of the drive train are maintained in the proper position through their attachment to the main frame. The main frame is connected to the top of the tower via a yaw bearing. The yaw bearing allows the main frame to turn so that the rotor is properly aligned with the wind. The tower holds the rest of the turbine up in the air. The foundation holds the tower in place. Nacelle cover j § : Balance of electrical system 5 Figure 5 Components of Typical Wind Turbine Sm ae RO DRAFT 5/5/03 The two most important features of a wind turbine as far as a hybrid energy system is concerned are the type of generator and the nature of the rotor control. Most wind turbines use induction generators, although some use synchronous generators. In either case the generator may be connected directly to the electrical network, or it may be connected indirectly, through a power electronic converter. There are two main forms of rotor control on wind turbines: stall control and pitch control. Rotor control is an important consideration because it has an important impact on how energy flows are regulated within the hybrid system. The most important function of rotor control is to protect the wind turbine from high winds. Under some conditions, the rotor can be controlled to facilitate start up or to reduce production when full output is not required. Stall control has frequently been used with wind turbines that have induction generators. The blades in these turbines are rigidly attached to the hub. Because the induction generator is connected to an AC network, the s eed of the generator is held very close to synchronous speed, regardless. re winds get higher, the power will incre: increase, but the speed will increase suddislieialiee That implies that the speed of the blades also increases only slightly. On the other hand, the increasing wind speed changes the angle of attack of the relative wind as it approaches the blade’s airfoil. Ata certain angle of attack, lift force begins to decrease. This is known as stall. Once the blade starts to stall, power will begin to level off or even decrease. The makes the wind turbine power essentially self limiting, as long as the electrical network is functioning properly. In pitched controlled wind turbines the blades are not attached rigidly to the hub. Rather, they are affixed in such a way that they can be rotated around their long axis. This allows the blades’ angle of attack to be change by an external control system. Pitch control gives the turbine more operational flexibility. The turbine can be started more readily in low winds and power output can be limited at will. On the other hand, pitch control is mechanically more complicated than stall control, and hence it is more expensive. Pitch control as some additional advantages in an isolated hybrid energy system in that it can be used to dissipate excess power and help maintain system stability. The power generated by a wind turbine varies in relation to the wind speed. That relation is summarized in a power curve, a typical example of which is illustrated in Figure 6. 10 DRAFT 5/5/03 280 240 200 160 120 80 Wind Turbine Power, kW 40 0 5 10 15 20 25 30 35 40 45 50 Wind Speed, mph 6 Figure6 Typical Wind Turbine Power Curve Some Photovoltaic Panels Photovoltaic (PV) panels are used to produce electricity directly from sunlight. PV panels consist of a number of individual cells connected together to produce electricity of a desired voltage. Photovoltaic panels are inherently DC devices. In order to produce AC they must be used together with an inverter. Most PV cells are made from crystalline silicon. The properties of silicon are such that the current produced is proportional to the intensity of the sunlight shining on it. The maximum current will flow when the terminals of the cell are short-circuited. When an electrical load is placed between the terminals, the voltage will increase and current will decrease slightly. When the voltage across the terminals is approximately 0.5 Volt, the current will drop precipitously. At the open circuit voltage, approximately 0.6 V, no current will flow at all. The current/voltage relations of a typical silicon cell at a fixed level of solar radiation is shown in Figure 7. Since power is proportional to the product of current and voltage, the power from a PV cell will continue to increase until the current begins to drop. The current/voltage combination where the power is maximum is called the maximum power point for the corresponding solar radiation level. Conversion efficiency of sunlight to electricity from crystalline silicon is approximately 15%. The rest of the energy is either reflected or converted to heat. 11 DRAFT 5/5/03 Current (Amperes) i I 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 Voltage (Volts) 7 Figure 7 Photovoltaic Cell Current vs. Voltage Because the maximum voltage from individual cells is less than 1 V, multiple cells are connected together in series on a PV panel. Efficiency from panels is somewhat lower than that of the individual cells. Power production from a PV cell depends to some extent on the cell’s temperature. Elevated temperatures reduce conversion efficiency. The maximum level of solar radiation on the earth is characterized by the solar constant. The accepted value 1353 W/m? outside the earth’s atmosphere, although the value changes slightly with the time of year. At the surface of the earth the intensity of solar radiation is seldom above 1000 W/m’. For that reason, PV panels are typically rated at that radiation level, which is also known as “1 sun”. The actual radiation level at any given time at a particular spot on the earth’s surface will vary significantly over the year and over the day. See Section 5 below for more details. 3.3.3, Hydro Turbines Hydropower is one of the oldest forms of electricity production, and is used in large electricity networks as well as small ones. Small hydroelectric plants are used in isolated systems in many parts of the world. Hybrid systems which include hydroelectric plants with other forms of generation are relatively rare, but they do occur. The most common of these are in locations where the resource varies significantly over the year, and there is not enough water is certain seasons. A diesel generator is then used instead of the hydroelectric generator during those seasons. The primary requirements of a hydroelectric plant are a continuous source of water and change in elevation. A hydroelectric plant typically consists of the following: a dam across a river, an impoundment behind the dam, a penstock which carries water from the impoundment to the power house, and a power house where the turbines and generators are located. Trash racks upstream of the entrance to the penstock keep debris out of the 12 DRAFT 5/5/03 turbines. Gates are used to shut off the flow of water during repairs and to save water when it is not needed immediately. There are a number of types of turbines that may be used for converting the energy of the water into mechanical energy. These include axial flow turbines, such as the Kaplan, and reaction turbines, such as the Francis. For larger drops, the Pelton wheel is often used. Another common turbine for smaller sites is the crossflow, or Michel-Banki, turbine. Hydroelectric plants have most commonly used synchronous generators, and have done so in such a way that the hydro plant could control both the frequency and voltage of the system. The frequency of the AC power is maintained through the use of a governor. The governor can take a variety of forms, but in the simplest, a set of flyballs is driven by the turbine’s shaft and turn in proportion to the speed of the turbine. An actuator is connected via a linkage to vanes surrounding the turbines. These vanes can control the amount of water entering the turbine. When the speed of the flyballs exceeds a certain level, the actuator decreases the flow of water to the turbine. When the speed drops, the water flow is increased. Open and closing the vanes requires a significant amount of force. The energy to produce that force is stored in an hydraulic accumulator, which is charged ultimately by the turbine. 3.3.4. Biomass Fueled Generators Biomass fueled generators are occasionally used in hybrid energy, though most often when they are employed in isolated networks they are the only power plants used. Biomass fueled generators are quite similar to conventional coal or oil fired generating plants, except for the combustors themselves and the fuel handling equipment. Biomass is any organic material which is used as a fuel. For purposes of power generation the most common sources of biomass include wastes from wood products or the sugar cane industry. Other agricultural wastes are sometimes used as well. A biomass power plant includes the following: biomass collection and storage, conveyors, combustors, steam generators, steam turbine, electricity generator, steam condenser and heat rejection system. The generator is normally synchronous. A governor acts in similar manner to that on a hydroelectric plant, except that is the steam flow which is controlled, rather than water. Other types of biomass fueled generator are sometimes used in conjunction with land fill gas. Such generators most commonly employ an internal combustion engine as a prime mover. Occasionally fuel cells have been used (see below). 3s! Fuel Cells Fuel cells can be used in hybrid power systems, and are expected to become more common as their costs drop. Fuel cells ultimately run on hydrogen, but in many cases the input fuel is some other gas, such as natural gas or land fill gas. Fuel cells can be thought of as a continuous battery. The fundamental reaction is between hydrogen and oxygen, the product of which is water and electric current. The reaction takes place in the vicinity of a membrane, which serves to separate the various components of the electrolyte and the electrodes. The electrodes are the terminals of the 13 DRAFT 5/5/03 fuel cell and carry the current into an external circuit. Like batteries, fuel cells are inherently DC devices. Fuel cells can be used in an AC network if their output is converted to AC via an inverter. When natural gas or land fill gas is used as the fuel, it must first be used to produce hydrogen. This is done in a reformer. Natural gas is primarily methane, CHg, In the reformer the methane will react with oxygen to produce hydrogen and carbon dioxide: CH,+0O, —>2H,+CO, The hydrogen will then pass into the fuel cell while the CO) is released to the air. The reforming process amounts to partial oxidation of the methane, and heat will be generated. This heat must be rejected to the environment to keep the fuel cell at an acceptable temperature. There are a number of different designs for fuel cells. They include proton exchange membrane (PEM), solid oxide, and molten carbonate. The most common one for stationary power applications, such as would be used in a hybrid energy system, are the PEM type. 3.4. Fossil Fuel Generators Fossil fuel generators are commonly used in hybrid energy systems. In fact, most isolated power systems at the present time are based on fossil fuel, using internal combustion engines as prime movers. Most medium size and larger isolated systems use diesel engine/generators. The smallest systems sometimes use gasoline. Some very large isolated power systems sometimes use conventional oil fired steam power plants. They will not be discussed here, however. 3.4.1. Diesel Engine/Generators Diesel engine generators are discussed elsewhere in this encyclopedia, so they will only be summarized here. Emphasis will be given to those aspects of relevance to hybrid energy systems. Diesel generators typically consist of three many functional units: a diesel engine, a synchronous generator with voltage regulator, and a governor. A diesel engine is an internal combustion engine, operating on the four-stroke Diesel cycle. On the first (intake) stroke, the piston is pulled down the cylinder, away from top dead center (TDC), pulling air in past the open intake valve. On second, or compression stroke, the piston returns to TDC. The valves are closed and the air is compressed, becoming very hot. Just before TDC, diesel fuel is injected into the combustion chamber. The fuel is ignited. The burning fuel expands rapidly, forcing the piston in the power stroke. On the fourth (exhaust) stroke the combustion products, primarily carbon dioxide and water, are forced out past the open exhaust valve. The process is then repeated. A diesel engine has a least one cylinder and piston. Some diesels have many. The fuel injection system is an important part of the diesel injection. Its function is to inject the proper amount of fuel at the appropriate time in the cycle. The timing of the injection is determined by the design of the engine itself; the amount of fuel is 14 DRAFT 5/5/03 determined by the governor. The injection system ensures that the fuel to be injected is at the proper pressure, and that the fuel is injected into the proper cylinder. The diesel engine is normally connected directly to a synchronous generator. The generator normally has an electromagnetic field of the type discussed previously. A voltage regulator ensures the proper voltage is produced. The frequency of the AC power is directly proportional to the engine speed, which in turn is controlled by the governor. Historically diesel generators have employed “droop” type governors. These are similar to those described above for hydroelectric plants. A set of flyballs is driven by the engine, so the speed varies in proportion to the engine speed. Through a set of linkages, the amount of fuel that can be injected at any time is varied according to how far the operating speed differs from (or “droops”) from nominal. As the electrical load on the generator increases, the droop increases and more fuel is injected. Diesel generators today are more likely to have electronic governors. These are typically, proportional-integral-derivative (PID) governors. They have quick response to changes in loads and they also have no droop. Some diesel engines have turbochargers. A turbocharger is essentially small air compressor, run off the exhaust gases. The turbocharger feeds compressed air to the diesel, giving it more air than it would normally have. The effect is that more power can be produced from an engine of a given size than would be the case without the turbocharger. The disadvantage is that some diesels with turbochargers are less suited to running at load levels than are conventional, naturally aspirated diesels. An important consideration regarding diesel generators is their fuel consumption, both at full load and part load. Diesel fuel consumption is frequently described in terms of electricity produced per gallon of fuel consumed. Full load values ranging from a low of 8 kWh/gallon to 14 kWh/gallon have been reported. Assuming an energy content in the fuel of 140,000 BTU, these values translate to 20% to 34%. The rest of the energy is rejected as waste heat. In some cases some of this waste heat can be recovered and used for space heating or other thermal applications. Diesel engine generators are often called upon to follow the load. That means that their output must be equal to the system load (or to the system load less then production of any other generators that might be on; this is called the “net load”). As the load may go up and down, so must the electricity generated. This results in part load operation. Generally, the conversion efficiency is less at part load than at full load. Fuel consumption over the full range of operation is summarized in fuel curves, such as the typical example shown in Figure 8. In these curves fuel consumption is graphed against power. In the ideal case, the fuel curve would be a straight line and pass through the origin. In reality, the fuel curve is indeed close to a straight line, but it actually passes through the y axis well above the origin. This reflects the observation that a diesel generator has significant no-load fuel consumption, typically between 5% and 20% of full load. 15 DRAFT 5/5/03 a Full Load Fuel Consumption | | } 6.0 | IF 5m tt | 6 N 2 r + = = 5.0 49 & 15 kW Diesel Engine ie & 4.0 Fuel Consumption |~L 3§ 2 3.0 | = 3 No-Load:Fuel Consumption ao S 2.0 =| a - ao © 10 1z 0.0 0 0 2 4 6 8 10 12 14 16 Engine Load, kW 8 Figure 8 Typical Diesel Engine Generator Fuel Curve Regardless of efficiency considerations, manufacturers normally recommend that diesel generators not be run below some specified minimum power level, known as the minimum load. Typically, the minimum recommended load is between 25% and 50% of rated. Engines run for long periods at levels below the minimum recommended can experience a number of problems. These are associated with operating temperatures and incomplete fuel combustion. Engines run in such a way can suffer fouling and they may need more frequent overhaul. Diesel engine generators have the advantage that be started and stopped fairly often with minimal problems. Especially in cold climates, however, it is usually recommended that they be kept warm. Starting a cold engine from which the lubricating oil has drained away can result in accelerated wear. When the electrical load varies significantly over the day or from one season to another, it is common to use multiple diesel generators. Under such situations, one or more of the diesels is set to run at a fixed power level, so the governor is inactivated for that time period. One diesel generator follows the load, supplying whatever power is not provided by those running at fixed power level. 3.4.2. Gasoline generators Gasoline generators are sometimes used for very small hybrid energy systems applications. These generators have the advantage that they are readily available throughout the world and are relatively expensive. They are similar in many ways to diesel generators, except that use spark ignition, and have lower compression ratios. They also typically use carburetors rather than fuel injection. The main disadvantage of gasoline generators is that they are less efficient the diesel. 3.5. Energy Storage Energy storage is often useful in hybrid energy systems. Energy storage can have two main functions. First of all, it can be used to adapt to a mismatch between the electrical load and the renewable energy resource. Second, it can be used to facilitate the control 16 DRAFT 5/5/03 and operation of the overall system. There are basically two types of energy storage, convertible and end use. Convertible storage is that which can readily be converted back to electricity. End use storage can be applied to a particular end use requirement but may not readily be converted back to electricity. 3.5.1. Convertible Storage There are a number of convertible storage media, although only a few of them have been used frequently in hybrid energy systems. The most commonly used form of convertible storage is the battery. Less commonly used, but frequently discussed, forms include pumped hydroelectric, flywheels , compressed air, and hydrogen. 554.1. Batteries Batteries are certainly the most commonly used form of convertible storage for hybrid energy systems. They have been used both for short term (less than 1 hour) and long term (more than 1 day) storage. A number of types of batteries have been developed. The most common type of storage battery for hybrid applications is the lead acid battery. Nickel cadmium has also been used occasionally. A typical lead acid battery is illustrated in Figure 9. It consists of a leak proof plastic case, inside of which are a number of cells. A battery cell consists of two sets of grids containing the active materials. Terminals are attached to each set of grids. The active material in the positive grid in a fully charged lead acid battery is lead dioxide (PbO2), the negative grid is pure lead (Pb). Many batteries not use pure lead. Some use antimony; others use calcium. The electrolyte is sulfuric acid. Each cell has a nominal voltage of 2 V, so anominal 12 V battery would consist of 6 cells. The actual terminal voltage, however, depends on the state of charge of the battery, and whether it is being charged or discharged. Terminal VYent Intercell Connections Plates Separator Case 17 DRAFT 5/5/03 9 Figure 9 Battery Construction The reactions that take place in a lead acid battery are the following: PbO, + Ph+ H,SO, > 2 PbSO, +2H,O (discharging) 2 PbSO,+2H,O — PbO, + Pb + H,SO, (charging) In so far as hybrid energy systems are concerned, there are five important performance characteristics of batteries: (1) voltage, (2) energy storage capacity, (3) charge/discharge rates, (4) efficiency and (5) battery lifetime. Batteries by their nature are DC. Individual batteries are made up by a number of cells in series, with each cell nominally two volts. Complete batteries are typically 2, 6, 12 or 24 Volts. The actual terminal voltage will depend on three factors: (1) state of charge, (2) whether the battery is being charged or discharge and (3) the rate of charge or discharge. The energy storage capacity is primarily a function of battery voltage and the amount of charge it can hold and then return. Charge is measured in units of current times time (Ampere-hours). The amount of charge that is stored in a battery at any particular time is often described with reference to its full state by the term “state of charge” (SOC). Discharging and charging back to a given level (normally fully charged) is referred to a cycle. A “deep cycle” is one in which the battery is nearly fully discharged before being recharged. The total amount of charge that a battery can hold is primarily a function of the amount of material used in the construction. Battery capacity is normally specified with reference to a specific discharge rate. This is because the apparent capacity of batteries actually differs with charge and discharge rate. Higher rates result in smaller apparent capacities. This phenomenon reflects the time constant of the chemical processes that take place in the battery. Batteries are limited with respect to the rate at which they can be charged or discharged. Charging or discharging rates are measured in Amperes, but often they are described in terms of hours, T, to discharge a full battery with initial charge C (measured in Ampere Hours). Lead acid batteries are normally discharged at rates C/T (Amperes) of between C/5 and C/20. As energy storage media, batteries are not 100% efficient. That is, more energy is expended in charging than can be recovered. Under normal conditions, the energy loss is primarily related to the differences in voltage during charging and discharging. Hydrogen out-gassing during charging and self -discharge can also reduce efficiency. Overall efficiencies are typically in range of 50-80%. An important characteristic of batteries is their useful lifetime. Experience has shown that the process of using batteries, and cycling their SOC between full and some lower level, actually decreases their storage capacity until eventually the battery is no longer useful. The important factors in battery life are (1) the number of cycles and (2) the depth of discharge in the cycles. Depending on the type of battery, the number of deep cycles to which a battery can be subjected ranges from a few thousand down to hundred’s or even ten’s of cycles. Certain designs are better suited to rapid charge and discharges, but not deep discharges. Other batteries (“deep-cycle”) are best suited to slower rates, 18 DRAFT 5/5/03 but can be discharged more often to greater depths of discharge. The cycle life of a typical battery is illustrated in Figure 10. 1000 800 600 400 Cycles to Failure 0.0 0.2 0.4 0.6 0.8 1.0 Fractional Depth of Discharge 10 Figure 10 Battery Cycle Life 3.5.1.2. Pumped Hydro One form of convertible storage that has been applied in some hybrid energy systems is pumped storage. In this case, water is pumped from one reservoir at a low elevation up to one at a higher elevation. The amount of energy that can be stored is a function of (1) the size of the reservoir and (2) the difference in elevation. The overall efficiency of the storage is a function of the efficiency of the pumps and turbines (which may be the same devices) and the hydraulic losses in the pipes connecting the two reservoirs. The use of pumped storage is limited by the lack of sites where such facilities can be installed at a reasonable price. Seasless Flywheels Flywheels can be used to store energy in a hybrid system. A flywheel energy storage system consists of the following components: (1) the flywheel itself, (2) an enclosure, usually evacuated to minimize frictional losses, (3) a variable speed motor/generate to accelerate and decelerate the wheel, and (4) a power electronic converter. Energy is absorbed when the wheel is accelerated up to its maximum speed, and is released when the wheel is decelerated to some lower speed. A power electronic converter accompanies the flywheel and motor/generator because the input and output power to and from the motor/generator is typically variable voltage and variable frequency AC. Flywheels typically store relatively small amounts of energy, but they can absorb or release the energy at high rates. Thus in hybrid power systems they can be used to smooth short term fluctuations in power (on the order of seconds or minutes) and they can facilitate system control. 19 DRAFT 5/5/03 3.5.1.4. Compressed Air Compressed air can be used for storage in hybrid systems, and some experimental prototypes have been built. Efficiency is relatively low, however, and this method of storage has not been widely used. 3.5.1.5. Hydrogen Hydrogen can be produced by the electrolysis of water, using a renewable energy source for the electricity. The hydrogen can be stored indefinitely, and then used in an internal combustion engine/generator or a fuel cell to generate electricity again. This method of storage appears to have a lot of potential, but it is still quite expensive. QR 3.5.2. End Use Storage End use storage, as opposed to convertible storage, refers to the situation where some product is created through the use of electricity when it is available. The product is then stored and made available when it is needed. 3.5.2.1. Thermal Energy A common form of end use storage is thermal energy, most often in the form of hot water. Hot water can be used for space heating applications, domestic hot water, swimming pools, etc. Hot water can be stored relatively inexpensively in insulated water tanks. Depending on the location of the water tanks relative to the end use, the efficiency of the storage can be quite high. 3.5.2.2. Pumped Water Pumped water is another form of end used storage. This form of storage has a long history of use in conjunction with windmills. In this application, water for any plausible purpose is pumped into a reservoir or storage tank, usually elevated, from which it can be released as needed. When the storage is elevated, then the water can flow by gravity to the point of use, so no further input of externally produced energy is required. 3.5.2.3. Pure Water Another, less common form of end use storage, is the production and then storage of pure water from salty or brackish water. Depending on the quality of water at the input of the process, ultrafiltration, reverse osmosis, or vapor compression evaporation may be used to produce the pure water. All of these are energy intensive, so the implicit energy density of the storage is high. 3.5.2.4. Other Products One can conceive of other products which are effectively a type of end use storage. Producing these products can be thought of as an application of a type of load management, also known as demand side management (DSM). For remote hybrid energy systems, examples include grinding grain, processing coffee, or sawing wood. 3.6. Power Converters For any hybrid energy system to function properly, it is common that one or more power converter be incorporated into the system. These are either electromechanical or electronic devices. 20 DRAFT 5/5/03 3.651" Electromechanical Power Converters There are at least two types of electromechanical power converters that have been used in hybrid energy systems. They include the rotary converter and the synchronous condenser. 3.6.1.1. Rotary Converter A rotary converter is an electromechanical device that converts AC to DC or vice versa. When it is converting AC to DC is a rectifier. When operating the other way it is an inverter. The rotary converter consists of two rotating electrical machines that are Either of them can run as a motor or generator depending on the intended direction o power flow. The AC machine can be either an induction machine or a synchronous machine. Which is used will depend on the requirements of the system. Generally, the induction machine would be used when there would always be at least one synchronous machine, such as one associated with a continuously operating diesel generator, somewhere else on the system. A synchronous machine would be used if there were sometimes no other such machines connected to the system, and one was required in order to maintain system voltage. Rotary converters have the advantage that they are a rugged and well-understood technology that has been around for many years. Their disadvantage is that their costs are high and their efficiencies are lower than are electronic devices that can serve the same purpose. 3.6.1.2. Synchronous Condenser — Synchronous condenser is the name given to a synchronous machine which is connected into an electrical network to help in maintaining the system voltage. The synchronous machine in this case is essentially a motor to which no load is connected. A voltage regulator is connected to the synchronous machine, and functions in the same way as described previously. Synchronous condensers are used in hybrid energy systems when there are, for at least some of the time, er synchronous machines connecte: IST'S ce a caaeecAbieropeedlerwhtcicidnfaglineneeeen arSEnioe intended to allow all the diesels generators to be turned off under some circumstances. For example, a synchronous condenser could be used in a wind/diesel system in which the wind turbines used induction generators and could at times supply all of the electrical load. The diesel could then be turned out, but the synchronous machine would be needed to supply the required reactive power to the induction generators, and maintain system voltage in the process. One variant of the synchronous condenser is the so-called “coupled diesel”. In this case, a synchronous machine is connected to a diesel engine by a clutch. When the clutch is closed, the generator is driven by the diesel in the normal way for a diesel generator. When the clutch is open, the diesel can be shut down, and the synchronous machine will serve as a synchronous condenser. Upon reconnecting, the spinning synchronous machine can bring the diesel engine quickly up to operating speed. 21 DRAFT 5/5/03 3.6.2. Electronic Power Converters In recent years, a wide range of electronic devices have been developed and adapted for use in hybrid energy systems. Many of them serve similar functions to the electromechanical devices described above, but have a number of advantages, such as lower cost, higher efficiencies and greater controllability. The devices of greatest interest include rectifiers, inverters, dump loads, and maximum power point trackers. 3.6.2.1. Rectifiers A rectifier is a device that converts AC to DC. The primary functional elements are diodes, which only let current pass one way. By suitable layout of the diodes AC ina single or three-phase circuit is converted to a rippling, but single direction, current. Capacitors may be used to smooth the resulting current. 3.6.2.2. Inverter An inverter is a device that converts DC to AC. The primary switching elements are either silicon controlled rectifiers (SCR’s) or power transistors (IGBT’s). They are arranged in a bridge circuit, and switched on (and off, in the case of transistors) in such a way that an oscillating waveform results. The waveforms are in general not perfect sine waves and require filtering to improve the waveform. Filters are comprised of inductors and capacitors. SCR based inverters usually have the worst waveforms. In the present state-of-the-art technology, inverters are transistor based, and are switched on and off using a technique called pulse width modulation. The waveform requires less filtering than with SCR’s. Some inverters operate in conjunction with other devices that set the system frequency. These are referred to as “line commutated”. Other inverters have the capability to set frequency themselves. These are called “‘self-commutated.”” Some inverters can also function as rectifiers. They are then referred to as “bi-directional converters”. The primary issues with power electronic converters, particular inverters, have to do with imperfections in the resulting waveforms. The ideal waveform is a pure sine wave, at the desired frequency of the system. This is normally 60 Hz or 50 Hz, depending on the standard where the system is located. Deviations from the ideal can be described in terms of other sine waves at different frequencies, normally integrally related to the ideal, of fundamental, frequencies. These higher order frequencies are called harmonics. Harmonics are disadvantageous for a number of reasons. They can interfere with other electronic devices; they can cause heating, loss of efficiency and even damage in the winds in electrical machinery. In general higher transistor switching frequencies will result in higher order harmonics, which are easier to filter. On the other hand, higher switching frequencies results in greater losses in the transistors and thus lower efficiency of the inverter. Actual switching frequencies result from a compromise. 3.6.3. Maximum Power Point Trackers Another electronic device that may be used in hybrid energy systems, particularly ones with photovoltaic panels is the maximum power tracker. This device is DC-DC converter than can be partially thought of as a DC transformer. Its function to provide a particular desired output voltage to the rest of the system, while adjusting the voltage at the input to allow the maximum power production by the generator which is connected to it. In the 22 DRAFT 5/5/03 case of photovoltaic panels, the voltage at the input will be the maximum power point voltage corresponding to the incident solar radiation level. Maximum power point trackers have also been used with small wind turbines. 3.7. Dump Loads A dump load is device which is used to dissipate power in order to maintain stability in an isolated hybrid energy system. Dump loads are used primarily to maintain power balances. They may also be used to control frequency. Dump loads are constructed from resistors and switching elements, that create a variable load as needed. The most common use of a dump load is in isolated wind/diesel systems where the penetration of the wind energy generation is such that instantaneous power levels sometimes exceed the system load less than minimum allowed diesel power level. The dump load control can sense the excess power and dissipate whatever is required to ensure that the total generated power is exactly equal to the actual system load plus that which is dissipated. The dump load is irtually a i in hi i i iesel systems using stall controlled wind turbines, because adjusting the power is impossible. en pitch controlled turbines are used it may be possible to dispense with the dump load, since power can be limited by pitching the blades. Because pitch action is relatively slow, however, a dump load may be useful anyway. Dump loads may be used to control frequency in systems where no other device _ capable of controlling frequency is connected. This is likely to be case in hybrid diesel systems where the diesel(s) are all shut off and where there is no self commutated inverter present. The control system for the dump load in this case monitors grid frequency and dissipates sufficient power to maintain the frequency within specified limits. 3.8. Supervisory Controller Many hybrid systems, especially the more complex ones, have a supervisory controller to ensure proper operation of all the devices within the system. The possible functions of a supervisory controller are illustrated in Figure 11. The controller itself consists of three main functional units: (1) sensors, (2) logical unit and (3) control commands. Diesel Generators Battery Switch Coupled Diesel Clutch Charge Controller Supervisory Control Optional Load Rectifier Deferrable Load Dump Load Inverter 23 DRAFT 5/5/03 11 ‘Figure 11 Supervisory Controller Functions Sensors are distributed throughout the system. The primary information they measure for system control is the power levels of the various devices. They may also measure more detailed electrical information such as currents, voltages, and frequency. Under some conditions, they may measure operating parameters such as temperatures, fuel flow, or vibrations. Information on the environment, such as wind speed or solar radiation may be monitored as well. The information gathered from the sensors is directed to the logical unit. The logical unit is based on a computer or microprocessor. It will make decisions based on an internal algorithm and the data from the sensors. Algorithms can be fairly simple or quite complex. The decisions made by the logical unit are referred to as dispatch decisions, since their function relates to dispatching of the various devices in the system. Dispatch in this sense refers to turning a device on or off, or in some cases to setting its power level. Whether or not to use storage or the dump load are also examples of dispatch decisions. The dispatch instructions from the supervisory controller are sent to controllers of the various devices in the system. This type of system control assumes that all of the devices will have dedicated control systems will be able carried out the detailed control in accordance with the commands of the supervisory controller. For example, in a system with two diesel generators, the supervisory controller may instruct one of the diesels to operate at a fixed power level and the other to follow the load. 4. Energy Loads The energy supplied by a hybrid system can be categorized in a variety of ways. The first has to do whether the energy supplied is electricity or heat. Within the electrical category, electricity loads are often divided into primary and secondary loads, and secondary loads may be further divided in what are known as deferrable and optional loads. This latter categorization facilitate consideration of load management as an essential feature of hybrid system operation. Regardless of type, it may be noted that loads frequently vary significantly from one season to the next as well as over the week and over the day, as was discussed earlier. Primary loads are the most commonly thought of electrical loads. They are those loads which consumers expect to be served when turning on a switch. In a conventional power system, all loads may be considered primary loads. Deferrable loads are one type of secondary load. The term refers to a situation where energy must be supplied within some constrained time period, but that there is no need for the energy to be supplied at any particular instant. An example would be the energy that would be required to pump water into a storage tank, where the storage tank could supply all the water required for a typical day. Thus energy supplied could be shifted in time over a period of hours, as long as it was supplied sometime during the day. Optional loads are another type of secondary load. This term applied to a load that may be supplied if there is excess energy available, but if there is not any excess then either the load will not be served at.all or it will be served by some other energy source. 24 DRAFT 5/5/03 An example is the use of excess energy for space heating in a situation where conventional oil furnaces are already installed. The excess energy could be used to supply some of the heat, but if there were no excess then oil would be used in the normal way. 5. Renewable Energy Resource Characteristics It is worth considering briefly the time varying nature of the various renewable resources that might be used in a hybrid system, because that nature will the design and operation of the system 5.1. Wind The wind resource is ultimately generated by the sun, but it tends to be very dependent on location. Over most of the earth, the average wind speed varies from one season to another. It is also likely to be affected general weather patterns and the time of day. It is not uncommon for site to experience a number of days of relatively high winds, and for those days to be followed by others of lower winds. The daily and monthly average wind speed for an island of the coast of Massachusetts, illustrating these variations, are illustrated in Figure 12. Figure 13 shows hourly variations for two months at the same location. The wind also exhibits short-term variations in speed and direction. This is known as turbulence. Turbulent fluctuations take place over time periods of seconds to minutes. Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec 18 + ri . 4 , , 4 16 Daily Average —- Monthly Average 14 a ‘4 i MAL AN Aa | ih Ht WT} 6 mi A MT "Hy Si mitt Wind Speed (m/s) 1 31 61 91 121 151 181 211 241 271 301 331 361 Day of Year 12 Figure 12 Daily and Monthly Wind Speeds on Cuttyhunk Island, MA 25 DRAFT 5/5/03 ancy July (5.8 m/s Avg) January (9.0 m/s Avg) xX 8 > 8 8 Wind Speed (m/s) o 3s = trees @ 0 100 200 300 400 500 600 700 Time (hours) 13 Figure 13 Hourly Wind Speeds for Two Months on Cuttyhunk Island, MA 5.2. Solar Radiation The solar radiation resource is fundamentally determined by the location on the earth’s surface, the date, and the time of day. Those factors will determine the maximum level of radiation. Other factors, such as height above sea level, water vapor or pollutants in the atmosphere, and cloud cover will decrease the radiation level below the maximum possible. Solar radiation does not experience the same type of turbulence that wind does, but there can be variations over the short term. Most often, these are related to the passage of clouds. Figure 14 illustrates the solar radiation over a 5 day period in December in Boston, Massachusetts. 300 250 200 150 Watts per sq. meter 100 50 420 440 460 480 500 520 Time, hrs 26 DRAFT 5/5/03 14 Figure 14 Hourly Solar for Five Days Radiation in Boston, MA 5.3. Hydro Power The hydro power resource at a site is a function of the amount of flowing water available (“discharge”) in a river or stream and the change in elevation (“head”). The head is usually relative constant (affected only by high water during storms), but the amount of water available can vary significantly over time. The average discharge is determined by rainfall and the drainage area upstream of the site on which the rain falls. Discharge will increase after storms and decrease during droughts. Soil conditions and nature of the terrain can also affect the discharge. Short term fluctuations are normally insignificant. 5.4. Biomass Sources of biomass are forest or agricultural products. The resource is ultimately a function of such factors as solar radiation, rainfall, soil conditions, temperatures and the plant species that can be grown. 6. Design Considerations The design of a hybrid energy system will depend on the type of application and the nature of the resources available. The primary consideration is whether the system will be isolated or grid connected. Other important considerations include: (1) how the various generator types will be intended to operate with each other, (2) excess power dissipation, (3) use of storage, (4) frequency control, (5) voltage control, (6) possible dynamic interactions between components. Many of the possible technologies were discussed previously and will not be repeated here. 6.1. Load Matching In the design of isolated hybrid system with renewable energy source generators one matter of particular concern is known as load-matching. This refers to coincidence in time (or lack thereof) of the renewable resource and the load. The match between the two will affect the details of the design and will also determine how much of the energy that can be generated from the renewable energy source can actually be used. When too much is available, some of may have to be dissipated. When too little is available, either storage or a conventional fueled generator will need to be used. Under ideal circumstances the energy requirement will match the available resource. Often, however, that is not the case. In many islands of the world, for example, the largest loads are during the summer tourist season, but the wind resource is greatest in the winter. Figures 3 and 12 above illustrated a typical example of this for the load and wind respectively. When there is a mismatch between the resource and the load, the system must be designed to function properly under all conditions. For example, a wind/diesel system designed for the situation shown in Figures 3 and 12 would most likely be designed so that wind energy could supply most of the load in the winter, keeping most or all of the fl DRAFT 5/5/03 diesel generators off for long periods, but in the summer, the diesels would continue to run and the wind turbines would serve as fuel savers. Figure 15 illustrates the possible energy flows for a 50 second period for a hypothetical wind/diesel system on an isolated island. The system illustrated has a primary load, an optional heating load, a dump load, a wind turbine, and multiple diesel engine/generators, at least one of which that must also remain on. 250 200 La | —e— Electric Load ] : moe | — 4— Wind Power | = s see “ me ~~ Diesel Power = 9M ee q | “nfm Heat Load $ ey x: Mo! - + @ - -Dump Load 3 e%s e ge x — m 5 ee : om 3g) 100 ° \ iar e 5 ; Time (seconds) 15 Figure 15 Power Flows in Hypothetical Wind/Diesel System 7. Economics Whether or not a hybrid energy system is actually used, and what it looks like, is strongly related to the economics of the system. In particular, will the cost of energy from the hybrid system be lower than that of a more conventional alternative? The cost of energy of a hybrid system is determined primarily by two factors: (1) the cost of the system and (2) the amount of useful energy that is produced. Other factors that are also important include the value of the energy, the cost of conventional energy, lifetime of the system, maintenance costs, and financial costs. The cost of a hybrid energy system is first of all affected by the cost of the individual components that make up the system. Installation of the components and integrating them into a functioning unit will also contribute to the cost. Generally, the renewable energy generators themselves are the most expensive items. For example, at the present time, wind turbines cost on the order of $1000-$2000/kW, depending on the size. Photovoltaic panels cost on the order of $6000-$8000/kW. Diesel generators are also costly, but considerably less so than wind turbines. Costs of $250-$500/kW are typical. Lead acid batteries cost $100-$200/kWh. 28 DRAFT 5/5/03 The energy that can be produced by a renewable energy generator will depend on the type of generator, its productivity at different levels of the resource, and the distribution of the occurrences of those levels. For example, a wind turbine will produce different amounts of power depending on the wind speed. This behavior is summarized in power curve, which gives power output as a function of wind speed. If the average wind speed each hour over a year is known, this information can be combined with the data in the power curve to predict the total energy that the turbine could produce. Similar curves describe the output of photovoltaic panels. These curves, combined with hourly data on the solar resource, can be used to predict the total annual energy from the panels. When a renewable energy generator is operating in a hybrid energy system, predicting the useful energy is not as simple as it would appear, based on the discussion above. First of all, because of a likely mismatch between the available resource and the load, it is may be that not all of the energy can be used when it is available, except in very low penetration systems. The excess energy will have to be stored or dissipated. In either case, the amount of useful energy will be less than one might have expected. When not all of the load is supplied by the renewable generator, the rest is made up a conventional generator. How much fuel is actually saved by using the renewable is often difficult to determine. Because of the difficulty in determining the amount of useful energy produced by the renewable energy generators in a hybrid system and predicting the actual fuel savings, detailed computer models are frequently to used to facilitate the process. These models typically use load and resource data for every hour of the year, and combine that with the characteristics of all the devices, including the supervisory controller, in order to carry out that task. These models also include the effects of inefficiencies in the various devices, losses into and out of storage, and shifting of energy to deferrable or optional loads when they are available. The value of energy in a hybrid energy system is related to the nature of the energy produced, the cost of the alternatives and the vantage point of the operator of the system. For example, the operator of an island diesel power system, considering installing a wind turbine, would want to know that the cost of the turbine would be offset by the decrease in diesel fuel purchased. If there were excess energy produced by the system that could be sold to space heating optional loads, it may be presumed that that energy would have a unit value equivalent to that of the fuel that was displaced. For a grid connected hybrid energy system, that value of the energy would be determined by the rate structure prevailing in that utility. It is be quite possible, for example, that some of the energy would displace electricity purchased at retail. Other energy might be sold at wholesale. Depending on the jurisdiction, additional charges or incentives might also apply. Economics of hybrid energy systems are typically evaluated by a technique known as “life cycle costing.” This method takes account of the fact that hybrid energy systems have relatively high initial costs, but long lifetimes and low operating costs. These factors, together with various financial parameters, are used to predict present value costs, which can then be compared with costs from the conventional alternatives. 29 DRAFT 5/5/03 A key consideration in hybrid energy systems is that of maintainability. Hybrid energy systems are at present used primarily in remote locations. In such locations there are often not the personnel and facilities to maintain complex electrical power systems. For that reason, it is important that the system designer take into account its likely eventual location, and make sure that it can be readily serviced and repaired. Experience has also shown that sometimes it may be necessary to introduce a complete operation and maintenance infrastructure into the region where hybrid energy system are to be installed. 8. Trends in Hybrid Energy Systems Hybrid energy systems are still an emerging technology. It is expected that technology will continue to evolve in the future, so that it will have wider applicability and lower costs. There will be more standardized designs, and it will be easier to select a system suited to particular applications. There will be increased communication between components. This will facilitate control, monitoring and diagnosis. Finally, there will be increased use of power electronic converters. Power electronic devices are already used in many hybrid systems, and as costs down and reliability improves is expected that they will be used more and more. 9. Bibliography Lundsager, P., Binder, H., Clausen, H.-E., Frandsen, S. Hansen, L. and Hansen, J. “Isolated Systems with Wind Power,” (2001) Riso National Laboratory Report, Riso-R- 1256 (EN), Roskilde, Denmark, http://www.risoe.dk/rispubl/VEA/veapdf/ris-r-1256.pdf Hunter, R. and Elliot, G. (1994) Wind-Diesel Systems, Cambridge University Press, Cambridge University Press, Cambridge, UK Manwell, J. F., Rogers, A., L. and McGowan, J.G. (2002), Wind Energy Explained: Theory, Design and Application, John Wiley & Sons Ltd., Chichester, UK 30 Hybrid Systems Architecture and Control by E. Ian Baring-Gould, NREL Basis of System Design This chapter addresses hybrid power system architecture and control, and provides some insight into different technical decisions that must be made in this regard. Some of the important considerations in system design will be given and explained as well as the various options for meeting the demands placed on the power system. Because of the complexity of this task, as well as the almost infinite possibilities, only technology and equipment that is readily available will be discussed in detail. In the simplest terms, a hybrid system uses multiple types of energy production components that use a given resource to supply a required load. Chapter six provides a description of the typical components that may be combined to form a hybrid power system. The architecture of a hybrid system is how these components are put together to efficiently meet the requirements set fourth in the system design. Economics are key criteria in the design of hybrid power systems. Hybrid power systems typically require a larger capital expenditure than standard engine generators, but provide decreased spending for fuel and system maintenance. Since the savings from hybrid systems come primarily from the'reduced fuel usage and system maintenance, these two parameters become paramount. The first is the purchase and transportation cost of diesel fuel. The second is the operational hours of engine generators. The effects of the cost of delivered fuel should be clear. The higher the cost, the larger the savings from reducing fuel consumption. Since the maintenance on conventional engine generators is based on the hours of operation for each generating unit, if the operational hours of the plant are not reduced, the savings from system maintenance will be minimal. There are two approaches of reducing a generator operating hours of a plant, the first uses power from renewables without storage to reduce the power required from engine generators. In plants with multiple diesel generators this can reduce the number or size of the units supplying the load. The second approach uses renewables and storage to shut down engine generators when power is available from renewable sources or storage. These approaches make up the basis for system design and are discussed in depth below. With these concepts in mind, there are many ways to describe system architecture and many Classifications that have been used to divide the possible system configurations. Even though there are rules of thumb that can be used in deciding which system architecture is best suited for a specific application, there are always exemptions to this NREL / EDRC Handbook on Hybrid Power Systems, March 1998 7-2 Architecture and Control rule. Because of this, it is important to understand the rationale for a particular design or configuration decisions. In this chapter, we will introduce a methodology for selecting the configuration and control strategy for a potential hybrid system. This design methodology follows the three basic levels of decision making that are expressed in figure 7.1. Each level requires the system designer to make decisions based on the expected load, level of service and system economics. A choice on the first level then limits the options that can be used in succeeding levels. One of the tools that an ee ee should not be overlooked ata at oe | ING oe eee in completing any system — “RE velags coumal design are computer a sciatic coamed simulation models. There Pa —_— cee fms l pelea ee are a wide variety of —— —= ‘Seres eee ae models available, from Power Storage initial screening tools to | a Castratied coutol detailed performance Was cereus son simulation software, to wan ge ial an help evaluate system architectures and control Tomleteares Taal oe System stabitny configurations. Although yaaa soaanes Saas aaare Saeeaae software tools can be very helpful, it should be made clear that they are best used by _ skilled engineers with an understanding of the operation of hybrid power systems. Appendix B should be consulted for a discussion of simulation models. Figure 7.1: Levels of decision making in regards to system configuration and design There are three technical elements that need to be captured when determining the load: patterns in the load, the system peak load, and the instantaneous peak load Handbook on Hybrid Power Syst Driving Factors in Choosing a System Configuration There are many factors that drive the configuration of a power system. The major factors are: (i) the size of the load to be served, (ii) the quality of the service to be provided, and (iii) the types of resources, both renewable and conventional, available at the location. Two other factors are also generally defined but impact more the planning and sustainability of the project, there are the special layout of the community, which defines if a dispersed or centralized power system should be used, and the ability to pay of the residence of the community (Baring-Gould., 2000). Load Size It is very important to accurately determine the size of the load that the hybrid system will be required to serve. There are usually three different elements that need to be captured when determining the load, the first is any patterns in the load, and the second Basic system design as a function of load size: 0-3 kWh/day Renewable only systems 3 to 250 kWh/day DC bus system 250 to 1000 kWh/day DC or AC based systems with long term storage 1000 to 5000 kWh/day_ AC based systems with short term storage Over 5000 kWh/day —_ AC based systems, potentially with storage is the system peak load while the last is the instantaneous peak load. Chapter 4 should be consulted for further discussion on this topic. Quality of Service The quality of the service that is to be delivered is of vital importance to system design. There are three elements that must be considered in regards to the quality of service provided, system stability, the quality of the power and Power Harmonics. System stability refers to the ability of the system to respond to sudden changes without adverse effects on system operation or power quality. Quality of power is basically defined by three criteria, that the voltage, frequency of the system remains within limits and that harmonic distortion of the waveform is small. Power harmonics represent the configu... On the converse side, the system cost is usually proportional to the quality of the service being provided and thus providing high quality, consistent power will greatly increase the power system cost. The importance of power quality is dependent on the types and size of loads that are being supplied. If the loads are generally lighting, maintaining tight limits on system voltage and frequency is not required. Even if there are a number of critical loads, it may make sense to buffer specific equipment using independent UPS/power quality systems instead of insisting on tight standards for the whole power system. Issues of power quality are largely dependent on system architecture. Power systems that primarily use the DC bus have fewer stability problems because of buffering by the battery bank, but can have higher harmonic distortion because of the heavy use of power electronics. Systems that use AC based induction wind turbines and diesel engines have more power quality issues but are better adapted to cover load surges. In all types of systems there are many different options available to supply the level of service required by the user. Each option comes with its own performance and cost implications that must be balanced to obtain the desired results. The number of hours per day that the system is designed to operate should also be considered. This will not be discussed except to say that current research indicates that for systems only operating part of the time, it is usually more economical to use standard conventional engine generator technology. This is largely due to the expense of storing renewable power and the losses associated with those storage mechanisms. There are some exceptions to this rule such as if there is a deferrable load that could use the power instead of it being stored in the battery bank, such as water pumping or ice making. Types of Resources Available The type of physical resources available at the site will also greatly effect system design. The term resource is used in two very different ways. Initially there are the renewable resources available at the site to generate power; this could include wind, solar radiation, and a stream for micro-hydro or biomass resource, to name a few. The renewable resources that are available in your area obviously will help in determining some of the components that will be included in the system design. The second kind of resources, physical resources, reflects the availability of trained maintenance staff and spare parts, as well as the availability and price of conventional fuel_ The topic of physical resources is much to broad for a complete discussion here but there are several things that should be kept in mind. The first and foremost is the cost and availability of fuel, either natural gas, propane, diesel or gasoline. If this type of fuel is ready available then from a financial standpoint a power system based on this technology may be best. If fuel is very expensive or hard to get or transport during parts of the year then, a system design that does not depend heavily on fuel may be required. The ability NREL / EDRC Architecture and Control 7-3 In all types of systems there are many different options available to supply the level of service required by the user, each option comes with its own performance and cost implications that must be balanced to obtain the desired results. The type of physical resources available at the site will also greatly effect system design. Handbook on Hybrid Power Systems, March 1998 7-4 Architecture and Control Primarily there are three system architectures, which describe most renewable based hybrid power systems Renewable only power systems are primarily used for individual households, small community or dedicated loads. to perform maintenance on the equipment and the accessibility of spare parts is an issue that also must be addressed. For example, if service is not readily available it may be advantageous to design redundancy into the system. Basic System Architecture In the simplest terms, a hybrid system uses multiple types of power generation equipment to supply a given load. Figure 6.1 in Chapter six provides a general schematic that introduces the general hybrid system configurations options. Although the operational philosophy can vary extensively there are three basic system architectures which describe most renewable based hybrid power systems; i) renewable only generation systems, ii) power system with renewable and conventional generation with storage, and iii) power system with renewable and conventional generation without storage. Each of these systems are discussed in depth below. System configurations Type 1: Renewable only power systems. Hybrid systems based on this configuration, shown in Figure 7.2, uses one or more renewable power generation device to supply the load. Batteries are used to store power over periods of time when there is no production from the renewables. This system is based on a DC bus, largely due to the reliance on the battery bank, and is generally small in size. These systems are commonly used for dedicated loads, individual housing or other single building loads, like schools or community centers. Systems of this type are generally inexpensive and relatively maintenance free so it is a good initial step in providing minimal electrical service to a community or dwelling. Since these systems do not contain a dispatchable generator, the system will stop providing power without a regular input of energy from the renewable sources. This type of system may have problems if the power demand is larger than the generation capacity during part of the ,; DC Source Center ea AC Loads pg Figure 7.2: Schematic of renewable only power system | Handbook on Hybrid Power Systems, March 1998 NREL / EDRC Architecture and Control 7-5 year. This makes the driving criteria in the design of these systems the load size, the monthly variation in resources and quality of service to be provided. Renewable only power systems have a very simple system architecture. They are generally comprised of renewable generator(s), batteries and a DC bus junction box. If AC loads are to be supported, an inverter will also be needed with an AC distribution system. The power flow in renewable only power systems is quite simple. If power is being generated by the renewables and it can be used, it passes directly from the generator to the DC bus junction box, which is tied to the battery bank voltage. Loads on the DC bus are supplied directly while any AC loads pass through the inverter. If more power is being generated than can be used, the battery is charged with the remainder being dumped. If less power is being produced than is needed, energy will be withdrawn from the battery to cover the deficit. Figure 7.3 demonstrates the power flows of system using both PV and wind renewable technologies. During the initial part of the day the wind is covering the load and charging the battery. During the middle of the day, PV is available to cover part of the load while the battery bank covers the deficit. In the evening hours, the load increases dramatically and the battery is discharged to cover the load. Late in the night the wind again picks up and reduces the draw on the battery bank, eventually charging it slightly Power sources and sinks, NS 9 29 VFN OB BN LQ DY PH Hour of the day Battery SOC, % 2 2 VN 8 KN BD Lb @ hb Hour of day Figure 7.3: Depiction of 24 hours of operation for a renewable only power system The potential for seasonal synergy between the load and specific renewable resources may exist and must be investigated. NREL / EDRC Handbook on Hybrid Power Systems, March 1998 7-6 Architecture and Control Hybrid systems using storage can range in size to cover loads from as small as 4 kWh/day to many MWh/day These systems have a number of very specific requirements. Without the assistance of a backup generator, the system designer must be very careful to complete an assessment of the renewable resources available. Thought must be given to the acceptability of load loss due to prolonged periods with no power generation. There may be seasonal variations between the load and different resources that must be considered. If there are multiple renewable resources that have an opposing seasonal variations, it may be advantageous to use two types of renewable generating sources. An example of this would be the use of both wind power and solar in temperate areas because of good solar content during the summer and fall months when the wind is low and stronger winds during the winter and spring. The ability to periodically equalize the battery bank is also of importance because of the absence of an on-demand generator to fill this roll. A wind turbine or hydro component in the system is advantages because they can supply the high voltages needed over prolong periods of time to complete battery equalization. PV based power systems do not have this capability because they are not capable of producing high voltage over the longer time periods that are required for battery equalization. Control of Renewable only power systems. The control of renewable only power systems is quite simple because each component is controlled independently but tied to the battery bank voltage. Renewable based systems rarely have a supervisory controller. When the battery is almost completely charged the charge regulators attached to each renewable devices will sense the rising battery bank voltage and reduce the amount of power passed to the battery bank, thus reducing charging. When the battery becomes very discharged, a low voltage disconnect switch disconnects the loads until enough energy is put in the batteries to raise the bank voltage above another threshold. These disconnects can be simple voltage set relays or very complex equipment that also takes into account temperature, discharge rate and discharge time. Load management is critical in these systems, especially during months of low renewable generation. Usually this task falls to the system owner. Type 2: Power system with renewable and conventional generation with storage. The classic hybrid system generally incorporates renewable technology, a fossil fuel engine generator(s), a battery bank and a power converter. In most cases this system is based on a two-bus system, using both a DC bus for the battery bank and an AC bus for the engine generator and distribution, Figure 7.4. The renewable technology may be attached to either the AC or DC bus depending on the system size and configuration. These systems usually supply AC power though some loads may be tapped off the DC bus-bar. This power system configuration is used for systems where more consistent is required than the previous variety, generally for communities or more critical loads like health posts or commercial buildings. System size can range from as small as 4 kWh/day to many MWh/day, with no firm boundary on either side. This general configuration can have a great deal of internal variability, generally depending on the system size. Smaller systems will likely use large battery banks, providing up to a few days of storage to cover the average load, and will use smaller renewable generation devices connected to the DC bus. These systems focus around the DS bus-bar, with the production of AC power coming from a power converter or diesel engines. Larger systems focus on the AC bus-bar with all renewable technology designed to be connected to the AC distribution network. The battery banks in larger systems are generally small and mainly used to cover fluctuations in power production. The division Handbook on Hybrid Power Systems, March 1998 NREL / EDRC Architecture and Control 7-7 between the two is gray but usually relies on the size of the battery bank, the available technology and finally, the cost of energy production based on the two system designs. The first type is can be referred to as DC bus system or system with long term energy storage system while the later is short term power storage or AC bus systems. ; DC Source Center Hybrids with storage can usually be classified as DC bus or AC bus systems depending on which electrical bus the renewables are connected too storage | Figure 7.4: Schematic of hybrid system with renewable and conventional generation with The type of storage used depends on the design constraints and storage requirements. In the following analysis we will focus on storage using batteries because they are the most commonly found. Other forms of energy storage may also be used but this is not found commonly in commercial systems. Long term energy storage The principle of energy storage implies that energy from a generator, either renewable or from a dispatchable generator, is placed in the battery when it is inexpensive to produce or in abundance. The energy is then used to cover the load when there is a shortfall in production or when the energy would be expensive to produce by other means. The decision to use energy from the battery must be made comparing the cost of cycling energy through the battery to the other alternatives, primarily starting a generator. Battery banks for energy storage are designed to cover the load over a reasonably long period of time, ranging from a few hours to several days. The large size of the battery bank puts an upper boundary on the size of systems using energy storage because large battery banks become relatively expensive. Figure 7.4 depicts a hybrid system with wind and conventional generator using batteries designed for energy storage. In figure 7.4 you will note that the system is focused around the DC Source Center, basically the DC bus- bar. Systems of this type are likely to use photovoltaics and/or wind power for their primary source of energy and have a conventional energy source to supply backup power in the absence of energy from renewable sources or the battery bank. There is a great deal of flexibility in regards to system design using the energy storage concept. For the case of simplicity, let us concentrate on a system with a single conventional engine generator on the AC bus, single wind based wind generator on the DC bus, battery storage, and power converter. The system supplies an AC load. For this analysis all inverters will be treated with 100% conversion efficiency. This system configuration is depicted in Figure 7.5. NREL / EDRC Handbook on Hybrid Power Systems, March 1998 7-8 Architecture and Control Figure 7.5: Example hybrid system for power storage with parallel power converter In the case of energy storage, the diesel will be shut down when renewables and the battery can cover the load. The system operation will largely be driven by the load profile, which is depicted in Figure 7.6 along with wind data for a representative day. This load profile represents a typical case for a small rural population where the major loads occur in the evening and morning. The load peaks in the early evening at just over 17 kW but for 17 hours of the day the load is below 10 kW. 20.0 18.0 — = — ——— = — = 16.0 +— 14.0 12.0 + 10.0 + 8.0 +— 6.0 4 4.0 + 20 0.0 + rt rete 123 4 5 67 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour of day —m— Load, kW Wind speed, m/s Figure 7.6: Depiction of 24-hours of load and wind profile for hybrid system operation analysis Handbook on Hybrid Power Systems, March 1998 NREL / EDRC Architecture and Control 7-9 The design of the inverter and diesel subsystem to provide AC loads could be approached in two ways, as a parallel or a switched system. These systems are designed around the power converter technology being used in the design, of which two types are common, parallel and series. Power converters with parallel operation means that while inverting energy, they are capable of synchronizing with an external power source on the AC bus, such as a dispatchable engine or grid. This means that they are capable of providing power at the same time as these other devices. Series power converters can not synchronize with a device on the AC bus and thus they can not be operated at the same time as any other active device on that bus. Both types of devices are capable of rectifying power whenever it is available on the AC bus. 1. System with Parallel Inverter The first configuration we will discuss incorporates a power converter with parallel inversion capability that is designed to cover the daytime load. In this system the inverter must be able to synchronize with the diesel generator, a feature found on more advances, microprocessor controlled converters. For this example the inverter is rated at 10 kW while the engine generator is rated at 15kW, both may be used to simultaneously meet the load. Given this system topography, the operation of the system is as follows: ¢ Load under 10 kW: When the load is less then the rated capacity of the inverter, 10 kW, it can be completely supplied by the renewable sources and/or the battery bank. If there is no energy available from renewables or in the battery, the load can be supplied by the AC generator. If there is an excess of energy being generated from the renewables or the generator, this energy is placed into the battery bank until it is fully charged. ¢ Load 10 to 15 kW: The inverter can not be used to cover the load and so the generator is started. The inverter may pass through up to 10 kW of power produced by the renewables to keep the diesel power to a minimum or the diesel may be used to charge the batteries. This choice will depend on the state of charge of the battery bank and the type of control being implemented. ¢ Load over 15 kW: Both the diesel and converter are used to supply the load up to 25 kW, which is the rated capacity for this system. The system can in fact supply more power that rated because both the inverter and the generator can be overloaded for short periods of time. Knowledge of the overloading capabilities of the power equipment is an important feature when determining what loads my be supplied by the power system. A typical day based on the load and wind profiles shown above are described in Figure 7.7. In the early morning the renewable power is high and being used to cover the load and charge the batteries. For the hours from 500 and 600, the load is over 10 kW and so the generator is brought on line to cover the load. Excess power from the generator and all of the power from renewables are used to charge the battery bank. During the central part of the day, from 700 to 1800 the load is covered from renewables or discharging the batteries through the inverter. In hour 1900 the diesel is again started and run at full power with the inverter supplying any additional power needed. After hour 2100 the diesel is used to charge the battery bank. In the last hour of the day, the diesel is stopped while the load is covered by the renewable production and batteries, all through the inverter. If either the inverter or generator is damaged or undergoing major maintenance, NREL / EDRC Handbook on Hybrid Power Systems, March 1998 7-10 architecture and Control the system can not meet the daily peak, one of the primary drawbacks of this type of system. Large systems with multiple diesel engines may also employ battery banks and power conversion equipment but in this case the power converter and battery act as a dispatchable generator with instantaneous start up. The power converter-battery combination is used to insure that the diesels are not running at a low load. Since the inverter can run together with a generator, it may be advantages, even if one diesel is currently operating, to withdrawal energy from the battery than to start an additional conventional generator. This type of equipment can also be used to shut off diesels and reduce the amount of standby capability a plant is forced to have operating. The battery inverter may also be able to supply all of the power during very light loading periods. Care should also be taken in considering the size of the renewable component in such cases. The most efficient use of the energy from renewables is to allow it to by-pass the battery bank completely and be provided to the load through the inverter. If the installed capacity of the renewable sources is larger than the inverter, the inverter may act as a power restriction, forcing renewable energy into the battery bank even if the load is large enough to consume all of the renewable based energy. In such cases, the backup generator may even be started to cover the difference between the output of the inverter and the load even if excess energy is produced by the renewables. 20 123 45 6 7 8 9 1011 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour of day xs Co 9 a 5 5 a 12345 6 7 8 9 1011 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour of Day Figure 7.7: Depiction of 24 hours of operation energy storage hybrid power system with parallel converter Handbook on Hybrid Power Systems, March 1998 NREL / EDRC Architecture and Control 7-11 2. Switched System Design Figure 7.8 shows a schematic of one of the basic conmfigurations of a switched power system. Note that in this case the engine generator and inverter can not be connected to the load at the same time. In this system configuration the inverter and the diesel may not operate at the same time. In these systems it is common to find a rectifier connected to the AC bus that may charge the battery bank if needed while the diesel is operating. In other configurations, a power converter takes the place of the inverter, and it can be connected directly with the conventional generator but it is not capable of providing power at the same time as the generator because the two units can not synchronize. This system can provide charge the batteries when the diesel is operating without the use of an independent inverter. Figure 7.8: Example hybrid system for power storage with switched power converter In both of these systems however, if the renewables and battery can not cover the load, or if the load is larger than the inverter rated power, the conventional fuel engine must be started. In addition, when the engine is supplying the load, all of the power from the renewables has to be stored in the battery bank, used to cover DC loads or dumped, since it can not be transferred to the AC loads. Because of this either or system desing, , in many cases both the inverter, or power converter, and generator are sized to meet the peak system load. To demonstrate this architecture, let us look at a configuration with a 20 kW switched inverter and a 25 kW conventional generator. Using the data from the example day shown in figure 7.9, the inverter is used to supply the load from 0100 to 1800 with power coming from the renewable generators and the battery bank. Between 0100and 0400 there is an excess of renewables and the battery is charged. Between 0500 and 0900 hours, renewables cover most of the load with the batteries covering the shortfall. From 1000 to 1800 the battery bank is solely used to supply the load through the inverter. Between hours 1900 and 2200, the diesel is operated to cover the load and charge the battery. As the wind picks up in the late evening, the diesel is again shut off and the batteries and wind power cover the load. In comparison to the parallel system just considered, this system also has the load limit of a 25 kW but has provides a more redundant system operation because either the inverter or generator can meet the load. There is a limit to this backup because if the dispatchable generator is inoperable and there is not enough renewable energy to cover NREL / EDRC Handbook on Hybrid Power Systems, March 1998 7-12 Architecture and Control all of the energy requirements, the battery bank will be depleted and system shutdown will result. : & Visadvantas ce There are four disadvantages to this system, the first is system cost because both the Serres » SW dohed 0) inverter and generator are sized 10 kW larger than the parallel case. The second is that alee Yes) nie @ the diesel is larger and thus will be more costly to operate, both from a maintenance and 48 fuel consumption standpoint. It should be noted however that for this typical day, the 30 123 45 6 7 8 9 1011 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour of day y Battery SOC, % ¢ ¢ 8 123 45 6 7 8 9 1011 1213 14 15 16 17 18 19 20 21 22 23 24 Hour of Day Figure 7.9: Depiction of 24-hours of operation of energy storage hybrid power system with switched converter engine generator was run for two hours less than in the previous parallel system case. This reduction in operational hours may actually reduce the total operations and maintenance costs for this system. The third disadvantage to systems that incorporate switched inverters is that, depending on the technology, advanced switching must be installed to transfer power seamlessly between the inverter and engine generator. This may only be of importance if sensitive loads, such as computers, are connected. The Ce eae ea a an approximately one half a second, whichis nota problem for most low technology loads. (Finally, the system efficiency may suffer because the inverter is also oversized for the average loads. Since most power converters have poor part load performance and standing losses based on size, a large power converter operated at low loading will result in poor system efficiency. Handbook on Hybrid Power Systems, March 1998 NREL / EDRC Architecture and Control 7-13 One configuration that has been used to deal with this problem is to rectify power from the AC engine generator and then run it through the converter to supply the load. The AC generator may also be connected to the AC distribution network directly through a conventional switch but switching may only be done when the system is unenergized. The architecture is usually referred to as a series system and is described in greater detail in Nayar et. al. 1993. Although this architecture will function, the losses associated with running power from the AC generator through a rectifier only to invert it again can be very large, on the order of 20 to 30%. For this reason this system architecture is not recommended or commonly used. The choice of which system architecture to be used in a specific application can be difficult. The ability to conduct long term performance modeling on systems with different configurations may be helpful. Using computer models, these systems could be tested using different inverter and battery bank sizes to determine which would be the best configuration. Although system modeling can be very helpful, there are many additional factors in system design that may not become apparent in standard system performance modeling. Care must be taken to evaluate these additional factors, like system redundancy, given specific system requirements and constraints. This ability only comes with system design experience. Applying these architectures to systems with multiple engine generators may be treated in the same fashion. In this case the choice may not be one of whether the diesel should be turned on but rather should an additional generator be turned on. From an economic standpoint there is a limit to the size of these systems where it becomes better to use short term power storage instead of increasing the size of the battery bank and inverter. The use of switched systems in very large hybrid applications can be quite inefficient unless the cost of diesel fuel is very high. Since the inverter and generators can not run simultaneously, the power converter must be designed to cover the complete load. This not only costs a great deal in equipment but requires a very large battery bank to store the needed energy. Generally, the cost of using the storage is larger than the cost of producing energy from the diesel generator, even if the energy from any renewable source could be considered free. This however assumes that the inverter is not passing any energy directly from the renewable generators. Switched systems may be used in cases where there are predictable times with low loads that cause the regular diesels to operate at light loading or when high fuel prices make paramount a reduction in diesel operation. This last section demonstrates the tight relation between system configuration and control, the subject of the next section. The control capabilities of the power system must be able to incorporate the design and vise versa. For instance if the system is to operate using the power converter during parts of the day, it must be configured to switch between the operational states, as well as determine if the loads are going to be to large for a specific configuration. In addition, in a case where the diesel engine is operational but there is an excess in renewable generation, the system should have the capabilities to provide power using the power converter. Control of systems using energy storage There are two general parameters that are used to control systems using energy storage, battery state of charge (SOC) and system load. Generally the inverter is used whenever the renewables and battery subsystem can satisfy the load, based on the battery state of charge, the generator is used for back-up power when renewables and energy from the battery bank can not satisfy the load. NREL / EDRC Handbook on Hybrid Power Systems, March 1998 7-14 Architecture and Control f Using battery SOC for system control has been used in industry for many years while the first published papers of come from Manwell et al., 1989, in a strategy that was coined | Cycle Charging. Using this strategy the main goals is to reduce the run time of the diesel ‘engines and insure that when they are operating, they are operated near peak efficiency. Cycle charging dictates that the batteries are used to cover any deficiency in renewable power to keep a diesel from being started. Once the batteries have been discharged the diesel is started and run covering the load and charging the batteries at the maximum rate possible. The diesel will continue to operate until the batteries have been charged to a state of charge specified by the operator at which point the batteries are again used to cover any deficits. The decision making process basically follows these two steps: Battery SOC above ~ 30%: Inverter and/or renewables cover the load if possible. Excess renewable power is used to charge the batteries. The 30 % SOC limit on the battery is arbitrary and will depend on the type of batteries used. Battery SOC reaches ~ 30%: Engine starts to cover the load and charges the battery bank. If any energy is generated by the renewables it is also used to charge the battery bank. When the battery reaches a set SOC, usually around 80 to 90% SOC, the diesel is shut off and the inverter takes over the load. Figure 7.10 demonstrates this method of control for a hypothetical power system. The method is advantageous for its simplicity in logic and control, requiring only the measure of battery state of charge, which is usually approximated by battery voltage. The simplicity of this method does have drawbacks in regards to use of the battery bank and the losses that result. This can be seen in Figure 7.10 where the battery is charged during the day but than is immediately discharged to cover the large evening load. The losses associated with this process would be quite large compared to operating the diesel to cover the evening peak load. This introduces the second control factor, which is load. In many cases it is possible to select a load level, either in power or current, at which point the generator is started. This is done because of the inefficiencies of drawing large quantities of energy out of the battery bank. In this case, even if the batteries are full, the engine would be used to cover the high load periods. Care should be given to the selection of the location of power or current measurement so that energy generated by the renewables can be taken into account. In many cases, although the load to the community may be high, renewable sources may be generating a large portion of this power, only requiring limited energy from the battery bank. In this case, starting the generator to make up this small load threshold would be very inefficient. In 1995 Dr. C.D. Barley introduced the concept that instead of using the engine generators to charge the batteries, they should be left discharged to maximize the capture of power from the renewables, ( Barley, 1995 ). The engine generator is only used to provide equalization charges of the battery as required. Barley expanded on this topic to define the|Frugal Dispatch Strategy Where the battery through-put cost, the total cost for each kWh taken out of the battery, is used to determine a load over which it is less expensive to supply the load by starting a engine generator. The battery supplies all loads under this critical load while the generator supplies any loads above. The strategy recommended in this text is that a combination of these strategies. The battery should be used to cover loads below a specific amount, the critical load specified by Dr. Barley. When the battery is depleted or the load is large, the engine generator is started and used to cover the load and charge the battery. At any point during the charging, if the power from the renewables can cover the load or the load drops below the critical level than the generator is also shut off and the load is covered by the renewables and the battery bank. Handbook on Hybrid Power Systems, March 1998 NREL / EDRC Architecture and Control 7-15 The generator remains off until the battery again reaches the low state of charge set point. This method allows for the capture of power produced by renewables without the potential of leaving the battery bank at a low state of charge for extended periods of time. Again, it should be clear that there are many control methods available. The ability to accurately model different control options can assist in the determination of the best control logic for a specific system. In most power systems of this type, system control is dispersed to a number of different components, usually using the voltage of the battery bank as the control variable. Each renewable generation device will come with or include a charge controller that Hour of day 100% 50% 0% % © 4A 9 Wp 2 6 A @ Hh P Battery SOC, %' Hour of day Figure 7.10: Depiction of cycle the charging control strategy moderates the energy that is passed to the battery bank, based on the voltage. The inverter/power converter usually uses battery voltage to regulate energy from the battery bank and to start any dispatchable generator if possible. Because of this, generally the system user has limited ability to specify system control other than through a few specific set points. Short term energy storage (Power storage) The second major use of battery storage is to cover short-term fluctuations in renewable power and allow a dispatch-able generator to start if the lapse in renewable power NREL / EDRC Handbook on Hybrid Power Systems, March 1998 7-16 architecture and Control Critical elements in regards to the design for systems incorporating power storage is tight controls over system stability, voltage and reactive power requirements becomes prolonged. The premise of this system design is that a large penetration of renewables, primarily wind power, is used in the system design, up to 300% of the average power requirements. When the renewable based generators are supplying more power than is needed by the load, all of the engine generators are shut down. The power of the system is regulated through the use of dispatchable productive use loads, dump loads, and/or a synchronous condenser. During lulls in the renewable power generation, discharging the battery bank makes up any difference. If the lulls are prolonged, or the battery bank is becoming discharged, an engine generator is started and takes over supplying the load. The batteries are recharged and when the renewable power can again cover a portion of the load, the generator(s) are shut off and the process repeated. Studies have been completed which indicate that most lulls in power from the wind have only a limited duration and using battery storage to cover these short time periods can lead to significant reductions in the consumption of fuel, generator operational hours and reduced generator starts( Beyer, 1995 & Shirazi, 1997). Systems based on the power storage concept will be focused primarily on the AC bus, though DC based systems are also possible. In these systems the generators are designed to be an integral part of the system, not just a back-up power source if the batteries are depleted. The addition of the dump load, which may actually have productive uses like heating or the production of hot water, and a synchronous condenser will add to system cost but are required to maintain system stability. Figure 7.11 provides a schematic of a possible hybrid system based on an AC bus architecture using the power storage concept. AC Wind turbines Control Figure 7.11: Schematic of a power storage hybrid system with a rotary converter In this system the AC wind turbines and engine generator provide power directly to the AC loads. A rotary converter or large solid state power converter is used to either charge the battery when excess power is available, provide power from the battery when there is a deficit or simply to provide reactive power and voltage control when the engine generators are shut down. An advanced control system will be required to operate this system successfully. The battery bank will be quite small, providing power for only up to 30 minutes of the average load. Handbook on Hybrid Power Systems, March 1998 NREL / EDRC Architecture and Control 7-17 Since the generators are the primary devices that are used to control system frequency, voltage and reactive power requirements, when the generators are off, other devises must be used to perform these tasks. Two devises are commonly used, a synchronous condenser to provide voltage control and reactive power and a controllable load bank to maintain system frequency. Figure 7.12 shows how this type of system might respond given certain wind and loading conditions. During the first 40 minutes of the data, the wind covers the load with the 300 250 200 150 100 Power, kW oO Time, minutes 250 200 150 100 Diesel power, kW ° - 2 Nu & 2 bk 8 6 8 Boa § & 8 og 8 8 Time, minutes | Figure 7.12: Depiction of 24-hours of operation of power storage hybrid power system | storage being used occasionally for short lulls. The wind then dies and the battery is required to cover the load. After five minutes, a diesel is started to supply the load, which happens two minutes later. The diesel is run for about 20 minutes charging the battery at which point the wind has strengthened and the diesel is again shut down. The strong wind is only temporary and the diesel is forced to restart in the 80" minute. Around the 100" minute, the wind again strengthens and the diesel is shut off. After another 40 minutes, the wind decrease, requiring the diesel to again be brought on line. The diesel remains active for the rest of the time with the diesel and wind turbine providing power for the load and re-charging the battery bank to a full state of charge. NREL / EDRC Handbook on Hybrid Power Systems, March 1998 7-18 architecture and Control In this architecture, it is helpful that the coincidence between the renewable resource and load is high because there is very little storage to allow energy generated at one time to be used at another. Unlike the long term energy storage case, it is important for the battery bank to be mostly recharged before the dispatch-able generator is shut down so that it can be used to smooth out fluctuations in the power produced by the renewables. In addition, the amount of energy going through the battery bank is small compared to the load and so the losses associated with charging the battery with energy generated from fossil fuel is minimal. A system of this nature will require more frequent generator starts and faster loading of the engine generators because of the variability in the renewable resource and limited storage capacity. This may require that the generator oil and/or cooling water be heated, allowing quicker engine loading but adding to maintenance cost and complexity. One of the critical elements in regards to the design for systems incorporating power storage is that tight control needs to be kept over system power quality, voltage and reactive power requirements. In long term energy storage systems, the large battery bank provides a buffer that increases system stability while, due to their small size, the batteries in short term power storage systems are not able to perform this task. There are numerous ways to maintain stability in systems with small battery banks, some of the more popular are; e Active control of the wind turbine(s) to reduce power production when an excess is being produced. This may be done by shutting turbines down or adjusting the power production through the use of alerons, mechanical pitching mechanisms or power control. e Installations of dispatch-able loads to consume extra power, such as resistance heating or water purification. e Load shedding, a process where non-critical loads are temporarily shut off to quickly reduce system load. e Backdriving the diesel generator, a process where power is actually put into the generator to overcome the generator losses while keeping the generation running so that it can be loaded quickly. This is analogues to using a cars engine to control speed while going down hill. e Installing systems, like block heaters, to allow quick starting of generators. e Installation of a capacitor bank to smooth out rapid system fluctuations and partially correct the systems power factor e Installation of a synchronous condenser or rotary converter, which is used to produce reactive power and help control system voltage. e Use of fast acting dump loads to maintain a load balance and thus control system frequency. Some of these devices are active mechanisms that are controlled by a central computer or operator while others are passive devices that need no manual interface. Generally, a number of these devices will be included in a power system to provide control during different modes of operation. In most cases one or more computer based controllers, programmable Logic Controllers (PLC’s), are required in this type of system. Handbook on Hybrid Power Systems, March 1998 NREL / EDRC A Architecture and Control 7-19 Battery choice in power storage systems The battery bank for a short term power storage application will be quite different than one designed for long term energy storage. Generally, power storage battery banks are much smaller than those used for long term energy storage, providing power for up to 30 minutes of system load. However, the needs for high current rates from these battery banks require either good battery discharge characteristics or a large enough quantity of batteries to spread out system loading. In addition, the large charge and discharge rates encountered in these systems are not typical of most battery applications and must be considered explicitly when reviewing specific battery characteristics. Because_of the 5. sgn nee heavy cycling of these battery banks, the batteries must have very good life expectancies undergoing deep discharge. For these reasons, Nickel Cadmium batteries have been used even though they are prohibitively expensive for long term energy storage applications. Control of systems using power storage The type of control strategy used for these applications has been called Short Term Power Smoothing, (Baring-Gould, 1998. & Barley, 1996). Battery storage is used to cover short fluctuations in the power output of the renewables, allowing diesels to be shut down during times of excess power and then started during a loss of renewable power. The strategy requires the diesel to meet the average net load, the system load minus the renewable power generation, with the batteries covering any power fluctuations above zero net load when the diesel is off. The diesel(s) are started if the battery bank is discharged to a moderate state of charge. When operating the diesel(s) will operate at a level to cover the load and charge the battery at the maximum rate possible. Diesel charging of the battery will stop and the diesel shut down if the renewables can again cover the portion of the load that a diesel was supplying. In multiple diesel systems, diesels may be switched off and on based on the same net-load condition, even if some diesel engines are already operational. The control question is, does the balance between the energy required by the user and the energy being generated by the system allow for a diesel engine to be shut down. The decision to start an engine generator must be made while the battery bank has the power to allow for proper warm- up of the generator before it is loaded. In this case, it is more important to have a full battery, even at the expense of diesel fuel. Power system with renewable and conventional generation without storage. In large power systems, the installation of a battery bank to cover shortfalls in renewable production may not be feasible, mainly due to cost. However, without the use of storage, Hybrid power it is very difficult to control the stability of a conventional power grid with large | systems without quantities of renewables power, thus the challenge of hybrid systems without storage. storage can This configuration, as shown in figure 7.13, is based on the AC bus and does not use range in size to batteries to provide grid stabilization. These systems range in size from 1 MWh/day | cover loads 1 upwards. Two general classifications of systems without storage are given, low and high MWh/day and penetration hybrid systems. above. Low penetration systems are usually defined where the total power generated from the wind turbines is between 25 and 40% of the total power supplied to the load, usually called annual energy penetration. Because system dynamics and power stability are of primary concern, at least one diesel generator is operated continuously and the wind penetration is usually only a fraction, from 20% to 70%, of the average load at any given time, called instantaneous penetration. Advanced control components can be included with these systems to allow for the shutdown or control of individual wind turbines and/or diesels depending on the resource, load, and system control requirements. It is NREL / EDRC Handbook on Hybrid Power Systems, March 1998 7-20 architecture and Control recommended that the wind turbines selected be considered based on their power impact on the system, the more benign the impact, the better the system will perform. Figure 7.14 shows the hypothetical results of installing wind turbines and controls onto a diesel system for a large community. In this case, wind power and the first diesel are initially being used to cover the load, each supplying about half of the needed power. As the wind decreases, the diesels are * switched so that the larger of the units, diesel #2, provides for the load. Eventually the 1500 8 1000 8 3 ® 500 o 3 a 0 2 £ ® -500 3 a -1000 -1500 Hour of Day ~s-Load, kW Wind power -*- Ds! #1Power -- Dsl #2 Power Figure 7.14: Depiction of 24-hours of operation of a hybrid system without storage load increases and wind decreases to a point that both diesels are needed to cover the load. During the late part of the day the wind again increases and the system returns to only operating with one diesel unit. This configuration saves about 1200 liters of fuel per Handbook on Hybrid Power Systems, March 1998 NREL / EDRC Architecture and Control 7-21 day, about 15% of the total consumption compared to a system with only diesel generators. Other types of renewable technology could also be used in large, low penetration hybrid power systems. Such technology could include river run micro-hydro, solar electric, solar thermal and bio-gas/biomass. Each of these technologies have different, but more stable performance characteristics, which would greatly simplify the system stability questions. The problem however becomes one of economics, low penetration hybrid systems put renewables in direct competition with the avoided cost of fossil fuel, usually diesel, which, depending on the market, can be quite low. This forces the use of only the most mature and inexpensive renewable technologies. High penetration renewable systems using wind power without storage are currently receiving much attention, although only one system has operated for any length of time. The basic premise is that the installed capacity of the renewable technology is much larger than the load. When the renewable devices are operating and producing more energy than is needed by the load by some margin, usually between 125% to 150% of the load, then the dispatchable generators can be turned off. External control devices, such as dispatchable loads, dump loads, synchronous condensers, and advanced diesel control are used to maintaining system stability and control. If the renewable energy dips below the threshold, a generator is started to insure power security. As can be imagined, this type of system produces a large amount of extra energy that must be used if the project is to be economical. At this point all high penetration systems, with-and-without storage, have been installed in northern climates where the extra energy can be used for heating buildings or water, displacing other fuels. In these systems, it may be wise to install-un- _interruptible power-supplies-(UPS’s) on critical loads. Although few systems have been installed, the concept is economically attractive and can drastically reduce fuel consumption and power generation cost in remote communities. Control of systems without storage. Some of the considerations about the control of hybrid systems without storage have already been introduced and focus primarily on the interactions of the wind and dispatchable engines, usually diesel, components. As the above discussion hopes to make clear, the control of these systems is determined by the sizing of the different components and the expected system operation. In low to medium penetration systems, system control may be rather simple, relying on strong component control, but limited system wide control. In fact, some of the most successful large low penetration systems use no overall system control, just monitoring that allows system operators to dispatch different components as needed. In higher penetration systems, where the ratio of renewable energy to the load is larger, automated control, usually using PLC controllers, is required. These elements of system control-can be rather complex, requiring a high degree of system understanding as well as prolonged testing prior to implementation. One additional control concepts should be introduced due to its importance in remote plant operation, spinning reserve. The term spinning reserve is used to describe the _ I ‘ jucti ific ti \ 1 load increases. It is calculated by subtracting the operating power of a plant by the rated capacity of all of the components currently operating in that plant. However, spinning reserve costs money, in terms of fuel and increased maintenance for the diesels that our operating but not being used. Depending on the type of system configuration and control being used, retrofitting a diesel plant with renewable technologies can either increase or decrease the spinning reserve or the need for it. NREL / EDRC Handbook on Hybrid Power Systems, March 1998 7-22 architecture and Control Other Technologies There are many technologies that could be used in hybrid power systems. These range from emerging technologies, such as flywheels to the experimental, such as hydrogen storage. Since these new technologies have limited impact on actual system architecture, these components are not discussed here but have been introduced in Chapter 6 under the same heading. It should also be noted that research on advanced, high efficiency batteries is ongoing and they may become commercially viable in the near future. Conclusion In this chapter we have investigated some of the issues associated with system architecture. Although mostly on the informational side, the understanding of these concepts will help in determining a proper system design. It is again expressed that many computer performance simulation models exist and, although not required for system design, may be used to assist in the design process. Some of these models assist in determining an initial system design with very little data input while others require much more detailed data but also provide very accurate performance predictions. It should be clear however, that computer simulation models can not take the place of experienced engineering and should not be the sole source for system design. There are many other factors that come into the design process. ; Bibliography Baring-Gould, E.I., "Hybrid2; The Hybrid System Simulation Model, Version 1.1, Users Manual". NREL/TP-440-21272, Golden, CO: National Renewable Energy Laboratory. 1998. Barley, C.D. (1996). "Modeling and Optimization of Dispatch Strategies for Remote Hybrid Power Systems," Ph.D. dissertation, Dept. of Mechanical Engineering, Colorado State University, Ft. Collins, CO. Beyer, H.G., Degner, T., Gabler, H., (1997). “Operational Behavior of Wind-Diesel Systems Incorporating Short-Term Storage: An Analysis via Simulation Calculations” Solar Energy, Vol. 54, No 6, pp.429-439, 1995. Manwell J.F..McGowan J.G., Jeffries, W.Q., Stein W.M., (1989), “Developments in Experimental Simulation of Wind/Diesel Systems”, EWEC’89, Glasgow, Scotland, July, 1989. Nayar, C.V.; Phillips, S.J.; James, W.L.; Pryor, T.L.; Remmer, D. (1993). "Novel Wind/Diesel/Battery Hybrid Energy System," Solar Energy, Vol. 51, pp. 65-78. Shirazi, M. & Drouilhet, S. (1997). “An Analysis of the Performance Benefits of Short- Term Energy Storage in Wind-Diesel Hybrid Power Systems,” 1997 ASME Wind Energy Symposium, Reno, Nevada, January 6-9, 1997. World Power Technologies, Inc “Owners Manual: Solar and Wind Renewable Energy Systems and Electrical Generators”, World Power Technologies Inc, Deluth, MN., USA, 1996. Handbook on Hybrid Power Systems, March 1998 NREL / EDRC Architecture and Control 7-23 Other references not specially sighted although the reader may find them of use Baring-Gould, E.I.; Newcomb, C.; Corbus, D.; Kalidas, R. (2001). Field Performance of Hybrid Power Systems. 13 pp.; NICH Report No. CP-500-30566. Baring-Gould, E. I.; Flowers, L.; Jimenez, T.; Lilienthal, P.; Lambert, T. (2001). Opportunities for Regional Rural Electrification Using Hybrid Power Systems. Wind Power for the 21st Century: The Challenge of High Wind Power Penetration for the New Energy Markets. Proceedings of the International Conference held 25-27 September 2000, Kassel, Germany. Germany: WIP-Renewable Energies; 4 pp.; NICH Report No. 30985 Drouilhet, S. (2001). Preparing an Existing Diesel Power Plant for a Wind Hybrid Retrofit: Lessons Learned in the Wales, Alaska, Wind-Diesel Hybrid Power Project. 13 pp.; NICH Report No. CP-500-30586. Drouilhet, S.; Meiners, D.; Reeve, B. (1997). High-Penetration Wind-Diesel Hybrid Power System Pilot Project in Northwest Alaska. Power Quality Solutions / Alternative Energy: Official Proceedings of the Ninth International Powersystems(TM) World '96 Conference and Exhibit, 7-13 September 1996, Las Vegas, Nevada. 14 pp.; NICH Report No. CP-500-26090. Hunter, R., & Elliot, G. (1994)., “Wind Diesel Systems”, Cambridge University Press, Cambridge, UK.,1994. NREL / EDRC Handbook on Hybrid Power Systems, March 1998 Assessing the wind resource wind speed component in the same direction. The averaging period mean wind speed components is normally of the order of 10 min, ling interval is much shorter, ‘vel: see Turbulence Intensity. bution: A probability distribution which has been found to provide eed data collected over an extended period of time, Can be expressed roll ool ft] m (10 minute or hourly) mean wind speed scale parameter shape parameter, related to long term (annual mean wind speed U U=cP(1 + (1/2) na function. whereupon the expression reduces to the Rayleigh function Sen{-z[aF | P(u) == 4 Designing a system In Chapter 1 a description was given of what constitutes a typical wind-diesel system, and sample configurations were outlined. The purpose of this chapter is to expand upon this basic information by describing in detail the design constraints and considerations which apply to a wind-diesel system and to its various components. To be effective and economically viable, wind-diesel systems must be optimised for each individual application. In particular both the characteristics of the host wind regime dealt with in Chapter 3 and the consumer load (Chapter 2) must be considered since both affect performance and method of operation. SYSTEM OPERATION Two major methods of system operation are possible, these involving running the diesel either continuously or intermittently. There are advantages and disadvantages to both methods. Continuous diesel operation This primary case has the advantage of technical simplicity and reliability since there is little difficulty in maintaining the continuity of supply, although care must be taken not to overload other generator sets in multiple diesel systems when some of the units are switched off. In general the operating diesel set(s), together with a dump load where required, maintain system voltage and frequency. The main limitations of this approach are low utilisation of wind energy, and correspondingly moderate diesel fuel savings. The former is especially noticeable for systems with a large wind component. It is poor part-load performance of diesel engines, especially of smaller sets, which limits potential fuel savings. The role of wind energy is to reduce the load on the diesel, but even at zero load a small engine might typically consume fuel at 20-30% of the rate at full load. Moreover, to avoid potentially damaging effects of low load operation on the diesel engine, manufacturers usually recommend a minimum diesel loading. If this is say 40% of rated output, then the minimum diesel fuel consumption will be about 3B CSREES OEE RR ONES mr St eons 96 Designing a system 60% of that at full load. Diesel fuel savings under these circumstances will therefore not be very significant. It is concluded that to make best use of the wind contribution and to achieve maximum diesel fuel savings, the diesel(s) must be switched off when not required. Alternatively, the operational constraints on the diesels may have to be rethought (Lundsager and Sherwin, 1990). Intermittent diesel operation To allow large fuel savings, it may be decided to have the diesel running only when the wind is low or the demand is high. However, to guarantee continuity of supply under these circumstances, added complexity in the architecture or control strategies is required. For systems without energy storage this entails switching on the diesel whenever the surplus of wind power over the load drops below some safety margin (usually a significant fraction of the available wind power) to take account of fluctuations caused by wind turbulence. In practice this approach results in the diesel running for extended periods when in fact its output is not needed. Only when energy storage or load management is incorporated into the system can the diesel be left off until actually required to make up an energy shortfall. Moving away from continuous diesel operation introduces the question of how much on/off cycling of the diesel engine can be tolerated. No definitive statements can be made as the effects vary with engine type and the method of starting. Increasing the size of the energy store reduces the rate of cycling and, depending on the losses associated with the larger storage, can be expected to marginally reduce diesel fuel consumption as well, In the design process the additional cost of energy storage must be traded off against the fuel savings and economic benefits of reduced cycling of the diesel. It is also possible to decrease the diesel cycling rate by the use of controls but this tends to result in an increase in fuel consumption. Control strategies are considered further under “System Control’. To define an optimum system, some degree of analysis must usually be carried out. This is dealt with in Chapter 6. However, before any optimization analysis can be undertaken, the system designer must define what is likely to be a good starting point for the iteration. In particular, decisions must be made regarding what components are to be incorporated: e.g. whether storage is required, how the system is to be operated, and roughly what rating each element should have. Thus the aim of this chapter is to present enough information to allow the designer to identify what basic characteristics are appropriate to the requirement, and to estimate what capacity and performance are required of each component. The information presented here is predominantly technical, therefore decisions taken by the designer at this stage will not be governed greatly by cost. Such economic considerations must wait. Designing a system oT" QUALITY OF POWER Where an existing utility system exists, for example on a remote island using multiple diesels, then the quality of power required of a wind-diesel system will be determined by the utility itself. In instances where the wind-diesel system is to be the first or only supply of electrical energy to end users, then quality of power and reliability issues need to be addressed through careful assessment of the load. Reliability of electrical systems is often described in terms of the availability of each of the component generators on the system. Availability is the percentage of time that the generation equipment is available to the consumer at its full or specified output. There is obviously a substantial difference in the way in which the availability of wind turbines and diesel electric generators can be assessed. Wind turbine output is solely dependent upon the stochastic nature of the wind energy resource, whilst dicsel availability is dependent upon the presence of diesel fuel in the tank. An allowance for the maintenance requirements of each type of generator must of course also be made. Quality of power is expressed in terms of the physical characteristics and properties of the electricity generated and is most often described by: Voltage stability Frequency stability Harmonic content Telephone interference factors Electromagnetic interference effects Phase balance * *£ &©* &€£ &€ & * Power factor The power supply must have a quality of power such that no components or consumers’ appliances should develop faults or experience deteriorated function during operation. Perfect power quality means that the voltage is continuous and virtually purely sinusoidal, with a constant amplitude and frequency. In practice, it is physically impossible to maintain perfect ‘stability’ of the voltage and its frequency at the user's terminals. Therefore, the degree of deviation from the ideal (nominal) values can be used as a measure of quality of power. Work is being undertaken by the International Electrotechnical Commission (IEC), the International Union of Producers and Distributors of Electrical Energy (UNIPEDE), and others to specify limit values as a basis for assessing quality of power. 98 Designing a system Voltage irregularities The main irregularities that may affect the voltage wave are as follows: Slow voltage variations Sudden changes in the RMS value of the voltage Voltage dips Unbalance of the three-phase voltages * * * * — Rapid fluctuations in voltage * * Harmonic voltage distortion * Frequency variations Definitions and information regarding the characteristics of these irregularities are normally given in national or international standards. Some of these irregularities will now be discussed. Emphasis will be placed on those which are likely to be most common in decentralised wind-diesel systems. Slow voltage variations Slow voltage variations can be defined as changes in the RMS value of the voltage occuring in a time span of minutes or more. National standards often state allowable variations in nominal voltage over an extended period, for instance 24 hours. IEC Publication 38 recommends 230/400 V to be the only normal/standard voltage for 50 Hz systems. The voltage at the consumer’s terminals under these conditions must not differ from the nominal voltage by more than +10%. Voltage level control within a permissible range is sometimes a useful means of controlling load. Rapid voltage fluctuations The terms ‘voltage change’ and ‘voltage fluctuation’ are defined in IEC Publication 555-3 (1982). According to this standard, which concerns household appliances, voltage fluctuation is ‘a series of voltage changes or a cyclical variation of the voltage envelope’. Rapid voltage fluctuations are a series of changes with intervals (intervals of time which elapse from the beginning of one voltage change to the beginning of the next) shorter than approximately one or two minutes. A dip can be defined as a short voltage drop greater than a minimum value, with a change interval of 10 ms to 60 seconds. Light fittings are particularly sensitive to rapid voltage fluctuations and tend to flicker under their influence. Maximum permitted voltage changes as a function of the possible fluctuation rate are Designing a system 99 normally given in national and international standards (see for example IEC Publication 555-3 (1982) or UNIPEDE experts (1981)). The former reference also classifies four different types of voltage fluctuation waveform, requiring the use of different assessment methods (e.g., periodic rectangular voltage changes of equal magnitudes (type a), a series of random or continuous voltage fluctuations (type d) etc.). Imbalance of three-phase voltages The voltage imbalance of a three-phase system can be defined by the ratio of the negative phase sequence component to the positive phase sequence component. It is difficult to quote general limits for the allowable imbalance of three-phase voltages. IEC Publication 34-1 permits an imbalance factor <1% over a long period, or 1.5% for a short period not exceeding a few minutes. Frequency variation Normally the frequency of large power systems is very stable (<1% variation). Limits for permissible frequency deviations are not stated in current international publications. Electrical components and appliances should normally be designed to withstand a frequency deviation of at least +3%. Small diesel grids and wind-diesel systems may benefit from the ability to operate over wider frequency ranges. The system developer should ensure that this is acceptable. Harmonic voltage distortion Distortions of the voltage waveform can be caused by the flow of harmonic currents in the system. Static power inverters and converters, and magnetic saturation of trans- formers, are the most common sources of this distortion. Arc furnaces can also produce such effects. Maximum permitted values of, for instance, total harmonic distortion are found in national and international standards, such as in UNIPEDE (1981), and should be used as guidance towards preserving a certain degree of voltage quality. Power quality in autonomous systems Although the irregularities described above, together with their referenced allowable bounds, actually concern ‘normal’ low voltage electricity supplies, they also forma basis for assessing power quality in autonomous grids. The IEA Recommended Practice by Ballard & Swansborough (1984) concerning Quality of Power from WECS and EPRI Report AP-4682 do not however cover wind-diesel systems. IEEE Standard 1001 (1988) covering interfacing of Dispersed Storage and Generation Facilities provides useful background, but again does not address small decentralised autonomous systems. It is to be expected that deviations occurring in isolated grids may be greater than 100 Designing a system those in a ‘normal’ supply. The power fluctuations caused by the wind turbine and the possible use of static power converters/inverters in such grids are specific reasons for this. When developing and evaluating autonomous systems, special concern should be given to rapid voltage fluctuations (flicker) and frequency variations. Wind turbines designed for interconnection to a large utility grid may not be able to tolerate significant changes of frequency, and it is always wise to ascertain what changes to the structure and control systems might be necessary. The complexity and cost of the control unit for such isolated systems are strongly dependent on the acceptable or specified limit values governing power quality. CHOICE OF GENERATORS In general, for an electrically, rather than a mechanically coupled scheme, there will be more than one electrical generator. In such circumstances it is normal though not essential for one generator, usually the one on the diesel, to be synchronous, and for the others to be asynchronous. The wind turbines therefore generally drive asynchronous (induction) generators, These take their reactive power excitation from the synchronous machine which in consequence must be kept spinning and excited. Despite this there is no need for the synchronous generator to remain coupled to the diesel if active diesel power is not required. It is common therefore for small diesel units to have a mechanical clutch between the synchronous generator and the diesel, thus allowing ‘wind only’ operation, There are three main classes of generator which can be considered for the various system elements, these being d.c., a.c. synchronous, and a.c. induction. In principle each can be run at variable speed, which in the case of the wind turbine can be advantageous in terms of improving system aerodynamic efficiency, torque transient behaviour and power variability, but it is more normal in the case of the a.c. generators to run at fixed frequency and hence nominally fixed speed. The basic attribute of each type of generator, when used in conjunction with the local a.c, network, will now be outlined, from which design considerations and constraints will emerge. D.C. generators Direct Current generators are relatively unusual in wind turbine applications except in low power demand situations where the load is physically close to the turbine. The stator consists of a number of poles, the field windings of which are excited by dic. The rotor consists of conductors wound on an iron armature which are connected to Designing a system 10 a split slip ring commutator. Power is extracted via brushes which ride on the com mutator. Direct current machines generally require regular maintenance and are expensive. Wind turbines having d.c. generators tend to be used primarily for battery chargin and resistive heating applications, and to operate at variable speed. Nowadays for most d.c. applications, for example battery charging, it is mor common to employ an a.c. generator (alternator), frequently permanent-magnet exciter to generate a.c. which is then converted to d.c. with simple solid-state rectifier Permanent-magnet machines operating at variable speed, and producing variable fr quency voltage, offer the opportunity of controlling maximum power output at high wind speeds by utilising the change in inductive reactance of the stator windings to lim current output. A.C. synchronous generators In a synchronous generator, if the rotor is excited with a d.c. current and is caused ! rotate, a 3-phase voltage is generated in the stator ata frequency determined by the spec of rotation. When connected to a grid, an important feature of the synchronous generator is th the rotor speed must match exactly the synchronous speed. Loss of synchronisation w occur if rotor torque becomes too high, and it is therefore important to know 1 generator’s ‘pull-out’ torque to avoid such eventualities. Synchronous machines when fitted to a wind turbine must be controlled carefully prevent the rotor speed rapidly accelerating through synchronous speed, especial during start-up sequences or in turbulent winds. Synchronous generators are closely coupled devices, ie they have very low dampi! and therefore do not allow drive train transients to be absorbed electrically, When th are used in a wind turbine which is subject to turbulence it is advisable to install additional damping clement such as a flexible coupling in the drive train, or to mou the gearbox assembly on springs and dampers. The reactive power characteristics of synchronous generators can be controlled a therefore such machines are often used to supply reactive power to other items generating or motoring plant on the grid which may require it. It is normal for a sta alone wind-diesel system to have a synchronous generator, usually connected tot diesel, which keeps rotating whether or not it is generating active power. Although a synchronous generator does not require an external source of reacti power and may operate on its own, its connection with the local grid is often significan more complex than that for an induction generator. In particular, synchronizing | 102 Designing a system generator’s frequency to that of the grid is a delicate operation and must always be carried out correctly, or serious damage can be done to the machinery. A related problem is that of voltage control. Whenever multiple synchronous generators are operated on the same network, special control equipment must be installed to ensure proper voltage regulation and the minimisation of circulating currents. Another disadvantage of synchronous generators is that they are more costly than induction machines, particularly in the smaller size ranges. It is also sometimes argued that they are more prone to failure. For wind driven machines, electrical stability problems may also arise. When a synchronous generator is being used to supply reactive power only, for example in a wind-diesel system where the synchronous generator has been uncoupled from its diesel by a clutch but is kept spinning, the quality of the waveform can be of particularly poor quality and may require conditioning. A.C. induction generators The induction (asynchronous) generator differs from the synchronous generator in several regards. A rotating magnetic field is induced by the application of an a.c. voltage to the stator. Power is generated due to a difference in the frequency of the rotating magnetic field and the speed of the rotor. This characteristic is termed slip and differences of only one or two percent form the normal design point. Thus when the machine is generating, the rotor does not rotate at synchronous speed, but at some slightly higher rate. Induction generators are consumers of reactive power, and itis not common for them to operate in isolation from other plant, although this is possible with special power electronics. It is recommended, especially in a small grid where the capacity of the other items of plant to generate reactive power may be limited, that power correction capacitors are added to the generator to compensate for its demand on the system. For certain designs of wind turbine, and to increase operating hours, the induction generator is called upon to motor the rotor up to generating speed. Current demand during this phase can be significantly higher than the maximum generating current. In a small decentralised network this current surge can cause problems which would not be so serious in a larger grid. Special control is thus required for motor start applications to prevent excessive power surges. Induction generators are very popular in wind turbine applications. They are reliable, well developed and resilient. Additionally, induction generators are loosely coupled devices, ie they are heavily damped and therefore have the ability to absorb slight changes in rotor speed whilst remaining connected to the grid. Drive train transients to some extent can therefore be absorbed. Designing a system 103 Power electronics Power converters can have a number of useful roles to play in wind diesel systems. By using an a.c.-d.c.-a.c, conversion in the case of a synchronous or asynchronous gener- ator, or a d.c.-a.c. conversion in the case of a d.c. generator, the wind turbine can be allowed to operate at variable speed (see later). Power electronics can also be used to condition the power coming from storage devices of significant capacity such as wide speed range flywheels or battery banks. In effect power electronics provide an interface between d.c. or variable frequency power sources and the ‘fixed’ frequency grid. Variable speed drives can be designed in a variety of ways, four common examples being indicated below: Synchronous, generator/line commutated converter Here the a.c.-d.c.-a.c. link consists of a rectifier, a d.c. choke, and a line commutated inverter. Line commutated inverters are well developed and relatively cheap. However, they cannot function independently of the grid they serve, and demand reactive power. Additionally, they induce harmonics which may have to be filtered to improve power quality. Induction generator/force commutated converter Here a force commutated rectifier supplies the generator with reactive power and the d.c. line with active power. The inverter connected to the grid has stand-alone capability since it does not require the network to have an independent source of power. At present force commutated converters are not as well developed as their line commutated counterparts and are therefore relatively expensive. Induction generator with slip recovery Here the recovery system consists of a rectifier, a line commutated inverter and a transformer. Induction generator with a cycloconverter The cycloconverter comprises three line commutated inverters. In general, power electronics will impart harmonics to the grid voltage and current. The extent of the distortion depends upon the type and quality of the converter. Such harmonics can be reduced to an acceptable level by filtering. Variable speed systems If the wind turbine is allowed to operate at variable speed, it is possible to achieve the following advantages: 104 Designing a system %* The wind turbine can be used as a regenerative storage unit (flywheel) to smooth out the wind induced power fluctuations. * Aerodynamic efficiency of the wind turbine can be improved since con- stant tip speed ratio operation becomes possible. * The stresses in the drive train can be minimised since the torque is more controllable. * Critical speeds corresponding to structural resonances can be avoided. * Acoustic noise emissions from the wind turbine at low wind speeds can be reduced by lowering the speed of operation. The major drawback is that more components are required and that the system becomes more complex. This can be a problem in remote locations where it may be difficult to get spare parts and well trained service personnel. CHOOSING A DIESEL GENERATOR SET A diesel engine generator is a device which converts fuel (diesel oil) into mechanical energy in an engine and subsequently converts mechanical energy to electrical energy in a generator or alternator. Speed regulation and controls are necessary to maintain useful power. In the following sections an overview of diesel engine attributes is given, and this is followed by guidance on diesel engine rating and on defining the requirements of the generator. An Appendix (p.133) is provided which gives sample calculations for rating a diesel driven synchonous generator. Diesel engines Diesel engines can be categorised according to several different criteria, including type of fuel, engine speed, form of aspiration and operating cycle. Type of fuel Diesel cycle engines can be fuelled by oil products ranging from No 2 diesel oil (light) to crude or No 6 residual oil (heavy). The choice of fuel depends upon cost, availability, calorific value, temperature conditions and specific engine features, Smaller diesel engines generally utilise No 2 fuel oil although some are designed to be multi-fuelled. Fuel generally accounts for about 80% of the diesel generator operating costs. Ata remote location the system designer should ensure that the fuel system of the diesel contains adequate provision for filtering. This is particularly pertinent if the fuel supply is likely to come from a local fuel store which might only be replenished infrequently. Designing a system 105 Aspiration Engines are either naturally aspirated or turbo charged. In naturally aspirated engines, air is taken in at atmospheric pressure. Turbo charged engines inject the air/fuel mixture into the engine cylinders at pressures higher than atmospheric. Turbo charging sig- nificantly increases engine capacity (up to 40%) and efficiency by allowing an increased quantity of air to enter the combustion chamber, so ensuring a greater and more efficient burning of the fuel. Operating cycle Engines are classified either as two-stroke or four-stroke. In a four-stroke engine the induction, compression, power (expansion) and exhaust phases of the combustion cycle all occur on separate strokes of the piston, whereas in the two-stroke engine the exhaust and induction phases occur when the piston is almost stationary at the end of its expansion stroke. Two-stroke engines tend to be either very large or very small. Method of cooling This can be by air, forced air, or liquid. Engine speed The speed of diesel engines is generally related to size, large engines tending to operate at lower speeds - usually under 900 r/min. Higher speed engines (over 900 r/min) are more common in the small to medium size range - common speeds are 1200, 1500, 1800, 2400, 3000 and 3600 r/min which are suited to the normal operating speeds of generators which in turn are determined by the grid frequency, typically 50 or 60 Hz. Engine speed is generally a trade off between size (capacity), cost, and engine operating life. Diesel engine controls The engine governor controls the engine speed which regulates the frequency of the generator. Governors occur in two basic configurations, these being mechanical or electronic. The mechanical governor is most often utilised on installations under 500, kW and where shared loads may fluctuate by £5-10%, The electronic governor is used where frequency stability is very important or in automatic parallel operation. Loads are generally managed within 5%, On large grids, multi-megawatt diesel generators, which are used for peak loads, are generally operated in a droop mode. Droop mode operation allows the speed and/or voltage of the generator to change slightly with load. However, current practice for smaller generators makes it undesirable to operate in the droop mode but rather in the isochronous mode in which frequency and voltage are both invariant, although this 106 Designing a system practice may lead to occasional dynamic instability of the wind-diesel system if limits are set too close. Operational considerations In deciding upon the control and configuration of a wind-diesel system, there is always a trade-off to be made in deciding upon the size of the dump load and/or storage, the tolerable on/off cycling rate and the loading of the diesel. On/off cycling can give rise to engine wear and to poor fuel consumption, although some measurements made by Infield et a/. (1985) indicated that for a conventionally started set, a rate of ten starts per hour did not give rise to excessively enhanced wear rates. Care should be taken, however, in extending this result to other situations, and as a general guide, if cycling rates are to be high then the maintenance of fluid temperatures within the diesel during shut-down will reduce wear and fuel use when the set is restarted. Engine wear and temperature are directly related. If a diesel does not reach a high operating temperature, then contaminants in the lubricant are not burned off, which in the long term can lead to damage. Many manufacturers recommend that a diesel engine should not operate below a certain part load for extended periods of time. 40% is a common threshold, although 20-30% might be more common for newer sets. One of the reasons is that even when idling a diesel will consume appreciable amounts of fuel, say 20-30% of that at full load. However, this is not to imply that low loading cannot be tolerated for short periods of time, indeed it has been shown that a diesel set can accommodate negative loads of up to 30% of rated output (Lundsager and Sherwin, 1990). In this mode the diesel acts as a ‘compressor’ dissipating excess system power. Fuel consumption in the negative region continues falling as more negative load is applied. System frequency is generally stable as long as the negative load does not exceed 30% of rating whereupon a rapid rise may be expected. It is stressed that negative loads should only be applied for short periods. Heat recovery from the diesel engine Only 30 to 40% of the calorific value of fuel burned in a diesel engine is converted to mechanical power. The balance of energy is converted to heat, most of which is removed either by water based coolants in a radiator system or by air. The remainder of the heat is either exhausted in the high temperature combustion gases, or is radiated from the engine surface. Turbo charged diesels also lose heat from their intercoolers. Typical energy (work and heat) balances for turbo and non-turbo charged diesels are shown below in Table 4.1. Designing a system 10° Table 4.1 Typical diesel engine heat balance (%) With turbocharger Without turbocharger Usable power 33.0 35 Water jacket Lube oil 39:5 30 Intercooler Exhaust 20.0 28 Radiation Ts a Figures vary from engine to engine and depend on load, the type of cooling and engine speed. Recovery of heat from the system to provide air conditioning or heat for residential and industrial processes greatly enhances the economics of operating diesel engine generating sets. Use of this heat may also help with load balance in a wind-diesel system. However the economics of heat recovery during prolonged diesel shutdown have to be taken into consideration. Generally most of the heat in the water jacket and about half of the heat available in the exhaust system may be recovered. This more than doubles the overall fuel efficiency to about 75%. Depending on frequency of stop/start cycles, it is recommended that the diesel should be kept warm, perhaps via system waste energy to improve start-up performance. For air cooled diesels, oil sump heater options should be investigated, whilst for water cooled sets the possibility exists of keeping the set warm via a water jacket heater. It must be remembered that in dry heat recovery schemes the engine must still be properly cooled when heat demand is low. Methods for recovering heat from a diesel can be divided into various groups as follows: Normal temperature water [93°C (200°F)]. High temperature water [121°C (250°F), 137 kN/m2 (20 psi)]. High temperature ebullient steam [121°C (250°F), 103 kN/m? (15 psi)]. Normal temperature water Water jacket temperatures of 93°C (200°F) can normally be utilised by incorporating a liquid-to-liquid heat exchanger to transfer engine heat to a secondary fluid, usually water, circuit. Additional efficiency may be gained by using an external heat recovery muffler. However, it is important to maintain fluid flow to avoid thermal shock to the exhaust system. Care should be taken to avoid lowering the exhaust temperature below 108 Designing a system 150-175°C (300-350°F) as this may cause condensation to build up, leading to corrosion and possible engine damage. High temperature water High water jacket temperatures 99-121°C (210-250°F) require a higher operating system pressure to keep the water from flashing to steam, These pressures are normally 30-140 kN/m? (4-20 psi) above the steam-point pressure. Pressure is usually controlled by an elevated or pressure controlled expansion tank. These systems utilise heat exchangers as described above, but require specialised fluid pumps. Higher temperature operation also requires special oil cooling systems. High temperature ebullient steam This type of system removes the heat from the diesel by a phase drainage of the coolant within the engine. The steam and water mixture is not as dense as water alone and rises through the diesel engine to enter a steam separator. This steam can be drained off and used as another energy source. The residual water is then re-circulated through the engine. This system has the advantage of providing low pressure steam for individual processes, and also eliminates the need for pumps and heat exchangers whilst minimis- ing thermal stresses in the engine. Sizing the diesel engine To a great extent the diesel can be sized independently of the rest of the system, This is because it is usually assumed, in the worst case, when the wind power is zero and the storage is exhausted, that the diesel alone must be able to meet the consumer load requirements. The major exceptions to this are systems based on acycle charge approach in which the diesel(s) run periodically to charge an energy store. It is implicit with these systems that the diesel rating is considerably larger than the average or sustainable load demand. For non-cycle charge systems the diesel should be sized so as not only to meet the maximum expected demand, but also any losses inherent in the system which need to be covered. A safety margin may be added and provision must be made for the expansion of demand. In this last respect the effect on demand of installing a wind-diesel system may be much greater than for conventional generation plant in that the consumers, may not have had previous access to electricity or may have had seriously limited access due to availability or cost. It is common for a new wind-diesel system to give rise to a significant, often dramatic, increase in electricity consumption. In principle though, the sizing of the diesel can proceed in a conventional manner with due regard to the nature of the load which should include factors such as motor starting loads, required frequency and voltage characteristics etc. However, the diesel’s generator has to meet some additional demands in wind-diesel applications, therefore attention has to be paid to the choice of this component as discussed below. Designing a system 109 Care should be taken in rating the diesel and its generator in locations of low air density. Both power development and cooling capabilities can be affected by low atmospheric pressure or high ambient temperatures. Choosing a synchronous generator for the diesel General guidance on generator options has already been given. Here, by way of example, a specific case is examined. The configuration is indicated in Fig. 4.1 and consists of a synchronous machine connected via a clutch to the diesel. The wind turbine fitted with an induction generator takes reactive power from the synchronous machine, and a dump load is used to absorb excess power. No storage is provided. Voltage Load control unit Clutch Electrical SN wind conversion Synchronous exer system generator Dumpload Fig 4.1 General block diagram of an autonomous wind-diesel system Generator functions The functions which the synchronous generator may perform are: a Conversion of the mechanical power generated by the diesel into electrical power. b Supply of the reactive power demand of the system (for the load, the dump load, the wind turbine generator, etc). c Control of the voltage level of the grid. d Supply of the sinusoidal shape of the grid voltage. e Supply of short circuit current for blowing fuses. f Commutation of thyristors in the case of line commutated convertors being connected to the grid. 110 Designing a system g Supply of inrush currents for induction machines on the system. Modes of operation This simple autonomous wind diesel system without storage, has two modes of opera- tion. i If the wind power is less than the load demand then the synchronous generator is driven by the diesel and converts mechanical diesel shaft power into electrical power to make up the shortfall in supply. If the generator has an efficiency, n (0 <n <1), and a minimum power factor of p (0 <p <1), then the apparent power of the generator has to be at least n/p times the rated diesel power. In Appendix 4.1, an example is given of the calculations which are necessary to establish the rated power of the diesel’s generator for an autonomous wind diesel system having a 25kW wind turbine and a 60kW diesel generator set. In this mode of operation, the diesel generator may meet all of the functions a-g listed above. ii If the diesel engine has been stopped, ie if the load demand can be met entirely by the wind turbine, then the generator is uncoupled from the diesel by means of a clutch, and operates as a synchronous condenser phase shifter. Only functions b-g have to be met. The generator is kept spinning, any losses being fed by the wind tur- bine. Special demands If any power electronic equipment is connected to the grid, then the voltage control unit of the synchronous generator must be compatible. Not all electronic control units are suitable. If a switchable or freewheel clutch is applied between the diesel engine and the generator, then a double bearing arrangement for the generator should be adopted. In remote areas, it is advisable to adopt brushless generators which have low main- tenance requirements. In sandy or salty environments, filtering of the cooling air or use of Totally Enclosed Fan Cooled (TEFC) generators is recommended. Filtering will require the generator to be overdimensioned. Offshore grade protection and treatment of the generator is recommended to improve resilience. The frame of the generator should be well earthed. In addition, if the machine’s 3 phases are connected in star (‘Y’) rather than delta configuration then the ‘starpoint’ should also be earthed. Normally the accuracy of the voltage control unit needs only to be within +5%. Generators must be derated in conditions of low atmospheric density, which are relatively common at remote sites, in order to have adequate cooling capacity. It is always advisable to talk with the manufacturer for detailed advice in such situations. Designing a system Ty WIND TURBINE SELECTION Most of the background information required for the assessment of the wind-diesel potential of a given site pertains to the wind turbine element. Chapters 2 and 3 described the wind, load, environmental and other factors which must be assessed before a turbine can be selected and a system configured. As for the other system components, the primary question here concerns the relative size of the wind turbine. In general the proportion of energy which the turbine can contribute to the system will increase with rotor size, but at the expense of complexity of the system control. At a good wind site it must be remembered that a wind turbine’s long term average power output will only equate to perhaps 30% of the generator’s nameplate rating. Nevertheless at remote sites load factors lower than 20% can still be economic; however this is very site dependent, and therefore it is essential that the system designer should make some estimate of the energy production potential. The IEA has published (Frandsen and Pedersen, 1990) a recommended practice on power performance testing of grid connected wind turbines in which a method of predicting energy productivity is given. This involves multiplying the power perfor- mance characteristic of the wind turbine, a sample of which is shown in Fig. 4.2, by the long term probability distribution of wind speed. The former is usually available from 150 I Cut-out or 20 m/s Maximum power whichever is less or rated power ~~ Typical pitch o Deciaes regulated -*— Typically stall regulated 0.5 m/s bins-+++— 2 mvs bins Net power, P - (kW) Each bin shall contain a 1 Fe rinimum of 3 datapoints 0 5 10 15 20 25 Wind speed at hub height, V - (m/s) Fig 4.2 Wind turbine power curve (IEA recommended practice No 1) 112 Designing a system the turbine supplier, and it is recommended that the purchaser satisfies him/herself that the curve has been derived independently, It should be noted that energy production is a function of air density, and therefore adjustments should be made to the estimates if the turbine is to be sited at a very cold, a very warm, or a very high location. It is vital in the case of a decentralised system to realise that not all of the power produced by the wind turbine can be utilised unless a large energy store is included and even here large losses in regeneration are likely to be experienced. A certain proportion of the energy has to be dumped during times of inadequate consumer demand, and attempts to improve long term wind power penetration by increasing the turbine rating and/or size are often counterproductive since this serves on many occasions merely to increase the power surplus. The system designer should therefore look at the nature of the load and the nature of the power availability to enable some optimum rating to be identified. Often in a wind-diesel system it is helpful to reduce the rated windspeed to enhance energy production at lower speeds. It is pertinent to note however for a typical turbine, which cuts in at 4 m/s and reaches rated power at 14 m/s, on a good site having a mean wind speed of 7.9 m/s, that 90% of the energy is produced in wind speeds below 14 m/s but only 10% is produced in wind speeds below 7 m/s, ie energy production covers a fairly narrow band of windspeeds and therefore time. It can be assumed for early sizing, that there is a certain mean wind speed above which consumer demand will be fully met by the turbine, although the concept of guaranteed power levels is somewhat misleading due to the random nature of wind turbulence. The greater the turbine size the lower is this windspeed. By using more than one turbine, the variability of the total wind produced power can be reduced (by up to the reciprocal of the square root of the number of turbines), so allowing the ‘guaranteed’ power level to rise proportionately. When choosing a turbine there are a number of important general considerations regarding siting and these are dealt with in Chapters 2 and 3. However it is worth emphasising that it is vital at an early stage to consider the logistics of shipping the turbine to site. Local craneage, transport and roads will normally only be able to handle parts up to a certain weight and/or size, and this may have a bearing on the maximum rotor diameter. Whereas parts for a 100 kW turbine might require expensive helicopter transport, two 50 kW units, despite their extra capital cost, might have little associated marginal transportation costs and has the advantage of still producing half the rated capacity in event of one machine being shutdown for servicing or maintenance. Wind turbine options Anyone considering the installation of a wind turbine should be aware of the various types of machine on the market and their relative merits. Although most wind turbines in the range 25 kW upwards are of horizontal axis, upwind design, other types of machine such as horizontal axis downwind, or vertical axis are available. In a horizontal axis wind turbine (HAWT), the axis of rotation is substantially horizontal and parallel to the ae 113 Designing a system wind velocity, whilst for a vertical axis wind turbine (VAWT) the axis of rotation is vertical and perpendicular to the wind. An apparent shortcoming of a horizontal axis machine where the rotor is upwind of the tower is that it requires a yaw system to keep the rotor correctly aligned to the wind For very small wind turbines this can take the form of a tail vane whilst on larger machines a geared yaw ring at the top of the tower in which a cog is driven either by ‘fan-tail’ side rotors or by a motor driven system is more common. The yaw mechanism obviously adds complexity and therefore cost to the turbine. An alternative approach which avoids the need for the yaw system is to place the rotor downwind of the tower, This however can cause dynamic instabilities and certainly produces added machine noise and blade loading as a result of the blades having to pass through the wake of the tower. Downwind rotors can be of free or damped yaw de Wind turbine rotors are generally either of fixed or variable pitch. A variable pitch machine allows the angle between each blade’s chord line and rotor plane to change This is usually utilised to regulate power and to control rotor overspeed and shutdown of the wind turbine. On a fixed pitch wind turbine the blades maintain the same angle between the chord line and the rotor plane. Rotor control is generally accomplished by aerodynamic stall of the blades with a brake to stop the rotor. There is a considerable variation of design approaches in existing horizontal axis wind turbines. Primary differences and their advantages and disadvantages are outlinec in Table 4.2 below. Table 4.2 Relative merits of different wind turbine types Configuration Advantages Disadvantages Upwind rotor Avoids tower shadow Requires method of maintaining wind (vs downwind) turbulence turbine rotor in upwind position. Lower noise (Added complexity and cost.) Added loads on tower Fixed Pitch Eliminates need for pitch Requires self stalling blade. More sub rotor (vs control mechanisms, ject to decreased performance if the variable pitch) fewer parts - less costly blades get dirty or collect insects. Requires tip brakes or other means of stopping rotor overspeed. Lower operating efficiency Rigid rotor Eliminates need for teeter Wind turbine must absorb higher (vs teetered stops and teeter bearings. loads rotor) Less costly 114 Designing a system The reversing gravitational force experienced at the rotational speed by a rotating blade can also cause problems for larger horizontal axis wind turbines, since this force increases non-linearly with size. Vertical axis machines require no yaw system, take wind from all directions and have the potential to have the power take off placed at ground level. The blades do not suffer from cyclic stressing due to gravity, but aerodynamic loading on the blades does vary as a function of azimuth. Various designs are available, the most popular being either of straight bladed or troposkein (‘egg-whisk’) design sometimes called Darrieus rotor. For a decentralised site, it is probably more important to choose a proven turbine with low maintenance requirements, than to consider one which might at first appear to be more technically elegant. Care should be exercised when talking to suppliers to emphasise that the turbine will be decentralised. For example the service life of the mechanical braking system is likely to be reduced due to the enhanced frequency of grid losses. Additionally, if the turbine generator is to be allowed wide frequency excursions, then mechanical loads on the turbine will increase. The manufacturer should be made aware of such special cir- cumstances and requirements and should supply evidence that the system and structure offered will perform properly and safely. There are several types of generator configurations utilised in wind turbines as indicated in Table 4.3. Table 4.3 Wind turbine generator options Type Application Permanent magnet Small battery chargers Alternator Small battery chargers D.C. generator Small battery chargers Induction Small to medium sized wind turbines 1 kW + Synchronous Medium to large wind turbines 30 kW + Variable speed Medium to large wind turbines The use of different types of generator necessitates different control and interface strategies for the diesel generator. The first three types generally work in parallel with the diesel generator set to charge a battery bank which then supplies power to the load. Generator type, rotor configuration, and wind turbine control all affect the variability of the power being produced, and therefore must be considered when devising a system control strategy. Designing a system Mk Wind turbine sizing This is a critical issue as the wind turbine(s) is likely to be the most expensive item ir the system. It is important to distinguish between the electrical rating of the wind turbine and its rotor swept area. Although for a grid connected wind turbine, the rated wind speed determines the relationship between these two factors and is roughly constant in relation to the mean wind speed for the site, this is not in general true for wind-diesel systems. For isolated systems, continuity of wind supply is more important than in grid connected applications where it is only the total energy yield and not its distribution in time which is important. For any particular situation the wind turbine(s) can only really be properly sized by the application of appropriate wind-diesel models in combination with economic analyses. The only general guidance that can be given regarding initial selection is that it is undesirable for the wind turbine rating to be significantly greater than the maximum consumer load plus the system losses, except where a large energy store is included. The rated wind speed for the turbine will ideally be less than it would be for grid connected applications. This will ideally be reflected in a larger swept area for a given electrical rating. In practice, however, the choice of available commercial machines may demand a higher electrical rating than is ideally required. In the final analysis it is the cost which is important. DUMP OR AUXILIARY HEAT LOADS The purpose of incorporating a dump load into the system is to enable excess energy from the wind turbine, which cannot be stored, to be dissipated preferably usefully, to preserve the stability of the system frequency and voltage. The dump load must be rated to accommodate the maximum instantaneous power surplus expected from the system. This requires a knowledge of the minimum consumer load, the maximum turbine power, and any minimum diesel loading. The interdepen- dence of load and frequency in many wind-diesel systems must also be taken into account when establishing these power levels. Control parameters for the dump load are normally frequency and power balance. System set parameters determine the maximum system frequency variations, and the dump load’s function is to preserve these. The frequency limits, and the nature of the system operation determine the accuracy and the control quality required of the dump load. These are described in Table 4.4 below. 116 Designing a system Table 4.4. Accuracy and control quality required by the dump load for various applications Relative Accuracy: Operational Modes Frequency Limits diesel large load narrow medium wide operation variations <2% 2-10% >10% continuous yes high medium medium no high medium medium start/stop yes high high high no high high high Response Time of Control System: Operational Modes Frequency Limits diesel large load narrow medium wide operation variations <2% 2-10% >10% continuous yes fast medium slow no medium slow slow start/stop yes fast fast slow no fast high slow In the table fast can be taken as better than 0.1 seconds, slow to be longer than 1 second, and medium to lie between 0.1 and 1.0 seconds. Various dump load types and control options are available and the characteristics of each are listed in Table 4.5. Figure 4.3 shows the electrical configuration of each. Dump load types i Rectifier controlled resistor Here, power is dumped by applying a d.c. voltage across a resistor. The d.c. voltage is controlled by means of the firing angle of a controllable, three phase, full or half wave rectification thyristor bridge. ii Diode rectifier plus chopper controlled resistor In this type of dump load, the three phase a.c. voltage is rectified to a constant d.c. voltage by means of a three phase diode bridge. This d.c. voltage is converted to another d.c. voltage by means of a controllable d.c./d.c. chopper converter. The chopper provides the means whereby the voltage across a d.c. dump load resistor can be controlled. Chopper controlled resistors are not widely available and cannot be obtained as standard items. Designing a system 117 iii Phase cutting controlled resistors The dump loads this time experience a.c, voltage, the rms values of which are controlled by cutting the three phase voltages. iv Binary resistor bank The resistive load on the grid is here made up of a number of three-phase resistors. Variations in loading are achieved by firing solid-state switches which change the net load seen by the grid. To achieve a smooth variation of this load with a relatively small number of components, the resistor bank is built-up in a binary fashion, It is important that the accuracy of the individual resistances is sufficiently high to ensure that the advancing binary pattern guarantees a monotonically increasing load. v_ Servo-controlled water resistor The immersion of three conducting plates, one for each phase, is varied by means of a servo motor, thus changing their wetted area and therefore the resistance between them. Table 4.5 Characteristics of the various types of dump load Response Reactive Voltage Type Accuracy Time Power Distortion Demand Rectifier controlled high fast yes yes Chopper controlled high fast no slight Phase cutting high fast yes slight Binary resistor bank high fast no no Water resistor poor slow no no STORAGE SELECTION For grid-independent wind-diesel applications the use of an energy buffer is often a necessity. The storage unit can serve various purposes which are mainly to: a Smooth short term fluctuations in the WTG power and/or consumer load for improvement of grid quality (short term storage). b Reduce start/stop cycles of the diesel generator set (short to medium term storage). Reduce fuel consumption (short to medium term storage). d Balance medium and long term WTG power or consumer load surplus (long term storage). 118 Designing a system —_—_—_ ran, : Se ms f Co © r Thyrister Servo-controlled water resistors control Phase cutting controlled resistors Firing angle control Rectifier controlled resistor ere i I } =a] Sh tea | 16R Copper control ao Diode rectifier and chopper Binary controlled resistor bank controlled resistor Fig 4.3 Dump load options € Minimise diesel start up time and therefore prolong stand-still times of the diesel engine (short term storage). Various technically different types of storage unit exist each of which has scope to achieve only some of the listed objectives. The different devices can be characterised by the following parameters: Designing a system 11 * Overall energy content. * Maximum energy flow during charge and discharge. * — Efficiency at high/low cycling rates. * Energy density per mass. * Average service life time. * = Cost. At the time of writing, four technically different types of storage unit have been use in wind-diesel applications. These are based on batteries, flywheels, hydraulic pressw vessels, and hydro. A description of each follows, together with a discussion of end u: storage. Battery storage systems Batteries, the basic elements of a Battery Storage System (BSS) are used world-wide many energy storage applications. They are very reliable as long as technical restrictio: are observed covering for example the maximum discharge level, maximum char; current, etc. As all batteries operate with d.c. current, a BSS for use in a wind dies application needs an interface to the a.c. part of the system. The interface includ elements such as rectifiers, transformers and/or inverters. The control of the charge/d charge of the battery elements is a function of the load and power input. Used correct batteries have a moderately good life expectancy and are very flexible in use becau of their modularity. The inclusion of batteries is a proven way of adding storage to an Autonomous Wi Diesel System (AWDS). They can be used for all of the purposes a to ¢ mentioned abo: A schematic of a system using battery storage can be found in Fig. 1.2. Sexon (198 and Traa (1985) describe typical applications. Generally it can be noted that batteries, independent of type, can only be used medium to long term storage in the range of minutes to hours. Three different types of batteries are relevant for integration into AWDSs: conventional lead acid battery, the nickel-cadmium or more generally termed st battery, and the sodium-sulphur battery, which is less commonly available. The characteristics of battery types, their advantages and disadvantages are n outlined. Lead acid battery The lead acid battery is available in a wide range of sizes and capacities. It has advantage of being relatively inexpensive in terms of its energy storage capacity unit cost. As a consequence of the great fluctuations in the supply and the need for h cycle-rate and lifetime, only lead acid batteries of higher quality should be used. 120 Designing a system Good quality units can be charged and discharged from 20% capacity to nominal capacity within about 10 hours without reduction of lifetime. The life of a lead acid battery is typically limited to between 400 and 1200 cycles, depending on the level of discharge, the battery quality and the power transfer rate. The efficiency of the unit is also very strongly dependent on these parameters, but typically is between 60% and 70%, Higher minimum discharge levels can prolong the battery life. It is essential in wind-diesel applications to use deep cycle (traction) batteries, Car Starting batteries are not appropriate. Expert advice in this area should always be sought. Nickel-cadmium battery is type of battery is able to withstand much lower discharge levels (down to 10%), and faster charge and discharge rates without any harm. Additionally, the number of cycles which the battery can sustain is more than 2000 cycles (up to 10 times higher than for the lead acid battery). On the other hand the units are roughly two to four times more expensive. The in-out efficiency for the battery in a wind-diesel system can be up to 80%, although power electronics can lower this appreciably, Other types of battery exist, similar to the nickel-cadmium type, which go under the generic title of ‘steel batteries’. In the near future, it might be possible that another material combination with the same technical concept will exceed the performance and the economy of the Ni-Cd battery. Sodium-sulphur battery This type, although not widely available, might in the very near future become the most favoured option for wind-diesel applications. The efficiency depends upon the frequen- cy of use of the battery. The unit is heated either by the losses experienced during normal charge or discharge, or by the self-losses during non-operation. There is no reliable information available about the number of charge-discharge cycles that can be accom- modated nor about the loading current. Flywheel storage systems Flywheels store energy as rotational inertia, They offer a fairly high energy density and a high lifetime even under the fast discharge conditions which are typical of AWDS applications. In existing wind-diesel schemes the storage capacity ranges from seconds to some minutes. Fluctuations in wind power also vary on a timescale of seconds to minutes. Flywheel technology is still at an early stage of development, but plans for systems having an energy storage capacity of up to 1.7 MWh have been reported. Sacks (1989) provides an overview. Designing a system 121 Flywheel systems developed to date for wind-diesel use have concentrated on medium scale applications. Two main types of flywheel exist, which differ in the nature of their coupling to the system and in their rotational masses and speeds. The simpler one is the low speed type which is coupled directly to the diesel-gener- ator, normally by a freewheel clutch which enables the diesel to stop or to run free during periods of surplus wind power. These flywheels have rather big masses, because the change in the energy stored in a flywheel is directly proportional to its moment of inertia and to the square of the change in its rotational speed. If the flywheel is coupled directly, the energy density is low, because the rotational speed and the acceptable speed range, which is limited by the tolerable bandwidth of the system frequency, is also low. This type of flywheel can be used to improve the grid quality in the sense that the fluctuations in the system frequency can be slowed down although not eliminated. Therefore, during times of wind surplus the wind turbine can store a certain amount of energy in the flywheel, before the system exceeds the upper frequency limit and has to be shut down. Also, the number of diesel start/stop cycles and the diesel run time can be reduced drastically. An example of this type of system is given by De Bonte et al. (1988) and Infield er al. (1988). If the frequency of the grid has to be very stable, a storage with adjustable, very high power transfer rate has to be used. For this purpose one of the most attractive storage types is a variable speed electronically coupled flywheel system. It consists of a variable speed driving motor, a gearbox, a high speed flywheel, and control and interfacing electronics. By adopting asynchronous operation the full energy content of the flywheel can be used, since its speed range can be much wider than the frequency range of the grid. The rotor can be built either of steel, steel compounds, or fibre reinforced plastics. Because of the high rotational speed (up to 30,000 r/min for GFRP rotors) the rotor is and to prevent enclosed in an evacuated container to reduce aerodynamic loss accidents in the event of the rotor bursting. The GFRP rotor system can be reduced in weight drastically, because it can accommodate very high rotational speeds and the strength of its protective container can be minimised as a consequence of the very advantageous destruction mechanisms (no heavy parts can separate from the rotor). There are very few standard products of this type available on the market, They can be fitted to the system by simply changing some parameters in the integrated control. An additional advantage compared to the directly coupled flywheel is that the storage unit can be separated locally from the rest of the system. A major disadvantage of the variable speed system is its high price, caused by additional power electronics, by the increased loadings on the bearings, and by the need for containment and evacuation. 122 Designing a system The efficiency of both types of flywheel is high. There are some bearing, air-friction and gearing losses, but these can be minimised by special design and evacuation. If the flywheels are asynchronously coupled to the diesel engine, or if there is a clutch for separating it mechanically, it can also be used for ‘crash-starting’ the diesel. In a crash-start, the diesel engine is accelerated from standstill to its nominal speed within a very short period. This allows the system control to decide at the very last moment whether the diesel has to be started to supply additional power, so allowing diesel stop times to be maximised and the start/stop actions to be kept to a minimum. Several prototype systems have proved that if the coupling is dimensioned correctly, neither the diesel engine nor the coupling is exposed to excessive wear. Crash-starts are used by the systems described by Infield et al (1988) and Lundsager and Norgaard (1988). Hydraulic storage systems Hydraulic storage is a way of providing short term and high power transfer rate energy. The energy is stored in a simple, commercially available pressure vessel of the type commonly used in many other industrial applications. The vessel contains a rubber separator bladder whose volume is filled with compressed nitrogen gas. During charg- ing, usually with high pressure hydraulic oil, the gas is compressed and energy is stored. When there is a wind energy surplus, the excess electrical energy is used to drive a hydraulic pump/motor in the pumping mode, so increasing the pressure in the pressure vessel. Inversely, if the consumer demand exceeds power production, the pump/motor is operated in the motor mode to drive a generator set. The system is regulated by an electro-hydraulic valve, which controls the speed of the pump/motor. There is also the possibility of coupling the pump/motor directly to the generator shaft of the wind turbine by mechanical gearing. System efficiencies are dependent on power transfer rates, since there are different efficiencies for adiabatic and isothermal processes. The depth of discharge and the system size also affect efficiency. Already smaller systems (with a storage capacity of approximately 6 kW/minute) achieve an efficiency of greater than 65% at higher loads as reported by Slack and Musgrove. It is believed that larger systems will perform even better. The range of nominal storage sizes is compatible with AWDS having a rating of from only a few kilowatts to more than 100 kW. Tests have shown that a significant reduction in diesel starts and fuel consumption can be achieved by using hydraulic storage. It is very important that the storage size fits the wind turbine, because efficiency is very strongly dependent on the power transfer rates and the standing losses caused by leakage. Designing a system 123 The cost effectiveness of hydraulic storage units has not yet been proven. It is clear that storage costs per energy unit will be relatively high, so that only short time storage will be appropriate, even though specific costs drop slightly with increasing size. Safety precautions must always be observed for hydraulic storage systems because of the high pressure levels. A schematic of a system using hydraulic storage can be found in Fig. 1.3. Hydro storage systems This type of storage uses the principle of converting kinetic energy into hydrostatic potential energy and back again. A pump/turbine is driven by the surplus wind energy to raise water to a higher level, where it can then be stored without losses and in almos! unlimited amounts. When additional power is needed, the flow can be inverted. In this case potential energy is transformed into kinetic (rotational) energy by the hydro-turbine which is coupled to a generator to produce electrical power. The efficiency of such a system is less than 70% and decreases with smaller nomina ratings. The costs of hydro storage systems are high compared with the cost of othe: storage units. Use of natural dams can help to reduce costs. For larger ratings, which are above the typical sizes of actual wind diesel systems this storage method could be really cost effective. On the island of Foula, Shetland Somerville and Stevenson (1987) have reported that a prototype system has beet installed to supply the 50 inhabitants. This prototype has a storage capacity of 1800 kWI and a maximum transfer rate of 25 kW. A fuller description of this system is given ini case study in Chapter 5. End use storage All of the storage systems discussed so far are designed to feed power back into thi supply system when required. An alternative approach, which is very akin to load contro (see later in the chapter) is to store excess energy in some useful form which will not b recovered via the main supply system. Typical examples are hot water storage, whic] is effectively a usable dump load, desalination, hydrogen production, or water pumping The last can be designed to create a head useful for subsequent irrigation. It is possibl that in an end use storage scheme the storage could form the sole load on the system, Rating guidance In general, energy storage can be considered to have two main functions. Firstly, enables the system to maintain a continuous supply by covering the load while a back-u diesel is started. The worst case occurs when the wind turbine trips out while providin SS 124 Designing a system rated output. Knowing the expected start-up time for the diesel generator, the energy to be covered from the store can be calculated. This can then be converted to storage size depending on the type of energy storage technology being applied. If, as can be the case with flywheel energy storage, energy to accelerate the diesel is also provided by the store, then this must also be taken into account in the calculation. Secondly, energy storage reduces the rate at which the back-up diesel(s) is cycled on and off. Itis the system designer’s task here to trade off the economic benefits of reduced engine cycling, in terms of wear and maintenance, against the increased cost of the store. One further aspect of energy storage is the possibility of making fuller use of the wind energy and so saving diesel fuel. The magnitude of the losses associated with increasing the storage must be taken into account when assessing this. The effect and efficiency of all of the storage systems discussed above is strongly dependent on their selected rating relative to the overall system size, and can vary with the nature of the supply and/or the load. Therefore it is not possible to give general rating guidance for storage units. If the capacity of the store is not selected correctly, as can easily happen, the benefits to be expected can disappear and can in fact be reversed. The optimization of the rating is a typical problem for a computer model. Such models require either real or synthesised wind and load data, time constants, and a description of the technical limitations of the storage device. The computer model calculates for a certain time step (seconds to minutes) the response of the system. The time step has to be different for different storage devices and applications. For example the analysis of a flywheel used for smoothing the system frequency will require a very short time step for the dynamics to be represented correctly. On the other hand, the design of a battery storage device could be accurate even when significantly longer time steps are chosen. Generally, storage is a very expensive part of the system, and therefore one should not try to save money by just connecting a storage device without previously carrying out a careful examination of the problems and benefits. Examples of simulation models which include storage will be described later in Chapter 6 which deals with modelling techniques. Slack and Musgrove (1986) describe a suitable model for hydraulic storage. SYSTEM CONTROL As far as possible the standard controllers on the individual system components should be utilised. For example a diesel generator set will already have engine speed governing, a start sequence controller, protection equipment and voltage regulation. Unless there is good reason, the designer should not interfere unnecessarily with these, It may be that 125 Designing a system the standard voltage controls on the diesel will be inappropriate, and attention should be paid to defining the voltage and reactive power requirements of the other generators on the system. The wind turbine generator(s) will likewise generally come supplied with its own controls to deal with connection and disconnection to a network, and in some cases power regulation. These should enable it to operate in a wind-diesel system, although some modification may be required to the frequency and voltage excursion limits. There are however two specific areas of control with which the system designer will have to cope. First is the control of the frequency by means of power surplus, and where required a minimum loading on the diesel. This is usually achieved by a dump load or storage element which is controlled to provide a power balance. Control is based upon measured power or frequency or both, and it has a critical role with regard to system stability but as such is beyond the scope of this handbook. The second area concerns the switching in and out of the diesel(s). Crudely the requirement can be viewed as ‘switching on’ a diesel when required and ‘off” when not required. In practice there is also the constraint to avoid excessive on/off cycling. Conditions will vary from site to site (especially relevant here is turbulence intensity) and the control strategy should be designed to take account of this. For systems with some storage, ie those that can at least cover the load while a diesel is started, the decision to start the diesel can be based on the minimum acceptable system frequency. More complicated is the decision to ‘switch off’ the diesel. A number of different approaches have been used, these being based on: i Diesel minimum run time, ie once the diesel has been started it is run for at least a pre-set time before being stopped. ii Required power surplus (hysterisis). iii Averaging or filtering of wind power surplus. These of course can be used in combination. Research at Rutherford Appleton Laboratory (RAL) has indicated that a minimum diesel run time is the least effective strategy for reducing cycling. For a given reduction in on/off cycling it causes the greatest fuel penalty, which is not altogether surprising since as a strategy it is in no way responsive to changing wind conditions. Averaging and power surplus criteria are both more effective although care must be taken with averaging in order not to let the effective time constant get too long. In this event switching will occur which will not reflect the current wind conditions and excessive cycling could result. It should also be noted that when selecting a power surplus level, account should be taken of system losses. Failure to do this can also result in excessive He} V9. 126 Designing a system ee 1 OAY raf 4 13P Increasing 4 _{wour exponential Pal souk ot . J dant Increasing minimum Snr time ai WN et MIN Increasing eng nae hysteresis . Store ie o-8+ a S storage 4 ° as T T AVERAGE FUEL CONSUMPTION ( £ /HR) ° o T / o 1500S 0-6 bt tt dt ° 5 10 15 AVERAGE DIESEL CYCLING RATE (STARTS/HR.) Fig 4.4 Effect of various diesel stop criteria on rates of cycling and fuel consumption on/off cycling. Figure 4.4 is taken from Infield et a/. (1988) and shows the effect of these different strategies on cycling and fuel consumption as calculated by simulation modelling. ELECTRICAL SAFETY It must be confirmed that the wind-diesel system meets the requirements of established standards and codes for the safety of consumers, the public and operators. Codes and standards may be both those adopted and legislated by government and regulatory groups, and those adopted by utilities and power generation authorities for their specific use. Itis the responsibility of the system designer to design and select safety and protection Designing a system 12 systems, devices and components and their application to ensure the safety of the systen In many areas advice given in standards relating to dispersed storage and generatic facilities on a utility network will be applicable. For instance ANSI/IEEE Standard 102 (1988) sets forth requirements for the interconnection of a small wind energy conversic system to a grid. ANSI/IEEE Standard 1001 (1988) is more extensive and deals with much wider range of devices. Rizy et al. (1984) give useful advice on operational at design considerations for electrical interconnection of dispersed storage and generatic systems. Specific requirements for safety vary from place to place and depend upon the natu and scope of the application. Specific examples of wind diesel applications with varyi) safety requirements are: a Integration of a wind turbine into an existing small diesel grid or utility by an independent developer The developer will be required to demonstrate that the wind turbine meets national wi turbine safety codes and that the electrical interconnection is safe and meets the electric safety requirements of the utility and state, province or country. b Integration of a wind turbine into an existing small diesel grid or utility by the utility The utility will apply internal codes and practices to ensure that the equipment confort Other agencies or groups may require that the wind turbine meets safety standard: there is an indication that safety of the public may be affected by installation operation of the wind turbine. c Construction of a new wind diesel plant in a previously unserviced area The designer and developer should be able to demonstrate that each component of system is suitably designed and applied in the system and that the components 1 accepted safety codes for operation under the conditions intended. In each case the successful completion of commissioning tests (see Chapter 7), un real and simulated fault conditions is a mandatory condition of acceptance and con mance to safety standards. LOAD MANAGEMENT The problem of wind power variability can be tackled by load control. Rather 1 attempting to match the power generation to the consumer demand by incorpora storage, as was discussed previously, the philosophy here involves an inversio approach and taking action to vary the load to make it match the power available. : ——————_ “ 0 £0 V9. 128 Designing a system If it is required that the behaviour of the power supply system should be totally transparent to the end consumers, as is the expectation on a large grid, then load control on its own is likely to be inappropriate, and the installation of an energy buffer or store as described previously in this chapter would be virtually essential. However, without large energy storage, and for significant wind penetration, excess energy would have to be dumped, which would generally result in poor economic viability. In many applica- tions however it is not always necessary to meet apparent demand, and an alternative less wasteful technique involving dumping the excess power usefully, when available, can be adopted. Additionally, many consumers if given economic incentives are prepared either to reschedule their demand to suit the system or to tolerate limited availability. This gives the designer greater flexibility. The key to successful load control lies in being able to sub-divide the total system load into essential and non-essential elements. Thereafter, by switching in and out, in an appropriate controlled manner, the latter low priority loads, an effective system can be realised. Load control of this nature obviously requires the co-operation of the system users, who cannot be allowed the expectation of total system availability enjoyed by consumers on large grids. A conducive tariff structure can encourage user co-operation, but in certain circumstances legal hurdles can prevent the users seeing the true cost of the energy they consume, thus jeopardising the viability of the scheme. Therefore, a perfectly sound technical solution can fail if certain institutional barriers are not overcome. Load management strategies can be classified as either short or long term. In short term schemes, switching may occur very rapidly, perhaps on a timescale of milliseconds. Short term control Successful short term load control schemes have been designed by Somerville and are described in Stevenson and Somerville (1984) and Somerville (1986). It is worthwhile studying one of these schemes to appreciate the type of network and network control that is required of such a load controlled system. Figure 4.5 shows a schematic layout of the power system on the remote Scottish island of Fair Isle. A 50 kW wind turbine with four pole brushless alternator and automatic voltage regulation is combined with a SOkW ‘winter’ or a 20 kW ‘summer’ diesel. The load is split up into three elements, viz essential service load (lighting etc), heating load, and (true) dump load. However only two of the system contactor switches, labelled D, E and F can be closed at any one time, making it impossible for a diesel and the wind turbine to serve the same load simultaneously. Stability of the wind turbine load is Designing a system Time clock SO kW Metering. Turbine\ Control (kWh Gd ff Existing Service Load Heating Load Reserve Fig 4.5 Schematic layout of power supply system (Fair Isle, Scotland) maintained by frequency sensing load switches located in each user's premises. Wh the system is lightly loaded, rather than directing excess power to dump, the switch: each of which has a different frequency threshold, add extra low priority consumer loz until the system frequency falls to an acceptable level. Similarly, when the system heavily loaded and system frequency is falling, the switches drop loads until the syst reaches design frequency. When the full heating load is being served and the wi turbine system frequency is still rising, excess power is directed to a dedicated bank dump load resistors, although in practice, if the system components are correctly rat only a small proportion of the energy should ever be dumped. Systems of this type can be made more equitable to individual users by the installat of time switches in each property, which act to vary priorities and to stagger guarant availability of the system. Control of loads does not necessarily have to be distributed. Central contro possible. Instructions to switches, which have to be located at individual premises be sent as ripple signals over the power lines or alternatively via the telephone netw: Normally, the increase in availability and reduction in tariffs, experienced wh¢ wind turbine is integrated into a small diesel network, encourages demand, and this 10 0 130 Designing a system be used to justify the laying of a parallel network. This makes it possible to adopt a tariff structure conducive to efficient system use, by allowing separate metering of wind and diesel produced power. Due to changing patterns of energy use and to possible growth in demand, it is important when designing such a system to introduce flexibility. This relates particularly to the ease with which the switching sequence for the controlled loads can be reset. For instance, it may be felt appropriate to allow certain consumers on the network who have young children or elderly persons in their care, a higher priority than others without such an acute need for space or water heating. Long term load management Long, rather than short term, load management can also be effective, as indeed can a combination of the two. Long term management often includes specification of priorities for different loads, perhaps associated with a graduated pricing structure. For example a hospital might have the highest priority whilst water pumping to a large storage tank the lowest. Control of the load in these situations may be undertaken manually or automatically. For severely undersized generating systems, load management may entail scheduled or unscheduled outages for portions of the service area. When assessing the possible use of load control, the system designer should satisfy himself that the consumers are prepared to tolerate a complex tariff structure and are prepared to co-operate in staggering their loads. Experience has shown that with the correct customers, a load controlled system can provide extremely cheap electricity. Conversely, without consumer co-operation, a load controlled system is likely to be fraught with operational problems. A load controlled system is capable of being robust and simple, of requiring no storage, of using a very high proportion of the generated energy, and of significantly reducing diesel running times. The disadvantages relate to the fact that systems must be individually designed for each application, and that low priority loads must be identifi- able. ACKNOWLEDGEMENTS The authors of this chapter were: Ray Hunter (UK), David Infield (UK), Stefan Kessler (CH), Jan de Bonte (NL), Trond Toftevaag (N), Bob Sherwin (USA), Malcolm Lodge (Can) who wish to thank Per Lundsager (DK), Kjetil Uhlen (N), Ola Carlson (SW), and Jim Manwell (USA), for their useful suggestions relating to the text of this chapter. Designing a system 13 REFERENCES ANSI/IEEE Standard 1001. Guide for Interfacing Dispersed Storage and Genera- tion Facilities with Electric Utility Systems. IEEE 1988, USA. ANSI/IEEE Standard 1021. Recommended Practice for Utility Interconnection of Small Wind Energy Conversion Systems. IEEE 1988, USA. Ballard, L. J., Swansborough, R. H., Recommended Practices for Wind Turbine Testing. Quality of Power Single Grid-connected WECs, IEA Programme for Re- search and Development on Wind Energy Conversion Systems. First Edition, 1984 De Bonte, J., Klerks, W.M.A., Kraayvanger, A.W., Recent Results of the Wind Diesel Project of ECN. ECN-Report-88-088, Petten, 1988. Electric Power Research Institute (EPRI). Guidelines for Testing Wind Turbines. EPRI AP-4682. Research Project 1996-25. Final Report, August 1986. Prepared by Southern California Edison Company. Frandsen S., Pedersen, B. M., (Editors) Recommended Practices for Wind Turbine Testing - 1. Power Performance Testing. Second Edition. International Energy Agency (1990). Infield, D.G., er al. Further Progress with Wind/Diesel Integration. Proc. 7th BWEA Workshop, Oxford, 1985, MEP 1985. Infield, D.G., et al. A Wind/Diesel System Operating with Flywheel Storage. Proc EWEC 88, Herning, Denmark, 1988. International Electrotechnical Commission. IEC Standard Publication 555-3. Distt bances in Supply Systems Caused by Household Appliances and Similar Electrica Equipment. Part 3: Voltage Fluctuations, 1982. Lipman, N. Overview of Wind-Diesel Systems. Proceedings of Mykonos workshc on wind-diesel. 1987. Lundsager, P., and Norgaard, P. The 55/30 kW Experimental W/D System at RIS¢ National Laboratory, Paper F6, presented ECWEC 88, Herning, Denmark (1988) (Also available as RIS@ report RIS@-M-2717.) Lundsager, P., Sherwin, R. W. Using Simple Wind-Diesel Systems Without Ener; Storage to Obtain High Penetration and Market Acceptance in the Near Future. Proceedings American Wind Energy Association Windpower ’90 Conference, Washington DC, USA (1990). Rizy, D. T., Jewell, W. T., and Stovall, J. P., Operational and Design Considera- tions for Electric Distribution Systems with Dispersed Storage and Generation (DSG). Oak Ridge National Laboratory Report ORNL/CON- 134 for US Depart- ment of Energy. September 1984, Oak Ridge, Tennessee, USA. Sacks, T., Has the Flywheel Lost its Momentum? Electrical Review, vol 222, No 24, December 1989, UK. Sexon, B., Theoretical and Experimental Analysis of a Wind Turbine/Battery Sys tem for Use in Isolated Locations, PhD Thesis, Reading University, 1985. Slack, G., and Musgrove, P.J., Hydraulic Accumulator Storage for Use in Wind- Ra Designing a system Diesel Generating Systems. Proc. 7th BWEA Wind Energy Conference, 185-192, MEP 1985. Slack, G., and Musgrove, P.J. Long Term Performance Modelling of a Wind-Diesel System with Hydraulic Accumulator Storage. Proc. 8th BWEA Wind Energy Con- ference, 43-50, MEP 1986. Somerville, W.M. Applied wind generation in small isolated electricity systems. Proceedings of the 1986 Eighth BWEA Wind Energy Conference. Cambridge, UK. Somerville, W.M., Stevenson, W.G., Wind power and microhydro cogeneration for isolated communities. Wind Energy conversion. Proceedings of 1987 Ninth British Wind Energy Association Conference, Edinburgh. Mechanical Engineering Publica- tions, London, UK, 1987. Stevenson, W.G., Somerville, W.M. Optimal use of wind and diesel generation on a remote Scottish Island. Proceedings of European Wind Energy Conference 1984. Hamburg, Federal Republic of Germany. Traa, W.G. Feasibility Study of the incorporation of a Battery Bank in an AWDS, TUE-report, EMV 85-01, Eindhoven, 1985. UNIPEDE Group of Experts. UNIPEDE Group of Experts for Determination of the Characteristics of Usual Distortions of the Voltage Waveform. Electricity Supply, 54th Year, No 92, May 1981 (reprint), UNIPEDE, Paris. APPENDIX 4A SAMPLE CALCULATIONS FOR RATING THE DIESEL’S GENERATOR Here the demands on the diesel’s synchronous generator are considered. With reference to the system shown in Fig. 4.1, the maximum apparent power whict has to be supplied by the diesel’s generator can be determined by the active (P) and thc reactive (Q) electrical power balances. Pp =P_ +Pp-Py (4A.1 Qp = 2, + Qp_ + Qy (4A.2 where the indices stand for D = =diesel-generator set, L- =load, DL = dump load, and w= = wind. Assuming the system’s dump load has solid state relay control, it will switch on a1 off at zero crossings of the voltage so the reactive power demand is Qp, = 0. If the wind turbine conversion system has a line-commutated convertor which operated at a constant firing angle, & = 150°, then Q,, =—P,, tan a = 0.58P,. (4A If the minimum power factor, cos 9, of the load is assumed to be 0.8 then the maxim) reactive power demand of the load is given by Qy = P, tan 9 = 0.75P, . (44 The maximum apparent power, Sp, which has to be supplied by the diesel’s gener: corresponds to 2. Sp = V(Pp? + 2p’) (4, P, and the power factor is COS 6p = 3 4 With equations (4A.3) and (4A.4), equation (A4.5) can be written as Sp =V(1.56P,2 + 1.34P,2 + Py -1.13Py, PL +2PLPpi-2Pw Pp) (4 If P,, > Py then Pry = Py — Py and Pp =0, so Sp = 0.75P, + 0.58P,, (« ie) 134 Appendix 4A and P. COS Op = i =0. (44.9) D If P< Py then Pp; =0, so 2 2 Sp = V(1.S6P,° + 1.34P,° - 1.13P, Py) (44.10) and Py (P,-P,) C08 by = <P = Low (4A.11) Sp Sp The maximum required apparent power, Sp, and the power factor demanded of the diesel’s synchronous generator, COs @p, are calculated as a function of Py, with Py as a parameter, according to equations (4A.8), (4A.9), (44.10) and (4A.11). The results are depicted in Fig 4A.1. 7 SS eee | Su a eo 6s Z 50 2 = 6 3 oa _ : A 30 % 12 20 6 0 10 Pw (kW) — 25 = x0 3 3 we 42 | 48 Su 60 —<—-_ cos@ 10 Fig 4A.1_ Maximum required apparent power and power factor demanded of the diesel generator as a function of wind power for various loads Appendix 4A 135 The apparent power which can be supplied by a synchronous generator depends on the power factor because the maximum power supply at a constant terminal voltage is mainly determined by the maximum value of the open voltage. At the maximum value of the open voltage, the maximum active power at cos 6 = | will be larger than the maximum reactive power at cos @ = 0 at a constant termina! voltage. This is depicted by the active and the reactive current in Figs 4A.2a and 4A.2t respectively for a synchronous machine with a cylindrical rotor and a system frequency of @ rad/s. L, is the stator self inductance (Ly = Lg = L,)- a) Go joLa i ee sd i u b) dip SS ees a alai Fig 4A.2. Active (a) and reactive (b) currents at the same value of open voltage (tip) and terminal voltage (i) For a salient pole synchronous generator the maximum value of the open voltage c be derived from the machine specifications according to Ay =O, Logg lp, = 4, cos 5, + w, Lyi, sin (5, + 0,) (4A.1 136 Appendix 4A w,L, cos ¢, 2, 6, = arctan — = _ (4A.13) a,+ o, Ly sin @, f, P i,=3 air (4A.14) ti, COS 0, The symbol “ signifies the maximum value or amplitude of a sinusoidal quantity. The suffix r indicates rated values. Additional terms are defined as follows: Up = open circuit voltage Lafd = mutual inductance of stator and field winding ly = field current u = stator voltage 6 = load angle i = stator current @ — =angular velocity P = power cos 6= power factor Lq and Lg = stator self inductances. At given values of @,, P,, ,, cos 6, Lg and Lg, the value of i,, 6, and ti, , can be calculated. The maximum current can be calculated as a function of the power factor in accordance with the vector diagram of Fig. 4A.3. jig Fig 4A.3 Vector diagram for a synchronous machine Appendix 4A 137 Starting with the load angle, 5, as a parameter, ol, iy and @Lq ig can be calculated oly i= asin d (4A.15) OL ig= a, —ticos 8. (4A.16) For given values of w, Lyand Ly ig and igcan be calculated. From this we can further obtain / and @. (4A.17) 9 = arecos = — 6. (4A.18) Using f, the maximum apparent power can be calculated as a function of the power factor for a constant phase voltage (G = 220 V2 V) and several values of the load angle, 8 5. = ; at (4A.19) max t Cos 6 = cos acco aoe s| (4A.20) In Figs A4.4a and A4.4b the results of this calculation are shown for two generator: of different rating - 60 and 80 kVA. These figures also indicate the power factor required of the generator. Comparing the demands with the capabilities of both machines, it can be seen tha the 80 kVA machine just fulfils the demands. ACKNOWLEDGEMENTS This appendix was written by J. A. N. De Bonte (NL) and Jan Pierik (NL). PL (kW) > Pw (kW) 100 80 60 =~ =— S, (kVA) 0S % ac 8 EZ: is | area ® 3 Fig 4A 4a The apparent power demand and the deliverable apparent power for a Stamford Generator C3A, 60 kVA as a function of the power factor To determine the suitability of this generator: at 25 kW wind power and 60 kW consumer demand, the apparent power demand is 72 kVA at a power factor of 0.52. At this power factor the generator can only supply 52 kVA so is unsuitable. Pu«kW) —— — 100 <—S, (kVA) ) 02 = cos od s Fig 4A.4b The apparent power demand and the deliverable apparent power for a Stamford Generator C3B, 80 kVA as a function of the power factor To determine the suitability of this generator: at 25 kW wind power and 60 kW consumer demand, the apparent power demand is 72 kVA at a power factor of 0.52. At this power factor the generator can just meet the demand. NREL/TP-440-21272 UC Category: 1213 DE96007901 ¢s,eda/mie [Ibs /rerl [2 lor da Nes ecs Une W090 Be wers to dawnload hy Hybrid2 The Hybrid System Simulation Model Version 1.1 Users Manual E. Ian Baring-Gould National Renewable Energy Laboratory 1617 Cole Boulevard Golden, Colorado 80401-3393 A Division of Midwest Research Institute Operated for the U.S. Department of Energy February 1998 iv NOTICE!! This manual is for the Hybrid2 software, version 1.1, which was released in August of 1997. An older version of this manual was released with the original software, version 1.0, in June of 1996. This manual should primarily be used with the new version of the Hybrid2 software. The manual is almost identical to the original except for the explanation of a few new options and an expanded question and answer section. In addition, several errors that were found in the original printing were fixed. In detail, edits were made to Section 4 on the menu command structure. A resource data gap filler was added to the Help menu and some changes were made to the wording and title lines. This was completed to provide a more user friendly software interface. The software gap filler is described in detail in Section 5.6 of this manual. This function will fill gaps in wind, load, temperature and solar time series data files but requires that data to be put in a specific format with the missing data marked. This addition should eliminate some of the troubles associated with using incomplete data files in systems analysis. The new synchronous condenser module is discussed in Section 7.3.3.7 as part of the Power System module. The synchronous condenser module allows a fixed standing loss to be placed on the AC bus. A synchronous condenser acts as a system buffer to maintain system stability and provide reactive power if the diesel in an AC bus based system is either underpowered or shut down. There were a number of changes made to the software in regards to system dispatch, Section 7.3.3.8. These edits include a simple dispatch strategy window that allows users to select from one of five simple strategies without being required to consider more advanced strategies. A second addition to the dispatch options provided in the Hybrid2 software that is the presence of an offset to specify when diesels will be brought on line. This offset allows for the more accurate modeling of no storage hybrid systems by allowing the user to specify if the diesel should be started to cover fluctuations in the power balance instead of just the average load. A third area where the manual has been modified in regards to system dispatch is in the descriptions for some of the dispatch strategies provided with the software. The new descriptions can be found in Appendix D. The last major edit to this manual was the expansion of Section 9, Frequently Asked Questions. Over the last year and a half a number of questions have been repeated by people using the software. Most of these points of confusion have been solved by clarifying the users interface but there were some that were not that simple. These questions have been reproduced with their corresponding answers. We recommend that users quickly review this section so that you will not have the same difficulties that have plagued a number of others Hybrid2 users. vi Table of Contents ] Introduction: wis ssarees neers caueeass senemeens sereone 3s Ea eae s Cee EES 1 1.1 Introduction to Hybrid2 2.0... cence eee eee 1 1.2 General description of the Hybrid2 model ...........0.. 0000. c cece ee eee 1 1.3 Current status of the Hybrid2 model. 1.2.0... 0... teens 3 1.4 Plans for near future... eee nett eee eae 3 2 The Hybrid2 Package ... 0... eect nett eee nee 5 2.1 Getting Started 0... eee eect etn e eens 5 2.2 Contents of the Hybrid2 Package ......... 00... cece cece eee eens 5 2.3 Required Hardware ...... 0... cece eee ee tebe eee e ene 6 2A Anstallation: ProCeQuyre sos. .-..6.10260-ccacyavs nimi sd at o-oo ace tntanie 4 Andy odd nace dads tba 6 2.5 Technical Support and Feedback .........0 000. c cc cee eee 7 2.6 Comventions 6.0... cece te teen eee eee ees 7 3 Structure of the Hybrid2 code... 1.0... ccc teens 8 3:1, Program structlte incaersearot eect etna 8 Bed UNS ges se 6 cg st es ee ee ee es ee ee 10 30 DitectOry SUUCHITC anes a: saaee s oausgemsap ¢s eaeu ee apee ss AaeeGe +s deem 11 SA COdE SPCC), iaci.cm amma o qacme « HADATGM swe SIU tas Aye 5's, HEMILe 413 HOH 11 4 Menu Commands ......... 0... cece eee eee eee eens 13 4.1 FUG). «ees eer nieine ¢ o sreiining + snaraimn mines + eayminw ¢ base ie bn nfo ae ers sosslinte 13 4.20 RUM 2. cnet e tenet ete e eee eee 13 4.3 Results 2.0... eect nent nett eee 13 44 Help... eect ete eee eee 13 5. Program Heatures << ojacis somes 4s Memes swe s 63 Se os HOS 6s De Rm: 14 Sab Library: scenes s amas ss meee. ne OMe Re oss HOw ss Wome os ele megs anism 14 D2 GIOSSALY 6 eee ct,s asis «Gee fom ee Ge + spe ss Hw ee es + cine 14 5.3 Import/Export Function . 00.0... teens 14 5.4 Graphical Results Interface... 0... teens 15 eS LOX QMO G5 inco ie ees ep foros senor ece wists ee oes 4 epee ts eb a sigerie tae cies > 16 5.6 Gap Filler sce. ccws ss cow ew s Sod qewwes sew wiie + siesees we bee ewes 16 6: Operating The Hybrid2 Code” cc. ccc: unseeesne endows see eeseee sane? 17 65) Starting Hybrid? scene os pores roe ewes cece ouee =: 17 6:2 Building 8 fot) CC xc sec ccc ences org ceo pores ce eeae sae e Sweeps 17 6.3 How to ruma simulation... 0.0... eee eee 17 6.4 How to run the economics separately ....... 0... eee eee 18 6.5 Importing time series data 2.0... tee eee 18 6.6 Description of the simulation output . 2.0... 0.2 eee 20 vil (Creating ;atbroject -e hey ec eee eee nee eee nee ene ee nee eee 21 7 loads! Module ase ae eee Cee EEE OEE tae eee asec 22 (ole primary loadsineeea ee eee ae een eee rae eee ree eo eee oe eeeree 23 (122 Primary Matrix/Load ee ere sane eee are eee eee eee 23 eS DeterrablerLoad! tees Lhe anaes a bee bane Mek y ane 24 (eli4@ional Coad, Wick tee EEE Reeds aki Jaana 4 25 7.2 The Site/Resource Module and Resource Data .............02000 eee ee eeee 26 1] ST ROWGR OYSUONB cis Nettie Cothber ae ae era ae ete lbete as eetetty eect] aes 28 (S81 COBNGUTEXIONS EGS) eee Uno are etiae atta tacts 30 7.32 Gontiguration restrictions.) 4 4 sno eeiaoe eeeioes seeds a eee ee 31 (7.333 Compotionts | hasan sets ss sme oer eed op bere a eoecea. 31 7-355. Wand hureine FAGe) PEELE aa some eh Aer EL en nna A Waar ace 31 32 Peto voltaic/ Module £412. ).).02/2). oe et else gbatede 32 TBS DESO bs os corse Hee elele|s latter stoas + opieaitd somes 4 33 TSS 4 Wate loads 2). 57). d ba bleslslsidaeie blocs bomeldaaaeetiae 34 T3BD BBCHOS ies ailold)c 5 azn ts steerer Shslomlae 4 cle itere oats eres 34 1233:6 EG wer Conversion \ Van soe chee eee cere es eee 35 4:3:367 Synchronous Condenser - © |./)-)))7.-/-1 joo) sell enoeeoe. 35) 73318! Dispatch | EEE LEAS sone eerie eet tots nla a orraes 35 7] A Basei@asey Ph e.s se shia dic seit as comet hte celta oe mettle aoe erat 37 iS EGeromics| 2 joao) ebb y 4 som mek ee teee dae Gebel aceel ae 39 S| SUMMARY OfGLesy Ero Stan PAE E aoe e ee ae eee ee Ser Ere ees eas 42 9 Frequently. Asked. Questions: 2/502 5 2ihis sot Lobel. seer) eed Wiles ices 8 44 Appendixes ss Mie eRe elas ghar Le) NS EA de had ieee oe) dal false bee ete Lk al) 45 AppendixtA: Output Mile Extensions). 5603002. sce tao. e se ees ete eos 46 Appendix B: Description of Hybrid2 Detailed Output File ...................... 48 ‘Appendix: ©: Battery Use Primer) = pes sneer ae eae See Le aa nee ae 51 Appendix D: Dispatch Strategies. 4.52505 005 73s BE Bo soe Bate redoe es oes 353 AppendixvE: Hybrid? Bug Response Form! 45555 l-ceeiidare pee cite oir 59 viii 1 Introduction 1.1 Introduction to Hybrid2 Hybrid2 is a very flexible and easy to use computer software to help with the long term prediction of hybrid power system performance. It will allow industry, government and other non- government agencies interested in the electrification of rural areas but who may have limited knowledge of hybrid power systems to evaluate hybrid alternatives to standard petroleum-based generators. Hybrid2 is also detailed enough to be used by experienced hybrid system designers as a tool to conduct preliminary system, ‘It is our hope that with the availability of this code, power system developers will have/a important and useful tool to assist in the evaluation and design of tural, off grid electrification projects. Hybrid2 contains four parts -- the Graphical User Interface (GUI), the Simulation Module, the Economics Module and the Graphical Results Interface (GRI). The GUI allows the user to construct projects easily and maintain an organized structure to all of the current projects. The GUI incorporates a library of projects, power systems, time series data, and mechanical components. The library is used to construct projects and expands as users enter more components or import time series data into the Hybrid2 code. The GUI also includes a glossary of frequently used terms and definitions to all of the Hybrid2 input parameters. The Simulation and Economics Modules allow the user to run simulations with relative ease and includes error checking of inputs. The new simulation module is quite versatile and allows for a great variety of system architectures using various loads, wind turbines, photovoltaic (PV) arrays, diesels, batteries, converters, and a dump load on an AC bus and/or a DC bus. The simulation module also has an extensive choice of dispatch algorithms that allow for more than one hundred different system control options. The independent economics module allows the user to perform an economic analysis using system performance information from the simulation. Parameters such as capital costs, O & M expense, and system replacement costs are used to calculate system cash flows, payback periods, and numerous other economic indicators. This independent analyses tool allows the user to vary economic parameters without requiring that the performance simulation be rerun. The GRI allows the user to easily view the detailed output data in a graphical form without leaving the Hybrid2 environment. All of these features makes the Hybrid2 code the most user-friendly, versatile, and detailed long-term computer simulation model of hybrid power systems available. Hybrid2 is programmed in Microsoft VisualBASIC and uses a Microsoft Access Database. 1.2 General description of the Hybrid2 model Two types of simulation models for hybrid systems are widely used. The first type are known as "logistic" models. They are used primarily for long-term performance predictions and for providing input to economic analyses. Historically, most of these models have been of the time series type. The second type are called “dynamic” models, and these models consider very rapid fluctuations and system responses to changes in system parameters. Hybrid2 is of the former type, although it uses statistical analysis to more accurately model what occurs during a given time step. The Hybrid2 code can model systems with time series input data of any length but is recommended for time steps ranging from 5 minutes to 2 hours. Briefly, Hybrid2 was designed to provide a consistent platform for comparing a variety of wind/diesel hybrid power systems, a means of performance estimation for feasibility studies, a baseline for comparison with other models, and for providing insight into control system options. Hybrid2 is a combined probabilistic/time series model designed to study a wide variety of hybrid power systems. The types of hybrid systems that can be modeled include those with one or more diesel generators of different types (up to 7), up to 1000 wind turbines of 10 different types, storage batteries, four types of power conversion, dump load, photovoltaics, and three types of consumer loads on each bus. The model uses a statistical approach to account for the effect of short-term fluctuations in wind power and load and to consider the power smoothing effect of multiple wind turbines. The spacing between turbines in a multi-turbine system is also considered. Many different control strategies/options are included. These allow for minimum diesel operating power levels, diesel "back drive" using the diesel as a limited dump load, minimum diesel run time, and other specialized control and dispatching options. Two levels of output are available with the Hybrid2 code, a summary output file and a detailed output file. Both of these types of files are available for the simulation engine and the economic analysis. The summary file is a tab delineated ASCII text file that reports on the general results of the simulation and economic analysis. It includes the results as well as an overview of the project input. The summary files are designed to be a permanent record of the analysis and include all of the information required, except for the specific manufacturer's component data, to repeat an analysis even if the original data is misplaced. The detail files report simulation output and power flows for each time step of the simulation run and year of the economic analysis. This data is comma delimited can be imported into any spreadsheet for further analysis. The detailed analysis for the simulation engine is also available in two levels, a standard output that is generally used and an extended output that includes a number of the control variables associated with the operation of the code. Both outputs are described in greater detail in section 6.6. The Hybrid2 code provides a graphical results interface and integrated text editor that allows the user to view the detailed results file, as well as the summary files, without leaving the Hybrid2 environment. The program is structured in four blocks, figure 1) The first is the user-friendly GUI where the user builds the project to be analyzed. This includes setting up the power system, importing the loads and resource data, and tying all of them together through the project definition. The GUI includes a glossary of terms commonly associated with hybrid power systems as well as an extensive library of equipment ranging from wind turbines to diesels to assist the user in designing hybrid power systems. In addition, the library includes sample Figure 1: Structure of Hybrid2 power systems and projects that the user can use as a template. The GUI allows the user to create all aspects of the hybrid system project. The GUI also performs range checking on all user input; it also performs a completeness check to insure that every entry in each form has been filled in before the form can be saved. In addition, prior to the execution of the project simulation, Hybrid2 performs a consistency check to insure that everything in the project is in order. An example of such a check would be to insure that if two buses are being used, power conversion equipment to transfer power from one bus to the other has been specified. The second block consists of the simulation run where the actual performance of the hybrid system is calculated. The economics module is the third section of the code in which the performance of the system is combined with a number of user-input economic parameters to calculate a number of economic indicators (e.g. system payback periods and lifetime cost of energy). The final stage is the analysis of output where the user considers both the performance simulation and the economic analysis output. The user may then wish to modify the original project and conduct another simulation. The validation and verification of the Hybrid2 code is ongoing but very positive. Comparisons have been made between a number of operational hybrid power systems and the Hybrid2 code. The Hybrid2 code is also heavily based on its predecessor, HYBRID1, which has been extensively validated(1,2). The validation of the Hybrid2 code is discussed in greater detail in Section 8. 1.3 Current status of the Hybrid2 model The simulation engine and economics has undergone extensive testing over the past 6 months, and we are confident in its results. There still may well be errors in the code, especially for overly complex systems. The Hybrid2 code allows so many combinations of system and control structures that it would be virtually impossible to check every possible combination. Care should be taken to check the detailed output of each run for any inconsistencies. If an error is found, please inform the user support personnel at NREL or UMass so that the proper corrections can be made before subsequent versions are released. The GUI is much more robust than when the first version was released but there are still some problems that can cause annoyance code shutdowns. In most cases problems within the GUI will not have any ramifications other than annoyance. The use ofa database structure insures that once data has been entered, it is safe and a system failure will not result in lost work. The GRI also has not been completely tested but it does not contribute to the simulation and will have no impact on system results. In some instances you may be required to restart windows for the code to work properly after a number of code failures. 1.4 Plans for near future There are many plans for the further development of the Hybrid2, although all of them are dependent on the future funding of the Hybrid2 program over the next several years. Our first order of business will be to address any bugs found within the code. Provided in the appendix is a simple bug report form that we hope you will complete if you find any bugs while working with the code. We also plan to improve a number of other portions of the code, such as increasing the number of system consistency checks, upgrading the users manual, expanding the help functions provided with the code, and including other modules such as microhydro and different combustion generators. We hope that if you see potential areas of improvement that you will let us know. 1) J.F. Manwell, J.G. McGowan, E.I. Baring-Gould, W.Q. Jeffries, W.M. Stein, "Hybrid Systems Modeling: Development and Validation", Wind Engineering, Vol. 18, No. 5, p. 241, Brentwood, England, Multi-Science Publishing Company, LTD. 1994. 2) E.I. Baring-Gould, J.F. Manwell, W.Q. Jeffries, W.M. Stein, "Experimental Validation of the University of Massachusetts Wind/Diesel System Simulator Code, HYBRID1", Proceedings of the 13th ASME Wind Energy Symposium, New Orleans, LA. January, 1994, 2 The Hybrid2 Package 2.1 Getting Started Welcome to the Hybrid2 code. The first task of a new Hybrid2 user is to check and insure that all of the components of the Hybrid2 package have been included and that the computer system that is to be used for the Hybrid2 code meets the requirements listed below. It is important that the user read sections 2.2, Contents of the Hybrid2 Package, and 2.3, Required Hardware, before installing the code. Section 2.4, Installation Procedure, describes the code installation while section 2.5, Technical Support and Feedback, describes the user support that is being provided to the user. If you have any questions regarding what is included in your Hybrid2 package, what computer configuration should be used to run Hybrid2, or if you have any problems with the installation procedure, please feel free to call user support -- that’s what we are here for. 2.2 Contents of the Hybrid2 Package The Hybrid2 software package that is provided includes both the Hybrid2 software and several other documents. The package includes: ! The Hybrid2 Users Manual, this document. ! The Hybrid2 Installation Disks ( 3 disks) ! Copy of the Hybrid2 Theory Manual ! Copy of the initial model validation report The Hybrid2 Users Manual, this document, describes all of the basic functions of the Hybrid2 code; the installation process; and how to create, run and analyze a simulation using Hybrid2. The manual should answer most of the questions relating to the operation of the code and should be consulted first if any error arises. If you are still having problems with the operation of the Hybrid2 code, please feel free to contact user support for assistance. Hybrid2 is included on 3 installation disks. Included with the Hybrid2 code are all of the required software drivers, the on-line glossary and the library database of sample projects, resource files, power systems and components. Instructions for installing the Hybrid2 code are given in section 2.4. The Hybrid2 theory manual describes the operation of the code in detail and allows interested users to become familiar with the algorithms used in the Hybrid2 code. We strongly recommend that users familiarize themselves with the content of the theory manual even if they are not interested in the exact operation of the code. The manual tells the user what assumptions have been made in the development of the code and indicates the importance of a number of the system parameters. The Hybrid2 validation report is the first installment of a series of Hybrid2 validations being conducted at NREL. This first report describes our plan for verifying the Hybrid2 model and the initial results. The first validation report compares the Hybrid2 simulation of the Freya Island hybrid system to actual system performance data. This validation is of a wind/diesel/battery system and uses 17 days of 10 minute data collected at the site. We feel strongly that for the Hybrid2 code to be used successfully in modeling potential hybrid power systems, users must convince themselves of the model's validation and therefore we are committed to that effort. More information on the validation effort can be found in chapter 8. 2.3 Required Hardware We have made an effort to keep the hardware requirements associated with the operation of the Hybrid2 code as low as possible. Although we have not succeeded completely in this effort, the level of hardware required is minimal compared to most software codes. To operate the Hybrid2 code the host must provide: ! AnIBM or compatible PC. This PC must be at least a 486 micro-processor with a math co-processor. [ The faster the speed of the processor, the shorter the time required for each simulation run. A | year simulation run for a wind/diesel/battery system on a 486-50 is approximately 25 minutes while on a Pentium 66 the simulation requires approximately 8 minutes. ] ! 4 Meg of Random Access Memory (RAM) ! 15 MB of free hard disk space. Hybrid2 requires approximately 7 MB of memory but the detailed simulation result files can be quite lengthy. ! VGA video driver with 640 x 480 resolution ! Mouse ! 3.5” disc drive ! Microsoft Windows 95/98/NT Hybrid2 is configured to function on most laptop computers. 2.4 Installation Procedure Hybrid2 comes on 3 high density 3.5” disks. The user should insert disk 1 into drive A: or B: and then from the windows file command, run the Install.exe program on Disk 1. The Hybrid2 installation software will prompt the user for a directory name. The Hybrid2 directory must be placed on the first level of your computer's main directory ( i.e. C:\Hybrid2 ). However it can have any name, C:\Hy2 for example. The installation software will also install an icon into your windows environment for easy access to the Hybrid2 model. Following the installation procedure the Hybrid2 code can be run by selecting the code from your program directory or double clicking on the Hybrid2 icon. Hybrid2 can be removed from your computer by running Hybrid2 uninstall program what will also be loaded into the Hybrid2 directory. This program will remove any software drivers that were installed on your computer to run the Hybrid2 code. Some users, particularly users with laptops, may need an independent version of a specific driver that can’t be replaced during the installation procedure. If this occurs, a copy of the driver, Threed. VBX, has been provided on disk 3; this will have to be copied while in DOS because it is used to operate windows. The driver should be copied into the Windows/system directory. Note for Windows95 Users: The install program will prompt you to place the Hybrid2 subdirectory in C:\Program Files\Hybrid2. Hybrid2 must be placed in the root directory C:\Hybrid2, and, therefore, you must edit the installation path accordingly. 2.5 Technical Support and Feedback Technical support to all users is being provided by the University of Massachusetts. In addition, any feedback, bug report forms or just general comments about the software should be addressed there. Since user support will not be constantly available, we are recommending that most correspondence regarding problems should be completed via e-mail or fax. The use of e-mail will allow for a quick response to potential problems as well as facilitate the distribution of relevant questions and responses to all beta testers, regardless of who asked the question. In this light, we recommend that beta testers check their e-mail for any bug notices or further code clarifications on a regular basis. User support will generally be available afternoons on Monday, Wednesday and Friday for phone consultations. Technical Support questions should be directed to: Utama Abdulwahid Renewable Energy Research Laboratory Department of Mechanical Engineering University of Massachusetts Amherst, MA 01003 (413) 545-3916 (413) 545-1027 E-mail: Hybrid2@kira.ecs.umass.edu People interested in obtaining copies of Hybrid2 or additional information should contact : Ian Baring-Gould NREL/NWTC 1617 Cole Blvd Golden, CO 80401-3393 Phone (303) 384-7041 Fax (303) 384-6901 E-mail: Hybrid2@nrel.gov 2.6 Conventions Names of individual screens, windows, or tabs are in /talics. Menu commands are in bold. Buttons are shown in <inequality brackets>. File names and directories are shown in [square brackets]. 3 Structure of the Hybrid2 code 3.1 Program structure Hybrid2 divides projects into five branches that extend out from the Hybrid2/Project screen. Each of these five branches are defined in a 4 level structure as shown in figure 2. The four levels are the Project level, the Module level, the Subsystem level and the Resource/Load/Component level. Every project will contain elements from each level and each level is inclusive of the elements in the lower levels. Project Power System Base Case) {Economics} Module Module }| Module Module Sub-Syste' Sub-System Components Resource/Load Data /Component Level Figure 2: GUI Structure The Project level consists of all of the information that defines the project in question. The Project level specifies which modules are being used in the specific analysis and allows users to identify different modules that are to be used. The Module level defines the different elements of the project. There are five modules which correspond to the five branches from the Project. They are; 1) Loads, 2) Site/Resource, 3) Power System, 4) Economics and 5) Base Case Diesel System. Each module contains information that is specific to that area of the project. The Loads and Base Case Diesel System Modules are unique because they are defined explicitly for each project. The three other modules may be used in many different projects and, therefore, are saved independently of the project. Each of the modules are described briefly below with a more in-depth description saved for later in this document. ! The Loads Module describes all of the loads for the community being modeled. The type of loads and their names are specified in this module. The actual loads are held in independent records that are inserted into the Loads Module as required. This defines the particular combination of loads to be analyzed in the current project. Load records can be inserted in many different Load Modules. More information on system loads can be found in section 7.1. ! The Site/Resource Module specifies which resource files are going to be used in the analysis. The different resource files available are the wind speed, solar insolation and temperature. In addition specific information about each of the resources and/or the specific site are located in this module. The site/resource module is also very dependent on the location of the analysis, but it may contain resource data that was not collected at the specific site. Unlike the loads module, the site/resource module exists independently and can be inserted into a project as a unit. Importing data and creating site/resource modules is described in detail in section 7.2. ! The Power System Module describes the specific power system that is to be used in the analysis. The exact configuration of the power system, its components, and the control strategy are defined in this module. As with the Site/Resource Module, the power system can be created as a unit and then inserted into any number of distinct projects. The power system module is defined in depth in section 7.3. ! The Base Case Diesel System Module specifies all of the information used to define a preexisting diesel system, if present, or an all diesel system to compare with the hybrid power system. Like the loads, the base case module is linked to the project and cannot be saved independently for use in more than one project. The base case all-diesel system is described in section 7.4. ! The Economics Module contains all of the economic parameters that are required to perform an economic analysis. The user is required to enter all of the cost information about system components and operation. Because an economic analysis can be performed independently from the simulation engine, the economics is saved independent from the project. This module should be completed only after the power system has been completely defined. The Economics Module is described in section 5s The Subsystem level is used to describe the different components of the same type that make up a power system. Because the Power System can include multiple diesels, wind turbines, power converters, solar modules and batteries, the subsystem is used to define the parameters that are specific to each type of component. An example of such a subsystem would be a PV array. A PV array is made up of a number of off-the-shelf PV modules placed in a certain configuration with certain array parameters. The subsystem specifies which module will be used and the array configuration but it does not describe the specific characteristics of the module itself. The Resource/Load/Component level represents the lowest level in the Hybrid2 hierarchy. System component files include the parameters of each piece of equipment, like a specific wind turbine, PV module, diesel, and battery. The Component file contains all of the information to describe how that single piece of equipment functions, it’s efficiencies and cost. The load records in this level describe the specified type of community load, whether, AC primary load or DC optional load. These files may be either time series in nature, thus including one value for each time step in the simulation, or a standard file that provides information that is used for the whole simulation. The Resource data of the Component level includes all of the time series information for each resource that is to be used. The resource files also include information about the type of data and the conditions in which it was collected. The Graphical User Interface, GUI, allows the user to define each of the modules in any order. The only restriction is that only one module can be worked on at a time and most of the modules must be completed in full before it can be exited. This is done to insure that a module is not left partially completed and then included in a simulation run. The only exception to this is the Power System module that may be left before being completed. This is allowed because the Hybrid2 code performs a consistency check on the project before a simulation is performed and inconsistencies in the power system will cause the simulation to be canceled and the user returned to the Run Simulation window. We urge the user to quickly review each project before running a simulation to insure that everything is in order before the simulation is started. The first step of creating a project is to select <New> on the project screen and then name the project. The user should then specify the simulation time step in the lower right corner of the project screen. All of the time series data being used in the project will have to use the same time- series time step. We recommend that the user first define the loads using the Loads Module, then proceed to the Site/Resource Module, both of which use data dependent on the specific site in question. The user should then define the power system using the Power System Module. The all-diesel Base Case and Economics Module can be completed last if those analysis are going to be conducted. A project must contain Loads, Site/Resource information and a functioning Power System before a simulation can be conducted. The user may also define components and import data into the library without including them in any specific project. The Hybrid2 simulation engine uses ASCII text files to import all of the information needed to perform a simulation. The GUI currently writes out text files that the simulation engine uses in performing the simulation. All of the files used are saved with the name hy2sim and are saved in the hy2sim sub-directory of the Hybrid2 directory. The Hybrid2 code deletes all of these files whenever a new simulation is performed so that the user does not need to worry about deleting them. However, this function allows the user to maintain text copies of any of the records in the database by printing these files before they are deleted. This function is described in more detail in the Import/Export section of this manual. 3.2 UnitsUnits are defined in Hybrid2 in various places and although this may seem confusing, it was added to allow versatility and is actually quite simple. Units are defined on both the Module 10 level and the Component level. In this fashion, the units used to define the parameters in the Resource/Site Module can actually be different from the units in the Resource Component. For example, a Resource/Site Module can be defined using metric parameters while the wind speed resource is in English and the solar insolation is also in metric. The information on the Wind Resource tab will be displayed in English while the rest of the parameters on the Resource/Site screen will be displayed in Metric units. This function is duplicated in the Base case and Power System Modules. 3.3 Directory Structure The Hybrid2 code is linked to a Microsoft Access database that records all of the library in a database form. This separates the user from the need to maintain strict directories with regard to the project under consideration, as was the case in HYBRID code. The only data sets that are not included in a database form are all of the time series data records. The files for all of the time series data are held in a directory called [ts_data]. This directory must not be deleted or moved because the database will be unable to access that time series data. The Hybrid2 code will automatically delete any time series data that has been removed by the user from the Hybrid2 library. The second directory used by Hybrid2 is the [h2sim] directory. This directory must also remain intact and is used as the default directory for all code input and output. Because of the quantity of data that is generated by Hybrid2, we recommend that the users create and maintain a directory structure to separate the different project simulations they are working on. Hybrid2 result files, a short text file describing the simulations, and, optionally, a backup of the project, may be stored in separate sub-directories of the Hybrid2 root directory for future use. This will keep the Hybrid2 directory clean and reduce the risk of accidentally overwriting any Hybrid2 result files. 3.4 Code Speed On older computer systems the Hybrid2 code may run slowly. The GUI will talk a long time to move between windows and any simulation will take a long time to be conducted. The speed of the GUI can be improved by the addition of more internal memory, but short of that nothing can be done to increase the speed of the GUI. The simulation itself is very computational intensive and can require a great deal of time on older computer systems. We are presently unsure of what portions of the code are causing the slow down of the simulation engine, disk access speed, internal memory, or CPU computational speed in some iterative loops. The speed of the code is greatly dependent on the computer. Some yearly simulations can take minutes on some computers and nearly an hour on others. There are a few things that the user can keep in mind if simulations are requiring too much time. 1) Do not create a detailed output file for all the simulation runs that you are conducting. When conducting repeated analysis, use the summary file only and save the detailed file once you have narrowed the scope of your analysis. This will reduce the amount of disk access required by the simulation for each time step and can decrease the run time of the simulation by about 20%. 2) When running a simulation for a year, run a complete analysis for the year and then see what season(s) or month(s) will drive the system design. For example, a single month with low wind 11 speeds and a large load may well drive the battery bank size. Run all of the simulations to finalize the design only on this time period instead of the whole year. Once you are satisfied that the system will perform during the worst case season, then complete a final simulation for the whole year. Typical years can also be simulated using a week from each season, or a week from each month instead of running the complete year for each simulation. 12 4 Menu Commands The following is a description of the elements in the menu bar of the Hybrid2/Project window. 4.1 4.2 4.3 4.4 File: Program functions. Export/Import Projects: This allows the user to select a project and export it to a separate database file for transport. The user may also import a file from another Hybrid2 database by using the import function. See Section 5.3 for a description of project importing and exporting. Splash: Returns the user to the introduction window of Hybrid2. Exit: Exits and closes the Hybrid2 code. Run: Running a Hybrid2 simulation or an economic analysis. Performance Simulation: Allows the user to conduct a Hybrid2 simulation. See Section 6.3 for more information on running a simulation. Economics Simulation: Allows the user to conduct a Hybrid2 economic analysis. See Section 6.4 for more information on running an economic analysis. Results: Methods for viewing results Time Series Output: Opens the Hybrid2 graphical results interface, which allows users to view the detailed simulation results file while still in Hybrid2. Please consult Section 5.4 for more information regarding the graphics capability of Hybrid2. Summary File Output: Allows the user to view any of the summary files while still in the Hybrid2 interface. This feature is discussed in Section 5.5 of this manual. Help: Help services supplied with Hybrid2 Gap Filler: A software program that will fill gaps in wind, load, temperature and solar time series data files. This software requires that data be in a specific form with the missing data marked. This feature is discussed in Section 5.6 of this manual. Glossary: Access to the Hybrid2 glossary where a user may find the definitions of frequently used hybrid power system terms. The glossary is also accessed by double clicking with the right mouse button on the background of any Hybrid2 window. See Section 5.2 for a description of the Hybrid2 Glossary. Technical Assist: Provides information on accessing Hybrid2 technical assistance. Credit: Credits for the people who have been instrumental in the design, coding and development of Hybrid2. 13 5 Program Features 5.1 Library The Hybrid2 code includes a large number of records that make up a library of files for use in the project development. The Hybrid2 library includes sample projects, time series data, sample power systems and manufacturer's data on system components. The user may use the library records, modify library records, or enter data for components not included in the NREL distribution library. The records may be used in any number of projects simultaneously and can be deleted by the user. The user may choose to edit an existing library record to add an additional feature or update performance information. Edits to a record are permanent; that is the original data that has been replaced is lost. Therefore, to edit a record, the user must first copy the record and then make any modifications to that copy. All user records become part of the library and can be used at a later date and in multiple projects. All of the components of the NREL distribution library are "read only" records and cannot be replaced, altered or deleted by the user. The entries can be copied and then modified but the user will be prompted to assign a new name to the record in question. This procedure insures the accuracy of the distribution library. Ifa user is having problems conducting a simulation, data from the NREL library should be used to insure that the input parameters to the simulator are accurate. All of the data provided by NREL were taken from manufacturer's specifications. Users should take care to manage the size of the library because, although each record does not take much space, many records can slow down the operation of the user interface. Each of the library records for the specific type of module, resource or component is accessible by clicking the left mouse button on the underlined downward facing arrow on the window in question. Hybrid2 uses a phrase to identify each of the records in the library. The record titles should be as distinct and descriptive as possible so the user can easily identify the different records in their libraries. Two records can not have the same title description. 5.2 Glossary A glossary of terms is provided to assist the user in the construction of hybrid power systems. The glossary provides a definition for all of the inputs required for the Hybrid2 code as well as terms that are commonly associated with hybrid power systems. In addition to definitions, the glossary provides, where applicable, an example, default values, recommended ranges and hard limits for all code input parameters. The glossary is accessible on the Hybrid2/Project screen under the Help menu or by double clicking the right mouse button on the background of any Hybrid2 screen. 5.3 Import/Export Function The Hybrid2 GUI contains an import/export function that allows the user to transfer projects from one computer to another, or it can be a means of backing up projects that are not presently being used in Hybrid2. Hybrid2 creates a Microsoft Access transitional database that can be merged into another copy of Hybrid2. The import/export functions are accessible from the 14 Hybrid2/Project screen under the File label of the Menu bar. Users are allowed to import or export one complete project at a time. When importing a project, a few things need to be kept in mind. Since record descriptions are used as identifiers, each record of the same type, the PV modules for example, must have a unique description. If any of the records being imported have the same description as one already existing in the database, Hybrid2 will add the word IMPORT to the title. Hybrid2 will only allow one imported copy ofa specific record into the database. If an imported copy of a record already exists, the new record will not be imported. For this reason, after importing a project, the user should check to see if any duplicate records were made. If any records are duplicates, we recommend that they be replaced in the project by the original record already in the library and then the imported duplicate deleted. This will ensure that the Hybrid2 database will not be filled with duplicate records. Exporting projects serve two functions. The primary use will be to transfer projects from one copy of Hybrid2 to another. The second use of the exporting function will be to back up projects that are not currently being worked with. The exported project may then be deleted from Hybrid2 which will free up space in the database but still allows the project to be available if needed. When exporting projects, the user must specify the file name for the project to be saved as and select a project to be exported. When a project is exported, all of the supporting records are also exported into the transition database. To export a single file, the user will need to attach to a dummy project and then export that project. The user may also wish to print out files from the database. A printing function is not presently available although the user may save the Hybrid2 simulation engine input files before they are deleted by Hybrid2. As noted in the Program Structure section of this manual, the Hybrid2 GUI writes out text files that the simulation engine reads to run the simulation. The GUI will overwrite these files every time a simulation is performed. Because these files are simple text files, the user may start a simulation run and after the files are written, select the <No> option to not run the simulation. The GUI has already written the specified files and the user may -- using any text editor -- open, copy, and/or save them under a different name. All of these files have the name h2sim but the file extensions are different for each type of record -- project, power system, or component -- they describe. Appendix A contains a listing of the file extensions for each type of Hybrid2 record. 5.4 Graphical Results Interface The Hybrid2 code includes a Graphical Results Interface (GRI) that allows the user to view the results of a simulation from within the Hybrid2 code. The GRI can be opened from the Results menu of the Hybrid2/Project screen. It can be used to quickly look at the results of previous simulation runs or a run just completed. Once in the GRI, the user will need to open a detailed results file using the Open command from the File menu tab. Plots created with the graphics package can be copied and pasted into reports or other documents. The GRI can plot more than one time series but is limited to 6000 total data points. The GRI time series index assumes the 15 time step is in hours and thus the data is plotted as such although it is a series plot and can have any units. The GRI uses the detailed output record and thus will only work if one is generated. Users should note that the GRI can be rather slow if large data sets are being examined but it allows faster access to the detailed results file than most spreadsheet applications. 5.5 Text Editor Hybrid2 includes a simple text editor that can be used for viewing any of the summary results files created by Hybrid2 without switching to another code. Because the imbedded text editor has a limited buffer size of 36,000 characters, users should be wary of loading time series data files into the editor. 5.6 Gap Filler The gap filler software allows the user to fill in holes in resource or load data before the data is entered into Hybrid2. The gap filler is best applied to only short holes in the data, up to one day, but can be used for slightly longer time periods. The gap filler uses a Markov process to create a transitional matrix from a large section of continuous data. The matrix is then used to fill in smaller gaps in the data. The statistical character of the data as well as any diurnal pattern will be maintained. More information on the methods used in this procedure can be found in the Hybrid2 Theory Manual. The data gap filler can be found under the Help menu of the Hybrid2/Project screen. The user must first identify the data file to be fixed and specify a minimum value below which the data is assumed to be in error. This requires a certain degree of pre-processing to put the data into a proper form with all of the gaps in the data identified. To fix a data set, it first must be placed in the proper form; data should be in a single column followed by a line feed and a carriage return. A place holder should be inserted for each missing data point using a number significantly below any possible data point. Example where -999 is used for each missing data point. 22.34 <LF><CR> 24.54 <LF><CR> -999 <LF><CR> -999 <LF><CR> -999 <LF><CR> 29.23, <LF><CR> 30.69 <LF><CR> 27.12 | <LF><CR> The user will then be prompted for the file name of the repaired file. If the user is repairing holes in a solar resource data file, the user will also be prompted for additional data like the geographic location of the site and initial day of the data set being repaired. 16 6 Operating The Hybrid2 Code 6.1 Starting Hybrid2 The Hybrid2 software can be started either by double clicking on the Hybrid2 icon from the Windows Program Manager or double clicking on the Hybrid2.exe file in the Windows File Manager/Explorer. 6.2 Building a project Prior to executing a simulation, the user must construct the project and power system for the site being analyzed. Projects can be constructed in three ways -- piecing together records from the Hybrid2 library, modifying library files, and/or constructing new records from scratch. Each of these three options will likely be used in creating an actual project. The GUI simplifies this process using a windows environment to give the user easy access to all of the parameters that need to be defined. To construct a functioning project, the user must fill in all of the data requested by Hybrid2. The Hybrid2 library, distributed by NREL, includes records of every type to allow the user to select pre-defined components for use in the projects. The user may select any of the records from the pull-down menus associated with those systems and insert them in their project using the <Insert> button. As the user modifies or creates new records, the work becomes part of the library to allow for use at a later date. If the user has a completely new system he or she may create new records or modify existing records using the <New> or <Copy> buttons respectively. As stated before, any modifications made to a record are final and cannot be undone. To insure that the original data is not lost, the user must first copy a record and then make any modifications. Once a record has been selected, it must be inserted into the project, module or subsystem using <Insert>. Any record that has a record description must be inserted into a project for it to be included in the analysis. If the user does not wish to include a new record in a project, she or he will just not insert it into the project. The <Remove> button is the opposite of insert and will remove the record specified from the project. A more complete description of creating a project in Hybrid2 is described in section 7. 6.3 How to run a simulation A simulation is executed by selecting the option Performance Simulation under the Run menu bar of the Hybrid2/Project screen. The simulation run window prompts the user to enter data relevant to the simulation run. The user is also asked to specify the type of output and the file names for the output files. The program also asks if the user plans to perform an economic evaluation based on the simulation and if that is to be done in conjunction with the simulation run. The simulation engine creates a data file containing all of the performance information used for the economic evaluation only if requested to do so by the user. An economic evaluation can not be completed without the simulation performance data. Therefore, if an economic evaluation is to be completed using a particular simulation run, a simulation performance output file must be completed or an additional simulation run will be required. After the type and file name of output files have been specified, the user simply clicks the <OK> button to start a simulation. A 17 consistency check is performed on the project as the first step of the simulation processes. If the check fails, the user is returned to the Run Simulation window with an error message indicating the system conflict, discrepancy, and/or emission. Any errors in the project will have to be corrected before a simulation will run successfully. Once the consistency check has passed the simulation and, if applicable, the economics analysis will be conducted. A progress bar has been provided to allow the user to keep track of the simulation progress. When the simulation is completed and the result files are printed, the user is returned to the Run Simulation window. 6.4 How to run the economics separately An economic analysis can be completed by in two ways: either selecting the option Economics Simulation under the Run menu bar of the Hybrid2/Project screen or by specifying that an analysis is to be completed as part of a performance simulation run. Because the user may wish to conduct more than one economic analysis for a given simulation, the economics module of the Hybrid2 code was separated from the main simulation engine. If economic evaluations are to be completed for a specific simulation run, the user must initially specify that a Simulation Economic Parameter File be constructed when running a performance simulation. This can be done either by selecting the "Run Economics Now" or “Run Economics Later” choice from the Run Simulation window prior to running the simulation. This will cause the Hybrid2 to create a simulation performance file that is used by the Economics Module. As described in Section 7.5, Economic Module, this file contains all of the system performance data that is needed to complete an economic evaluation. The other piece of information required by the simulation to run an economics analysis is the economic input record created by the user in the GUI. An economic analysis is completed by specifying the Simulation Economic Parameter File to evaluate and the project economic input record from the Hybrid2 database. The user must then select the type of output wanted and specify the file names for the appropriate files. The Economics Module creates two types of output files, a summary report and a project cash flow report. The summary report is a text file that includes all of the economic indicators, like years to payback, internal rate of return, present worth and annualized system expenses. The summary report also provides a single cash flow for the project. The detailed output file is a spreadsheet formatted text file that provides a cash flow analysis for many system parameters. Cash flows for yearly income, specific expenses, system profits and the replacement cost of various components are given for each year of the projects economic life. The economic input record in the database can be modified and another economic evaluation completed to perform a parametric analysis on various economic considerations. This process can be repeated, either saving different versions of the economic input file or modifying a single record. The summary report constructed by the economic module records all of the input provided by the user and, thus, will act as a log of the inputs for each particular analysis. 6.5 Importing time series data Time series data is used to define primary loads as well as wind, solar and temperature resources. Some time series data has been included as part of the Hybrid2 library but the user will likely want to include their own data in the analysis of certain projects. This is done using the <Import> button located on the window tabs of any windows allowing data importing. Presently 18 any data that is imported into Hybrid2 must be put in the proper form before the import can be completed, this is discussed below. This manipulation can be done in any word processor or spreadsheet although the data must be saved in a text format to be imported into the database. Before importing data the user needs to create a new record for this data, using the <New> button, and fill in all of the information requested including the data time step. This data represents a specific place, time and conditions. Although it is useable in other locations, the original condition in which the data was collected should not be changed. The user should then, using the left mouse button, press the <Import> button. A file dialog box will appear prompting the user to select the file of time series data. Once the data file is selected the user will be prompted whether the data is in metric or English units and then it will be copied into the [ts_data] sub-directory of the Hybrid2 directory. Once imported it is recommended that the data be plotted and the statistics noted to insure that all of the data arrived successfully. The graphics will only print and calculate the statistics on the first 10,000 points of data although the whole data set is still present and can be used in a simulation. We also recommend that the user take advantage of the notes field to include important information about the data such as, how it was collected, calibration, when it was collected and the name of a contact people, if applicable, who collected the data. Once imported the time series data becomes part of the library and can be used in any project until it is deleted by the user. To import data, it first must be placed in the proper form, data should be in a single column followed by a line feed and a carriage return. Example: 22.34 <LF><CR> 24.54 <LF><CR> Ifa standard deviation for each time step is known, for wind and load time series data, and is being included it must be specified in the time series file next to the corresponding average separated by several spaces. Example: 22.34 3.245 <CR><LF> 24.54 3.933 <CR><LF> In this example 22.34 is the average for the time step and 3.245 is the standard deviation of the data over that average. The data file should not contain a header or any special characters and must be saved in a text format. The data file can be located anywhere on your system and will not be altered or deleted by the importing process. One limitation of the Hybrid2 software is that all of the time series data, both resource and load that is to be used in the same project must have the same time-step or averaging interval. This time-step must also be used as the Simulation Time Step during simulation runs. In addition, all of the time series data must be synchronized, not only daily but down to the time step. Obviously, if the load and resource data for a PV village system are 12 hours out of phase, with the peak solar output being generated by the simulator at midnight load time, the results of the simulation will be in error. 19 6.6 Description of the simulation output Hybrid2 provides output from both the simulation engine and the economic package. Two forms of output for each portion of the code are provided. The first file is a summary file while the second is a detailed output file. The summary output file for the simulation engine includes summations of all of the important power flows, performance of individual components, total fuel usage, and fuel savings. The summary file also includes enough information to recreate the project. This file allows the user to determine the performance of the modeled system and, if applicable, compare it to the base case all-diesel system. Using the summary file, the user can determine possible revisions to improve the performance of the hybrid system. The summary file is a tab-delimited text file that can be viewed and formatted in any word processing software or the text editor provided with Hybrid2. The detailed file is a space-delimited text file that includes time step by time step values for each important parameter associated with the hybrid system. The file can be viewed in the Hybrid2 Graphical Result Interface or imported into a standard spreadsheet. Two levels of detailed output are available, the standard detailed file includes parameters such as power, diesel fuel use, unmet load, system losses, and battery state of charge. This level of detail will be sufficient for most users to determine interactions between different components and the effectiveness of the control strategy selected by the user. The extended time series file includes all of the time series data specified in the standard version as well as parameters like the maximum and minimum net loads, ambient temperature, horizontal solar insolation, and losses associated with the discharge of a battery bank. The extended file is probably most useful in determining the accuracy of detailed performance data, system control logic, and detailed loss calculations. Both the standard and extended detailed output files will only provide results for components that are included in the project being simulated. This cuts down on the size of the files but they, depending on the complexity of the system and length of the simulation, can be more than two megabyte in size for a 1-year simulation. Because of the size of the detailed output files, users should take care to delete any unneeded or outdated time series output files. Appendix B provides a description of each time series output provided by the simulation engine. The output for the economics package also comes in a summary and detailed form. The summary file provides all of the economic figures of merit such as payback period, internal rate of return, and all of the economic input parameters that go into the analysis. The detailed output file includes a year-by-year breakdown or revenues, expenses, and overhaul expense schedules. The summary file is a tab-delimited text file, while the detailed file is a comma-delimited text file. More information on the output of the economics package is provided in the Economics Section of this document, section 7.5, as well as the Hybrid2 Theory Manual. 20 7 Creating a Project Creating a project is a task that we have tried to make as simple as possible. The use of the Hybrid2 library will allow the user to select components or even whole modules without needing to worry about any of the system details. If a more accurate analysis is needed, all of the parameters can be edited to more closely model the site in question. We recommend that the user follow these instructions to create the project. The first step of creating a project is to select <New> on the Hybrid2/Project screen and then name the project. The user should then specify the simulation time step in the lower right corner of the project screen. All of the time series data being used in the project will have to use the same time series time step. This time step must also be used as the Simulation Time Step during simulation runs. As an additional requirement, all of the time series data must be synchronized, not only daily, but down to the time step. The Project you are working on Libra k Hybrid2jProject fea ‘0 Copy the current Be ia tae ee Pam || opel haing anew a 3 j i yy name [Deering Alaska «ds (S| Soy |New |(ocite Jge | Delete the Project ‘A small native community in northern Alaska. The site includes a number of ane Start a new Project home as well as a few community buildings. The site presently has 4 diesel generators that are used for power. 7 Notes about the Proje The Simulation time step for the Project The different Modules that make up a Project 21 7.1 Loads Module Hybrid2 allows for a system to contain loads on both the AC and/or DC buses. The code also provides the use of three types of loads -- primary, deferrable, and optional. Primary loads are time series dependent while deferrable and optional loads are specified for all or part of the simulation period. A primary matrix load is a time-series load generated by Hybrid2 based on representative values input by the user. Each of the loads are defined on an individual tab, which can be accessed by clicking on the tab with the left button of your mouse. The Hybrid? library is accessible by clicking the left mouse button on the underlined down arrow next to the load description. Each of the library records can then be selected using the mouse. The time series data can be viewed using the <Plot> button on that tab. Once a load has been selected, it should be inserted into the project by clicking the <Insert> button on that specific tab. The description of the load will appear in the appropriate box in the top portion of the loads module. To remove a load from your project, simply press the appropriate <Remove> button with your mouse. All the AC and DC deferable and optional loads are defined by a series of load specifications. Each load is defined as a separate line in the specific grid, and there can be more then one load of each type. All the different types of loads are discussed in detail below. Importing data for the primary loads is done with the <Import> button and is discussed below. Once all of the loads for your particular site have been selected, clicking on the <OK> button will return the user to the Hybrid2/Project screen. The Project you are working on Loads Module - {Cuttyfuunk Istand, Case 1} ftt— Loads in Project Remove from Project Load Tabs Plot Function Data Import Insert into Project Data Statistics Done Defining Loads 22 7.1.1 Primary loads: The primary load is used to specify the on-demand load of the community under analysis. The primary load is made up of time series data, in which each time step of the simulation has a specified load. The primary load can also contain an inter-time step variability or standard deviation. The primary load must be supported by the power system. Any load that is not met and the amount of time for which the load was not met is reported in the summary output file. If a project includes optional or deferrable loads on either bus, a primary load must be included. The primary load is required because if the deferable load has not been met in its required period, the deferable load is transferred to the primary load. The user can specify a primary load record that consists of zeros (in other words, no load) to satisfy this demand. The inter-time step variability within the load can be specified in one of three ways. A standard deviation can be specified for each time step of the load; this value forms another string of time series input. One value for the standard deviation can be specified for the whole data set. An average variability in the load can be used instead of this standard deviation. This also applies to the entire data set. If detailed time series data is available, they can be imported into the library using the import function on the Primary load tabs of the loads module. Importing data is described in section 5.3, Importing time series data. Load time series data can include either an average value or an average and the corresponding standard deviation of the data for that average. 7.1.2 Primary Matrix Load: The second way to create a time series load is by using the primary load matrix function incorporated into the Hybrid2 code. This matrix allows the user to specify the average load for each hour of a typical day, and a monthly scale factor for each month of the year. The Hybrid2 code then uses the hour average and scale to create a yearly load profile. The user is still required to specify the average variability for the load. The Hybrid2 code includes a daily load profile generator that users can access to determine a daily load profile in the Hybrid2 matrix load generator called Load_gen.xls. This load generator uses an Excel spreadsheet and was originally created by Sergio Castedo of the American Wind Energy Association. Using this external package, the user specifies the different power needs for a community, defined by the number of specific energy devices, their rated power, and the number of hours of operation daily. This data set is used to generate a daily load profile that can be used in Hybrid2 to generate a yearly load profile. General operating instructions are provided with the software. If the user has more available data than is needed for the matrix load generator, it may be better to create a load time series using a spreadsheet and then import that data as a time series. This method, although more time consuming, will result in more accurate performance estimates if a single daily load profile does not capture the actual community load. Examples of such loads would be large variations in the daily load over a week -- such as weekend loads or market days - - and places with wide variations in the daily load profile because of the seasons -- as may be found in the far north or south. In places such as these, the user will have to decide if the increased accuracy of the simulation is worth the extra time used in creating a primary load profile outside on the Hybrid2 environment. 23 Loads Module = (Cuttyhunk Istand, Case 1} [Block Island Load” (Remove [Cutighonk seasonal edi k (Remove a ft ; renee | water heating load that peeks in the [j Plot of hour average Monthly scale factor starting with first month of the data Daily load profile starting with the hour from 12:00 PM to 1:00 AM 7.1.3 Deferrable Load: A deferrable load is an electrical load that contains a limited amount of storage and thus allows some leeway in when it is fulfilled. Deferrable loads may be postponed for some time while waiting to see if excess energy from renewable energy sources or from diesels forced to run at a minimum can provide the required energy. If the deferrable load is not met in its time period, the load is treated as a Primary Load and must be supplied immediately. Any failure to meet the load constitutes a power outage. Examples of a deferrable load are an ice maker or water cistern that must be filled on a regular basis. The time of day the load is met, however is of little concern. Two types of deferrable loads have been designed in Hybrid? -- the block and the running average method. Block average deferrable loads have a fixed time duration over which the load must be met. For example, every 24 hours the pump needs to be run at rated power for 8 hours. The user may specify a number of Block average loads, all of which run sequentially, with the last one defined operating for the remainder of the simulation. Each deferable load is operated for the same period of time. The running average method fills the load and then restarts the clock saying "now we have 16 hours before we may need to start the pump". The running average method allows for concurrent deferable loads with different deferral period. Both of these methods are described in the Hybrid2 theory manual and code glossary. Deferrable 24 loads can be on both the AC and/or DC busses simultaneously, or one bus alone. Ifa deferrable load is present on a bus, that bus must also contain a primary load. Each load is defined by four parameters: ! Rated power of each device. ! Duty cycle of its operation which describes the amount of time it must operate over its Deferral period. ! Deferral period which is how often the load must be filled. For Block average loads, only one deferral period is defined for all of the loads. Different Deferral Periods can be specified for each load when using the Running average method. ! Part or full load operation of the device. More detailed descriptions of each parameter are given in the Hybrid2 glossary, accessible by double clicking the right mouse button on the background of the main window. Loads Module ~ (Cuttyhunk Island, Case 1} [> Two defined loads Add an additional load Defines which type of load to use for Project Delete the highlighted load 7.1.4 Optional Load: An optional load represents a useful application for excess electricity. Here, excess energy is the energy that is left after supply of primary load, battery storage, and any 25 deferrable loads. Loads can be defined that use this energy instead of it being wasted. In the event that excess energy is not available to meet such a load, one of two circumstances will apply: the application is a need that may be met by other means, or the application is a convenience rather than a need and may be neglected indefinitely with no harm being done. The value of optional energy is that waste energy, which would normally have to be dissipated, is used to replace another source for power generation or heating. An example of an optional load is a water-heating system featuring both an electrical heating element and a combustible fuel. When extra power is available, it is used to heat water instead of being dissipated using a dump load. The use of the excess power has a monetary value because it replaced the fuel that would have been expended to heat the water. Optional loads can be on both the AC and/or DC buses simultaneously or on one bus alone. The optional load is defined in the same manner as the deferrable load except that only one load on each bus can be active at one time. Multiple optional loads can be defined but they are fulfilled in sequence with each one being fulfilled for the duration period specified by the user. An example of an optional load could be space heating for a northern community. One Operational Load Duration is defined for all of the loads ( say a month or 730 hours) and then 12 optional loads are defined using different duty cycles to describe the different seasonal heating requirements. Hybrid2 will start with the first optional load defined and run that for the specified Operational Load Duration, and then it will move to the next optional load. If no additional optional loads are defined and the simulation has not been completed, Hybrid2 will use the last optional load for the remainder of the simulation. Use of deferrable and optional loads are forms of load management and can greatly enhance the quantity of the loads that can be served by renewable energy and, thereby, the use of renewable energy. Power used for optional and deferrable loads can have economic value when it replaces other power sources or can be sold. It also allows the power system to use excess power when it is available instead of wasting the power through the use of a power dump. This increases the system flexibility and efficiency. 7.2 The Site/Resource Module and Resource Data The Site/Resource Module allows the user to create a combination of data and site parameters to include in different projects. The resource data records include information specific to the collection of the data, whereas the Site/Resource Module includes parameters that are specific to the particular site. For example, the Site/Resource Module shown below is for Cuttyhunk Island although the wind resource data was collected at Block Island, about 35 miles to the West/Southwest. The average wind resource will likely be the same but the local site conditions and turbulence may well differ. The Site/Resource module is saved as an independent record and may be used in any number of different projects. This was done so that the same site record may be used in a number of different but similar locations such as the numerous islands along the coast of Massachusetts and Rhode Island. Three types of resource input data can be used in simulation runs of Hybrid2 -- wind speed, solar insolation, and ambient temperature. The type of resource data that will be required will depend on the type of system being modeled. Accurate time series resource data are of great importance 26 in obtaining an accurate simulation of the system. Therefore, if data from the actual site in question are available, they should be used. Numerous techniques can be used to obtain resource data, some of which are discussed below. Time series data of wind (including fluctuations), insolation, ambient temperature, may be imported into the Hybrid2 database from the appropriate tab on the Site/Resource screen. The methods of importing data are covered in section 6.5, Importing Time Series Data. Before the data can be imported into the Hybrid2 database, it must be put in the proper form as discussed in section 6.5. Site record included in the Project Remove a Site record from the project d Case eat Insert a Site record a into the project coe SMe CEA kee ret odes (UA AILS a ee ‘[istand off the southern coast of Massachusetts, US to the west of Martha's Vineyard Coenotsh : Units of Site record : | insolation __ [Remove | Ambient Temperature [Remove | Remove time series , a "__[Cuttyhank Solar insolation data [Cuttyhunk temperature data (TS) data from Site wind Rerouce Parameters. Ground Reflectivay a [20 Temp tooth Ambient Temperature TS data in Site z a TS Data Tab _] {Block Island. RI wind data. Taken with | _ | [a DOE contract for the MOD 2 _ | Data Time Step (min) Import TS data Plot TS data “Time Series ua: zt a Insert TS date Avarines 538 (m/s) into site record Plot of TS data Units of time series (TS) data Data Statistics (only after plotting) To Wind Resource Parameter window Wind speed time series data can include not only the time interval data but also the standard deviation of the wind speed over that interval. Ifa standard deviation is not available the user may enter the average variability to be used in each discreet time step. When a standard deviation is included with the time series data, it should be prepared in a text form with each line containing the average value of wind speed, several spaces, and the standard deviation of the wind speed for that time step. 27 The user is also required to include a number of parameters associated with the data that is being used. These parameters -- such as anemometer height and pyranometer location are important characteristics of the data and should be reported properly. We also recommend that the user take advantage of the notes field to include important information about the data -- such as how they were collected and calibrated, when they were collected, and the name of a contact person, if applicable, who collected the data. Because the time series data was taken under specific conditions, once this record has been created, the data cannot be altered or copied. Values for the wind speed can be scaled to allow the time series data to be used with a different yearly average at another site for which the same wind speed distribution is judged to be appropriate. If no detailed resource data can be obtained for the site, the user will have to be more creative, and careful, about the data that are used for the simulation. There are a number of approaches that can be used to generate resource data but they all depend on the amount of data available from the site in question. The Hybrid2 library contains a number of wind time series data sets from various places in various climate regions. Most of these data sets contain only 6048 hours of data, 21 days per month for 12 months. This was done because of incomplete data and worries of using wind speed synthesis routines on large portions of missing data. If the user only has a yearly average for wind speed, the data file that most closely typifies the location of the site could be used with the wind speed scale factor used to adjust the average wind speed to that of the site. If monthly averages are known, the user could print out one of the data sets, as described in the Import/Export section of this document, modify the monthly averages using a spreadsheet, and then import the data back into Hybrid2 for the simulation. In addition, the wind resource parameters could be modified to better model the turbulence, spacing, and wind shear conditions at the site in question. Solar insolation and ambient temperature resource data are also included in the Hybrid2 library. Solar insolation and temperature data are usually easier to obtain because local topography will have a much smaller effect than is seen with wind data. Insolation and temperature data from an airport located 40 miles away are not likely to vary substantially from that at the site in question. However, local terrain conditions may have a great effect on the local wind speed and thus any wind data from the airport may be virtually useless. The creation of resource data is very complicated and great care must be taken in determining what data to use and what errors should be expected from their use. It should be clear to anybody using this code that an expertly designed system may fail miserably if the resource data used for the design is not accurate. The purpose of this manual is not a guide to resource assessment and, therefore, interested users should consult the reference section of this chapter for more information on this subject. But we recommend that a system should not be installed without some amount of reasonable data from a site in close proximity to the site under consideration. 7.3 Power Systems The Power System Module in Hybrid2 allows the user to create or specify a power system to be included in a project. The power system is based on a three-bus grid that includes an AC, DC, and shaft bus system. Specific types of hardware components are then included in each 28 The Power System(PS) in the Project aa remove the Power System from The Power System being edited le project Make copy of PS Create a new PS Delete the current PS te Porrer Sysiem Module - (Cuttyhunk Island Test system) Insert the current PS into the current Project PS notes Arrows indicate power flow Sub-systems of the Power System To define the Dispatch Strategy The loads connected to the current Project subsystem that is attached to one of the buses. Converters can be placed between the two buses and a control strategy can be defined to describe the interaction between the different components. The arrows on the Power System Module screen indicate the flow of power from the devices through the grid and act as a simple system one line diagram. Like the Site/resource records, the power system is defined and named separately and can be included in many different projects. The library of different power systems can be seen by clicking on the underlined down arrow just to the right of the power system description. The subsystem is used to describe which specific component of each type, and their quantities, is being included in the power system. The components describe a specific piece of equipment, like a wind turbine or diesel engine. Basically, the components are independent pieces of equipment that are combined using the subsystems to create the power system. An example of the difference between the subsystem and the components is found when defining a PV array. Each PV module is defined as a component and then included in the PV array subsystem. The subsystem describes the number of modules in the array, the presence of a maximum power point tracker, any array losses and the type of rack or tracker on which the modules are installed. The component, on the other hand, describes the operation of the specific module -- such as the 29 amount of power it will produce, the module voltage, and the module temperature coefficients. Each different Subsystem is defined by clicking the appropriate button with the left mouse button, selecting the desired Components and their number, defining any required system parameters, and then returning to the Power system window. PV module that makes up the PV array Number of Components and configurations that make up the PV array Remove the Component from the Sub-System DC PY Atray Sub-Sy.tem - (Deering Alaska} The Sub-System: defines what is in the Power System r The Component: a 7 se sped ic piece fof : ware 1000 3.4 149.8 15.9 Access to Component library Insert Component into the Sub-System 7.3.1 Configurations: Many different types of hybrid power system configurations are allowed using the Hybrid2 code. Systems can contain none or multiple wind turbines on either or both buses, none or multiple diesels and PV on one bus at a time, battery storage and a dump load. A number of different power conversion options have also been provided. The dispatch strategy that is used will greatly depend on the system configuration and, therefore, should be one of the final elements within the power system to be completed. The type of power system will also depend on the type of renewable resource available and the nature of the loads. For example a telecommunication repeater station in a northern location that will be served using DC power where the only resource is wind would not contain PV. In addition, the power system should be based on a DC bus because the load is strictly on the DC bus. Any configuration not violating the restrictions described in Configuration Restrictions, section 7.3.2 below, is allowed. 30 7.3.2 Configuration restrictions: A number of system configuration restrictions that have been imposed by the structure of the model. These restrictions are also based on the desirable system architecture so that impossible or impractical systems cannot be designed. There are six general system restrictions. ! Diesels can only be on one bus. A power system cannot have a combination of diesels on different buses as well as the shaft bus. ! Photovoltaics are only allowed on one bus at a time. ! Power systems can not have redundant power converters. A power system may have only one power converter in each direction. This would prohibit configurations that would include, for example, an inverter and a rotary converter. ! A power system that uses the DC bus must include battery storage. Integral to the DC bus is a voltage defined by these batteries. ! The battery bank voltage must be between 65% and 85% of the DC PV array voltage if a Maximum Power Point Tracker (MPPT) is not being used. If this is not the case errors in voltage matching between the battery and a DC PV array may result. ! A system with a coupled diesel present must include a rotary converter of approximately equal rating. A small number of other simulation restrictions are also included, such as the need for a control strategy if diesels or batteries are included in the system. These restrictions do not limit the configuration of power systems being modeled. The user will be warned of these restrictions when in the GUI. 7.3.3 Components: The power system is made up of a combination of components, each of which is specified by a set of parameters particular to that component. The components may either be selected by the user from the library pull down menus or created by the user. All of the information required to define a component should be readily available from the component manufacturer, although a little prodding may be necessary. This section describes each of the components and the information that is required to define them. 7.3.3.1 Wind Turbine: Hybrid2 divides wind turbines into two types, AC and DC. DC turbines are usually smaller in size, under 20 kW, and will most likely be used in smaller systems. AC turbines are larger, ranging from 10 kW up to 5 MW although AC turbines in the range of 10 to 250 kW will most likely be used in hybrid power systems. Turbines are defined in Hybrid2 mainly by their power curve, rated power, and hub height. Therefore, most types of conventional wind turbines can be modeled. The power generation by the turbine is determined by the wind speed and the power curve entered for the turbine. Several adjustments are made to the power and wind speed because of differences in heights between the turbine and anemometer, power smoothing, and air density. A complete description of the calculation of power from the wind turbines is included in the Hybrid2 Theory Manual. A power system is allowed to have up to 10 different types of wind turbines while the maximum number of turbines of each specific type is 100. Wind turbines can be placed on the AC and/or DC simultaneously. Wind turbines are 31 Two Components included in Sub-system The number of each specific Component in Sub-system DC Wind Turbine Module = {A cuttyhunk power system) Sub-system Beaerterer Oe ‘ormation, Jacobs 23-12.5, 12.5 kW turbine th e same for all ponents oft this type Access to [ ae Library ‘ , ‘ opy Component [Bergey BWC Excel 1OKW | |] wa a new name [Berney TOKW DC turbine for battery Insert Component chargi Bi ‘Wind, Co., ei ine ih Pesiy ave” Nomen, _ fC ee Delete Component Define new Comp. Geaphie depends on the Component Delete data from grid omponent manufacturer Add data to grid Comp nent information, available described in the AC and DC Wind Turbine Component window and although all of the information defining the turbines is identical, AC and DC turbines cannot be cross connected. If an economic analysis is being conducted, the replacement period and cost of each wind turbine need to be specified in the economic module. The order of the specification in the economics module should be the same as they are specified in the power system starting with the AC wind turbines. 7.3.3.2 Photovoltaic Module: A number of different types of solar panels can be modeled using the Hybrid2 code. Most PV modules can be broken into two types: crystalline and thin film. The crystalline type modules, polycrystalline or monocrystalline silicon for example, consist of a number of individual solar cells that are connected in series. Thin-film modules like the amorphous silicon (a-Si), cadmium indium selenide (CIS), or cadmium telluride (CdTe), are made up of one solar cell per module. Hybrid2 can model both types of modules. Power from the PV modules is calculated using a one-diode model, the most commonly used PV model. The one- diode model is not exact in modeling the performance of some PV modules (the Siemens M75, for example) but has the benefit of only requiring information readily available from module manufacturers. A PV array is defined by selecting a PV module and then inserting that into a PV 32 sub-system where all of the system parameters are specified. DC connected PV arrays without a MPPT need to be matched to the voltage of the battery bank. If the battery bank voltage is not between 65% and 85% of the PV array voltage, inconsistencies between the operation of the batteries and the PV array will result. If the DC connected PV array is connected through a MPPT, voltage correlation does not need to be considered. PV arrays that are connected to the AC bus must include an MPPT, which also acts as a dedicated inverter with a signal system efficiency. One of the problems with the PV power model being used in Hybrid2, as well as almost every available PV system simulation code, is that it does not model every type of module with the same accuracy. Some modules (most notably some Polycrysalline) are not modeled well using the one- diode model. This problem is primarily because of the shape of the PV module's I-V curve and the module's fill factor, a term describing the shape of the I-V curve. The effect of these inconsistences is that the power output from the module may be in error under certain conditions. An error message is given to remind the user of this shortcoming when a user has inserted a module into the PV array. It should be noted that this tradeoff in accuracy was made to model PV modules with information from a manufacture's specification sheet instead of requiring detailed module information and independent testing to determine the parameters required for the model. It should also be noted that almost every other hybrid simulation code that incorporates PV, including PVForm and WATTSUN-PV use this same model. More detailed information about the PV section of Hybrid2 and the one-diode mode is located in the Hybrid2 Theory Manual. 7.3.3.3 Diesels: Diesel gensets are also divided into two categories -- AC diesels and DC diesels. There are no specification differences between the two diesel types and both use the same input format and information but they cannot be cross connected. Diesel performance is defined by means of the rated diesel power, linear fuel curve and minimum power level. The fuel curve is the mass flow rate of fuel as a function of the diesel's power level. The use of a linear curve in place of a more complicated curve to represent the fuel use will result in some small errors. These errors could be minimized by linearizing the fuel curve over the area of general use instead of over the whole diesel operational range. The linear relation is used to calculate the fuel use of the hybrid system and determine optimal operation of multiple generator systems. In addition, curves that correspond to the locally available fuel should be used. The BTU content of fuels can vary in different parts of the world and this should be considered in detailed calculations. Diesels can only be included on one of the three buses for a given simulation. Up to seven diesels are allowed in both the hybrid power system and base case diesel system. All of the diesels may be of different types or a combination of a few different types. If an economic analysis is being conducted, the replacement time and cost of each diesel need to be specified in the same order as they are specified in the power system. The use of other generators, such as gas turbines, natural gas engines, and other combusters, can all be modeled using Hybrid2. The heart of Hybrid2’s “Diesel” algorithm is the linear curve of unit of fuel use per kW of power output. Any combuster that follows this relationship can be used. The restriction does exist that generators using different types of fuel can not be used in the same simulation because a single fuel consumption is 33) reported for all the generators. 7.3.3.4 Dump load: The dump load is a device that allows the release of power, usually through resistive air or water heaters, which maintains grid stability. If a system does not contain a dump load and the energy production goes above the required demand, the power system voltage and frequency can exceed acceptable limits. Power dispersed through the dump load is not used for productive applications and is assumed to be wasted. Dump loads, as all electrical equipment, have a specified rated power that they cannot exceed. If the power generation is above the demand load and the rating of the dump load, Hybrid2 reports this error as excess dump power in the summary and detailed output files. If any excess dump power is produced, the designed rated power of the dump load is probably inadequate. Dump loads are a critical element to most hybrid power systems. Ifa system has an abundance of dumped energy, an investigation of some ways to use that power, either through optional loads such as water or space heating or deferrable loads such as water pumping or ice making, should be conducted. Most DC power generation components include a virtual dump load because they are not able to generate power if an excess of power exists on the DC bus. This type of loss, known as spilled power, is not presently recorded in Hybrid2. 7.3.3.5 Batteries: Similar in nature to the PV system, each type of battery is considered an independent component and is specified in the battery bank subsystem. The subsystem is used to specify parameters such as the number of batteries, their configuration, initial state of charge and a bank-scale factor. This building block approach allows for the easy inclusion of new batteries into the Hybrid2 database. Hybrid2 uses the Extended Kinetic Battery Model (EKiBaM) developed at the University of Massachusetts to predict the performance of the battery bank, (Manwell, et al., 1995). The EKiBaM model takes into consideration the effects of voltage in charging and discharging, charging and discharging losses, and the effect of current on battery capacity. EKiBaM has been tested against real data for both Lead Acid and Nickel Cadmium (NiCad) batteries with good results and is based on research conducted at the Department of Energy BEST laboratory (Hyman, et al., 1986a). The battery model may work for other types of batteries, but this has not been experimentally confirmed. Hybrid2 currently uses a simple model requiring only the input of four types of data that can usually be obtained from a manufacturer's specification sheet. The first series of parameters is the battery capacity at various constant current discharge rates. The second is the battery voltages at the beginning and end of charging and discharging, specified as 20% and 80% state of charge. The third set of parameters is the battery life defined by a depth of discharge (DoD) vs. cycles to failure (CtF) curve. The last parameter required for the battery model is the internal resistance of the battery. If life information is not available for a battery, a nominal life can be specified. Ifa system contains a DC connected PV array without an MPPT, the voltage of the battery bank will need to be matched to the voltage of the PV array. Ifthe battery bank voltage is not between 65% and 85% of the PV array voltage, inconsistencies between the operation of the batteries and the PV array will result. Ifthe DC connected PV array is connected through a MPPT, voltage correlation does not need to be considered. A short primer on batteries has been included in Appendix C. This describes some of the important considerations about the use of batteries in hybrid power systems. 34 More information on the EKiBaM model and the battery algorithms can be found in the Hybrid2 Theory Manual. 7.3.3.6 Power Conversion: Four types of power converters may be used in the Hybrid2 code; inverters, rectifiers, bi-directional converters and rotary converters. All converters are modeled in the same fashion, a rated power and a linear efficiency curve generated from a no-load loss and a full-load efficiency. The bi-directional converter uses different efficiency curves for the two directions of power flows the rotary converter combines the efficiencies for the AC and DC portions of the converter. One restriction in the use of power converters is that redundant converters cannot be used in the power system. For example, this restriction would, not allow the use of a bi-directional converter and an inverter in the same power system. Converters can be specified as either switched or parallel in operation. Parallel inverters are ones that can be operated in parallel with another generating source on the AC bus, such as a diesel. A switched inverter cannot synchronize with another generating device and, thus, may only operate when no other generation devices are connected to the AC grid. Parallel inverters are inherently more complex and, thus, usually more expensive. 7.3.3.7 Synchronous Condenser: The synchronous condenser is a device placed on the AC bus that will maintain grid stability if there are no other controlling devices operating. In most hybrid systems; either a generator or an advanced self-commutating inverter is used to control system voltage, frequency and provide reactive power to the AC bus. The device operates as a large AC motor and flywheel that is provided power from any other operating source and then maintains the system stability. The condenser, as presently configured in Hybrid2, acts as a constant parasitic loss placed on the AC bus. This device is considered operating at all times, whether an alternative system controlling device is operating or not. This device is most applicable either in larger wind/diesel systems where all of the diesels will be shut off or in systems incorporating a rotary converter. 7.3.3.8 Dispatch: All power systems must also include a control strategy that describes the interactions between its components. Depending on the configuration of the system under design, the user will only have to define certain parameters. A user will have to be careful about changing the configuration of a power system without corresponding changes in the dispatch strategy. Such an oversight may cause problems or errors when running the simulation. Due to the complexity of system dispatch, Hybrid2 has incorporated a Simple Dispatch Strategy Window to allow users to select one of five commonly used dispatch options. Each of these options is described in brief while a more detailed description is provided in both Appendix D of this manual and in the online glossary included in Hybrid2. If the user would like to take advantage of the full array of control options provided with the software, the user may select <Advanced Control Options> from this window. The Advanced dispatch strategies provided in Hybrid2 are divided into three sections based on the power system configuration: Battery Dispatch, Diesel Dispatch, and Battery and Diesel Dispatch. The level and type of input that is required from the user depends on configuration of the power system being used. The user may 35 also chose to select one of the 12 strategies included in the library either in its entirety or as a base for their own control strategies. Each of these strategies are described at length in Appendix D and the software glossary. Insert a simple strategy Control strategy selected To select an advanced control strategy The hybrid system dispatch allowed by Hybrid2 is primarily divided into the following three categories: Battery Dispatch: The only parameter that must be specified for a system containing a battery but no diesel is the minimum charge level of the battery. Batteries may not be discharged below this level even if it results in a loss of the load. Diesel Dispatch: When a diesel is included in a system but batteries are not, questions such as the diesel minimum run time and the order of diesel dispatch must be defined. One of the control parameters provided for the diesel operation is a period of forced shut off. This period uses a 24- hour day with the action starting at the start of the hour. However an anomaly in the code occurs at midnight that requires the use of a 25th hour. Ifthe user does not want the diesel to run from 10PM to 7AM, they must specify the first forced off period being from 22 to 25 (hour 22 to hour 36 1) and the second from | to 6 (hour | to hour 6). Ifthe user wishes to use a user prescribed Diesel Dispatch Order then the first configuration should be all diesels off. If this is not the case, the selected diesel will remain active, regardless of the selection for the Allowed Diesel Shutdown. Another choice that the user may specify is an offset to be used in dispatching the diesel engines. Hybrid2 controls the operation of diesels based on user selection and a parameter called the netload. The netload is defined as the load on a specific bus minus the power generated by renewables. Using this definition, a negative netload indicates that there is a surplus of energy on that specific bus. In systems with storage, the dispatching of the diesels is not critical because the storage can make up any shortfalls in power over a time step. In systems without storage system stability becomes a very important factor because if the netload ever climbs above zero, a grid instability, and potentially a system failure, across. To protect against this happening, the user may specify an Offset in Netload so that Hybrid2 will dispatch the diesel before it really needed. This factor of safety is used frequently in systems with little or no storage. Battery and Diesel Dispatch: When a system includes both batteries and diesels, the user must provide the code with all of the parameters for the battery-only system, diesel-only system, as well as their interactions. These interactions includes when the batteries should be charged and with what, how they should be discharged, when the diesel should start and stop, and what level the diesels should operate at when they are operational. Differences in dispatch can greatly affect the system operation and thus the system economics. To help the user in the selection of a dispatch strategy, 12 different generic strategies have been included in the Hybrid2 library and are described in detail in Appendix D. It should be noted that a good deal of the work in relation to the different dispatch options available is the result of work by Dennis Barley (Barley, 1996). 7.4 Base Case To use as a comparison to the hybrid simulation, the Hybrid2 code allows for the specification of a Base Case all-diesel system. The base case is envisioned as a diesel plant that may already be in the community in question or one that is being considered instead of the hybrid power system. The base case system is described by one or more diesels, some operation criteria and a dispatch order. The loads that are used for the base case are the sum of the primary load(s) and the deferrable load(s). Optional loads are not considered by the base-case system. af Types and number of diesels in Base Case(BC) diesel system Number of each type of diesels Base Case‘ dodule - {Cuttyhunk Island, Case BC diesel dispatch and contro Comp ponent ormation The base-case diesel system is configured by opening the Base Case Module screen and selecting the diesel(s) that are to be included in the base-case system. The diesel base case can contain up to seven diesels, each of which can be of a different type and may be different than the ones specified for the hybrid system. The base-case diesel system is assumed to be based on an AC bus and thus only the AC diesel library is given. The user is also required to specify some rudimentary control and dispatching for the all-diesel system. If an economics simulation is being performed the user may also specify a number of costs associated with the diesel system. Care must be taken to accurately describe the operation of the diesels at an existing diesel plant if a retrofit comparison is being conducted. Some time should be spent determining the size, operating characteristics and operational order of any diesels present at any site under investigation. This should be done to conduct an accurate model of the existing system and because diesels present at the site may be used in the hybrid power system. 38 . 7.5 Economics Hybrid2 includes a detailed economic model that allows the user to determine basic economic figures for a particular simulation run. The economics engine uses performance information from the simulation run and economic data supplied by the user to calculate parameters such as payback period, internal rate of return, cash flow and equipment replacement expenses. The user has wide versatility in determining the expenses of the project and what detail of inputs to include. Parameters such as grid extension, importation tariffs, system administration costs and taxes can be included in the analysis. The economic package has been provided so that the user may Economics Module included in Project Economics Module undr Edit Econo mies. Module - {Cuttyhunk Island, Case 1) Insert Economics into Project 8h fo ca [erro | [sr100 conduct comparisons between differing hybrid possibilities, other power solutions, and to determine ballpark costs. Hybrid2 will also allow a user to conduct parametric analysis on certain cost parameters, such as fuel price, discount rate, and inflation rate, to help determine how the value of certain parameters can affect the viability of the project. As we recommended for the results of the simulation engine, after a certain system configuration has been defined by iterative 39 use of the Hybrid2 code, the user should complete a detailed system design and economic analysis to determine the true viability of the power system being proposed. before an economic simulation can be completed, the user must complete the economics portion of the project, found in the Economics Module. This version of Hybrid2 requires that the user manually input the total equipment cost specifications even if these numbers appear in the individual component screens. In future versions of the Hybrid2 code, the component costs will automatically be calculated from the individual component descriptions. The user must then run, or have run, a simulation that specified that an economic analysis is to be conducted. This is required because the Hybrid2 code will only calculate and produce an economic performance file if requested to do so by the user. When conducting an economic evaluation independently of the simulation engine, the user must specify the economic performance file as well as the user input economic parameter record to be used. The user may use the economic performance file any number of times to perform a parametric analysis. The Economic Summary Results file includes all of the information contained in the user input Economic Parameter Record so that a record is maintained if the user economic parameters are changed. As configured, the economic package does not provide for the replacement of diesel gensets or wind turbines over the projects’ financial life. These figures can be included using either the operation and maintenance or overhaul costs specified in the user input economic parameter record. For further information regarding the economic package in Hybrid2, please refer to the Hybrid2 Theory Manual. References 1) Baker, R. W., Whitney, R. L., and Hewson, E. W.; ““A Low-Level Wind Measurement Technique of Wind Generator Siting.” Wind Engineering, Vol 3, No. 2, pp 107-114, 1979. 2) Stevens, M. J. M., and Smulders, P. T., “The Estimation of the Parameters of the Weibull Wind Speed Distribution for Wind Energy Utilization Purposes.” Wind Engineering, Vol 3, No 2: pp. 132-146; 1979. 3) Hiester, T. R., and Pennell, W. T., The Meteorological Aspects of Siting Large Wind Turbines, DOE Report PNL-2522, Pacific Northwest Laboratories, Richland, Washington, January, 1981. 4) Panofsky, H., Shirer, H. N., Lipshutz, R., and Larko, D., ““A Model for Wind Spectra over Uniform and Complex Terrain.” AIAA/SERI Wind Energy Conference proceedings, Boulder, CO, pg. 194, April, 1980. 5) Frost, W., and Smith, C. F., “Wind Characteristics Over Complex Terrain Relative to WECS Siting.” AIAA/SERI Wind Energy Conference, Boulder, CO, pg. 185, April, 1980. 6) Wegley, H. L., Ramsdell, J. V., Orgill, M. M. and Drake, R. L., A Siting Handbook for Small Wind Energy Conversion Systems, DOE report PNL-2521 Rev 1, Pacific Northwest Laboratories, Richland, Washington, March, 1980. 7) Manwell, J.F., McGowan J.G., Baring-Gould, E,I, and Stein, W. "Recent Progress in Battery Models for Hybrid Wind Power Systems." Proceedings of the 1995 American Wind Energy Association, Washington, DC, March, 1995. 40 8) Hyman, E., et al., "Modeling and Computerized Characterization of Lead-Acid Battery Discharges." BEST Facility Topical Report, RD 83-1, EPRI, 1986a. 9) Barley, C. D. (1996). "Modeling and Optimization of Dispatch Strategies for Remote Hybrid Power Systems." Ph.D. Thesis, Fort Collins, CO: Colorado State University; pp. 14-31. 4) 8 Summary of Test Program As with any simulation model, Hybrid2 must be tested to ensure that it is sound and to build confidence in the use of the model. The model developers, NREL and the University of Massachusetts, are conducting a test program with three main components -- verification, validation, and beta-testing. We expect the outcomes of Hybrid2 testing will make it possible for us to establish confidence that the model is technically sound, to demonstrate its effectiveness and usefulness, and to clearly identify limitations of which users should be aware. We also expect to demonstrate that model results have a reasonable correspondence to a few real systems for which historical data is available. Verification is the process of confirming that the selected mathematical models have been accurately expressed in the source code. Essentially, this means debugging the code to ensure that the programming has been done correctly. The verification consists of designing probable scenarios for which the output can be determined by hand calculations prior to the simulation. The simulation is then conducted and compared to the expected results. Any discrepancies are considered and corrections to the model are made accordingly. The Verification efforts were completed at the University of Massachusetts prior to the release of the software code. These tests include preforming over 300 different simulations using 68 different configurations. A verification exercise was conducted using data from Block Island, RI in addition to an analysis of the results of the HYBRID1 validation procedure and its applicability to the Hybrid2 code. HYBRID1, developed at the University of Massachusetts with support from NREL, was the predecessor to the Hybrid2 code. (Manwell et al., 1994) HYBRID] isa wind/diesel/photovoltaic/battery model much like Hybrid2 but limited in scope and versatility. The HYBRID1 model underwent a strenuous validation effort, which included more than 12 test comparisons between the model and the University of Massachusetts Wind/Diesel Test Bed, (Baring-Gould et. al, 1994 and Baring-Gould, 1995). This experimental work acts as further evidence of the validity of the Hybrid2 code. Validation refers to comparisons of simulated performance to measured performance data from operating systems. Validation is useful to demonstrate the degree of correspondence between the model and real power systems and to identify limitations of the model. Four validations planned for Hybrid2 are noted in table 1. (Others may be done as data sets become available and resources permit.) Beta-testing is model testing conducted by individuals outside of the development team. A group of about 30 potential users of Hybrid2 was trained to use the model and then asked to exercise the model to simulate power systems of interest to them. The beta-testers have provided feedback as to model usability, effectiveness, and acceptance. Beta-test results have been qualitative to a great degree. Nevertheless, they are an important measure of the overall effectiveness of the model. 42 Table 1. Hybrid2 Validation Tests Source of Measured Data Power System Description Length of Data Set, Sampling Rate Froya Island, Norway Wind/Diesel/Battery/Dump Load ]| 17 days of 50 kW nominal 10-minute data Xcalac, Mexico Wind/PV/Battery 83 days of 40 kW nominal 1-hour data New World Power Technology Wind/Diesel/Battery/Dump Load } Testing underway 2/96, Corp. tested at NREL 50 kW nominal 10-minute data Wind/Diesel System Test Bed 5 Different Configurations of 12 data sets, University of Massachusetts Wind/Diesel/Battery/Dump | each consisting of 15 kW nominal 2 hours of 2-sec data References 1) J.F. Manwell, J.G. McGowan, E.I. Baring-Gould, W.Q. Jeffries, W.M. Stein, "Hybrid Systems Modeling: Development and Validation", Wind Engineering, Vol. 18, No. 5, p. 241, Brentwood, England, Multi-Science Publishing Company, LTD. 1994. 2) E.I. Baring-Gould, J.F. Manwell, W.Q. Jeffries, W.M. Stein, "Experimental Validation of the University of Massachusetts Wind/Diesel System Simulator Code, HYBRID1", Proceedings of the 13th ASME Wind Energy Symposium, New Orleans, LA. January, 1994. 3)Baring-Gould, E. I. Experimental Validation of the University of Massachusetts Wind/Diesel System Simulator Code, HYBRIDI, M.S.M.E. Thesis, Amherst, MA: University of Massachusetts of Amherst, May, 1995. 43 9 Frequently Asked Questions. Q: Why do I get a "Data Type Mismatch Error" as soon as I start running a project simulation? A: The most likely problem is that one of the data sets that you imported into Hybrid2 had a header of some kind attached to it -- perhaps a header to the column that you exported from your spreadsheet. To verify this, run the project again, but when you get the message "Do you want to run the simulation now?" switch to a text editor or word processor by using an <Alt> <Tab> combination. Once there, open up the h2sim.acp, h2sim.dcp, h2sim.wnd, h2sim.sol and h2sim.amb files. If, immediately after the "Code for fluctuations" line, there are characters or text before the test data, then that data set will have to be imported again without the additional text. Q: I ran a simulation with wind turbines but am getting no wind turbine power in any of the output files, why? A: Check to make sure that you have the air density correction factor set to a non-zero number. The air density is found in the Wind Parameter window, which is accessible from the Site/Resource window. If this is not the case, go back to the power system that you defined and check that the wind turbines you specified are displayed in the proper subsystem window. Q: Why am I not getting any power from my PV array? A: First check to see that the PV array efficiency and the MPPT efficiency, both found on the PV Subsystem window, are right and were not entered as a fractions. If this is not the problem, plot out the solar insolation time series data, either from a detailed result file or on the site/resource window, and make sure that the input data is correct. Q: Why are the base case diesels not running? A: Most likely the configuration for the base case diesels has not been set. Go to the Base Case diesel window and look in the upper right hand corner. Ifa diesel configuration has not been set, either computer controlled or by manually specifying which diesel should operate, none will. The easiest solution is to check the box marked Computer Optimized. Q: Why am I getting a “No Economic Record Specified” error when running the economics? A: Check to see that the Notes field for your Economics record does not say “None.” If it does, Hybrid2 thinks it is an empty record and won’t let you use it. Just type something into the notes field of the economics record. Q: Why do I get a “Division by Zero” error right after I run a performance simulation? A: There could be a number of reasons but the most common is that the battery was not defined properly. The two things to check is to make sure that an Internal Resistance is specified on the Battery Voltage tab of the Battery Window. Another possibility is that if the user entered a new battery, the Calculate button was not used. Check this and if this does not fix the problem, call the Hybrid2 user support line at the University of Massachusetts. 44 Appendixes AppendixcA: Output File Extensions) arse aoe cee eer eee eoeea 46 Appendix B: Description of Hybrid2 Detailed Output File ..................000. 48 Appendixs@4Battery Useybrimen iets ion sealer eee aa Sil AppendixaD «Dispatch strategies jar oe eaeeee te ec eereeeor ec oe ECC EaEniot a3 Appendix.EsHybrid2;Bug: Response Horm nei nee ease eee ener 59 45 Appendix A: Output File Extensions The output files created by the GUI for the simulation engine are written in the C:\Hybrid2\H2sim directory and all have the same file name, h2sim. The individual files can be identified using the file extensions that are listed below. If more than one type of file has been created the file name is extended to h2him1., h2sim2. and so on. The files are deleted when a new project simulation is run. Project Files -prj (project files) Module Files sit (site data) _pow (power systems) .eci (economics data) Resource Files -wnd (wind speed) -sol (solar insolation) -amb (temperature) Load Files .acp (AC primary loads, time series) .acd (AC deferrable loads) .aco (AC optional loads) .dep (DC primary loads, time series) «ded (DC deferrable loads) .dco (DC optional loads) Component .ctl (dispatch parameter file) -acw (AC-connected wind turbines) _pvm (PV modules) .acg (AC-connected gensets) .dmp (dump loads, AC only) .dcw (DC-connected wind turbines) .deg (DC-connected gensets) -btr (batteries) -enb (bi-directional inverter) -cni (inverter) .cnr (rectifier) .cns (rotary converter) 46 Recommended User-Defined Output Extensions .sum (simulation summary file) .det (detailed file w/ hourly results, contingent on user choice) .ecO (simulation economic performance file created by the simulation _ engine) .eCs (economics summary output, from the economics algorithm) .ecd (economics detailed output, from the economics algorithm) 47 Appendix B: Description of Hybrid2 Detailed Output File Hybrid2 can write a detailed output file that will provide the user with a time step by time step description of many different system parameters. Hybrid2 allows for two types of detailed output, standard and detailed. Below is a short description of each column of output. Hybrid2 will not report details for systems that are not present in the system being simulated. For example, if your system does not contain DC wind turbines the DC wind turbine power will not be given. Standard output: Primary_AC: The average AC primary load for that time step. Any load specified as an AC primary load. This column does not represent power supplied to the load, only what was called for. Defer_AC_1: Power delivered to the first AC deferrable load during that time step. Defer_AC_2: Power delivered to the Second AC deferrable load during that time step. Optional_AC: Power delivered to the AC optional load during that time step. Primary_DC: The average DC primary load for that time step. Any load specified as a DC primary load. This column does not represent power supplied to the load, only what was called for. Defer_DC_1: Power delivered to the first DC deferrable load during that time step. Defer_DC_2: Power delivered to the second DC deferrable load during that time step. Optional_DC: Power delivered to the DC optional load during that time step. Unmet_Load: Any primary and deferrable load, both AC and DC, that was not met by the power system for that time step. Spilled: The power lost by any mismatch between DC generators and the battery bank. For example if a DC PV array is undersized and the voltage is below that of the battery bank, the power can not be used. Wtg_AC: The power generated by all of the AC wind turbines in the power system. PV_AC: The total power generated by the PV array if it is located on the AC bus. Diesel_AC: The power generated by all of the AC combustion generators. Dump_AC: The power supplied to the AC dump load. This indicates an excess of power that is being wasted. Dump_AC_XS: Any power produced in addition to all of the required loads as well as the rated power of the dump load. It also indicates that the dump load is undersized or the system power generation is oversized. This indicates that the power system as designed is unstable and should be redesigned by the reduction in power sources, increase of storage, or installation of an additional optional or deferrable load. Wtg_DC: The power generated by all of the DC wind turbines in the power system. PV_DC: The total power generated by the PV array if it is located on the DC bus. This will be different than the actual power received on the DC bus because of voltage losses associated with the battery bank. Diesel_DC: The power generated by all of the DC combustion generators. 48 Diesel_Shaft: The power generated by the engine connected to a rotary converter in a three-bus power system. Dump_DC: The power supplied to the DC dump load. This indicates an excess of power that is being wasted. Dump_DC_XS: Any power produced above all of the required load as well as the rated power of the dump load. This indicates that the dump load is undersized or the system power generation is oversized. . This indicates that the power system as designed is unstable and should be redesigned by the reduction in power sources, increase of storage, or installation of an additional optional or deferrable load. Store_In: Energy put into the battery bank during the time step. Store_Out: Energy removed from the battery bank during the time step . Losses: All system losses associated with power conversion and the use of the battery storage. Voltage: The voltage of the battery bank at the end of the time step. Storage: The capacity of the battery bank at the end of the time step. V_Hub: The wind speed at hub height of the first turbine. Sun_Slope: The solar irradiation falling on the solar array taking into consideration the position of the sun and the slope of the PV array. Fuel_Hybrid: The total fuel consumed by all of the generators in the hybrid system during that time step. Fuel_Base: The total fuel consumption of all of the generators in the base-case all diesel system during that time step. PV_POWER_DC: Actual energy received on the DC bus from the PV array. This will be less than that produced by the PV array because of voltage losses associated with the battery bank. PV_XMPT_LOS: Losses associated with the use of a Maximum Power Point Tracker Additional parameters in the extended detailed output. Balance: The system power balance, meaning the power from all of the power sources minus all of the power sinks. This should always add up to zero, or very close to it. >Load_Max_AC: The maximum load on the AC bus during the time step because of variation in the load. Load_Min_AC: The minimum load on the AC bus during the time step because of variations in the load. Net_Ld_AC: The average net load on the AC bus. The net load is the total load minus the power produced by renewables during the time step. Basically it represents the amount of power that will be required from the battery bank or diesels. This value is used during dispatching the diesels and batteries. A negative value indicates power generation in excess of that needed to meat the power demand. » Net_Ld_Max_AC: The statistical maximum net load during the time step on the AC bus. The power system must be able to supply this load to prevent a system failure during the time step. Net_Ld_Min_AC: The statistical minimum net load during the time step on the AC bus. Load_Max_DC: See Load_Max_AC but as it applies to the DC bus. Load_Min_DC: See Load_Min_AC but as it applies to the DC bus. 49 = Net_Ld_DC: See Net_Ld_AC but as it applies to the DC bus. Net_Ld_Max_DC: See Net_Ld_Max_AC but as it applies to the DC bus. Net_Ld_Min_DC: See Net_Ld_Min_AC but as it applies to the DC bus. Loss_Chg: Losses associated with the charging of the battery bank. This includes converter losses if the energy came from the AC bus. Loss_Dis: Losses associated with the discharging of the battery bank. This includes converter losses if the energy was going to the AC bus. Time_Not_Met_AC: The amount of time that the load on the AC bus was not met. This time period can be less than a time step because the maximum net load may be much larger than the average net load. Time_Not_Met_DC: The amount of time that the load on the DC bus was not met. This time period can be less than a time step because the maximum net load may be much larger than the average net load. PV_Tempr: The temperature of the PV modules of the PV array. Sun_Horiz: The solar irradiation on a plane horizontal to the earth. Sun_Kt: The portion of defuse radiation as collected by the PV panel. V_Anem: The anemometer wind speed; it should be the exact wind speed entered in the wind resource file. Ambient_Tempr: Ambient temperature from the temperature resource file. Diesel_Flag_#: Specifies if a particular diesel was operating during that time step. 50 Appendix C: Battery Use Primer Some of the key issues for the use of batteries in hybrid power systems are the size of the battery bank, level of discharge, boost changing/battery equalization and the effects of all of this on battery life. We have included this primer to help those with little field experience with batteries. A variety of functions can be served by battery banks that are installed into hybrid power systems and the size of the battery bank, relative to the system load, is one of the major design criteria. Small battery systems are mainly designed to cover transients in the average load to avoid the need for the operation of a diesel or gasoline generator. Such a battery bank can also be used while a diesel genset is started following a drop in renewable power. Small battery banks allow the diesel(s) to be dispatched to cover the average load while the batteries cover any fluctuations outside of the diesels operational range. Battery banks of this type are typically designed to cover the average load for a period of time from several minutes to an hour. Large battery banks are used for systems with intermittent power or when keeping all diesels off is of paramount importance. This is obviously for systems that rely completely on renewable power -- such as solar home systems -- in which the batteries are required to cover any load between charging by renewable sources. In systems where dispatchable power is available, the batteries are used to provide the difference in power required and that generated by renewables. In this case, the diesel generators are completely shut down, thus conserving fuel. Such systems can have a battery capacity to cover the average load for many hours -- up to a number of days. In both types of systems, when the diesel is operating it can be run either following the load, thus not charging the batteries, or at a rate where the batteries are charged. A second major issue with the use of batteries is a tradeoff between the depth of allowable discharge and the life of the batteries. Many types of batteries are available, all with different physical construction and thus different performance and life. Standard auto batteries are designed for long life undergoing very shallow discharges -- up to approximately 10% depth of discharge -- but cannot be deeply discharged. Deep-cycle batteries are more expensive but can be discharged repeatedly to a much lower depth of discharge -- approximately 70%. Deep discharge batteries can also be found in a number of sizes with projected cycle life from a few hundred cycles to a few thousand. Nickel Cadmium batteries (NiCad) allow repeated deep discharging but are very expensive. The temperature of the site, and, thus, the battery bank, will also greatly affect the life and apparent capacity of batteries in different way depending on their type and construction. The choice of which battery to use will greatly depend on the location of the site and the requirements of the system. A system in a developing country that can use a local supply of inexpensive, poor quality batteries may be more economical than importing better batteries, even if they are replaced more frequently. On the other hand, a very remote system with large transportation costs may well use very expensive batteries so that they will not require frequent replacement. As batteries undergo repeated charge and discharge cycling, the batteries' characteristics will change. The two major results of this cycling is the sulfation of the battery plates and voltage drift. The buildup of sulfites on the battery plates is a result of the chemical process when the 51 batteries are not charged fully on a periodic basis. The result of this buildup will be a reduction in the usable capacity of the battery bank. Voltage drift occurs because batteries in different parts of the battery bank will be discharged and charged at different rates. This will cause a spread in voltages among the batteries and subsequently will reduce the efficiency and life of certain cells. The most common method to alleviate both of these problems is to perform a battery equalization charge periodically. An equalization cycle is completed by charging the batteries to a very high state of charge and voltage, which is accompanied by gassing in flooded batteries. A 12-volt battery should have an equalization charge voltage to about 15.5 volts. This equalization removes most of the sulfite build up on the battery plates and equalizes the voltage of all of the battery cells within the battery bank. A periodic boost charge also insures that the batteries are not left at a low state of charge for long periods of time. The interval of boost charging will depend on the cyclic use of the battery bank in question but once or twice every month is recommended. A boost charge of 100% of the full state of charge of the battery is standard. Some consider batteries a "black art" and, for the most part, everybody agrees that it is very difficult to predict the operation and life of batteries. For more information, we suggest reading any book on battery operation (Yoder, 1995) available from most battery manufactures. References 1)Yoder J. A., Primer on Lead-Acid Storage Batteries, DOE Handbook, DOE-HDBK-1084-95, FSC-6910, U.S. Department of Energy, Washington, DC, September, 1995. 52 Appendix D: Dispatch Strategies Dispatch strategies are one of the most complicated portions of the Hybrid2 code. Currently the model has approximately 180 different combinations of possible dispatch strategies, not all of which would be practical or advisable. In an attempt to simplify this matter, we have defined a number of different dispatch strategies and described how they work. The second section of this appendix contains a list of dispatch combinations that are not advised. The user should consult this list if the dispatch strategy that you are using gives strange results. Users are encouraged to read the quick discussion on batteries and boost charging that is covered in Appendix C. The dispatch configurations available in Hybrid2 should be used to represent real operational control strategies to the extent possible. Hybrid2 is designed as a long term performance model and so the time step to time step operation of the simulated system might not operate in the same fashion as a real system although the overall performance may well be very close to the real system. It should be clear that Hybrid2 does not consider the dynamic characteristics of a real system, and, therefore, will not indicate a potential instability in the system being modeled. One of the clear examples of such problems would be a system containing no storage. Because Hybrid2 looks at the next time step and dispatches diesels appropriately, it will always have adequate diesel capacity, if available, on line and will not drop the load. This is not the always the case in a real system which would fail any time the renewable power could not cover the load while the diesel was not operating. Users should also compare a number of different control strategies to determine which one will work best for the system under design. A different control strategy can greatly enhance the performance of your system. D.1 Dispatch Strategies: Thirteen dispatch strategies, which are provided in the Hybrid2 library, are described below. To simplify the following discussion, we will use the following code terminology in expressing the different control functions. DSC: Diesel Starts code 0) Diesel starts to meet the load: The diesel starts only when it is required to meet the load. 1) Diesel starts to meet the load and charge the batteries: The diesel is started to meet the load or if the battery bank has been discharged below the minimum battery state of charge specified by the user. BDC: Battery Discharge code 0) For transient peaks only: batteries can be discharged to cover only transient peaks in the load while the diesels are dispatched to cover the average net load. Using this choice, the batteries will not be discharged to cover the whole load unless the diesel(s) are unable to meet the average load. 1) For all or part of average load: the batteries will be used to cover all or part of the load to allow one or more diesels to be shut off. 33 DOPC: Diesel Operating Power Level code 0) Load following with batteries covering transients: the diesel is run to cover the average load while the batteries are used to cover any transients above the average. When the net load is below the average the excess diesel power is used to charge the batteries. 1) Rated power: the diesel is run to cover the load as well as charge the batteries at the highest rate allowed by the battery model. 2) Load following with diesel covering transients: the diesel is run to cover the load. The diesel will be dispatched to cover the average load but will cover any transients up to the diesels rated power. The battery bank will cover any transients above the diesels rated power and will not be charged by the diesel unless the net load goes below any minimum power level set for the diesel(s). DSDC: Diesel Shut Down code 1) When wind, solar and batteries can meet the load: the diesel is shut down if there is enough renewable power and power in the battery to cover the load. 2) When wind, solar can meet the load: the diesel is shut down if the renewables are generating enough power to cover the load. 3) When wind, solar can meet the load or the batteries are charged above the percent SOC (State of Charge) specified by the user: the diesel is shut down if the renewable power can cover the load in full or when the diesel has charged the batteries above the SOC specified by the user. 4) When the batteries have reached percent SOC: the diesel is shut off when the batteries have been charged to the state of charge to stop diesel charging of the batteries as specified by the user. 5) Multiple diesel dispatch: the diesel shut down code to use if more than one diesel has been included in the power system. See strategies 9 and 10 below. D.1.1 Traditional Power Smoothing; (DSC = 0, BDC = 0, DOPC = 2, DSDC = 2) Battery power is never used to meet the average load in a time step. Diesels are dispatched to cover the average load and the battery covers any loads above the rated power of the diesel. The diesel will follow the load and the battery bank will not be charged unless the power during the time step goes below the minimum power level of the diesel. This strategy is used for small battery banks, in the order of a few hours at average load, where renewables are assumed to charge the battery bank periodically. This allows the diesel to be shut down during times of reasonable winds. D.1.2 Short Term Power Smoothing; (DSC = 1, BDC = 0, DOPC = 1, DSDC = 2) Minimum battery SOC for diesel charge set at approximately 50%. This control strategy is to be used with short-term storage to cover short fluctuations in the power output, allow the diesel to be shut down and start the diesel in a loss of renewable power. The storage is planned to be less than an hour at the average load. The strategy requires the diesel to meet the average net load (if positive) with the batteries covering any fluctuations above zero net load when the diesel is off. The diesel is started once the battery bank gets to a moderate state of charge so that the battery will always be able to cover any power deficits and there will always be battery power to cover 54 the load while the diesel is started. The diesel will charge the battery bank and will operate at the maximum level set by the netload and the allowable battery charge rate. Diesel charging of the battery will stop and the diesel shut down if the netload is negative. This strategy depicts a real system where the diesel will not have an instantaneous start capability. The minimum battery level should be padded to allow for the batteries to cover the maximum possible load for enough time to perform an emergency start of a diesel. The model will never allow the battery to discharge to the real minimum level but this will more accurately model a real system. In this case, it is more important to have a full battery, even at the expense of diesel fuel. D.1.3 Power Smoothing/Diesel Charging (DSC = 0, BDC = 0, DOPC = 1, DSDC = 2) Minimum battery SOC for diesel charge set at Approximately 40% and the SOC for diesel charging of the battery to stop set at approximately 70%. Used for systems with moderate battery capacity ( 3-2 hours of average load ) and similar in nature to short-term power smoothing but for systems with larger storage banks in locations that have a low wind penetration for at least part of the year. The battery bank covers only transients in the load, allowing the diesel to be shut down. The diesel will not be started to charge the batteries, and it is operated to cover any positive netload and charge the battery at the maximum allowed battery charge rate. The advantage of this strategy is that in a period when the renewables are not capable of charging the battery bank, you are still able to shut down your diesel. D.1.4 Load Following (DSC = 1, BDC = 0, DOPC = 2, DSDC = 1) This strategy allows the batteries to be used to cover any renewable deficit in the average load before a diesel is brought on line. When the diesel is operational, it is run following the load, only charging the batteries if excess energy is produced. Renewables are used to charge the batteries when excess power is produced. This strategy should only be used with a relatively large battery bank in high renewable penetration systems where renewable power can keep the batteries charged. In a low-penetration system, the batteries will be depleted and never recharged. A boost charge in this type of system is critical. D.1.5 Full Power/Minimum Run Time (DSC = 1, BDC = 0, DOPC = 1, DSDC = 1) The battery bank will be used to meet the average load, if possible, and the diesel is operated to cover the net load and allow the battery to be charged at the maximum charge rate. The diesel is run until renewables or the battery can meet the load and its minimum run time requirement has been fulfilled. D.1.6 Full Power/Minimum Run Time for Intermediate Diesel (DSC = 1, BDC = 1, DOPC = 1, DSDC = 1) Follows the same logic as the Full Power/Minimum Run Time strategy but allows the diesel to start to charge the batteries. This case would be best for small PV systems or for systems in which the diesel is not allowed to operate during various times during the day. In this case, the Minimum Battery SOC for diesel charging and the minimum battery SOC would be set at different levels. This would allow the diesel to start at the end of a forced off period if the battery SOC was lower than the diesel charging SOC but above the minimum SOC of the batteries. 55 D.1.7 Soft Cycle Charge (DSC = 1, BDC = 1, DOPC = 1, DSDC = 2) In this dispatch strategy the batteries are used to meet the average load if renewables are not sufficient before a diesel is started. When the batteries have been discharged, the diesel is started and used to charge the batteries as well as to cover load deficiencies. Once the diesel minimum run time requirement has been fulfilled the diesel will remain operating until the power generated by the renewables can cover the load and any fluctuations. This may cause prolonged diesel operation with the batteries at a nearly full state of charge. This strategy is mainly for systems with a large battery bank in which renewable power is fairly constant and can keep batteries charged. D.1.8 Moderate Cycle Charge (DSC = 1, BDC = 1, DOPC = 1, DSDC = 3) In this dispatch strategy the batteries are used to meet the average load if renewables are not sufficient before a diesel is started. When the batteries have been discharged, the diesel is started and used to charge the batteries as well as to cover load deficiencies from the renewables. Once the diesel minimum run time requirement has been fulfilled the diesel will remain operating until the renewables can cover the load or the battery bank has been charged to the state of charge specified by the user. This strategy is mainly for systems with a large battery bank in which renewable power is fairly constant and can keep batteries charged. D.1.9 Hard Cycle Charge (DSC = 1, BDC = 1, DOPC = 1, DSDC = 4) The batteries are used to cover any deficiency in renewable power to keep a diesel from being started. Once the batteries have been discharged the diesel is started and run covering the load and charging the batteries at the maximum rate possible. The diesel will continue to operate until the batteries have been fully charged and the diesel's minimum run time requirement has been fulfilled. This strategy is mainly for systems with a large battery bank in which renewable power comes in spurts with long lulls in between. D.1.10 Multiple Diesel Load Following (DSC = 0, BDC = 0, DOPC = 2, DSDC = 5) This multiple diesel control option keeps diesels operational to cover the average netload if positive. The code determines the netload and then starts as many diesels as needed to cover the average load. The battery bank will cover any fluctuations above the rated power of the operational generators. The diesels remain operational until changes in the renewables and/or load allow more diesels to be taken off line or started. The battery will still cover transients if the average netload is negative, allowing all diesels to be shut off. D.1.11 Multiple Diesel Hard Cycle Charge (DSC = 1, BDC = 1, DOPC = 1, DSDC = 5) This multiple diesel control option keeps diesels operational to charge the batteries when they have been discharged. The batteries are charged at the maximum rate set forth by the battery charge rate limit and are charged to the amount set forth by the battery SOC for diesel charging to stop parameter. Diesels are dispatched in the most efficient manner possible to supply the average load and charge the batteries. Any operating diesel will be run at the maximum allowed by the battery charge rate limit. 56 D.1.12 Battery/Renewable system control (No Control options) This strategy is used for systems not incorporating any diesel engines. The only parameter that the user may specify is the depth of discharge the batteries will be allowed to be discharged to before the load will cease to be met. All of the other parameters, such as boost charging, are dependent on the renewable resource only and are not controllable by the user. D.1.13 Diesel/Renewable system control (No Control options) This strategy is used for systems that do not contain battery storage. Only the parameters on the diesel control tab need to be addressed. It should be noted that if all the diesels are allowed to be shut down, Hybrid2 will predict the performance of a system that IS NOT stable dynamically without very advanced control logic. A user should be VERY hesitant of this control option unless he or she knows a great deal about the dynamics of hybrid power systems without storage. D.2 Unusual Dispatch Parameters W have found several combinations of dispatch parameters that either cause unusual problems or are not allowed in the Hybrid2 code. Using the same coding terminology as was described previously, these control strategies should be used with care. An X in the place of a control option indicates that any choice of that control code should be used with extreme caution.. ! (DSC = X, BDC = 0, DOPC = 0, DSDC = X): This option is not allowed in the code. ! (DSC = X, BDC = X, DOPC = 0, DSDC = 2 or 4): Keeps the diesel on even when the wind is charging the batteries. ! (DSC = X, BDC = 0, DOPC = 1, DSDC = 1): Not a meaningful strategy ! (DSC = X, BDC = 1, DOPC = 1, DSDC = 1): May cause rapid cycling between the diesel and the battery bank depending on other control parameters. ! (DSC = X, BDC = 1, DOPC = 0 or 2, DSDC = 5) and (DSC= X, BDC = 0, DOPC = 0 or 1, DSDC =5): These are not options allowed in the code. ! (DSC = X, BDC = X, DOPC = X, DSDC = 2) can lead to extended diesel operation under certain system configurations with low renewables content. ! (DSC = X, BDC = X, DOPC = 0, DSDC = X): This strategy is not commonly used. ! (DSC = X, BDC = 1, DOPC = 0 or 2, DSDC = X): This strategy is inconsistent because the diesel is told to start to charge the batteries but runs in a load following mode. This will lead to strange system operation. Sf Appendix E: Hybrid2 Bug Response Form Name: Data: After completing please fax or mail to user support Was the bug in the graphical user interface or in the simulation? GUI GRI Simulation — Economics Graphical user and result interface errors: Window that the bug was found in. (Ifthe error occurred between windows, indicate the starting window and the destination window). Was an error message given? If yes, what was it? Was data filled in on the window that you left? What was the result from the error? Allowed to continue, Hybrid2 close, system crash.... Describe, in as much detail as possible, the process you went through to get the error. Could you repeat the error? Simulation errors: 1) Call user support to determine if there is a real bug or the code is handling the input in an unexpected fashion. 2) Export the project that contained the error and save a copy of the simulation or economics summary for that simulation. 3) Describe the error in as much detail as possible. 58 HOMER: The Hybrid Optimization Model for Electric Renewables Peter Lilienthal Larry Flowers National Renewable Energy Laboratory 1617 Cole Boulevard Golden, Co. 80401 United States Charles Rossmann Economics Department University of Colorado P.O. Box 0256 Boulder, Co. 80309 United States Hybrid renewable systems are often more cost-effective than grid extensions or isolated diesel generators for providing power to remote villages. There are a wide variety of hybrid systems being developed for village applications that have differing combinations of wind, photovoltaics, batteries, and diesel generators. Due to variations in loads and resources determining the most appropriate combination of these components for a particular village is a difficult modelling task. To address this design problem the National Renewable Energy Laboratory has developed the Hybrid Optimization Model for Electric Renewables (HOMER). Existing models are either too detailed for screening analysis or too simple for reliable estimation of performance. HOMER is a design optimization model that determines the configuration, dispatch, and load management strategy that minimizes life-cycle costs for a particular site and application. This paper describes the HOMER methodology and presents representative results. 475 HOMER: The Hybrid Optimization Model for Electric Renewables Introduction Approximately 2 billion people in rural areas of developing countries do not have access to reliable electric service; many rely on kerosene and candles for lighting and batteries for communications. There are several approaches to improve their access to electricity: grid extensions, solar home systems, diesel mini-grids, and hybrid renewable systems. Hybrid renewable systems consist of two or more of the following components: small wind turbines, photovoltaics (PV), battery storage (usually with an inverter), and a diesel generator. Because of synergies among technologies, hybrid renewable systems can often outperform other approaches and provide energy services with higher quality, greater reliability, lower cost and reduced environmental impacts. Relatively simple heuristic rules of thumb have been developed for the preliminary design of the first three approaches. However, the use of hybrid renewable energy systems has been hindered because there are no simple methods for determining the sizing of the components. Different suppliers recommend different system architectures and there has been no consistent method for comparing them. For a particular application, it can be a difficult modeling task to determine the best combination of components. Variations among villages in terms of load and resource profiles, cost of backup diesel fuel and maintenance, and seasonal characteristics can have major impacts on the design of a least-cost power supply system. There are many design questions that must be resolved when developing a hybrid renewable system; What is the minimum wind speed at which the addition of wind turbines reduces the overall cost of the system? How does the minimum windspeed vary with the temporal match of the resource and load, the quality of the solar resource, and the cost of diesel generation? What is the best size for the battery bank? When does it make more sense to use the diesel for low-resource periods? Can load management entirely replace the diesel? What is the marginal cost of increasing loads? How much would system costs decline if there were a larger water storage tank? The potential flexibility of hybrid systems becomes an advantage only if there is a way to evaluate the multitude of design options. To address this design problem the National Renewable Energy Laboratory (NREL) has developed the Hybrid Optimization Model for Electric Renewables (HOMER). Given site-specific hourly wind and solar resource information, HOMER solves a (nearly) linear mixed-integer program to find the optimal capacity of wind turbines, PV array, battery bank, and diesel generators to minimize the present discounted value of meeting a site-specific hourly load. It also can identify load management strategies to further reduce cost. Previously existing models are either simple spreadsheet models or sophisticated dynamic simulation models. Although both types of models have their uses, they are not appropriate for selecting the least-cost option from different system configurations. The spreadsheet models are useful for financial analysis, but cannot reliably predict the performance of hybrid systems with intermittent resources and storage because they do not consider the temporal patterns of loads and resources. The dynamic simulation models are very detailed and time consuming to set up and run. They are useful for evaluating the performance of specific, well- defined systems. An example of the detailed engineering simulation models is HYBRID2, which is being developed by NREL and the University of Massachusetts. HOMER fills the large gap between these two types of models by giving the user insight into how the system design is affected by changes in parameters, such as component costs, technology performance, load management strategy, and load and resource profiles. The detailed simulation models, such as HYBRID2, require the user to specify the size of each component. Since the optimal size of each component is an output of HOMER, there is a natural flow of information between the models. When confronted with a new site, HOMER can quickly determine a small set of optimal 476 or near-optimal systems for more detailed analysis with HYBRID2. Both models provide performance information that can be used as inputs to finance models to analyze the cash flow and profitability of particular projects. Inputs There are two basic categories of inputs that describe the components and the hourly profiles of the available renewable resources and loads. Sensitivity analyses can automatically be performed on any of the input parameters (except the hourly data). Each of the parameters can be given an initial value and a step size and HOMER will automatically rerun the model for a specified number of steps. Hourly inputs. Resources and loads must be specified hourly. Although actual hourly data can be used, a more compact representation uses hourly profiles for typical days for each season. A season can be any number of consecutive weeks. In order to model the stochastic nature of both renewable resources and loads, these typical days are then expanded into a user-specified number of modeled days by adding two types of noise to the profiles. An hourly noise parameter independently perturbs each of the hourly values, while a daily noise parameter perturbs an entire day. The daily noise is important because persistent weather patterns have a major impact on storage requirements. For the wind resource, HOMER reports the Weibull k value that incorporates both the variation inherent in the typical profile and the two noise parameters. In addition to the typical profiles and noise parameters, average wind speed and average full-sun hours are specified for each season. Separate residential and commercial loads can be specified for weekdays and weekends. In addition to the hourly profiles, three types of load management can be used: deferrable loads, optional energy, and unserved energy. Deferrable loads are loads, such as water pumping and ice making, that require a certain amount of energy each day, but HOMER is free to find the least-cost period to serve that energy. During high-resource periods, the system may supply excess energy. If this energy has economic value, such as for displacing fuel for thermal loads, it is called optional energy and a value can be assigned to it equal to the value of the avoided fuel costs. Finally, the user can specify a maximum level of unserved energy. If this parameter is set to zero, HOMER will model a system that supplies extremely reliable service. HOMER can determine the cost savings if a lower level of reliability is acceptable for a particular application. After all, remote diesel mini-grids and simple PV home systems, two popular village options, do not supply 24 hour, AC power. Component characterizations. There are five types of components that must be described; wind turbines, specified for each component. Normally, HOMER will choose the optimal size of each component, but each of these sizes can be fixed if a particular system is being modeled. All components, except the wind turbines, are continuous variables. Wind turbines come in discrete units, so HOMER chooses the number of each type of turbine. Two different types of wind turbines can be specified with different power curves and derating factors, if desired. PVE has a fixed cost as well as a cost per kW. Efficiencies are specified for the inverter — and diesel generators. The diesel parameters can be specified separately for small and large diesels to capture the economies of scale in that technology. Diesel operations and maintenance are specified as a cost per kWh. Batteries require special consideration when modeling isolated systems. HOMER keeps track of their state of charge and energy flow in each hour, subject to constraints on the rate at which they can be charged and discharged as well as their minimum acceptable state of charge. Furthermore, the lifetime of a battery is a function of usage, so HOMER charges depreciation for each kWh of battery throughput. Miscellaneous inputs. There are other inputs, such as fuel price and interest rate that are required. Furthermore, the system can be constrained so that a minimum fraction of energy is delivered by the renewable portion of the system. Outputs HOMER produces outputs that describe the optimal system, various categories of costs, and the hourly energy flows. Optimal system. The most fundamental output of HOMER is the optimal sizes of the different components. The PV system, diesel, and the inverter are specified in terms of rated kW. Batteries are specified in terms of kWh. The optimal number of each size of wind turbine is reported. Hourly energy flows. HOMER generates all the energy flows for each hour of operation that is modeled, including the output of each of the energy sources and the rate of (dis)charge and state of charge for the battery. The pattern of load management is also available, showing when the deferrable loads were met, as well as the optional and unserved energy. Costs. Capital costs, fuel costs, O&M costs and battery replacement costs are each reported separately. Levelized cost of energy is reported in two forms, with and without a deduction for the value of optional energy. Results A synthetic data set was developed to test HOMER's capabilities and to produce illustrative outputs. Sensitivity analyses were performed on fuel price and annual average wind speed. The results are shown in Figure 1. These results are meant to illustrate the capabilities of the model. Our initial experience with the model confirms that the optimal configuration is very sensitive to the input assumptions. These results for the specific test case should not be used to make inferences about the optimal system for any particular application. At an average annual wind speed of 7 meters per second the optimal system has only wind and batteries. Diesel is not competitive with wind even when the fuel price is only $0.30 per liter. At 4 meters per second, the optimal system is a PV-diesel-battery hybrid, unless the fuel price is at least $0.70 per liter. For this application, wind is more effective than PV for replacing diesel. At intermediate wind speeds, the optimal system contains both wind and PV. Wind and PV are complementary competitors. The competition between them is demonstrated by the inverse relationship between the optimal capacity of each type. The synergy between wind and PV is illustrated in the graph of optimal battery capacity (see Figure 1). At a fuel price of $0.70 per liter, the optimal system has no diesel and the battery capacity is substantially greater for systems with only wind or PV than it is for systems at intermediate wind speeds that have both wind and PV. This is due to the independence of the two stochastic sources of energy. At lower fuel prices, diesel replaces batteries and the synergy between wind and PV is lessened. Future work Our efforts to date have been focused on model development. There are several activities planned for HOMER in the near future. A verification exercise is planned to compare HOMER's results to the results of 478 more detailed non-optimizing performance simulation models, such as the HYBRID2 model. Where appropriate, its results will also be compared to hybrid systems in operation. A Visual Basic/spreadsheet user interface is being developed for HOMER. Although the optimal system is very sensitive to input assumptions, we have not yet investigated the cost implications of near-optimal systems. There may be a wide range of systems that are very different in configuration but not very different in total cost. The marginal cost information that is automatically provided will be very useful for addressing this question. We envision HOMER to have several uses, including site/application system definition and comparisons, as well as, providing results that are generalizable so that project developers can be given guidance on the key drivers for system design. NREL's intention is to use HOMER for its technical assistance activities in its international village power initiative. O8r KWH of Batteries ain mcuerted Sitaa 700 500+ 400 3004 200- 100 Windspeed (m/s) a / $0.7 Sa $0.50 IL Fuel price ($Aiter) Fuel price (Siter) Ad 4° MX Windspeed (m/s) DIESEL 0 KW of Diesel $0.70 Fuel price 7 (SAiter) FIGURE 1 =? HOMER THE OPTIMIZATION MODEL FOR DISTRIBUTED POWER Getting Started Guide Version 2.0 DRAFT May 2003 PS NREL <« gy we 7 National ease Energy Laboratory 1617 Cole Boulevard Golden, Colorado 80401 - 3393 NREL is a U.S. Department of Energy Laboratory Operated by Midwest Research Institute * Battelle * Bechtel 3 About this Getting Started Guide This Getting Started guide introduces you to HOMER by walking you through eleven steps. You will start by providing HOMER with information, or inputs, about power system designs that you want to consider. HOMER will simulate system configurations, create a list of feasible system designs, and sort the list by cost-effectiveness. In the final step, you will use HOMER to perform a sensitivity analysis. By going through each step in the guide, you should become familiar with the software, and develop enough experience to start using the model on your own. DRAFT HOMER Getting Started Guide 2/29 It should take about an hour to complete this exercise. The online version of this guide You can open an online version of this guide by choosing Getting Started on HOMER's Help menu. Checking your work as you go Throughout the guide are illustrations that show how HOMER should look as you use the software. Be sure to compare what appears on your computer screen to the illustrations to make sure that you have correctly completed each step. About Tips and Notes: Throughout this guide, tips and notes provide additional information to help you better understand how HOMER works. A note is important information that you should read to better understand the step of the exercise that you are completing. A tip is supplementary information that you may find useful for your future work with HOMER, but is not essential to understand to complete the exercise. Table of Contents Welcome to HOMER .3 Step one: Formulate a question that HOMER can help answer....... 5 Step two: Create a new HOMER file... .6 Step three: Build the schematic.......... .7 Step four: Enter load details 9 Step five: Enter component details.. -11 Step six: Enter resource details....... -14 Step seven: Check inputs and correct errors .. -16 Step eight: Examine optimization results... 19 Step nine: Refine the system design... Step ten: Add sensitivity variables .. = soa Step eleven: Examine sensitivity analysis reSults............ccssscseesesreeseeteeeeeeaees Getting Started Guide summary CONACES 20. eeeeeeceeeeeeseeeeeeeseesseesceeseneeessessenseesseeeseeseessneseseeeeeneeseeeensaeeeeaeessaeeseaaeeenes® HOMER v2.0 (May 2003) ° Welcome to HOMER DRAFT HOMER Getting Started Guide 3/29 What is HOMER? HOMER, the optimization model for distributed power, simplifies the task of evaluating designs of both off-grid and grid-connected power systems for a variety of applications. When you design a power system, you must make many decisions about the configuration of the system: What components does it make sense to include in the system design? How many and what size of each component should you use? The large number of technology options and the variation in technology costs and availability of energy resources make these decisions difficult. HOMER's optimization and sensitivity analysis algorithms make it easier to evaluate the many possible system configurations. How do | use HOMER? To use HOMER, you provide the model with inputs, which describe technology options, component costs, and resource availability. HOMER uses these inputs to simulate different system configurations, or combinations of components, and generates results that you can view as a list of feasible configurations sorted by net present cost. HOMER also displays simulation results in a wide variety of tables and graphs that help you compare configurations and evaluate them on their economic and technical merits. You can export the tables and graphs for use in reports and presentations. When you want to explore the effect that changes in factors such as resource availability and economic conditions might have on the cost-effectiveness of different system configurations, you can use the model to perform sensitivity analyses. To perform a sensitivity analysis, you provide HOMER with sensitivity values that describe a range of resource availability and component costs. HOMER simulates each system configuration over the range of values. You can use the results of a sensitivity analysis to identify the factors that have the greatest impact on the design and operation of a power system. You can also use HOMER sensitivity analysis results to answer general questions about technology options to inform planning and policy decisions. How does HOMER work? Simulation HOMER simulates the operation of a system by making energy balance calculations for each of the 8,760 hours in a year. For each hour, HOMER compares the electric and thermal demand in the hour to the energy that the system can supply in that hour, and calculates the flows of energy to and from each component of the system. For systems that include batteries or fuel-powered generators, HOMER also decides for each hour how to operate the generators and whether to charge or discharge the batteries. HOMER performs these energy balance calculations for each system configuration that you want to consider. It then determines whether a configuration is feasible, i.e., whether it can meet the electric demand under the conditions that you specify, and estimates the cost of installing and operating the system over the lifetime of the project. The system cost calculations account for costs such as capital, replacement, operation and maintenance, fuel, and interest. HOMER v2.0 (May 2003) DRAFT HOMER Getting Started Guide 4/29 Optimization After simulating all of the possible system configurations, HOMER displays a list of configurations, sorted by net present cost (sometimes called lifecycle cost), that you can use to compare system design options. Sensitivity Analysis When you define sensitivity variables as inputs, HOMER repeats the optimization process for each sensitivity variable that you specify. For example, if you define wind speed as a sensitivity variable, HOMER will simulate system configurations for the range of wind speeds that you specify. HOMER on the Internet The HOMER Web site, www.nrel.gov/homer, contains the latest information on the model, as well as sample files, resource data, and contact information. HOMER v2.0 (May 2003) e DRAFT HOMER Getting Started Guide 5/29 Step one: Formulate a question that HOMER can help answer HOMER can answer a wide range of questions about the design of small power systems. It is useful to have a clear idea of a question that you want HOMER to help answer before you begin working with HOMER. Examples of the kinds of questions that HOMER can answer are: e Is it cost-effective to add a wind turbine to the diesel generator in my system? ¢ How much will the cost of diesel fuel need to increase to make photovoltaics cost effective? e Will my design meet a growing electric demand? e Is it cost-effective to install a microturbine to produce electricity and heat for my grid- connected facility? For this exercise, let us assume that diesel generators typically serve small loads in a remote area, and that we want to use HOMER to find out whether it makes sense to add wind turbines to such systems. The question we will use HOMER to help answer is: How do changes in average wind speed and fuel price affect the feasibility of adding wind turbines to a diesel-only system design? HOMER v2.0 (May 2003) Step two: Create a new HOMER file DRAFT HOMER Getting Started Guide 6/29 A HOMER file contains all of the information about the technology options, component costs and resource availability required to analyze power system designs. The HOMER file also contains the results of any calculations HOMER makes as part of the optimization and sensitivity analysis processes. HOMER file names end in .hmr, for example: WindVsDiesel.hmr. When you start HOMER, it looks for the most recently saved file and opens it. If HOMER can not find the file, it displays a blank window. For this exercise, create a new HOMER file: e Click New File OC, or choose File, New from the menu to create a new HOMER file. HOMER displays a blank schematic on the Main Window. Equipment to consider —————___— Click the Add/Remove button to add loads and components. Resources —__—_—_—_— Other HOMER v2.0 (May 2003) Step three: Build the schematic DRAFT HOMER Getting Started Guide 7/29 HOMER compares multiple technology options for a power system design. The schematic represents all of the technology options that you want HOMER to consider: it is nota— schematic of a particular system's configuration. You build the schematic to give HOMER information about the components to consider to answer your question. The schematic may include components that are not in the optimal design. In this exercise, HOMER will simulate systems that include wind turbine and diesel combinations to answer the question How do changes in average wind speed and fuel price affect the feasibility of adding wind turbines to a diesel-only system design? 1. Click Add/Remove to choose the components that you want HOMER to consider. Equipment to consider ———__——_ Click the Add/Remove button to add loads and components. Resources - Other ——— HOMER displays all of the possible components in the Add/Remove window. 2. Select the Primary Load 1 check box. Tip: Every system design must include either a primary load (a description of the electric demand), deferrable load, or be connected to a grid. 3. Select the Wind Turbine 1, Generator 1, and Battery check boxes. Loads ———_—____——_—_. Components i M Primary Load 1 ar py & IF Primay Load 2 + I Wind Turbine 1 7 Detenable Load 36 7 Wind Turbine 2 7 Thermal Load J” Hydro I¥ Generator 1 OF Generator 2 o I~ Generator 3 4 Grd HM Battery T~ Converter vd [~ Electrolyzer HOMER v2.0 (May 2003) DRAFT HOMER Getting Started Guide 8/29 4. Click OK to return to the Main window. Equipment to consider. ——————— Sj rl 2 ween 1 Generator 1 Primary Load 1 OkWwh/d Bl OkW peak Battery & button appears for each component that a Diesel requires a resource HOMER displays buttons on the schematic that represent the load and components (wind turbine, diesel generator, and battery). In the Resources section (directly below the schematic) HOMER displays buttons for the resources that each component will use. In this case, buttons for the wind and diesel resources appear in the resources section of the schematic. HOMER v2.0 (May 2003) eo e * Step four: Enter load details DRAFT HOMER Getting Started Guide 9/29 The load details are inputs to the HOMER simulations. The load inputs describe the electric demand that the system must serve. This section describes how to import a sample load file. 1. Click Primary Load 1 ®| on the schematic to open Load Inputs. 2. Type Remote Load as a label for the load. Label [Remote Load Load type: @* AC DC Imporréile... 3. Choose AC as the load type. Sprithesize File 4. Click Import File _Inpatt Fie. | to open the sample load file Remote_Load.dmd. Note: This sample file is located in the same directory as the HOMER program (homer.exe) in a sub-directory called Sample Files. Baseline data Hou ___Load | 00:00-01:00/ 2) 01:00 - 02:00 02:00 - 03:00) 03:00 - 04:00 a 04:00 - 05:00 2 | ey 05:00 - 06:00 2 06:00 - 07:00 ES 07.00 - 08:00 3, 08:00 - 03:00 09:00 - 10:00 10:00 - 11:00) — 11:00 - 12:00) HOMER displays the daily load profile in the table and graph. Note that the name of the imported file appears in the graph title. Tip: You can also create a load profile by entering 24 values in the Load Profile table. HOMER v2.0 (May 2003) 3 5. Click OK to return to the Main window. Equipment to consider. ——_———— | Add/Remove i [a] | Je 1 Generator 1 Remote Load 85 kwh/d 11.5 kW peak Battery AC pc On the schematic, notice the arrow that now connects the load button to the AC bus and shows the direction of energy flow. Also note that the label you typed, "Remote Load," appears on the schematic, along with the values of the average and peak demand. DRAFT HOMER Getting Started Guide 10/29 HOMER v2.0 (May 2003) 3 Step five: Enter component details DRAFT HOMER Getting Started Guide 11/29 The component inputs describe technology options, component costs, and the sizes and numbers of each component that HOMER will use for the simulations. This section describes how to enter cost data for diesel generators, wind turbines, and batteries. The costs in this exercise do not reflect real market conditions. 1. Click Generator 1 [a] on the schematic to open Generator Inputs. 2. In the Costs table, enter the following values: Size 1, Capital 1500, Replacement 1200, O&M 0.05. Note that O&M stands for operation and maintenance. O&M costs do not include fuel costs for a diesel oe Coste seis wacte.t | lho , SA} ‘Pp 4 1.000 1500 ae 0.050 oe This tells HOMER that insta a diesel generator in the system initially costs $1500 per kilowatt, that replacing the BE SES Tad cast $1200" per RIOWatG, aed thatic wn cost $0.05 per hour to operate and maintain. Notice that HOMER plots the cost curve based on the values you enter in the Costs table. Tip: For this example, the cost curve is linear: HOMER assumes that the cost and generator size are related linearly, i.e., that the installation cost of hardware is $1,500 for 1 kilowatt worth of diesel generation, $3,000 for 2 kilowatts, $4,500 for 3 kilowatts, etc. You can define a non-linear cost curve to account for quantity discounts and economies of scale by adding rows to the Costs table with values that do not follow this linear pattern. As you enter values in the table, HOMER automatically creates a blank row at the bottom of the table so that you can add additional values as needed. 3. In the Sizes to consider table, remove 0.000 and 1.000, and add 15. The values in the Sizes to consider table are called optimization variables. The table should look like the one shown below: Sizes to consider — Note: HOMER automatically adds zero and any sizes that you entered in the Costs table to the Sizes to consider table. You can leave these values in the Sizes to consider table if you want HOMER to simulate systems with these component sizes, or delete and add to them if you want HOMER to simulate different sizes. HOMER v2.0 (May 2003) HOMER will simulate systems with a 15 kilowatt generator. On the Cost curve, notice that HOMER displays the optimization variables as diamonds: DRAFT HOMER Getting Started Guide 12/29 Cost Curve ir | | os - 0 2 4 6 8 10 12 14 16 Size [kW] wee Capital = Replacement HOMER uses the values in the Costs table for the system costs calculations that are part of the simulation process to determine how much installing, operating, and maintaining the diesel generator will add to the power system's cost. The optimization variables tell HOMER how much diesel generator capacity to include in the various system configurations it will simulate. 4. Click OK to return to the Main window. Click Wind Turbine 1 *| on the schematic to open Wind Turbine Inputs. 6. In the Turbine Type list, click Generic 10kW to select the generic 10 kilowatt wind turbine. HOMER displays the Generic turbine's power curve. Turbine type [Generic 10k | Tabi AOC 15/50 unbine prope pe 1500 Abbreviatio| BC Excel-A Manufactud BC Excel-S : Bw <L.1 eon Genetic 10k\y Notes: Generic 1k Ranaric Ibias 7. In the Costs table, enter the following values: Quantity 1, Capital 30000, Replacement 25000, O&M 500. Costs Quantity | Capital (#] | Replacement (8) | O&M (8/1) 1 30000 25000 500 Note: The O&M (operation and maintenance) cost for a wind turbine is expressed in dollars per year ($/yr), and not in dollars per hour ($/hr) as it is for a generator. HOMER automatically displays 0 and 1 in the Sizes to consider table. Sizes to consider — HOMER v2.0 (May 2003) % 8. Click OK to return to the Main window. DRAFT HOMER Getting Started Guide 13/29 9. Click Battery =) on the schematic to open Battery Inputs. 10. In the Battery Type list, click Trojan L16P to select the Trojan model L16P battery. HOMER displays the battery's properties. Battery type [Trojan LI6P x] Batt Copy of Surrette 4KS25P Herp PIOPE ¢ nette 4KS25P Vifdrica 11¢.96n 11.In the Costs table, enter the following values: Quantity 1, Capital 300, Replacement 300, O&M 20. Cole eee ee Quantity | Capital ($) | Replacement ($) O&M ($/yr)_ 1 300 300 20.00, In the Sizes to consider table, delete 0 and 1, and add 8. Sizes to consider — Quantity 8 12. Click OK to return to the Main window. You are now finished entering component information. The schematic should look like this: Equipment to consider ———______—. Generic 10kw | Generator 1 Remote Load 85 kWh/d 11.5 kW peak DC Resources —_—__—_—— Other 4 Wind resource al Economics [a] Diesel @| Generator control &| Constraints HOMER v2.0 (May 2003) % Step six: Enter resource details DRAFT HOMER Getting Started Guide 14/29 The resource inputs describe the availability of solar radiation, wind, hydro, and fuel for each hour of the year. For solar, wind, and hydro resources, you can either import data from a properly formatted file, or use HOMER to synthesize hourly data from average monthly values. This section describes how to define resource inputs for wind and fuel, which are the resources required by the two components HOMER will simulate: wind turbines and diesel generators. 1. Click Wind resource 2 to open the Wind resource inputs window. | Wind resource ob) Diesel 2. Click Import File _inpott File | ang open Sample_Wind.wnd. HOMER can synthesize hourly wind speeds for a whole year from 12 monthly values, a Weibull K value and the other parameters. See Help for more information. Baseline cate o> ® Ne ‘a gi a a4) oO 2 c = ° Jan Feb Mar Advanced para September, 3.594 Weibull k October 4.823 ae Autocorrelat Nowember 6.587 fee. December 7.195 HOMER initially Annual average sets the scaled value equal to the Scaled data for simulation — baseline value. Scaled annual average (m/s) da HOMER v2.0 (May 2003) ° The baseline data is a set of 8,760 wind speed values that describe the wind resource for a single year. Pay special attention to the baseline annual average value (at the bottom of the wind speed table), and the scaled annual average. DRAFT HOMER Getting Started Guide 15/29 HOMER uses scaled data for simulations to allow you to perform a sensitivity analysis on resource availability. To create scaled data, HOMER determines a scaling factor by dividing the scaled annual average by the baseline annual average and multiplies each baseline value by this factor. By default, HOMER sets the scaled average equal to the baseline average, which results in a scaling factor of one. You can change the scaled annual average to examine the effect of higher or lower wind speeds on the feasibility of system designs. Note: HOMER will interpret a scaled annual average of zero to mean that there is no available wind resource. For this exercise, the scaled annual average is the same as the annual average, so HOMER will use the baseline data for simulations. In Step ten: Add sensitivity variables, we will see how to use the scaled annual average to examine how wind speed variations affect the optimal system design. 3. Click OK to return to the Main window. 4. Click Diesel [4] (in the Resources section) to open the Diesel Inputs window. Resources ey Wind resource Uo 5. Verify that the diesel price is $0.4 per liter. Price ($/L] | if 6. Click OK to return to the Main window. HOMER v2.0 (May 2003) ? Step seven: Check inputs and correct errors DRAFT HOMER Getting Started Guide 16/29 HOMER checks many of the values that you enter in the input windows to see if they make technical sense. If HOMER notices values that do not makes sense, it displays warning and error messages on the Main window. For this example, HOMER displays a message suggesting that a converter should be included in the system design. A converter is a component that converts alternating current, AC, to direct current, DC, (rectifier); DC to AC (inverter); or both. 1. Click the Warning button A to view a more detailed message. Arr gge ee ef A er a Converter should be considered. Warnings tell you that there may be a problem with one or more inputs. These problems may not prevent HOMER from running, but could indicate that there is a problem with the design of the system. You can see on the schematic that there is no arrow between the DC bus and the load. This means that power from the DC wind turbine will not be supplied to the AC load. The warning message suggests that adding a converter to the system design would correct this problem. indicates a problem that will prevent HOMER from running simulations. 2. To add a converter to the schematic, Click Add/Remove, select the Converter check box, and click OK. Equipment to consider Remote Load Generic 10kW 85 kWh/d 11.5 kW peak Converter Generator 1 Ac oc 3. Click Converter on the schematic to open Converter Inputs. 4 Inthe Costs table, enter the following values: Size 1, Capital 1000, Replacement 1000, and O&M 100. Costs Size (kw) Capital ($] Replacement (4) | O&M ($/yr] 7,000 1000 1000 100 HOMER v2.0 (May 2003) This tells HOMER that the cost of either installing or replacing a converter in the system is $1,000 per kilowatt, and that it costs $100 per year to operate and maintain the converter. DRAFT HOMER Getting Started Guide 17/29 5. In the Sizes to consider table, remove 1.000, and add the values 6 and 12. Sizes to consider — Size (kW) | 0.000 6.000 12.000 | This tells HOMER to simulate system designs that include either no converter (0 kilowatts), a 6 kilowatt converter, or a 12 kilowatt converter. Since the peak load displayed on the schematic is 11.5 kilowatts, we can guess that a 12 kilowatt converter would meet the load for any hour that the wind turbine serves most of the load. Specifying the 6 kilowatt converter allows us to find out whether a using a smaller, less expensive converter is a more cost-effective design option. 6. Click OK to return to the Main window. Converter AC oc HOMER can now consider systems that deliver power from the DC wind turbine to the AC load. Tip: Notice that the converter functions as both an inverter (converting DC to AC) and rectifier (AC to DC). This will not affect the results of an analysis of a system that only requires an inverter. You can, however, remove the rectifier component of the converter by opening the Converter Inputs window and setting Capacity relative to inverter to zero. HOMER v2.0 (May 2003) DRAFT HOMER Getting Started Guide 18/29 7. 8. AR In the Main window toolbar, click Search Space ** to review the optimization variables. Fa File View Inputs Outputs W 0 Sika? The Search Space summary table displays all of the optimization variables (sizes to consider) that you entered in the input windows for each component. You can use the information in the table along with the peak and average load values that appear below the table to make sure that at least some combinations of components are capable of meeting the load. You can add and remove sizes to consider for a component in this table, or by opening the input window for that component and editing the Sizes to consider table there. Gio Gent Batteries Converter _ kw) (kw) = 0 15,00 8 0.00 a ; 6.00 a 12.00 In the table for this example, the heading G10 represents the Generic 10 kilowatt wind turbine, and Geni represents Generator 1. Note: HOMER will simulate system designs for all of the combinations in the Search Summary table. For this example, HOMER will simulate 6 designs: 2 wind turbine quantities (G10), 1 diesel generator capacity (Gen1), 1 battery quantity, and 3 converter capacities, or 2 x 1 x 1 x 3 = 6 designs. Click OK to return to the Main window. HOMER v2.0 (May 2003) ? Step eight: Examine optimization results DRAFT HOMER Getting Started Guide 19/29 HOMER simulates system configurations with all of the combinations of components that you specified in the component inputs. HOMER discards from the results all infeasible system configurations, which are those that do not adequately meet the load given either the available resource or constraints that you have specified. 1. Click Calculate _Latcuiate | to start the simulation. While HOMER is running, the progress indicator shows approximately how much time remains before HOMER finishes the simulation (for this example, approximately one second). ee Simulations: 2 of 6 Progress: NN a Sensitivities: 0 of 1 Status: Solving... 2. When HOMER is finished running the simulations, click the Optimization Results tab, and click Overall to view a table of all feasible system configurations. Sensitivity Results Optimization Results Double click on a system below for simulation results. etl “ Total Tota Ren. ag pital NPC sawn Frac. ae $30,900 $319.253 0.805 0.00 me 6.965 6 1 ‘ : : $60,900 $327817 O827 O21 15148 6,096 ae 15 8 12 $ 36,900 $335,076 0.845 0.00 17.657 6968 ; o 5.4 1 15 8 12 $66,900 $342259 08863 O21 15,063 6,057 In the Overall Optimization Results table, HOMER displays a list of the four system configurations that it found to be feasible. They are listed in order (from top to bottom) of most cost-effective to least cost-effective. The cost-effectiveness of a system configuration is based on its net present cost, displayed under the heading "Total NPC" in the results tables. For this example, one diesel/battery configuration ( @ BZ) wins over the other configurations, including two wind systems ( ®& 6 SB), HOMER y2.0 (May 2003) % 3. To view a table of sorted system designs, click the Optimization Results tab, and click Categorized. DRAFT HOMER Getting Started Guide 20/29 Simulations: 6 of 6 Progress: | Calculate Sensitivities: 1 of 1 Status: Completed in 1 seconds. Sensitivity Results (Optimization Results ) Double click on a system below for simulation results. ea) G10 | Gen Iny. Total Total Ren iesel aI ial (kw) | Capital NPC (snwn) Frac. "th 6508 6 $30900 $319253 0805 0.00 17.650 6965 P65 1 s : 6 $60,900 $327,764 0826 O21 15138 6,092 Overall xf _ | In the Categorized Optimization Results table, HOMER displays only the most cost “ | effective configuration of each system design. 4. To view the details for the most cost-effective wind/diesel/converter design, double-click the second row in the Optimization Results table. Sensitivity Results Optimization Results | Double click on a system below for simulation results. @ Categorized Overall G10 | Genl] Batt. | Inv. Total Total COE Diesel | Gen “ [hae] Capital NPC ($/k\wh) Fee (L) (hrs) T 5 6 en ee 0805 0.00 17.650 6,965 0.21 15,148 6.096 In the Simulation Results window, you can view many technical and economic details about each system configuration that HOMER simulates. For this example, click the Electrical tab, and note that 16% of the total electric energy produced by the system is excess electricity, or energy that is not used by the system and goes to waste. Would including more batteries in the system design result in this excess electricity being used by the system? Cost Electrical | Generator 1 | Battery | Hourly Data] Annual electrical energy production am - Annual electric loads served cece Wind turbine: 8.337 kWh = (21%) AC primary load served: 31,025 kWh Generator 1: 31329 kWh = (79%) Total production: 359.666 kWh Total load served: 31.025 kWh Renewable fraction: 0.210 Excess electricity: 6.155 kwh (16%) Capacity shortage: 1kWh (0%) 5. Click Close to return to the Main window. 6. In the File menu, choose Save As, and save the file as Excess_Energy.hmr. HOMER v2.0 (May 2003) ¢ Step nine: Refine the system design DRAFT HOMER Getting Started Guide 21/29 This section describes how to use the optimization results to improve the system design. For this example, we will see if adding batteries to the system design will reduce the amount of excess energy produced by the system. 1. Click Battery 5) on the schematic to open Battery inputs. 2. In Sizes to consider, add 16 and 24. Sizes to consider Quantity 8) 16 24 HOMER will simulate systems with 8, 16, and 24 batteries. 3. Click OK to return to the Main window. Inputs have changed since results were created. HOMER displays a warning message at the bottom of the Main window to let you know that the information in the results table does not reflect the changes you just made. 4. Click Calculate Saleviete | to start the optimization process. D|Batey search space may be insufficient. When the simulations are finished, HOMER displays the new results in the results tables, and also displays a warning message at the bottom of the Main window. HOMER v2.0 (May 2003) % 5. Click the Battery Search Space May be Insufficient Warning button AL DRAFT HOMER Getting Started Guide 22/29 A The optimal number of batteries might be greater than the maximum number you allowed, 24. You might want to / ! specify one or more larger numbers and run HOMER again. The allowable numbers of batteries are found on the Battery window in the table called ‘Sizes to consider’. HOMER displays a message suggesting that you add more battery quantities to the Sizes to consider table. Since we are not sure exactly how many batteries to add, we will add a range of new battery quantities. 6. Click OK to return to the Main window. 7. In the Main window toolbar, click Search Space Ea to open the Search Space Summary table. 8. Add 32, 40, 48, and 56 to the number of batteries. | G10 | Gent Batteries. | Converter _ ew] __ kw) ia 0 15.00 8 0.00 ogra 1 16 6.00 24 12.00 32 40 48 56 You could also add these values to the Sizes to consider tables in the Battery Inputs windows. 9. Click OK to return to the Main window. 10. Click Calculate _Latculate | to start the simulation. When the simulation process is finished, HOMER displays the new results for systems that include the battery quantities that we just added to the optimization table. This time, HOMER does not display warning messages. As you can see in the battery column of the Categorized Optimization Results table (Batt.), the most cost-effective system configurations include 32 batteries. HOMER v2.0 (May 2003) 11. In the Categorized Optimization Results table, double-click the wind/diesel/battery system (in the second row) to open the Simulation Results window. DRAFT HOMER Getting Started Guide 23/29 Sensitivity Results Optimization Resus | Double click on a system below for simulation results. @ Categorized Overall Batt. Total Total COE Diesel | Gen ae Capital NPC _| ($/kWh (his) 408 ie 32 6 $ 38.100 $ CeO 0.681 14.315 4145 The excess electric energy produced by the most cost-effective configuration of the wind/diesel/battery system is dramatically reduced from 16% to 2%. Cost Electrical | Generator 1 | Battery | Hourly Data | Annual electrical energy production _—__.________ Annual electric loads served. ———_______—___—__— Wind turbine: 8,337 kwh (22%) AC primary load served: 31,025 kwh Generator 1: 29,267 kWh = (78%) Total production: 37.604 kWh Total load served: 31.025 kWh Capacity shortage: Tkwh = (0%) 12. In the File menu, choose Save As, and save the file as Reduced_Excess.hmr. HOMER has helped us refine the system design by adding batteries to store excess energy. However, systems with no wind are still more cost-effective than systems that use wind. Under what conditions does it make sense to include wind turbines in the system design? To understand this question, we will use HOMER to do a sensitivity analysis. HOMER v2.0 (May 2003) i Fe DRAFT HOMER Getting Started Guide 24/29 Step ten: Add sensitivity variables In Step Five, you learned that HOMER uses scaled resource data for simulations. This section describes how to enter sensitivity values for both the wind speed scaled annual average and diesel price to perform a sensitivity analysis on these variables. The sensitivity analysis will allow you to explore how variations in average annual wind speed and diesel fuel prices affect the optimal design of the system. Another way to say this is that the analysis will show you the range of average annual wind speeds and diesel prices for which it makes sense to include wind turbines in the system design. 1. Click Wind resource By to open the Wind Resource Inputs window. 2. Click the Scaled annual average Sensitivities button Aa] to open the Sensitivity Inputs window. Scaled data for simulation Scaled annual average (m/s} | 45 wl 3. Add the values 4, 5, 5.5, 6, 6.5, and 7 to the Average Wind Speed sensitivities table. Variable: Wind Data Scaled Average Units: m/s Link, with: | <none> S | Values: / 4.500 Clear | 4.000 5,000 5.500 6.000 6.500 7.000 These sensitivity values tell HOMER to simulate each system configuration using seven sets wind speed data (scaled to each average annual wind speed value in the table). 4. Click OK to return to the Wind Resource Inputs window. Notice that the number of sensitivity variables, 7, appears in between the brackets on the Sensitivities button. Scaled annual average (m/s) | 45° {7} | 5. Click OK to return to the Main window. 6. Click Diesel [4] (in the Resources section) to open the Diesel inputs window. Resources Wind resource laloins HOMER v2.0 (May 2003) % 7. Click Price Sensitivities button it] to open the Sensitivity Inputs window. Price ($/L) [ Lal 8. Add the values 0.5, 0.6, and 0.7 to the Diesel Price Sensitivities table. Vatiable: Diesel Price Units; $/L Link with: | <none> 7] a DRAFT HOMER Getting Started Guide 25/29 = Win C | 4 070 HOMER will simulate each system configuration for each diesel price value in the sensitivities table. 9. Click OK to return to the Diesel Inputs window, then click OK to return to the Main window. HOMER y2.0 (May 2003) k by DRAFT HOMER Getting Started Guide 26/29 Step eleven: Examine sensitivity analysis results HOMER displays sensitivity results in graphs and tables. This section describes how to view and interpret the sensitivity results to determine under what conditions a wind/diesel system is more cost-effective than a diesel-only system. 1. Click Calculate _Latculate | to start the simulation. The progress bar indicates an estimate of the time remaining until the simulation and optimization process is complete. Tip: You can stop HOMER at any time during the simulation process by clicking Stop. 2. Click the Optimization Results tab, and click Categorized to display the table of sorted system designs. Sensitivity Results Optimization Results | Sensitivity variables Wind Speed (m/s) | 7 x] Diesel Price (saj[o7 = | Double click on a system below for simulation results. @ Categorized ( Overall eels iain a oe Lae Te (kw) (kw) Capital NPC ($/kWh)} Frac. my (hrs) 5 @ 88 6 $72,900 $245,775 0.620 0.58 6.887 1,993 o 5k i i 6 $38,100 $325,083 0820 O00 14315 4,145 HOMER now displays the Wind Speed and Diesel Price sensitivity variables in the boxes above the Categorized Optimization Results table. You can see that when the average annual wind speed is 7 meters per second and the price of Diesel fuel is $0.70 per liter, wind/diesel/battery is the optimal system type: it is more cost-effective than the a > system with no wind turbine. You can explore how changes in the average annual wind speed and diesel fuel price affect the optimal system type by selecting different wind speeds and fuel prices. For example, if the diesel fuel price is $0.70 per liter, and average annual wind speed is 4.5 meters per second or lower, system designs that include wind turbines are no longer optimal. Sensitivity Results Optimization Results | Sensitivity variables Wind — . | Diesel Price (gaj[a7 7] or simulation results, ce oe ™ Overall Inv. Total Total Ren. iesel (kw) Capital NPC isnt Frac. mn ie 6 $38,100 $325,083 0.820 0.00 14315 4145 . 6 $68,100 $338,662 0.854 0.15 12357 3,726 HOMER v2.0 (May 2003) = HOMER also displays sensitivity results in graphs, which can be a more useful way to look at the results. 3. Click the Sensitivity Results tab, and click Graphic to display the table of sorted system designs. Make the following selections: DRAFT HOMER Getting Started Guide 27/29 e Inthe Wind Speed list, select x-axis. In the Diesel Price list, select y-axis. e Under Variables to plot, select Optimal System Type in the Primary list. Select <none> in the Superimposed list. Sensitivity Resuks | Oplimization Results | Siren caitankee eee eae Se ee eee Wind Speed (m/s)} x-axis x] Diesel Price ($/L)| y-axis Vatiables to plot is AN tee ace senate oa eR ee Primary [Optimal System Type 1 superimposed [<rone> = New Window... 0.707 Legend Ba Conerator 1 Battery [Bi windicenerator 1 80tt 60 65 70 50 $5 Right click to copy, save, or modify Wind Speed (m/s) On the Optimal System Type (OST) graph, you can simultaneously see the information for all of the sensitivity variables from the Categorized Optimization Results table. The graph shows that given the load, component costs, and resource availability that you defined as HOMER inputs, the optimal, or most cost-effective system design includes wind when the average annual wind speed is 5.0 meters per second or greater. HOMER displays the results of the simulation and optimization in a wide variety of tables and graphs. Spend some time looking at the different graphs to familiarize yourself with these tables and graphs. HOMER v2.0 (May 2003) % Getting Started Guide summary DRAFT HOMER Getting Started Guide 28/29 This section describes some main ideas to remember about HOMER as you work with the model. e To use HOMER, you enter inputs (information about loads, components, and resources), HOMER calculates and displays results, and you examine the results in tables and graphs. e Using HOMER is an iterative process. You can start with rough estimates of values for inputs, check results, refine your estimates and repeat the process to find reasonable values for the inputs. e You can use HOMER to simulate a power system, optimize design options for cost- effectiveness, or to perform a sensitivity analysis on factors such as resource availability and system costs. ¢ HOMER is an hourly model. HOMER models system components, available energy resources, and loads on an hourly basis for a single year. Energy flows and costs are constant over a given hour. HOMER can synthesize hourly resource data from monthly averages that you enter in tables, or you can import measured data from properly formatted files. e HOMER is primarily an economic model. You can use HOMER to compare different combinations of component sizes and quantities, and to explore how variations in resource availability and system costs affect the cost of installing and operating different system designs. Some important technical constraints, including bus voltage levels, intra-hour performance of components, and complex diesel generator dispatch strategies are beyond the scope of an economic model such as HOMER. NREL's design tool for hybrid power systems, Hybrid2, can simulate these and other technical constraints and is useful for further exploring design options that HOMER identifies as cost-effective. HOMER v2.0 (May 2003) = Contacts DRAFT HOMER Getting Started Guide 29/29 Peter Lilienthal, PhD peter_lilienthal@nrel.gov phone: (303) 384 - 7444 fax: (303) 384 - 7411 Tom Lambert, P.Eng. tom_lambert@nrel.gov http://www.nrel.gov/homer National Renewable Energy Laboratory 1617 Cole Boulevard Golden, CO 80401 USA HOMER v2.0 (May 2003) Analysis of Renewable Energy Retrofit Options to Existing Diesel Mini-Grids ASIA-PACIFIC ECONOMIC COOPERATION ENERGY WORKING GROUP EXPERT GROUP ON NEW AND RENEWABLE ENERGY TECHNOLOGIES Prepared by Sustainable Energy Solutions in association with National Renewable Energy Laboratory Strategic Power Utilities Group -October 1998- TABLE OF CONTENTS CHAPTER 1 INTRODUCTION......ccccssssssssesssssesssnesesnsessnenencenenesucassnsacsncassncaeensaesseeeaneneseensnesneneeneacenennes 1-1 CHAPTER 2 PROVIDING POWER TO THE RURAL AREAS. ......ccssssssssssssssensenenseensnnensnsensasensensnnes 2-1 MINI-GRIDS IN RURAL AREAS. PRICE SUPPORTS FOR DIESEL FUEL. CHAPTER 3 CONSIDERING RENEWABLE ENERGY/DIESEL RETROFITS........c:sssecsssesseeesees 3-1 BENEFITS TO RENEWABLE ENERGY/DIESEL RETROFITS ........:scesecceeseecseesescsesceecseseeceacsssceesaseceesasaseesavecatasees 3-1 CHARACTERISTICS OF A RENEWABLE ENERGY/DIESEL HYBRID SYSTEM .. RENEWABLE ENERGY OPTIONS FOR HYBRID SYSTEMS .. BARRIERS FOR RENEWABLE ENERGY .... CHAPTER 4 FINANCING MECHANISMS AND INVESTMEN' RURAL ENERGY MARKETS ... INVESTING CAPITAL IN THE RURAL AREAS FINANCING MECHANISMS SUITED TO RURAL ENERGY CUSTOMERS SOURCES OF CAPITAL. CHAPTER 5 RENEWABLE ENERGY IN THE PHILIPPINES. ENERGY PROFILE OF THE PHILIPPINES....... PROJECTED GROWTH OF ENERGY DEMAND .. PRIMARY PLAYERS IN PHILIPPINES ENERGY SECTOR.. RENEWABLE ENERGY RESOURCE POTENTIAL... RENEWABLE ENERGY POLICY FRAMEWORK. MINI-GRIDS IN THE PHILIPPINES ..........-..++ COSTS OF DIESEL POWER GENERATION AND TRANSMISSION ENERGY END-USES AND CONSUMER PROFILES RENEWABLE ENERGY/DIESEL RETROFITS MODELING OF RENEWABLE ENERGY/DIESEL RETROFIT CONFIGURATIONS IN THE PHILIPPINES ........-.++4+-5-27 CHAPTER 6 FEASIBILITY OF RENEWABLE ENERGY/DIESEL RETROFIT OPTIONS IN THE PERTEEPPINES ....isecscscssscossssosscsssssconsssnecnsssssnsssusseccussecsescnsesscessusovovoesoconssnssensnssnconssescisoessusinecnsneiseonseesosssaeed 6-1 CLASSIFICATION OF PLANTS FUEL PRICES WIND RESOURCE ASSESSMENT ... SOLAR RESOURCE ASSESSMENT. HYBRID DESIGNS ASSUMPTIONS USED IN MODELS.. QUANTITATIVE MODELING .. FINDINGS CHARACTERISTICS OF RURAL AREAS THAT ARE LIKELY CANDIDATES FOR RETROFITS . ECONOMIC CONSIDERATIONS IN DESIGNING A RETROFIT . SOCIAL AND DEVELOPMENT ISSUES... COST OF RENEWABLE ENERGY/DIESEL RETROFITS . TECHNICAL ISSUES ..........06++ BARRIERS TO BE OVERCOME... LOCAL AND NATIONAL POLICIES TO SUPPORT RURAL ELECTRIFICATION... CHECKLIST FOR ANALYZING OPPORTUNITY FOR RENEWABLE ENERGY/DIESEL RETROFITS . CHAPTER 8 CONCLUSIONS.. ABBREVIATIONS AND ACRONYMS. .....cssssssssssssssssssssssssssssssssssssssssscssscsssesssssssssnsnsssasecasasessscassssecenses 9-1 BIBLIOGRAPHY PHILIPPINES... APPENDIX B CHARACTERISTICS OF STRATEGIC POWER UTILITIES GROUP (SPUG) DIESEL PLANTS.. 7 ii Chapter 1 INTRODUCTION The importance of electrification to socioeconomic development in the rural areas cannot be underestimated. Energy is an ingredient to unlocking human and economic potential. Making energy available to rural populations increases their prospects for economic and educational progress and creates opportunities. The goal of most member economies is to provide reliable, affordable energy services in the rural areas so that the rural people can avail themselves of the benefits that energy can offer. The forecast growth in energy demand and growth in the economies of the APEC region will place pressures on the environment, in both rural and urban areas. There is also increased public concern about environmental degradation arising from the combustion of fossil fuels and longer-term fears about oil availability and prices of fossil fuels. Today, worldwide, an estimated two billion people still rely on traditional fuels-- wood, crop residue and charcoal-- for cooking and the same number lack access to modern energy services. A large number of these people, over 60%, live in the rural areas of developing countries. The rural areas that do have electricity tend to rely on diesel generation for their power. Meanwhile, renewable energy technologies that have the potential to provide clean, affordable power have made only a negligible impact in rural areas. The traditional approach to rural electrification has been to extend the central power grid. This option presents problems for the developing member economies primarily because of the high costs and the infrastructure requirements. Often, the electrical grid ends a great distance from the rural populations and given the cost of extending it, little likelihood exists that the grid will reach many isolated and lesser-populated areas for years, if ever. Where there is a grid, the cost of grid-supplied power in rural areas can actually be much higher than in urban areas due to decreased load density and lower load growth in rural areas, which are typically characterized by dispersed, remote communities. Alternatives to grid extension are now being considered. Recognizing the drawbacks of grid extension, the paradigm of energy supply and distribution is now changing from large centralized power systems connected to the central grid to smaller, distributed utilities, using mini-grids or individual household systems. A significant percentage of mini-grids in the APEC member economies_are_ ‘powered by small diesel generator sets, which provide power to a village or a facility either in stand-alone or in mini-grid configurations. The problem with diesel generators is that they can be expensive to operate and maintain, and may require technical expertise that is not locally available. These systems which are usually in remote areas, also have problems because of the difficulty in getting spare parts to repair them and in getting fuel delivered in a reliable and timely fashion. In addition, the cumulative emissions from the numerous generator sets can represent a significant source of greenhouse gas emissions. High fuel costs combined with high costs for operation and maintenance often mandate that the generators be operated only during part of the day, meaning that the local 1-1 population is without electrical service during the intervening hours. Typically, diesel prices are highly subsidized, so that the local community is paying far below market price and the cost to the government over the long-term is extremely high. However, there is an opportunity to offset the use in the rural areas by combining the diesel with renewable energy-based options. In light of the increased awareness about the environmental and economic benefits of renewable energy and the problems associated with relying solely on diesel generators, many APEC member economies are now beginning to look into the possibility of retrofitting diesel generators in mini-grids to incorporate renewable energy systems. Renewable energy/diesel hybrid systems, that may use a combination of photovoltaics, wind, mini-hydropower, biomass, batteries, and diesel may offer practical alternatives for remote power generation, because they can offer clean and efficient power that will in many cases be more cost-effective than sole diesel systems. Although fairly new on the horizon, hybrid systems may be capable of directly competing with conventional alternatives for village electrification because of reduced fuel consumption, reduced maintenance costs of the diesel generators, better performance, and_ reliability. Renewable energy/diesel hybrid power systems are proving to be a viable sustainable option for rural communities and villages in many developing member economies where conventional grid extension is not an economical or practical option. Seeing the need for a better understanding of the opportunities and challenges associated with retrofitting diesel systems with renewable energy technologies, this study was initiated by the APEC Expert Group on New and Renewable Energy Technologies. The APEC Expert Group on New and Renewable Energy Technologies was established by the APEC Energy Working Group to promote and facilitate the expanded use of renewable energy where it is cost effective. This group is seeking to further the use of renewable resources in order that they can contribute both economically and socially to the well-being of the APEC region. They recognize that continued economic growth within the region will require meeting the increasing demand for energy services including electricity both in urban and rural areas, and renewable energy technologies can offset the use of conventional fuels. The focus of this study is the technical, economic, social, and environmental issues associated with retrofitting diesel mini-grids with renewable energy technologies and the development of a systematic approach for evaluating the various options. To set the stage for this study, general considerations of renewable energy/diesel retrofits are presented, including the characteristics and costs of diesel mini-grids, the opportunities and benefits of retrofitting the diesels with renewable energy options; and the types of financing mechanisms and means to access to capital to foster rural energy development. The reliance on diesel mini-grids, the desire to consider renewable energy options, and the ability to finance a diesel/renewable energy retrofit are three important initial conditions in being able to design and implement a retrofit project. The general issues and considerations discussed in this study in Chapters 2 through 4 naturally lead to a more detailed look at these issues as they relate to a particular APEC member economy, the Philippines. 1-2 \ Ne The Philippines is an APEC member economy with a large variety of diesel mini-grids providing power in their remote areas and a good renewable energy resource potential. This member economy is also one of the larger markets for renewable energy utilization, and the combination of its growth rate, the increasing demand for energy, and the diverse renewable resource base, make it an ideal place to evaluate the possibilities of retrofitting their diesel systems with renewables. This study incorporates the results of investigations done on the state of renewable energy development in Philippines, the renewable energy | resource potential, the extent and characteristics of existing diesel generation in rural ' areas, the consumer and end-use needs, the technical, institutional, financial and fiscal policy environment affecting renewable energy development; and the considerations in designing retrofits for their diesel mini-grids. | Analytic modeling tools (Hybrid2 and HOMER) have also been used to evaluate the | Opportunities to retrofit existing diesel mini grids with wind and photovoltaics for six | different scenarios in the Philippines and to determine optimum system configurations. By demonstrating the capabilities and versatility of the models, other APEC member economies may see the value of integrating this type of modeling into their own energy analysis and planning. Since many member economies in the APEC region use diesel mini-grids for their remote generation, the results of this study can be readily adapted to address questions and concerns with renewable energy/diesel retrofits. Other APEC member economies will also benefit from these findings because of the ability to learn from the experiences in the Philippines as they consider their options for rural energy development. The final part of this study, Chapter 7, presents general guidelines on common issues when considering the retrofit of existing diesel mini-grids with renewable energy systems. They are intended to provide broad guidance on social, economic, policy, and technical issues. This information can be useful in designing a new hybrid system or in retrofitting an existing diesel to include renewables. The hope is that information presented in this study, and the overall approach developed, will be used by local and national decision-makers in APEC member economies to objectively evaluate the opportunity to incorporate renewable energy systems into a diesel mini-grid system so that informed decisions on the generation and delivery of energy services to remote areas can be made. This study was a collaborative effort among three institutions. The principal author on this work was Dr. Ellen Morris (Sustainable Energy Solutions, United States). Dr. C. Dennis Barley and Lawrence T. Flowers (National Renewable Energy Laboratory, United States) contributed Chapter 6 and the appendices, and Mr. Pio J. Benavidez, Mr. Rafael L. Abergas and Mr. Rene B. Barruela (Strategic Power Utilities Group, Philippines) assisted with the quantitative modeling, provided data, and wrote portions of Chapter 7. Research assistance was provided by Ms. Gwendolyn S. Andersen (Powercom Associates, United States). Chapter 2: PROVIDING POWER TO THE RURAL AREAS Rural electrification is considered an essential component of socio-economic development strategies. Given that the rural populations tend to be dispersed and have relatively small power demands, it is a challenge to provide the rural communities with affordable and reliable energy services. Traditional rural electrification schemes have focused on grid extension from the urban to rural areas although this is not always the most cost-effective alternative for the utility or the government. Having recognized this, APEC member economies are promoting the use of decentralized energy systems that either are standalone systems or connected through a small electrical grid (i.e., mini-grid). Mini-grids in rural areas Mini-grids are small electricity grid systems that connect a small number of consumers using a local electricity generator. The mini-grids are typically characterized by multipurpose electrical power service to communities with populations ranging from several hundred to several thousand (perhaps 50 to 500 households or more), with overall energy demand ranging from several tens to several thousand kWh per day (Flowers, et al., 1994). Mini-grids are usually located in areas that are separated from other demand centers, or the central grid. For example, they may be used for providing power to islands, small cities, or clusters of villages. Because of the small dispersed nature of these communities, it is usually not feasible or economical to connect to the central grid or to build utility-sized coal, gas turbine, or combined cycle plants. The most common technology for remote generation of electricity for mini-grids is diesel-powered generators. This technology has been used in rural areas over the last several years because of the following reasons: > The initial capital cost is relatively low; > The systems are readily available on the market; > They can be installed anywhere; and >» The technology is well understood and familiar to the local community. Although diesel units have a low initial cost, the costs for the fuel and the operation and maintenance are still very high. The cost of electricity production from diesel generators is highly dependent on fuel prices and the quality of the maintenance. It has been estimated that the operation and maintenance cost for a diesel system is on the order of © / - US$0.02/kWh and the fuel cost can be US$0.20-US$0.60/kWh (Office of Technology Assessment, 1992). Therefore, when compared to renewable energy technologies such as — wind and micro-hydropower, diesel systems are not always the most cost-effective option. However, the diesel systems have been in use much longer than the renewable energy technologies, and until local communities and utilities become more familiar and comfortable with the alternative, the rural energy markets will still be dominated by diesel systems. 2-1 Besides the high cost associated with diesel systems, there are also a number of other drawbacks. These include: > — Lower availability and reliability, when compared to other technologies; > Limited operating hours; » Adverse environmental impacts; > — Lifetime of the generators is only 8-10 years; and > Typically, the units are oversized. The reliability issues for diesel mini-grid will be depend on the reliability and maintenance of the individual diesel units. Typically, diesel engines can be unreliable because of the high operating temperatures, high rotating speeds and the need for_ frequent maintenance (McCandless, 1997). Diesel engines usually require a complete { “/ AC overhaul every 10,000 hours of operation (representing a cost of about US$1500), and | ~ these costs can prove to be onerous over the long-term. All operation and maintenance costs and a substantial portion of the fuel costs are strictly a function of operating hours. Communities see that the only way to reduce the operating costs associated with diesel generators is to reduce the number of operating hours. Consequently, diesel systems may sometimes only be run for 4 to 6 hours per day, usually in the evening. This small amount of power greatly limits the potential for the community to create income-earning opportunities that require reliable power over the course of the entire day. In addition, the emissions and noise from diesel generators will contribute to pollution in the local area. Another problem with diesels in rural areas is that they are often oversized for the demand, making them inefficient and more costly. Baring-Gould et al. (1997) points out that remote diesel systems are usually sized to meet the yearly peak load rather than the average daily load. Operation of the higher capacity diesel uses much more fuel than is needed and can require that excess power be dumped into dummy loads. Price supports for diesel fuel A frequent objective of developing member economies is to provide cheap energy, in the belief that this will stimulate economic growth. To do this, diesel fuel supplies are often subsidized, which leads to price distortions and undermines the ability for competition and cost recovery. Reform of energy subsidies which distort market choices, combined with energy pricing which incorporates the full social and environmental costs (i.e., externalities) of various technologies, could help create a level playing field on which all potential energy options could be judged on their merits. It could also reduce the substantial financial burdens borne by taxpayers and governments in developing member economies that support under-priced electricity services or over-priced energy production. 2-2 Subsidies Typically, rural electrification is subsidized through lower prices for diesel fuel, however the subsidies are becoming a large burden on governments in the APEC member economies. Subsidies also distort the market by making diesel much cheaper than the alternatives for rural electrification, making it difficult for renewable energy based electrical generation to compete. These subsidies are justified based on the desire to extend electricity service into remote areas, to hold down costs for consumers, to promote industrial development, and to encourage domestic production for trade and security reasons. There are a number of drawbacks to using energy subsidies including: > Subsidies tend to benefit the wealthier members of the population because the poor cannot even afford the household connection; > Systems that are paid for (as opposed to being given away or heavily subsidized) creates a sense of ownership and commitment in the community; > Governments can no longer afford subsidies; > Without cost recovery, the system will always have to be subsidized and will lead to unsustainability; >» Subsidies create dependency in the local community and inhibit development; and > Subsidies are not always needed because people in rural areas are willing and able to pay for energy services if given access to appropriate financing mechanisms. While these arguments against subsidies are sound economically, it may simply be impossible, for political reasons, to eliminate them. Because existing energy subsidies provide benefits to a wide range of economic and social groups within a member economy, there may be considerable political resistance to their removal. It is, however, possible to finance a project in such a way that the cost to the end-users remains relatively low, without interfering with the long-term sustainability of the project, and subsidies can gradually be phased out. For example, this can be done by matching the energy service payments with the end-user’s income stream. This creates a sense of ownership and pride in the system, and provides funds for operation and maintenance, repairs, parts replacement, and fuel. If the price of electricity is to be subsidized, it must be done in such a way that the project does not become unsustainable. One way to compensate for the price distortions caused by subsidizing fossil fuel is to have temporary investment subsidies for renewable energy technologies and infrastructure in order to break the momentum for using energy systems powered by fossil fuels. Another option is to subsidize the interest rate on a loan; however, this will most likely have negative repercussions for the lender. Perhaps the 2-3 best method would be to provide government or utility loan guarantees, reducing the interest rate the lender needs to charge, in exchange for allowing a government agency or the utility to perform managerial oversight. Sometimes governments institute energy price controls as a form of subsidy, requiring the national utilities to sell electricity to consumers at artificially low prices, without subsidizing the inputs. The utilities pay market prices for fossil fuel imports, but must sell the electricity at below market rates. Insufficient or even negative revenue makes it impossible for the utility to be able to afford preventative maintenance, timely repairs, and, in some instances, makes it impossible to provide 24-hour, seven day a week electricity. If mini-grid operators are required to offer electricity at prices below what is necessary to recoup their operating expenses, the system will be unsustainable and the electricity supply will be unnecessarily limited. As privatization and increased competition begins to take hold, price controls will be more difficult to maintain, and it could facilitate the transition to more cost-effective options such as renewable energy. Externalities Environmental and social externalities have been viewed as a way to justify subsidies. Environmental externalities are costs associated with damage caused by conventional, diesel electrification; and social externalities are costs associated with development and non-excludable improvements in quality of life. An example of a social externality is the benefit that the entire community would have, if a community’s school, health clinic, and other government services were electrified. In other words, the social benefits to electrification that are not being paid for by all of the beneficiaries but are realized by the community as a whole. An approach to account for negative environmental externalities associated with the use of diesel is to incorporate the environmental costs into the price of diesel. Attempting to value the environmental damage caused by burning diesel, and taxing the fuel at a rate equal to that value, is a way of internalizing the environmental and social costs. Whereas a subsidy distorts prices and costs the government money, an environmental tax helps to rationalize prices. It is usually possible to encourage electricity supply without distorting prices by removing whatever barriers are preventing the market from increasing the supply on its own. This could include removing high tariffs on electrical equipment or rescinding laws prohibiting private electrical generation or distribution. Allowing utilities to charge enough to recoup their costs would help to increase electricity supply and improve reliability in many member economies. Two-part pricing structure Prices for electricity are typically subsidized in rural areas to keep the cost per kWh low, regardless of consumption. Lilienthal (1998) points out that the problem with this pricing system is that the wealthiest households receive the largest subsidies because they have 2-4 the highest consumption rates. If renewable energy systems were being used, the largest consumers would deplete the batteries and degrade the quality of service to the entire community. Appropriate pricing structures for a renewable energy/diesel hybrid system are essential to ensure the long-term sustainability of a village power program. One way to structure electricity rates in the rural areas is to use two-part prices that are based on electricity consumption (Lilienthal, 1998). In this scheme, an initial amount of consumption per household is subsidized to give everyone in the community a basic level of service. Above the basic level, the rate that is charged depends on the actual marginal cost of the system. In addition, special rates could be set up for loads that could be deferred or interrupted, since these loads will not be associated with additional costs for the system. A two-part pricing structure is an equitable way to have electricity consumption correlated with electricity rates so that larger consumers are paying a market price and the system will be able to recover its costs. 2-5 Chapter 3 CONSIDERING REN EWABLE ENERGY/DIESEL RETROFITS Although diesel mini-grids are the most common power supply for rural areas, it is possible to retrofit diesel generators with renewable energy production components such as photovoltaics, wind, biomass, and mini-hydropower in a hybrid configuration. These hybrid or village power systems make use of the renewable resources to produce electricity that can supplement diesel generators. Renewable energy options have increasingly become the preferred solution for rural electrification. Benefits to renewable energy/diesel retrofits Hybrid systems that combine renewable energy systems with diesel offer many advantages for the rural areas of the APEC region. Some of these benefits include: > Improved reliability. By diversifying the fuel supply, it is possible to guarantee a firm power supply and reduce the downtime during power outages. Multiple sources of generation are important because of their ability to provide backup power. Retrofitting improves reliability by providing an alternate generating system should the supply of diesel be cut off from the community or if the system breaks down. Renewable energy/diesel hybrid systems can provide continuous, reliable power by matching the capabilities and power outputs of the diesel and renewable energy components. In addition, photovoltaic and wind energy systems, because they have fewer moving parts, have lower maintenance requirements than diesel, so they are subject to less downtime for repairs or routine maintenance. Since renewable resources are indigenous and free, the fuel supply is more secure than diesel. The greater fuel security offered by hybrids also has an impact on the local community’s ability to develop income-earning opportunities for their long-term economic growth. > Improved energy services. Diesel operating costs are high. Generating electricity with diesel is so expensive that many remote communities using diesel mini-grids only can afford to have electricity for short time periods (4-6 hours/day). Renewable energy has the benefit of being able to work with the diesel to provide high quality, reliable electricity services for 24 hours/day. Most of the costs of photovoltaic or wind power generation are in the form of up-front capital expenditures. Operating and maintenance expenses are low. Therefore, incremental costs of additional generation are low. Therefore, generating electricity for 24 hours a day with photovoltaics or wind costs only marginally more than generating power for 4 or 6 hours per day. 3-1 > Reduced emissions and noise pollution. The environmental benefits of renewable energy/diesel retrofits can be seen in terms of decreased noise and air pollution. Reduced emissions of CO2, CO, SO2, NO, and particulates achieved by offsetting the use of diesels will have a favorable impact on air quality and more broad reaching impacts on climate change. For example, photovoltaic, wind, and micro-hydropower generation create no air or water pollution, unlike diesel generators, and renewable energy systems are substantially quieter than diesel generators. > Continuous power. The intermittancy of renewable resources can be mitigated by combining it with diesel during periods of poor resource availability. In addition, if there is a sudden increase in energy demand or the batteries’ capacity decreases, the diesel generator will be able to supplement it so that the local community is supplied with continuous power. > Increased operational life. Since the diesel system will not be used continuously, renewable energy/diesel hybrids will extend the life of the overall system. Operational life of the battery can be increased since excessive depth of discharge can more easily be prevented (Asian Development Bank, 1996). > Reduced costs. When considered in the context of life-cycle costs, it is often more cost-effective to use renewable energy/diesel hybrid systems. This is due to the reduced use of diesels, which in turn saves on fuel consumption and maintenance costs. Other intangible cost benefits that will be realized with the use of hybrids are achieved through environmental and social externalities. In many rural communities the “landed” cost of diesel fuel, in other words, diesel fuel plus transportation, is typically very high. In addition, the cost of service and spare parts can be exorbitant to a remote community. The benefit to using renewables in a diesel retrofit is that there is no fuel cost because they are indigenous resources. Retrofitting a diesel mini-grid to incorporate renewables allows some or most of the costs associated with diesel fuel to be displaced, saving money over the long-term. It should be noted that there are still costs for operation and maintenance of renewable energy components. However, this can be easily coordinated with the operation and maintenance of the diesel systems. > More efficient use of power. By using hybrids, it is possible to efficiently cope with power demand peaks. For example, the renewable energy system could be sized to meet the base load demand with a high degree of reliability and the diesel generator could be used to meet the peak loads during periods of higher demand. > Energy security. Energy self-sufficiency is important to a member economy’s long-term growth and national security. A reliance on imported fuels puts a member economy in a vulnerable position in terms of their security of supply and fuel prices. Renewable energy resources have the benefit of being indigenous and plentiful in the APEC region, and are therefore a more secure fuel source for the 3-2 local economy. Moreover, increasing the use of renewable energy resources will be important in achieving energy self-sufficiency. Characteristics of a renewable energy/diesel hybrid system A diesel generator, kept in working order with an adequate fuel supply, can serve as a backup to a renewable energy system, allowing for better reliability and the ability to meet any unexpected peaks in energy demand. Because the diesel generator is only one of the sources of power, if it breaks down or runs out of fuel the community is not left powerless. If the renewable portion of the system is sized to provide the majority of the power, the diesel is only run intermittently, reducing the maintenance and fuel costs and increasing the lifespan of the diesel generator. A renewable energy/diesel hybrid system will have at least one diesel generator and at least one renewable energy component, power conditioning equipment, possibly energy storage (e.g., batteries), and a control system. In diesel-only systems, the diesel generator can provide varying amounts of power to match the load by increasing or decreasing fuel flow. Renewable energy systems, on the other hand, provide variable amounts of power depending on the resource availability. When the power produced exceeds the amount of power needed, the excess power must be diverted. If the system includes batteries, the excess power is used to charge the batteries. Once the batteries are fully charged, or if the system does not include batteries, excess power must be diverted by the automated system controls to a controllable or “dump” load. This load is ideally for something useful, such as heating buildings or water. Energy storage systems in renewable energy/diesel retrofits are usually batteries. Batteries can improve diesel generator efficiency and lifespan by reducing diesel starts and by allowing the diesel to be run at full capacity. Whenever there is a shortfall of power production between what the renewable energy system is providing and the load, the diesel must be started, even if the shortfall is only for a few minutes. Frequent starts and stops are very rough on diesel generators and can shorten lifespan considerably. Batteries can delay or prevent most or all short-term diesel starts. The use of batteries in a system can also avoid running the diesel at very low loads, which is extremely inefficient. In addition, when the renewable energy source cannot meet the load, the diesel generator can be run at full capacity to meet the load. A sufficiently large battery bank may allow the diesel generator to only be used as only a backup generator. A control system is necessary to protect batteries from overcharging or over-discharging. If batteries or photovoltaics are used, the system must have an inverter to convert the DC power from the batteries or photovoltaics to AC power. Renewable energy options for hybrid systems Much of the APEC region is blessed with plentiful sources of renewable energy. Wind, hydropower, biomass and solar resources exist in abundance. They are generally clean and sustainable sources of power. However, their appeal goes far beyond the clear environmental benefits. Recent developments in the technologies that convert these 3-3 resources into useable power have made them much more suitable for rural applications. These developments include technical progress (greater efficiencies), cost reductions and improved modularity (World Bank, 1996). These improvements make them potentially much more viable for communities considering the incorporation of renewable energy systems into their diesel mini-grids. In rural areas, where there are smaller, more localized electrical loads that are currently being served with diesel generators, renewable energy systems offer a viable and cost- effective alternative to conventional fuels. Many of the rural areas have renewable energy resources that are sufficient to produce electric power that can be cost competitive with the life-cycle cost of diesel generators. In these cases, it is usually cheaper and quicker to build local renewable-based energy systems than to expand the national grid. As power generation requirements begin to increase in remote areas, the interest in developing renewable energy systems is becoming stronger and therefore more incentives for electric distribution utilities to produce their own power using indigenous resources. Brief descriptions of the technologies that have the most opportunity for use in retrofitting diesel mini-grids are presented below. Wind Wind technologies use the wind to turn blades, which are connected to an electric generator. Wind systems provide intermittent power in either small standalone wind systems with energy storage or centralized hybrid systems with a local mini-grid distribution network. The generator’s output depends upon the wind resource available, which varies constantly, but can be greater during certain seasons. The small wind turbines can range in size from 0.25 to 20 kW. These modular systems can include one or more turbines (depending on the load and the wind resource), a bank of batteries, an inverter/battery charger, a microprocessor controller, and a backup diesel generator. The batteries are configured to provide adequate load support. Because of their modularity, wind systems are typically quick and easy to install. Although wind systems have high initial capital costs, the designs have been improved to provide ease of operation and lower maintenance costs. The operation and maintenance costs for wind turbines are low. _(less than US$0.01/kWh), however there-isstil'a need for adequate service and access to replacement parts in the local area. The_cost of electricity in rural areas using wind — turbines ranges from US$ 0.40 to 0.70/kWh (World Bank, 1996 and D. Barnes, World Bank, personal communication). For rural areas, wind is well suited for village electrification, water pumping, and remote telecommunications applications. Other applications that are emerging include battery charging stations and wind-electric icemakers. Using relatively simple designs with few moving parts, small wind turbines can offer high reliability and low maintenance. Most regions have sufficient wind resources (at least above 4 m/sec) to use the small turbines suited for the rural areas (Bergey, 1996). Since wind can vary considerably, it is best utilized in conjunction with other energy supplies to ensure reliability and satisfaction with the system. One of the most promising applications for wind power in rural areas is fv in the retrofitting of diesel mini-grids with wind turbines. 3-4 j Wind-diesel hybrids can offer rural communities operational, economic, and environmental benefits over strictly diesel systems. Using sophisticated controllers, wind-diesel hybrids can be optimized to minimize the need for diesel and maximize the use of the wind resource. Hybrid systems can supply 24-hour AC power and can substantially increase the efficiency with which diesel fuel is used. The move from diesel-only systems, with power supplied perhaps 6-12 hours a day to power available 24-hours, can directly lead to socio-economic development of the local community by expanding their income-earning opportunities. In the Weingart et al. (1998) study, it is noted that operating time of the diesel can be reduced by 30-70%, depending on the nature of the load, the wind resource, and the design of the hybrid power unit. Similar benefits that are described for PV-diesel hybrids such as substantial reductions in diesel fuel consumption, reduced emissions, and improved reliability also apply for the wind- diesel systems. Photovoltaics Photovoltaic (PV) cells are semiconductor devices that absorb sunlight and convert it directly into electricity. The photovoltaic cells are interconnected to form the modules that deliver useful levels of voltage and current. Photovoltaic modules now on the market are typically sized to give a power output of 50 W, in full sun and to have a lifetime of around 30 years. A typical stand-alone photovoltaic system includes a photovoltaic array of modules, rechargeable batteries for energy storage, a battery charge controller, interconnection wires, switches, and possibly an inverter. The cost of electricity using photovoltaics in rural areas ranges from US$0.80-$1.00/kWh (World Bank, 1996). a eae Photovoltaics have several advantages. Reliability is high, and maintenance and operations are relatively easy due to the absence of moving parts. The systems are quiet and generate no pollution. Photovoltaic systems require no fuel, only adequate sunshine, and limited maintenance for the battery banks. Finally, they are modular, making short lead times, for both the original installation and future expansions, possible. However, initial capital costs for photovoltaic systems tend to be high. Since rural areas are faced with the problem of lack of access to modern energy services, tural electrification using photovoltaics is an attractive option because of its modularity, applicability in remote areas, ease of use, varied applications, and economics. Photovoltaic systems are already being used in a broad range of rural energy applications in the household, agriculture, communications, and public service sectors. Households and small businesses can benefit from energy services such as lighting, refrigeration, and entertainment provided by photovoltaic systems. The agriculture sector can use photovoltaics for water pumping and the public services that can be provided for with photovoltaics include public lighting, water purification, and electric power for public facilities such as schools and rural health facilities. 3-5 Photovoltaic-diesel hybrids can be an effective means of offsetting the diesel usage in rural areas. In using a PV-diesel system, it is necessary to incorporate batteries and controllers in order to match the power supply to the load and to increase the lifetime and efficiency of the diesel generators. Hybrid systems do not require as much battery storage capacity as stand-alone systems because of the additional capacity of the diesel generator. It has been noted by Asian Development Bank (1996) that the addition of photovoltaics to_a system can reduce the diesel engine running time by more than 50%, “Tesulting in a doubling of the time between engine overhauls, and it can reduce fuel requirements by as much as 50%. Although the initial cost of the photovoltaics will be high, this cost can in some circumstances be recouped in the reduced costs for diesel fuel and operation as well as the improved reliability and quality of energy services of the overall system. Biomass Biomass is plant-derived material that can be used to generate electricity by direct combustion or by conversion to either a liquid or a gaseous fuel. The most common use of biomass in rural areas is in the burning of traditional biofuels (e.g., wood, charcoal, crop residues, and dung). Biomass or biomass-derived products such as agri-waste materials (e.g., rice hull, bagasse, wood wastes, coffee hull, coconut husk, and coconut shells) however are the largest, most diverse, and readily exploitable of the renewable energy resources that can be used to generate electric power. Biomass can be used for power generation by burning the material to produce steam and using the steam to drive a steam turbine, or the biochemical and thermochemcial degradation of biomass can be used to produce biogas and liquid fuels that can then be used directly for fuel or converted to electric power. An advanced technology for biomass that shows promise in tural areas is biomass integrated gasifier/combined cycle that use biomass gaseous fuels in combined cycle gas turbines (Williams and Larson, 1996). The cost of electricity derived from biomass in rural areas ranges from US$0.08 to US$0.14/kWh for gasified biomass to US$0.15-0.25/kWh for biomass combustion systems (World Bank, 1996). The use of biomass residues in the rural areas offers great potential by turning waste products into power, that can either be used on-site by an agricultural processing facility or sold locally through a mini-grid. What is important for the rural areas is that biomass residues are a local resource and therefore it is valuable for distributed power applications (e.g., mini-grids) and important in alleviating local waste disposal problems. The off-grid units being used to supply local, on-site power for industrial concerns range in size from 100kW to 2MW, but manufacturers are considering the production of smaller units of 20 kW to 40kW for village power (P. DeLaQuil, EnergyWorks, personal communication). This power can be produced less expensively than the diesel and is often more reliable than the grid electricity that may or may not be available. In fact the net efficiency can increase from under 2 kWh per liter of diesel fuel to as much as 10 kWh per liter (Weingart et al., 1998). The cost-effective use of biomass energy in industries other than sugar, palm oil and pulp and paper has been demonstrated, however for other agri-wastes such as rice straw and 3-6 husks, and coconut husks and shells, there are two concerns. First, these biomass materials are low in carbon content, and therefore require a large volume to supply cost- effective energy. Therefore, the fuel supply needs to be available and plentiful. Second, dispersed collection and long transportation requirements from the production site to power plants can be difficult and expensive, if the residue is not found in close proximity to the plant. Hydropower Hydropower is a renewable energy technology that utilizes the energy from falling or running water to drive a turbine connected to an electric generator. Due to its reliability and efficiency, energy produced from hydropower resources may be utilized as a base load power supply. Hydropower projects are very site specific and their applicability depends on stream flow, seasonal runoff, topography, environmental impacts, and other factors. A typical hydropower system consists of hydraulic construction components (weir, intake, power canal, head race and penstock), mechanical equipment (turbine), and electrical components (transformers, switchboards and controls, generators). Hydropower projects are classified into three categories, based on their capacities, namely: i) micro-hydropower systems are systems with capacity less than 100 kW; ii) mini-hydropower systems are systems with capacity of 100 kW to 10 MW; and iii) small and large hydropower are systems with capacity of 11 MW and up (Morris et al., 1997). The cost of electricity for mini- and micro-hydropower are relatively low (US$0.13/kWh), however initial capital costs can be on the order of US$1,000 to US$2,500 per kW of installed capacity (McCandless, 1997). Micro- and mini-hydropower systems can be used effectively to supply power to rural areas that are not connected to the central grid. Many micro-hydropower stations have battery charging facilities that are not near the local transmission lines. The development of mini-hydropower by local distribution utilities or rural cooperatives is a possibility for the rural areas. Micro- and mini- hydropower systems are widely used in the rural areas because they are proven technologies that have low operating costs and can be installed quickly. People in rural areas are familiar with the equipment, the maintenance, and the level of service they will get with the hydropower system. The systems in rural areas have primarily been small “run of river” systems that do not incorporate energy storage. Although this is better for the environment, because there is not massive flooding with dams, it can present operational challenges because of fluctuations in the water flow. Because mini-hydropower can provide reliable power, it allows the rural communities to set up business enterprises that will lead to overall economic development. Combining diesel with hydropower is an option for reducing the reliance on diesel and a way of providing alternative power during drought periods. The price of hydropower is 33-50% lower than price of diesel-generated power so operating these systems in a complementary way makes economic sense (APEC, 1998). Keeping the diesel generators in reserve for use during peak demand or when streamflow is inadequate would be a suitable way to run a diesel-hydropower hybrid. The price of power will 3-7 increase by 20-30% if the diesel is brought on line during a drought, but the overall savings over a diesel-only system will still be 60% (APEC, 1998). A problem with only operating the diesel during droughts is that it is not a very efficient use of the diesel and is fairly complicated to implement. Similar to the other renewable energy technologies, the benefits in using hydropower with diesel lie in reductions in consumption of expensive diesel fuel and in costs of operating and maintaining the diesel generators. Geothermal Geothermal energy involves converting the heat of the earth, in the form of steam, to drive turbines to produce electricity. The conventional notion of geothermal powered electricity generation is that of large, multi-megawatt (MW) power plants. Although the World Bank currently considers 5 MW plants "mini-geothermal," there is a niche for remote, off-grid, power for much smaller plants 10 kW to 1000 kW that are fueled by geothermal. Entingh et al. (1994) indicate that a small geothermal power plant, for example a 300 kW unit using 120°C brine, can produce electricity for as low as US$0.11/kWh, which competes favorably with diesel generators. Geothermal has many benefits including a very high capacity factor (90%); reliable and stable power supply; modularity; and energy storage capacity. Because small-scale geothermal can be modular, it is likely that several modules would be grouped together to achieve economies of scale. The added benefit of low environmental impact from geothermal systems provides a further rationale for increased worldwide use of this indigenous energy resource. However, this market for small-scale geothermal has yet to realize its potential. The use of small, modular, geothermal power plants in rural areas has generated some interest in the geothermal industry. The smallest unit currently available on the market is 100 kW, but project developers are unlikely to consider anything less than 5 MW (L. Vimmerstedt, NREL, personal communication). Moreover, there have not been a large number of projects because of technology limitations and the high initial costs associated with drilling and exploration for the sites. Despite this, there is indication that small-scale geothermal could be developed on an economically viable basis. Since this opportunity for using small geothermal is still emerging, there has been no work done in combining geothermal with diesel in a hybrid configuration. Because of this, geothermal is not emphasized in this study. Barriers for renewable energy Despite the fact that renewable energy/diesel hybrid systems have great potential to improve the quality of energy services provided in the rural areas, there are still many barriers that renewable energy faces. These barriers have impeded the adoption of renewable energy systems and must be considered when developing a renewable energy/diesel retrofit project. Some of these constraints include: 3-8 > High up-front capital costs. Renewable energy systems typically have high initial capital costs. However when considered in the context of their lower lifecycle costs, renewables will be more cost-effective. Savings in fuel and other operating costs could offset the higher up front costs. Longer time horizons for the investment (i.e., loan terms) will improve their viability. > Limited access to financing. Because of the higher perceived risks by the investment community and the small size of the projects, it can be difficult, if not impossible, for renewable energy project developers to secure traditional financing. This situation is changing with the recognition that renewable energy projects, so well suited to meet these off grid needs, can be cost-competitive and can produce returns that are attractive to an investor. In addition, there is a concerted effort by multilateral financial and development organizations to help catalyze investment and access to capital through programs targeted at renewable energy development. > Policies are geared toward conventional fuels. In most member economies, current energy policies overwhelmingly support the use of fossil fuels, steering markets along conventional supply paths and forming market barriers to the introduction of renewable energy technologies. By creating policies that create a level playing field where renewables can compete, member economies will help to open up and accelerate their renewable energy markets. For example, this could be done by eliminating subsidies, reducing tariffs (i.e., import duties), and by allowing competition in the energy sector. > Unfamiliarity with the technologies. Both the end-users and the investment community are unfamiliar with the benefits, capabilities, and risks associated with renewable energy technologies. They are still viewed as unproven and their record of accomplishment is not well publicized. Therefore, it is essential to increase awareness about the improved reliability, system performance, and cost- effectiveness of renewable energy systems for rural areas. Customer satisfaction, and the expansion of the market, could be enhanced using product guarantees, warranties, and reliable service networks. In addition, training and capacity- building in the member economy are essential to the long-term sustainability of the renewable energy sector. Another important aspect of increasing the familiarity with the technology is the need to understand that most renewable energy projects are site-specific, depending, for instance, on the resource, the end-uses for the power, the community’s preference, and the expected load. It is therefore necessary to understand that each system is unique and has its own specific design considerations, rather than “one size fits all’. 3-9 Chapter 4 FINANCING MECH ANISMS AND INVESTMENT As the need to deliver energy services to the rural areas of the APEC region becomes more urgent so is the need to attract investment to this sector. The World Bank (1996) notes that rural populations continue to grow faster than the spread of electricity and they estimate that the population of developing countries will grow from three billion today to more than five billion in 40 years. If per capita energy use in these countries is to even begin to approach the use in developing countries then large strides in energy generation will need to be made. Many of the rural areas in the APEC region are currently underserved or lack access to modern energy services. Despite the large potential opportunity, the rural areas have not been able to attract capital in the same way as larger power development projects that are geared toward urban areas. In order to make this capital available and convince investors to risk their capital, renewable energy/diesel hybrid systems will need to demonstrate cost recovery and show competitive returns. In order to get the local communities to invest their capital in these projects, will require assurances that the renewable energy/diesel hybrids will meet their needs, will be reliable, and that there will be access to appropriate financing schemes to make the systems affordable. For the project developer, the challenge is to bridge the gap between the end-users’ needs and ability to pay and the organization or investor providing the capital. Rural energy markets Rural areas in the APEC region present strong markets for renewable energy, however they are still relatively immature. As household incomes rise, people typically switch to modern fuels if they are available. The correlation between access to energy services and increasing prosperity implies that efforts to spur rural economic development need to focus on both the delivery of energy and improving the overall economic conditions. It has been noted that investments made in modern energy services in the rural areas can have more impact if socio-economic development is proceeding in tandem with rising per capita incomes (World Bank, 1996). There is a clear link between infusion of capital into the rural areas, the overall economic well being of a member economy, and socio- economic development that will positively influence the transition to renewable energy systems and opening of the markets. Much evidence suggests that people are willing to spend a significant portion of their incomes on higher quality energy services that improve their standards of living or enable them to generate income (World Bank, 1996). Income-generating activities (i.e. productive uses) such as water pumping, battery charging, crop drying, and lighting can spur economic activity and increase cash flow for the local community. Therefore, whether for household or productive uses, a large market for rural energy services exists, but the capital to finance this expansion is limited. Historically, the capital has come from development agencies and bilateral donors in the form of aid-based projects. These 4-1 standalone projects tended not to be sustainable because the support infrastructure was missing (e.g., service and spare parts) and the community was not involved in the development or implementation of the project. Recognizing this, aid is now structured so that project developers are required to be responsible for the cost of the money or consulting service they receive. Expectations from the funding organizations are that there will be cost recovery, reasonable rates of return, and mechanisms to replenish the funds. One of the more successful ways to put energy within the reach of rural customers has been in the deployment of individual solar home systems, where the end-user pays a small monthly fee for energy services and is not required to buy the equipment. The end- user, therefore, is only paying for the energy service (e.g., electricity) and the maintenance and service are taken care of by the project developer (Morris and Price, 1998). This financing scheme is attractive to low-income energy consumers because usually the large upfront costs of renewable energy systems are a major barrier. As economies of scales are achieved and the model is replicated, profitable returns are anticipated for the investor. On the other hand, financing models for renewable energy/diesel hybrid systems on a village-scale are not as well developed. This is partly due to the fact that village power systems requires a much larger capital investment, the systems are generally more complicated, and the cost recovery and repayment schemes are more difficult to implement. To access financing, the community as a whole must work together to secure the project funds, set up the billing system, and ensure that the loans are repaid. As the track record for retrofitting diesel mini-grids with renewables is further established, and ways in which to recover costs and structure financing in the local community are better understood, markets for renewable energy/diesel hybrid systems will become more mature. Investing capital in the rural areas Historically, private sector investors have been more comfortable financing large-scale energy projects that target larger concentrations of households or industrial concerns. Generally, these are large fossil-based power plants or dams which have been financed as typical bulk power projects, allowing them to secure long-term debt maturities, subsidies, and other incentives and attract foreign investors. These projects will continue to make the largest contribution in electrifying the rural areas. However, the large-scale undertakings are not likely to impact the lives of large segments of the rural population because the central grid will not reach them in the near- to mid-term. Until recently, the private sector has had little experience financing smaller or remote energy projects. This is changing as the investment community sees the large market opportunities. Moreover, renewable energy projects, well suited to provide distributed power through mini-grids, may become more attractive to private investors. Significant efforts are being made to support the efforts of the private sector in developing business opportunities for rural renewable energy options. Evidence does confirm that better financing techniques will stimulate demand. However, easier access to credit alone will not be enough to support a rapid expansion of the renewable energy 4-2 markets. What is needed is not only the ability to buy but also the desire to buy. Another point of focus has been on providing business development assistance and seed capital for businesses that sell sustainable energy technologies and services. The hope is that credit specifically designed for rural borrowers and easier access to working capital for project developers will serve to nurture the market for renewable energy technologies, which in turn will lead to better rates of return for investors. Rather than the traditional capital markets, most investors in renewable energy projects are drawn from organizations interested in making “socially-responsible” investments. Until the renewable energy industry has more of a track record, targeting investors with a predilection for “green” or “social” investments is going to be the key to bringing in money, since attracting investors who are interested only in commercial financial returns is going to be a challenge. This is because the margins are still very narrow for these types of investments. Fortunately, many investors are comfortable with the terms and risks associated with financing renewable energy projects provided their other agendas (e.g. environment, climate change, etc.) are advanced. Financing mechanisms suited to rural energy customers To improve energy services to the rural areas will require an enormous capital investment that, given the greater fiscal constraints on local and national governments, the public sector is not in a position to make. In the Philippines, renewable energy projects have largely been financed by government guaranteed foreign loans (e.g., World Bank, Asian Development Bank, and Overseas Economic Cooperation Fund), equity investments, and government subsidies. However, since the debt crisis of the 1980’s, increasing restraints on public spending has limited what previously had been the greatest source of funding for the electric power sector---the government (Reddy, et. al, 1997). As the APEC member economies have embraced policies that ultimately lead to a shrinking government presence, a stronger private sector, and liberalized capital markets, the method in which infrastructure projects are being financed has changed. The potential funding sources for new energy projects have multiplied. Whereas in the past the state-owned energy companies were used in electricity supply and distribution, they are now being turned into corporations, independent of government control. The move toward competition and privatization is creating opportunities for joint ventures between public and private entities. These partnerships serve two purposes. The local partner helps the project developer/investor navigate the bureaucratic and business hurdles. In addition, the partnership brings capital into the member economy to help build up the project. For example, in the Philippines electricity generation is being privatized, and the agency responsible for the remote mini-grids, the Strategic Power Utilities Group (SPUG) will be spun off from the National Power Corporation (NPC). Most likely, a private sector entity will partner with SPUG to carry out the Philippines agenda for rural electrification. However, how this will be done is yet to be decided. Developers of all types of energy projects can begin to utilize a variety of financing mechanisms to access capital. Regardless of the type of financing that is sought for a 4-3 project, it is important to consider: i) rural energy needs of the community, ii) income and repayment capability of the community, iii) renewable energy options that are appropriate, iv) financing schemes that are suited to the community, and v) technical and market support that is in place (Santibanez-Yeneza, 1997). There are numerous financing mechanisms for end-users and project developers that can be used in the delivery of energy services to the rural areas. These include micro-credit, energy service companies, credit cooperatives, and loan guarantees. Micro-credit Micro-credit is a type of debt financing well suited to borrowers in the rural areas because smaller loans are issued that are tailored to the cash flow of borrowers that have limited ability to pay. A micro-credit facility provides the opportunity for the end-user or a project developer to purchase systems through affordable financing arrangements that fit their budgets. Because cash sales to purchase systems outright are often not an option for rural customers, financing at the local level is critical in making energy systems affordable and available. Micro-credit is an effective mechanism for financial institutions to use in providing households, communities, and small businesses with access to capital via loans for small-scale investments under flexible, and often non-traditional lending conditions (Morris and Price, 1998). Loans are usually very small and typically include flexible repayment schemes, fee schedules that match the income streams of the customers, and longer loan repayment terms. These loan pools can be structured so that the fund is continually replenished by borrowers as they repay their debt (e.g., through a revolving fund). This type of loan fund has been used in the rural areas, mainly in the agriculture sector. Typically the interest on the loans is used to manage the loan pool and help offset some of the risks associated with inflation, loan defaults, and cost of capital (Gregory et al., 1997). In the most successful and profitable models (e.g., Grameen Bank in Bangladesh), loans are provided at non-subsidized rates of interest, which encourages productive economic activity from the borrowers and covers the cost of fund mobilization and loan administration. Typically, micro-credit schemes rely on peer group lending, where borrowers from a community form a group that then applies for a loan. The group as a whole is responsible for repayment of the loan (Gregory, et al., 1997). Due to peer pressure within the group to adhere to the repayment terms, risk to the financial institution of default is minimized. Peer group lending is one way in which village power projects could be financed by the local community. Energy service companies Local energy service companies can own, operate, and distribute electric power in rural electricity grids in much the same way that a small utility operates. This assumes that the member economy allows competition within the power generation sector. Energy service companies can be structured so that the end-user pays for energy services (e.g., electricity) rather than purchasing the hardware to produce the electricity. The energy service company owns the systems and manages the entire operation—project 4-4 implementation including transport, installation, service, training, administration, marketing, and monitoring. The end-user pays a modest monthly fee and in return, the service provider agrees to provide reliable energy services. An energy service company arrangement relieves the first-cost burden from the rural customer, and the capital risk is assumed by the energy service provider. Because the energy service company is the primary sponsor of the project, they can approach local financial institutions or multilateral agencies for loans or equity. The energy service company model may be one way to drive the large-scale expansion of market-driven delivery of energy systems in the rural areas. In fact, US-based energy service companies have attracted equity and debt financing to expand and replicate this model (Morris and Price, 1998). Therefore, it is possible to make electricity available and affordable to rural people by combining enterprise development with locally- managed credit programs. Rural cooperatives An effective way to serve the rural areas is through financial intermediaries such as rural cooperatives. These institutions are typically designed to service and not to profit. Cooperatives have traditionally been set up to provide loans to the agriculture and residential sectors, however they are now expanding their reach to include energy lending. Cooperatives are usually much smaller than banks and are focussed on the local community in terms of their resources, loan requirements, client base, and repayment schemes (Morris and Price, 1998). Benefits of rural cooperatives include the ability to provide credit to low-income borrowers; an in-depth knowledge of the clients since the cooperative is locally-based; a less complicated bureaucracy; and a more flexible lending structure tailored to the income stream of the end-user (Gregory et al., 1997). A cooperative can either issue debt to consumers to purchase systems or they can be directly involved in the implementation of projects. Rural electric cooperatives or private local distribution companies can serve the rural areas by owning, operating, and maintaining the systems in order to provide affordable electricity services to the local community. Electric cooperatives usually have their own franchise area where they sell its electricity. The cooperative is responsible for the overall operation and maintenance of the electric generating facility in their area, and they are also in charge of the billing, fee collection, and end-user education. In order to be able to provide electricity to all people in the rural areas, the cooperative can use the proceeds from viable projects to finance electrification in non-viable areas. Although cooperatives typically operate with negative or low margins, any proceeds they have can be used to improve service, lower rates, or expand service. Electricity prices can vary throughout a member economy due to factors such as investment cost, operation and maintenance costs, sales levels, and losses (APEC, 1998). An alternative to the rural electric cooperative is a community-based cooperative, where the local community forms their own cooperative to provide electricity to the local community. The community itself is responsible for owning, operating, and maintaining 4-5 the energy systems. When dealing with individual household systems, the cooperative will typically buy many systems in bulk and then will sell the systems to the end-users. If there is appropriate training and capacity in the community, this is an effective way to reduce overhead and costs of energy services. An added benefit is that the community is directly involved and they can more effectively manage the power requirements and types of energy services that are needed. The Barangay Power Association in the Philippines is one such community-based cooperative providing power to the rural areas (see Chapter 5 for a full description). Loan guarantees Loan guarantees from a government or a multilateral agency can help facilitate access to financing for communities that may not have access through traditional lending institutions. Traditionally loan guarantees have been used to finance rural agricultural operations, farmers, and small-scale industrial plants. Given that there are power demands in these sectors that may not be currently met, it is possible that loan guarantees could be an appropriate financing mechanism for renewable energy/diesel retrofits to augment productive-use operations. For example, loan guarantees would be useful in easing the financial risks and reducing the high transaction costs that are associated with a village power project. In addition, the guarantees could improve the bankability of projects and help projects access financing from traditional lending sources. Sources of capital With projected total annual energy investment requirements expected to increase dramatically in the APEC region, traditional sources of capital will be insufficient. The new austerity confronting governments is impeding their ability to fund energy sector development and the limited levels of foreign aid mean that increased levels of private sector capital and the utilization of the financial markets will become more common. There is a need to maximize the investment in energy by leveraging capital provided by different sources including multilateral institutions, the private sector, and bilateral donors. There are several new funds that are either available or being developed by the public and private sector to increase the use of renewable energy technologies in rural areas, including diesel retrofits. A detailed presentation of the variety of financing mechanisms and sources of capital for renewable energy development in the APEC region can be found in a recent study by Morris and Price (1998). A sampling of some these programs are presented below. Multilateral institutions Historically, the multilateral financing institutions have financed large power infrastructure projects, but increasingly they have begun to play a role in stimulating the rural energy markets. Multilateral institutions can be instrumental in facilitating renewable energy development by providing project funding, training, and infrastructure. In addition they can support the development of energy sector programs and assist in various aspects of project implementation, including financing, technical assistance, 4-6 training, and project planning. Perhaps most importantly multilateral financial and development institutions can catalyze investment from other sources, including local governments and the private sector. Multilateral institutions are expanding their portfolios to include smaller projects such as renewable energy-based generation, and they are becoming more flexible and creative in structuring financing terms. Financing obtained through the multilateral programs have been very attractive for project finance in Asia because these institutions can provide guarantees against risk, they can serve as "multipliers" to commercial lending capacity, and they support the development of local capital and financial markets. Their involvement in a project serves to strengthen institutional capacity and foster public- private partnerships because of the comfort level they can provide to the project partners. The International Finance Corporation and the World Bank have large programs dedicated to expanding the use of the renewable energy in rural areas. The International Finance Corporation The IFC has three funds that are targeted at renewable energy development in the APEC region. Briefly they are: > Small and Medium Scale Enterprises Program (SME). The Small and Medium Scale Enterprises Program (SME) is a joint program of the World Bank/Global Environment Facility (GEF) and the International Finance Corporation to stimulate small- and medium- scale enterprises that address two GEF themes—biodiversity and greenhouse gas reduction. The design of the SME Program centers on debt or equity funding for financial intermediaries (e.g., traditional financial institutions, non-governmental organizations, or venture capital groups) that can identify, analyze, finance, and monitor GEF-eligible SME projects. > Renewable Energy and Energy Efficiency Fund (REEF). The REEF is a specialized fund targeted at on-grid and off-grid (e.g., mini-grids) renewable energy projects and energy efficiency in emerging markets. The fund, which will be operational in late 1998 or early 1999, will offer debt and equity finance and grants to finance incremental costs and/or mitigate risks. The underlying goal of the REEF is that it will catalyze further investment in these types of projects by increasing awareness about the technologies and project structures that have been proven in the market, supporting new types of projects, and developing and accessing new sources of commercial financing. > The Solar Development Corporation (SDC). The SDC is an initiative being launched by the World Bank Group and a number of U.S. charitable foundations to provide finance and business advisory services to accelerate the use of photovoltaics systems in off-grid applications in developing countries. SDC aims to overcome many of the key barriers to accelerated growth of photovoltaics in the off-grid market by providing both financing in the form of debt, equity, and quasi- equity investments and business advisory services to provide market and business development services. World Bank Until recently, the World Bank had financed programs and projects of which renewable energy was only a minor part. Now, with the establishment of the Global Environment Facility (GEF) and the Asia Alternative Energy Program, this situation is changing. > Global Environment Facility (GEF). The GEF is an international fund managed by the World Bank, the United Nations Development Programme and the United Nations Environment Programme, that provides grants and concessional funds to developing countries to address global environmental problems and promote sustainable growth in the focal areas of climate change, biological diversity, international waters, depletion of the ozone layer, and land degradation as it relates to the other four issues. It operates in part by helping developing countries bear the extra cost of measures designed to mitigate global environmental effects, by providing concessional funding and by offering other incentives for environmentally favorable projects. > Asia Alternative Energy Program (ASTAE). ASTAE is a specialized World Bank program that helps identify and develop renewable energy and energy efficiency projects for World Bank/GEF financing in Asia. ASTAE also designs and implements training programs, helps formulate alternative energy policies, assists in strengthening institutional capabilities, collaborates with donor agencies, and mobilizes technical assistance funds in support of its program. Private sector Private sector participation, whether it is in the form of financing or in supplying energy, is particularly important in its potential to meet the rapidly growing demand for the production and distribution of energy in the APEC region. The primary drivers for private sector investment in the rural areas are an attractive return on investment with an acceptable amount of risk. Private sector financing of renewable energy power projects is fairly new on the horizon because typically they have been funded as stand-alone demonstration projects implemented by international development and aid programs in coordination with the local government. However, this is changing as project developers and entrepreneurs recognize the large market potential of the rural areas and develop innovative ways to deliver energy services that will provide them with acceptable margins. There are a variety of innovative ways that the private sector is at work to infuse capital into the rural energy sector. The private sector can bring financing and technical expertise to help develop local capital markets and new institutional mechanisms to support the development of the rural areas. As mentioned previously, most private sector investment involves leveraging of capital and risk with funds from multilateral financing institutions and governments. There are many different private sector entities engaged in renewable energy project development. An illustrative set of the range of different models being used is presented. A more thorough discussion of the private sector financing options for the APEC region can be found in Morris and Price (1998). 4-8 Commercial banks There are commercial banks that have dedicated portions of their portfolios for investments in environmentally and commercially sound energy companies and technologies. One such institution is Triodos Bank in the Netherlands who has demonstrated that investments that are good for the environment and are socially responsible can be both prudent and profitable. Triodos Bank provides debt and equity financing, guarantees, and grants for projects and businesses that have social, environmental, and cultural objectives, including renewable energy, organic agriculture, arts and culture, protection of the environment, and conservation of natural resources. They have three specialized funds in the Triodos Bank group that are appropriate for renewable energy project finance: Stichting Triodos-Doen, Stichting Hivos-Triodos Fonds, and Stichting Solar Investment Fund. The Stichting Triodos-Doen fund provides financing for small rural-based institutions that are not eligible for subsidies and fall outside the criteria for a regular bank loan or micro-credit. The Stichting Hivos-Triodos Fonds creates credit facilities have been made available by Triodos Bank and maintained by deposits and interest on the account to support and expand local credit institutions, especially micro-credit facilities. There is also the Stichting Solar Investment Fund which provides finance to local financial intermediary organizations (e.g., credit organizations, cooperatives, non-governmental organizations, or entrepreneurs in the photovoltaics business) to enable them to pursue solar energy for rural households and small businesses. Venture capital funds Venture capital funds are available to companies when more conventional sources of financing are not, either because of the high level of risk inherent in the investment or because the company is not able to offer the type of collateral traditional institutions normally demand. Environmental Enterprises Assistance Fund (EEAF) is one such organization that provides equity and debt financing for small-scale renewable energy and environmentally responsible projects in developing countries. They participate in higher risk, later stage investments, with a goal of leveraging funding from other sources using equity and debt financing. Business development services Recognizing that many rural energy projects lack well formulated and bankable projects, many business development organizations are attempting to anticipate investor concerns and helping project developers design projects accordingly. E&Co is a commercially- oriented non profit organization that seeks to address the gap that exists between access to financing and project developers who are ready to deliver the technologies. E&Co’s goal is to support enterprises that create economically self-sustaining energy projects that use modern energy technologies, and that will produce a more equitable distribution of energy services, with special concern for people living in poverty. Their investments cover a wide range of technologies including solar, biomass, geothermal, hydropower, 4-9 energy efficiency, and advanced gas turbines and have a significant record of accomplishment in financing off-grid and small on-grid renewable energy projects. Micro-credit Micro-credit can be one of the important ways to reach out to rural energy consumers by providing convenient, affordable credit for the end-user. One well-known organization that has developed a model for delivery of energy services and creation of employment is Grameen Shakti in Bangladesh. Grameen Shakti is a private company funded by the Grameen Fund (a venture capital fund), donor agencies, and multilateral funding sources that provides small loans (US$300-500) to end-users in rural areas for the purchase of renewable energy systems. The loan repayment terms are structured to meet the income stream of the borrowers and there has been no problem with defaults on the loans. Grameen Shakti has demonstrated that with the right financing vehicles, rural customers can support a profitable business, because Grameen Shakti has been able to generate a profit. Bilateral donors There are many bilateral donors who have included renewable energy in their programs, and this will hopefully extend to the use of renewable energy/diesel retrofit projects. These bilateral donors usually provide funds to developing countries in order to help support sustainable development. In order to alleviate concerns with destroying market incentives by providing systems at below cost or free, most programs are now including cost recovery and cost-sharing in their project design. This includes mechanisms whereby the bulk of cost of equipment is borne by the end-user by setting up a financing mechanism that includes service, maintenance, and administration. Bilateral aid can also be a good way to leverage funds from either the multilateral agencies or the private sector. Working together, they can create larger markets in the long-term and enable renewable energy manufacturers to fully benefit from economies of scale which will in turn reduce the costs, reduce the prices, and expand the market. 4-10 Chapter 5 RENEWABLE ENERGY IN THE PHILIPPINES The Philippines archipelago is comprised of more than 7,100 islands with a total land area of 300,000 square kilometers. These islands span more than 1,851 km north to south and 1,107 km east to west, making the Philippines one of the largest island groups in the world. The larger islands, Luzon, Visayas, and Mindanao, have central power grids, whereas the bulk of the smaller islands and remote areas are still underserved or without electricity. Approximately 50% of the population in the Philippines live in rural areas and about 50% of those have no electricity. These figures define the scope of the problem of how to provide modern, clean, and affordable energy services to the rural areas in the Philippines. In the early 1990s, the Philippines suffered severe energy supply shortages. The resulting brownouts caused production losses, business failures, cost overruns, lost contracts, and layoffs and are estimated to have cost the Philippine economy several billion dollars per year (McBeth, 1993 and EIA, 1996). Following this, new power development was aggressively and successfully pursued through privatization schemes, specifically build- operate-transfer scenarios. New capacity additions were in operation by 1992-93, mainly from fossil-based installations. However, the rural areas have their own unique challenges. Due to immense political pressure to supply power to remote island communities, the National Power Corporation (NPC) launched a program to build and operate decentralized diesel power plants. Because of the high costs to maintain and operate these remote grids as well as the lower incomes in the rural areas, the NPC had to heavily subsidize the program, which has led to the current state of unsustainability. It is now recognized in the Philippines that renewable energy-based electric generation may be more appropriate and economically feasible than the diesel-based systems. A concerted effort is being made by NPC to develop projects for their remote mini-grids that incorporate renewable energy technologies that can be self-sustaining. In addition, government policies and regulations are being put in place to facilitate investment of the private sector in renewable energy and to allow for access to appropriate credit and financing mechanisms for the end-user and the project developer. Energy profile of the Philippines Before the energy shortages of the early 1990’s, the Philippines was heavily reliant on fossil fuels, as indicated in Table 5.1. 5-1 Table 5.1: Electricity generation mix in the Philippines in 1991 E s Electricity nergy Source Production (GWh) pa ef Thermal’ 10750 Hydropower 5130 Geothermal 5757 "Note: Includes oil, gas, and coal Source: Heidarian and Wu (1994) As new plants came on line in 1992 and 1993, the Philippines grew even more reliant on fossil fuels. According to the U.S. Energy Information Administration (1996), 73% of the Philippines’ energy consumption was petroleum-based, 7% coal-based, 7% hydropower and, 12% from geothermal. Much of the oil and coal is imported. Of 1995’s estimated 3.3 million short tons of coal that was consumed, 1.4 million was imported. The situation for oil is worse, with 330,000 barrels/day consumed in 1995, of which 323,400 barrels/day were imported (EIA, 1996). This reliance put the Philippines in a vulnerable position both in terms of security of supply and prices of fuel. Economic growth is boosting national oil product demand to around 8% annually making future vulnerability even greater (EIA, 1996). In the Philippines, the need to develop new sources of energy other than the conventional fossil fuels has long been recognized. For example, the initial efforts of the government to develop geothermal energy predated the energy crisis of 1973, and biomass cogeneration has been widely used by the sugar industry since the turn of the century. Large-scale hydropower has also been used in the Philippines. For example the National Power Corporation (NPC) manages large storage hydropower facilities in Northern Luzon and Mindanao. Table 5.2 summarizes the goals set forth in the Philippine Energy Plan for 1996-2025, which seeks to increase energy supply, rationalize energy prices, and build an energy infrastructure with considerations for social and environmental issues. Fundamental to these efforts is their goal to use more indigenous energy resources in the Philippines. For instance, large capacity additions are expected for hydropower, geothermal, coal, oil, natural gas, and new and renewable energy sources (i.e., biomass, wind and solar). 5-2 sh S we © O cl . cy an rv. (oe Table 5.2: Current and projected energy supply mix in the Philippines | 1996 2025 Energy Source | Capacity | Percentage | Consumption | Percentage | Capacity | Percentage | Consumption | Percentage (MW) contribution (GWhiyr) contribution (MW) contribution (Gwh/yr) contribution Min IR a a I a a) Hydropower 2333 22 5699 15 7065 7 24016 5 Geothermal 1414 13 8423 23 6309 6 43449 9 1460 14 7617 20 10120 10 57654 12 5322 51 | 15463 42 [ 5999 6 | 13138 3 Natural gas 0 0 0 0 6500 6 44983 10 New and 8 0.1 . 0 3947 4 14517 3 renewable energy Imported 0 0 0 0 30400 30 181087 39 Imported Oil 0 0 0 0 29684 29 65008 14 Nuclear 0 0 0 0 2400 2 25556 5 TOTAL 10537 37202 102424 | 469408 * Note: Information not available Source: Philippine Department of Energy as cited in Weingart et al. (1998). The use of indigenous fuels should result in increased energy self-sufficiency, however due to projected large increases in demand, self-sufficiency levels of 44-45% remain relatively unchanged over the period of the plan. Imported energy will still constitute the bulk of the total generation mix, and this will mainly be through imports of coal and oil. Despite this, the plan projects that demand for renewable energy will increase by a factor of three, from 61.9 million barrels of fuel oil equivalent (MMBFOE) in 1996 to 214.4 MMBFOE in 2025. A significant portion of this demand is projected to come from woodwaste, accounting for 44 % whereas 15% of the demand will be from wind, solar and ocean energy and 3% from municipal waste. Moreover, new and renewable energy sources are being tapped in the rural electrification programs for the isolated islands, municipalities and provinces. Projected growth of energy demand The growth rates of energy consumption in the APEC region are projected to be quite high, and in the Philippines, this is expected to be from 6-15% per year. The rapid rise in Doin? iE 5-3 the energy consumption is driven primarily by the acceleration in industrialization and motorization as well as the need for electrification in the residential sector and the increasing levels of urbanization. In February 1998, the National Power Corporation (NPC) announced that it plans to build 6,000 megawatts (MW) of additional power plant capacity by 2005 to meet the Philippines’ growing electricity demand. Most of this will be for large fossil-fuel plants in urban areas. The Philippine Energy Plan 1996-2025 projects meeting the future power requirements of the member economy by following their high economic growth targets. Over the plan period, from 1996-2025, the total energy requirement of the Philippines is expected to increase at an annual average of | 6.6%, slightly lower than the then expected average GDP growth rate of 6.9% annually (Morris et al., 1997). The National Economic and Development Agency’s Power Development Program foresees total electric generating capacity additions of 13,000 MW between 1996 and 2005, with an additional 32,660 MW between 2006 and 2015, and 46,500 MW from 2015 through 2025. This will cost an estimated US$1.2-$1.4 billion per year (EIA, 1996). The projected growth of energy demand for the rural areas is also high (Table 5.3). This is demonstrated by the fact that the network of electric cooperatives in the Philippines has provided power to 1,384 out of 1,417 municipalities, 35,362 barangays (small villages), with 4.13 million connections out of a potential 7.25 million customers (APEC, 1998). Given that the National Electrification Administration is proposing that all of the potential customers be provided with electricity by 2018, the growth in the rural energy sector will be substantial. The Strategic Power Utilities Group (SPUG), the arm of the NPC in charge of rural electricity grids, forecasts total peak demand in the island grids increasing from 65.34 MW in 1996 to 226.29 MW in 2005, assuming a 14.8 % growth rate per year (Benavidez, 1997). Prior to this period, from 1990 to 1996, the average annual growth rate had been 17.1%. Forecasting load growth with precision is difficult, especially in rural areas where growth rates and electrification projections are constantly evolving. Some assumptions used in making load projections are the future price of electricity, particularly if subsidies are reduced, and how this will effect demand, rural business operations, and commercial and industrial load growth, bearing in mind the current economic crisis in much of Asia. In addition, the number of hours of operation of electricity generation, given the desire to extend energy services to 24 hours, is an important input into load growth projections. Additional capacity will be needed at many plants if electric service is to be expanded to 24 hours a day. For example, at Palanan DPP plant, in Northern Luzon, electricity is provided for as little as 3 hours daily. In other areas, 24-hour service is already available. Additional capacity will be needed in some areas due to load growth accompanying expected economic development in the rural areas. On the other hand, there are plants with low capacity factors that are unlikely to need additional capacity within the next five - years even if service is extended to 24 hours. Other plants are unlikely to need additional capacity within the next five years, even if service is extended to 24 hours daily, because the load is primarily from low-income residential customers who do not have the means to pay for additional consumption. This could be overcome with financing mechanisms 5-4 better suited to the income stream of low-income customers. The unique characteristics of each remote power grid demonstrates the need to carefully evaluate all of the relevant parameters such as load, costs, and capacity to determine the best option for renewable energy/diesel retrofits. Plant Name Province 1996 1996 Installed Demand Demand Capacity Forecast for (kW) (kW) 1996-2005 (kW) |Rapu-Rapu Albay | | ong te eo 4 ae - —_ - = ' Aurora 434 740 955 Casiguran Basilan Basilan Island 3500 1620 7700 Bantayan Cebu 1665 2508 3663 Olango Cebu 284 326 625 Bongao Kalinga 950 1716 2090 Cuyo Palawan 560 968 1232 Polilio Quezon 360 760 792 7 Rombion 316 423 695 Sibuyan Tablas Romblon 1695 2956 3729 Siquijor Siquijor 1305 1500 2871 Kalamansig Sultan Kudarat 780 1203 1716 Dinagat Surigao del Norte 512 884 1126 Loreto Surigao del Norte 1500 2000 3000 Source: National Power Corporation/Strategic Power Utilities Group. Price elasticity Lyman (1994) investigated residential electric demand and price elasticity in the Philippines and found that the practice of charging a flat rate for the initial “block” of electricity consumption encourages many consumers to remain within that block. This has the simultaneous effect of increasing household consumption up to the block limit, and limiting consumption by ensuring that it does not exceed that block. 5-5 Rural electric cooperatives in the Philippines uniformly employ a rate schedule with a minimum bill or fixed charge which allows a household to consume a certain amount of kWh within the first-block at a zero marginal price. A constant, non-zero marginal price then applies to the second block for additional consumption. Among different cooperatives, the maximum, first-block consumption under the minimum bill varies significantly, ranging from 0 to 35 kWh/month, with an average of 12 kWh/month. Marginal price has a mean of 2.12 PhP/kWh (US$0.05/kWh) and ranges from a low of 1 PhP/kWh (US$0.02/kWh) to a high of 5.1 PhP/kWh (US$0.12/kWh). Not all customers in the service areas of rural electric cooperatives in the Philippines use more than their first-block of consumption. In fact, for some cooperatives as many as 80% of the customers may be minimum-bill customers and, for others, as few as 5% (Lyman, 1994). Therefore, there is a low price elasticity for the first block of consumption. In other words, a basic amount of electricity is very important to some consumers and, if able, they are willing to pay it. Beyond this basic level, price becomes a greater factor. This implies that, even if the marginal price were to increase, most of these people would continue to pay it, i.e. consumption would not decrease. However, if the maximum first-block consumption were to decrease, minimum bill customers may well curtail consumption in order to avoid paying a higher fee. For the rural electric cooperatives, the increase in demand that might be seen with 24- hour power may be correlated with the percentage of minimum-bill customers in that region. For the purposes of demand forecasts, it is reasonable to assume that the electricity demand for these minimum bill customers will remain constant. Therefore, a cooperative with a high percentage of the minimum bill customers may not face a pressing need to increase short-term capacity, while those with a low percentage of minimum bill customers may be able to anticipate increased demand. Primary players in Philippines energy sector The principal framework for the new structure of the Philippines energy sector is currently being debated in Congress (Omnibus Electric Power Industry Act of 1997). This legislation lays the groundwork for moving toward competition in the electric power sector and breaking apart the generation, distribution, and transmission of power production, which will involve more private sector interests. In addition, this bill will encourage the consolidation of electric cooperatives or private investor-owned utilities while still maintaining the social mandate to electrify the rural areas. Given that the situation is currently evolving in the Philippines and the legislation has yet to be passed, it is possible that the roles of the primary players in the Philippines may be changing. National Power Corporation (NPC or Napocor) The National Power Corporation (NPC) is a non-stock corporation wholly-owned by the Republic of the Philippines and is an attached agency of the Philippine Department of Energy (DOE). The power generation function is still currently controlled by the NPC 5-6 though there are Independent Power Producers (IPPs) generating power and selling their outputs to NPC. IPPs are allowed to develop projects under build-operate-transfer (BOT), rehabilitate-operate-maintain (ROM) and other various arrangements. NPC sells power to power distribution companies composed of 17 private operators, 119 electric cooperatives and 9 municipal/provincial systems. In a continuing drive to improve the efficiency of the energy sector, the NPC is moving towards privatization. In March 1998, NPC revealed plans to privatize about 80% of the Philippines electricity generating capacity. The proposal would break NPC into seven separate concessions and increase competition in the electricity supply market. The initiative requires government approval, but action has been delayed due to the May 1998 election. Strategic Power Utilities Group (SPUG) As NPC is moving toward privatization, the Strategic Power Utilities Group (SPUG), will be separated from NPC and will operate as an independent government agency charged with NPC’s missionary (i.e. considered inherently unprofitable) electrification activities. SPUG’s purpose is to provide power generation and transmission for grids not connected to the main NPC grids. These include smaller island grids and grids for isolated or remote communities. These areas are served, despite SPUG’s inability to recover costs from the customers, as a form of public service. SPUG is responsible for the small island and remote grids in planning, construction, and operation of baseload power plants, providing standby capacity via the operation and maintenance of power barges, operating transmission and distribution facilities, and providing management and technical assistance for its customers. National Electrification Administration (NEA) The National Electrification Administration (NEA) was created in 1969 as a government corporation to pursue rural electrification. Like NPC, the NEA is an attached agency to the DOE, but the NEA has full autonomy and control over its operations. The NEA’s mandate is to pursue a goal of total electrification of the rural areas by organizing and supervising the electric cooperatives. The NEA manages 119 electric cooperatives located throughout the Philippines and provides technical, financial, and institutional assistance including managerial and training services, grants and long-term low-interest loans to build and operate power distribution lines within the cooperatives’ franchise areas, and support for grid expansion projects. Power is distributed to’4.3 million rural households through the NEA. The strategy for implementing electrification will continue to focus on extension of the grid for areas in the mainland and providing diesel generators for island grids and island provinces. This goal will require substantial government subsidies in order to be achieved. 5-7 Rural Electric Cooperatives and Local Government Units The rural electric cooperative system in the Philippines is based upon the U.S. model for rural electricity delivery. The government began establishing rural electric cooperatives in the early 1970s with substantial U.S. Agency for International Development funding and technical assistance. There are now 119 rural electric cooperatives, most of which purchase their power from SPUG and resell it at a 200-300% markup in order to recoup distribution and billing expenses. The cooperatives are responsible for operation and maintenance of their distribution infrastructure and for bill collection from the members and customers in their franchise area. Many have high loss rates and poor financial positions, however this is expected to improve given the introduction of streamlined management, financial procedures, and billing using automated systems. In some areas, the cooperatives have declined to provide power due to distance from its operating base. There are some islands and communities where a local government unit (LGU) has assumed this responsibility. These LGUs can be at the municipality or barangay (i.e., small village) level. Three of these LGUs are on islands in the Romblon Province: Concepcion, Banton, and Corcuera. Barangay Power Association (BAPA) The Barangay Power Association (BAPA) is a group of electric cooperative members that reside in a cluster of 30 or more households within a given barangay to manage power distribution in their local area. As a small community-based organization, the BAPA is a subset of the electric cooperative that buys electric power in bulk at a preferential rate that is passed onto its members. Their goal is promote rural electrification through the prevention of power pilferage, improved collection methods, and reduction of administrative and operating costs. It should be noted that their performance record is quite good, with systems losses 7% lower than the national average of 18% and collection efficiency 3% higher than the national average of 91% (APEC, 1998). Department of Energy (DOE) The Philippines Department of Energy (DOE) is the central institution for the planning and coordination of the Philippines’ energy sector. The DOE has the overall mandate to prepare, integrate, coordinate, supervise, and control all plans, programs, projects and activities of the government relative to energy exploration, development, utilization, distribution and conservation. The DOE is responsible for the Philippine’s long-term energy plan. Energy Utilization and Management Bureau (EUMB) The promotion of renewable energy is a function of the DOE under its Energy Utilization and Management Bureau (EUMB). The EUMB is also responsible for energy efficiency programs and environmental management. 5-8 Energy Regulatory Board (ERB) The Energy Regulatory Board (ERB) regulates prices of electricity and oil products. The ERB also ensures that investor-owned utilities adhere to government policies and regulations. National Economic and Development Authority (NEDA) The National Economic and Development Authority (NEDA) is the government's highest economic planning body. NEDA coordinates the preparation and implementation of the national economic and development plans. All projects requiring government investments, including those in the energy sector, require the approval of NEDA. Department of Environment and Natural Resources (DENR) The Department of Environment and Natural Resources (DENR) regulates and monitors the use of the Philippines’ natural resources. It is responsible for environmental impact evaluations and has the authority to approve environmental clearance certificates for energy projects. Renewable energy resource potential The Philippines is richly endowed with vast resources that can be harnessed to provide for their escalating energy requirements. Among these are renewable resources such as solar, wind, hydropower, geothermal and biomass. Despite the effort to utilize these resources, none of these resources are currently being exploited to their full potential. Since renewable energy resource potential is an essential ingredient to designing a diesel retrofit, it is necessary to accurately characterize the resources to identify potential sites. Wind The Philippines is situated on the fringes of the Asia-Pacific monsoonal belt and lies right on the path of the prevailing monsoon winds making it ideal for the development of wind resources. Wind is highly site specific. For example, the extreme northern part of Luzon has good potential but moving south the resource potential decreases. The yearly average wind speeds are on the order of 3.6-5.6 m/sec with some areas as high as 7.5 m/sec (APEC, 1998 and Weingart et al., 1998). Common applications for wind power in the Philippines are water pumping for irrigation and communal water supplies and battery charging stations (Morris et al., 1997). In 1993, NPC in cooperation with the Philippine Council for Industry and Energy Research and Development (PCIERD) conducted a 2-year preliminary wind monitoring project in six sites in Guimaras Island, Cuyo Island, Basco in Batanes, Catanduanes, and Burgos in Ilocos Norte. This project was followed by more comprehensive wind measurements in 1995 at Burgos, Bangui and Pagudpud, Ilocos Norte, Sagada, Mt. Province, and Guimaras Island. The results showed that northern Luzon, particularly those areas in Ilocos Norte, have great potential for large-scale grid-connected wind farms. Conservative calculations showed that a commercial 500 kW pitch controlled wind turbine placed in one of the sites can produce about 1.2 GWH of electricity annually with a capacity factor of about 27% (Magpoc, 1997). A 10 kW wind turbine pilot plant has also been installed by NPC in Pagudpud, Ilocos Norte. This pilot stand-alone power plant is providing electricity needed for 23 households. The actual capacity factor of the plant was computed at 9%, but the figure could reach up to 30% if the wind turbine output is fully consumed (Barruela, 1997). The DOE has conducted pre-feasibility studies for wind potential in Masbate Island, Mountain Province, Panay Island, Masinloc, Palawig and Iba, Zambales, Burgos and Pagudpud, and Ilocos Norte. Of the sites investigated, priority locations were identified in Malinta Masbate and San Salvador Island, Zambales (Morris et al., 1997). Other areas in the Philippines that have been identified with a high potential for wind energy utilization include (Balamiento, 1994): Cuyo, with an average wind speed of 5.58 m/sec Basco, with an average wind speed of 5.39 m/sec Catanduanes, with an average wind speed of 4.15 m/sec Tagatay City, with an average wind speed of 5.0 m/sec Lubang and Cabra islands off the northwestern coast of Mindoro Western portions of Batangas Guimaras in Western Visayas Subic in Zambales Entire coastline along Western Luzon VVVVVVVVV Unfortunately, while an annual average wind speed can intrigue project planners, it alone is not sufficient to determine whether the wind resource warrants the installation of a wind generator, or to sufficiently estimate how much of contribution wind energy can , make in meeting the needs of the local grid. Far more detailed information about the wind resource, measured over the course of a year and correlated to the community’s energy usage and demand pattern, is needed. To address this, a detailed national wind resource assessment program is currently underway to determine the wind energy potential in the Philippines. Photovoltaics Almost all parts of the Philippines have potential for photovoltaic applications because of the good solar resource. Based on the weather data of the Philippine Atmospheric Geophysical & Astronomical Service Administration (PAGASA), the average solar radiation for the Philippines (based on sunshine duration) is 161.7 W/m* (1,416 kWh/m’/yr), with a range of 128-203 W/m’ (1,120 — 1,778 kWh/m’/yr) (McNelis, 1996). The average insolation in the Philippines is 4.75 kWh/m?. It is thought that the northern part of Luzon has highest solar incidence (R. Barruela, Strategic Power Utilities Group, personal communication). Whereas the best solar insolation was measured at Vigan 5-10 ul bight (annual average of 5.5 kWh/m’/day), and many locations receive between 4.0 and 5.0 kWh/m?/day (McNelis, 1996). Although the Philippines has over 20 years of experience with the use of photovoltaic technology, it is still considered a means of pre-electrification rather than a permanent rural energy solution (APEC, 1998). Currently solar home systems are the primary market for photovoltaics. The installation of solar systems began with a demonstration project in Bulacan implemented by the then Office of Energy Affairs and supported by the German Technical Assistance Agency (GTZ). The first phase of the project was a demonstration of the various applications of the technology, including solar home systems (SHS), solar refrigeration, video cine, radio, and battery charging stations. The ‘commercialization phase followed soon after in 1988 wherein some 100 photovoltaic solar home systems were distributed to members of the San Pascual Masbate Solar Power Corporation with financing from the Development Bank of the Philippines at 13% interest rate per year. As of 30 June 1997, the DOE has inventoried 3,462 photovoltaic and solar thermal installations (Morris et al., 1997). Hydropower Despite the magnitude of hydropower resources already being utilized or developed, sizable levels of reserves are yet to be developed in the Philippines. The NPC has identified hydropower potential of 12,308 MW at 245 different sites. As of the end of 1995, 2,278 MW of hydropower capacity were operational in the Philippines (EIA, 1996). Most of the current and expected hydropower used is in large installations connected with national grids. For hydropower potential, the most promising sites for development are located in Palawan, Mindoro Island, Catanduanes Island, Basilan Island, and Sibuyan Island . Of relevance to the SPUG mini-grids, the Power Development Plan calls for future hydropower use in Mindoro (28.2 MW in year 2004 and 18 MW in year 2006) and Palawan (2 x 1.8 MW in year 2006) (R. Barruela, Strategic Power Utilities Group, personal communication). Mini-hydropower (defined as 100kW to 10 MW) is a well-established technology in the Philippines. By the end of 1996 there were 45 mini-hydropower plants installed representing a total of 133 MW (Weingart et al., 1998). Potential mini-hydropower resources of 1,100 MW and approximately 30 MW of micro-hydropower (100 kW or less) potential has been estimated at over 400 sites. Mini-grids for smaller islands and remote communities using mini-hydropower by distribution utilities are very promising. At the moment, the Cagayan Electric Power and Light Company (CEPALCO) is developing a 7 MW mini-hydropower plant harnessing the potential of the Bubunawan River located within its franchise area (Morris et al., 1997). At least three more mini-hydropower plants are also being planned in the near future by the same company in partnership with other investors. A number of electric cooperatives have also identified hydropower sites in their franchise areas that they are interested in developing. For hydropower development, water use permits are issued 5-11 only to companies with 60% Filipino ownership. As many foreign companies require majority ownership before they invest, this requirement could become a limiting factor. Biomass Utilization of biomass resources in the Philippines constitutes the largest contribution of renewable energy to the total energy supply portfolio. Technologies range from higher technology applications such as the use of bagasse for cogeneration, rice/coconut husk dryers for palay drying, and gasifiers, to lower technology uses of fuelwood and agri- waste for oven/kiln furnace and cookstoves for cooking/heating purposes. As of 1996, the DOE estimated that biomass, particularly bagasse, coconut residue, ricehull, fuelwood and charcoal contributed 72.366 million barrels of fuel oil equivalent (MMBFOE) to the total energy mix. Biomass residues are important for producing power on-site or for distribution in a mini-grid. In the Philippines, biomass conversion falls into three categories (Renné and Pilasky, 1998): > Direct combustion; > Thermo-chemical; and > Biochemical. Cogeneration is the use of a fuel in a direct combustion plant to generate both heat and power for use within the plant. These plants can be cost-effective, particularly for mills using crop residues when the residue is free, or has a negative cost due to the need to dispose of it; when transport costs are negligible because the residue is already present; or when grid electricity is not subsidized. Table 5.4: Supply of biomass energy resources Type of Biomass 1996 2000 2010 2020 2025 (MMBFOE) (MMBFOE) | (MMBFOE) | (MMBFOE) | (MMBFOE) Rice residues 7.26 8.50 12.58 18.62 22.66 Coconut residues 18.48 20.01 24.39 29.73 32.82 Bagasse 10.99 12.86 19.04 28.18 34.28 Source: Philippine Department of Energy as cited in Morris et al. (1997). It is projected by the DOE that aggregate biomass supply potential will grow substantially in the Philippines over the next 25 years through the use of woodwastes, bagasse, coconut and rice residues, animal wastes and municipal wastes (see Table 5.4). Rice hull residues The Strategic Power Utilities Group (SPUG) indicates that there are 12,546 rice mills in the Philippines. Although rice production is most concentrated on Luzon, it is present on 5-12 most of the smaller islands as well. Rice hull, a major by-product of rice millers, which causes disposal problems for the mills, has a big potential for waste to energy conversion. In 1995, total rice hull production was 2.1 million metric tons, which represents 1.9 TWh of potential power production and power generation capacity of 309 MW (Weingart et al., 1998). On-site power production from rice hulls by large rice millers is an option that solves the waste disposal problem. For smaller mills there is a possibility of using a communal plant (3-5 MWs), wherein fuel supply will come from various rice mills within a local area that want to dispose of their rice hull and at the same time produce power. Table 5.5: Possible sites for communal rice hull power production Sites Number of | Farthest Milling Available Rice Mills | Distance | Capacity Rice Hull (km) (TPH) (MT/day) Cabatuan | =H 7 1.5 18.1 80 Cabatuan II 10 1 25.75 80 Cabatuan Ill 5 1 14.25 80 Aurora 8 1.5 19.1 80 Santiago, Isabela 11 2 20.25 80 Cauayan 4 2 8.25 80 Gapan | 10 1 8.05 70 Gapan Il 12 8 11.8 70 San Leonardo 6 1 7.7 70 Balagatas 11 5 14 80 Bocaue 12 1 15 80 Tacloban City, Leyte 10 1.5 24 80 Molave, Zamboanga 2 1 10 80 Source: PNOC’s Preliminary feasibility study of rice hull for communal power plant, as cited in Morris et al. (1997). However, the smaller farmers tend to be geographically dispersed, and the challenge becomes how to handle the logistics of gathering and transporting the hull from their source to the central processing site. It may be possible to cluster some of these mills to provide biomass power capacities to the mini-grids in the local area. A study conducted 5-13 by the PNOC-Energy Research and Development Corporation in the Philippines identified 13 areas that have potential for a communal rice hull power plant with a capacity of |MW to 3 MW. Table 5.5 gives a summary of potential sites for communal power plants that utilize rice hull. One problem when rice hull is used as fuel is the waste (ash) which can reach up to 30%. The cost of retrofitting an existing diesel generating system with biomass is between US$500-700/kW (R. Barreula, SPUG, personal communication), which is very expensive and threatens its economic viability. Sugar and bagasse The sugar sector in the Philippines is comprised of 39 mills spread over 16 provinces. The bulk of the mills are concentrated in Negros, one of the larger islands, located in the Visayan Islands between Panay and Cebu however it is not one of the islands served by SPUG (Zamora, 1994). The mills process from 500 tons of cane per day (tcd) to 10,800 ted, for an average of 4,600 tcd (Zamora, 1994). Bagasse, a by-product of sugarcane processing, is used as the principal fuel for steam production in the sugar mills. Most sugar mills in the Philippines are already using bagasse cogeneration. As of December 1996, national production of bagasse by-product was about 6.4 million tonnes (Morris et al., 1997). These products are being utilized by sugar millers as fuel for their power and process requirements. Power generation potential from bagasse has been estimated by Weingart et al. (1998) at 1.4 TWh/year, which corresponds to 233 MW of electric power capacity. For bagasse to contribute to electricity generation, the ownership of the residual cane must be worked out by the farmers and the mill owners. If the residual cane is legally considered the property of the sugar grower, the sugar grower will understandably wish to be compensated for use of the fuel. However, this will reduce the incentive of the miller to invest in bagasse-fired cogeneration facilities. Republic Law 809 in the Philippines regulates the relationship between the sugar growers and millers and accords sugar growers with 64% of the value of cane products and by-products (Weingart et al., 1998). Forest Plantations The economic and biological requirements for successful commercial forest plantations for electricity production are demanding. These requirements include good land, fast- growing plant materials, and technical expertise. The Philippines has experience in wood plantations, beginning in 1979 when over 60,000 hectares in energy crops were planted. Provincial, municipal and village plantations were attempted as well, although few successful plantations were developed under local government programs. Instead, private corporations and individuals established tree plantations for fuelwood in areas where markets were dependable. Some of the plantation programs were implemented by the 5-14 National Electrification Administration. NEA's Dendro Thermal Power Program used wood to generate electric power for rural power grids. Many plantations failed and overall the Philippine program has been judged to be unsuccessful (Perlack, et. al. 1995). The remaining plantations have had lower yields and incomes than originally expected. Factors contributing to the failure of these programs include actual yields that fell short of forecast yields, problems related to the difficulty and cost of transport, irregularities in the administration of project funds, and, in some areas, problems related to peace and security. Additional problems are specifically related to the biomass powerplant projects. These include power plant design deficiencies (particularly related to fuel preparation and handling), and wood suppliers who sold wood to other markets despite their contract commitments. Plantations developed under private initiatives were often more successful than government projects, reportedly due to the use of better quality land and the provision of more protection to young trees. Geothermal The Philippines is the only member economy in Asia with significant exploitable geothermal capacity (EIA, 1996). The development of geothermal resources for power in the Philippines started in 1979, and to date, there are 12 geothermal plants in the Philippines. Geothermal resource potential is limited to Mindoro Island. Total capacity of these plants is 1,783 MW (11% of the member economy’s electricity generation), making the Philippines the second largest geothermal power producer in the world (Morris et al., 1997). According to the Philippine Energy Plan, 4,895 MW of geothermal capacity is expected to be put on line within the next 30 years. Note that these are all large-scale grid connected power plants. While large-scale geothermal energy development is considered cost effective, there is good potential for developing small geothermal projects as decentralized source of power or for non-power application. However this is not currently being pursued, and therefore the current state of small geothermal is discouraging. The smallest geothermal unit constructed today is 100 kW, however the smallest project that most developers will consider is 5 MW (L. Vimmerstedt, National Renewable Energy Laboratory, personal communication). Other uses of lower temperature geothermal resources that may be attractive to a community because of their income-earning potential include crop drying, refrigeration, and salt making. Technological breakthroughs have also paved the way for use of excess heat from separated fluids of large plants which can be utilized for process heat before they are injected back to the earth’s surface. Taking advantage of these possibilities will pave the way toward the development and use of low temperature and marginal geothermal resources nationwide. 5-15 Renewable energy policy framework The stated goals of the government of the Philippines for their energy sector development are to ensure the reliability, security, and affordability of the electric power supply, and to provide power to the entire member economy. In support of this, government policies strongly promote and encourage the deployment and adoption of non-conventional and so called new and renewable energy systems (NRES), which includes solar, wind, biomass, and ocean energy. The rationale for this is that increased energy self-reliance and fuel diversification will enhance the reliability and security of electric power supply. Through the use of renewable energy, the Philippines government feels they will reach their goal of total electrification by making rural electric supply more affordable and reliable, and they will do so with less environmental damage than diesel mini-grids alone. The commitment of the Philippine government to renewable energy is strong, and yet substantial work has yet to be done to make progress in increasing the use of alternative energy technologies. Still, the privatization process has only recently begun, and neither the process nor the outcomes are well understood yet. Right now, each private power deal is a drawn out and complex process, involving a patchwork of regulations, overlapping jurisdictions, unclear authority, and ad hoc procedures for negotiations. As the process is standardized, simplified, and made transparent, real progress will hopefully be made. The Philippine Energy Plan The Philippine Energy Plan provides the national policy framework for the energy sector. The 1996-2025 Plan calls for enhanced energy self-sufficiency, diversity of energy supply, greater private sector involvement in the energy sector, and the integration of environmental concerns in energy program and project planning and implementation. Rural energy is one of the essential aspects of the Plan. Specifically, the Philippine Energy Plan calls for electrification of rural, isolated and island areas, targeting 900,000 additional households, to bring the total number of electrified rural households to 11 million. The targets set forth in the Plan include: 100% energization of municipalities by 1996, 100% barangays (small villages) by 2010, and 100% of potential households by 2018 (Morris et al., 1997). As of 1996, 98% of the municipalities, 69% barangays, and 59% of potential households were energized. As discussed in Morris et al. (1997), although the Philippine Energy Plan manifests a strong support for the development and use of indigenous energy resources, including renewable energy, there are still many supporting policies that are not in place. There is no targeted policy on renewable energy development, severe price distortions exist due to subsidies for conventional fuels, unclear regulatory and legal frameworks are still in place, and there is uncertainty related to deregulation of the power markets. 5-16 The Medium-Term Philippine Development Plan The Medium-Term Philippine Development Plan, 1993-1998, sets the following rural electrification target: “The rural electrification program will benefit an additional 726,752 households, increasing coverage to 60 percent in 1998 (4.2 million of 7.3 million potential households) from 50 percent in 1992. Barangay coverage will expand from 63 percent in 1992 to 73 percent (25,956 of the potential 35,561 barangays) by 1998. All 1,422 municipalities under the franchise area of government-assisted rural electric cooperatives will receive electric service by 1995 (from 94 percent in 1992).” 1993-2000 Medium-term Non-conventional Energy Program Government support for renewable energy is further illustrated in the 1993-2000 Medium-term Non-conventional Energy Program (Renné and Pilasky, 1998 and Balamiento, 1994). The Non-conventional Energy Program considers photovoltaics a priority technology. The policies for the non-conventional energy sector (NES) are to: Intensify promotion of non-conventional energy resource use Help the private sector manufacture NES equipment Create a favorable market environment for buyers and sellers of NES Institutionalize area-based energy planning and management for NES Support commercial-scale NES projects that are environmentally friendly, cost effective, and socially desirable Support technological research and development activities on NES Enhance the coordination and planning of NES policy and programs Vv VeVi ev Board of Investment Priorities Plan One of the venues the government is using to promote development of their non- conventional energy sector is the Board of Investment Priorities Plan. The Board of Investments (BOI) is a government agency responsible for the promotion and facilitation of both foreign and local investment in the Philippines. In this role, BOI provides incentives for private sector participation in energy infrastructure. The Priorities Plan provides additional incentives for power generation facilities that do not use petroleum fuels. The fiscal incentives include (Santos, 1994): Tax and duty exemptions on imported capital equipment Tax credits on domestic capital equipment Income tax holidays of 6 years for projects in less developed areas Additional deductions for labor expenses Deductions from taxable income for expenses on infrastructure VVVVV 5-17 Renewable energy retrofits to existing mini-grids may be allowed an income tax holiday of as much as 6 years based on their location in “less developed areas” in remote grids. House Bill 2360: Non-conventional Energy This bill, which was introduced in 1996 but is not yet passed, seeks to accelerate the rate of adoption and increase the scale of renewable energy applications. It directs the government to establish an institutional infrastructure to develop local capabilities in the use of non-conventional energy systems and to promote these systems for both basic rural needs and in support of integrated rural development. Local production and supply of renewable energy equipment will be encouraged through tariff relief. The bill also establishes a Non-conventional Energy Trust Fund to finance research and development, to promote of renewable energy, and to conduct renewable energy resource assessments. It is to be funded from 10% of the royalties from oil, gas, coal, and geothermal production, and by a 0.2-centavo surcharge on all petroleum products sold in the Philippines. Funds would be disbursed as grants, loans, or equity investments. Omnibus Power Industry Act of 1997 This Act, which is yet to be passed, would mandate the deregulation and privatization of the energy and electric power sector as well as expand the roles and opportunities of the private sector in the supply of energy services. The generation, transmission, and distribution components of the National Power Corporation would be privatized under this legislation. Currently this bill is stalled in Congress, and it is not clear when it will be passed and enacted into law. The bill proposes an Energy Development Trust Fund be established for ten years to channel private foreign funds and official development assistance as long-term loans for private sector energy projects. This fund could be used as a venue for special incentives for renewable energy projects, or to encourage renewables by providing loans for renewable energy-based projects with the same or better credit terms than those available to diesel-based projects. It also seeks to establish a new agency dedicated to renewable energy development in primarily off-grid applications. Additional, detailed information on current laws, regulations, and procedures can be found in the Trade Guide on Renewable Energy in the Philippines (1996). Mini-grids in the Philippines Mini-grids are the best choice for electrification of much of the Philippines due to its geography, rugged topography, and dispersed population. As of October 1996, SPUG provided power for 44 islands and 8 isolated towns located in 29 provinces. The total installed capacity was 85,871 kW from 66 land-based and 12 barge-mounted power plants (SPUG, 1996). Virtually all of the electricity capacity is provided by diesel mini- grids. There were, by the end of 1996, 45 mini-hydropower plants installed in the a 5-18 Philippines, but none of these were operated by SPUG (Weingart et al., 1998). SPUG also has a couple of generators that use bunker fuel. There were almost 4 million unelectrified households and over 10,000 unelectrified barangays (small villages) in the Philippines as of September 1996 (Weingart, et al., 1998). Not all of those with access to electricity have 24-hour power. In fact, many communities in remote areas only have 3 hours of electricity per day. The Philippines is considering distributed generation using renewable energy technologies at the load end or interconnecting the renewable energy systems directly to low voltage lines, such as the distribution network of rural electric cooperatives. They note that the advantage would be the ability to delay the construction of major transmission and distribution infrastructure, since power is supplied near the load center, and good voltage and frequency regulation at the load-end. Costs of diesel power generation and transmission Determining the true cost of electricity generation is difficult. In distorted markets that have fuel subsidies, it is even more difficult, as in the case of the Philippines. The price of diesel is set by private oil companies. Electricity prices vary in different electric cooperatives due to differences in investment costs, operation and maintenance costs, sales, and distribution losses. In order to maintain level pricing, cross-subsidies between islands exist among utilities and consumer classes (APEC, 1998). In the rural and lower income areas, consumers do not pay the full cost of electricity. Diesel fuel is not only used for power generation in the Philippines but also in transportation. Subsidies for diesel power generation The Strategic Power Utilities Group (SPUG) has a “missionary function,” which means that as a matter of social equity the rural areas are not charged the full cost of producing the electricity. SPUG is having difficulty maintaining their missionary function because of escalating costs to provide power to the rural areas despite the fact that they currently have special tax and privileges (e.g., duty drawbacks and specific taxes) that help to offset the cost of diesel used in their remote power grids. SPUG is currently losing money on small island grids, denying it the revenue necessary to expand its coverage to additional islands, and removing any incentive to do so, since it would only lose money on those islands as well. The operating costs have grown at staggering rates in the last 10 years, rising by more than 3000% (Philippine Daily Inquirer, 1998). As operating costs were climbing during that period, so were the subsidies—since 1988 NPC extended PhP2.35 billion (US$56 million) in generation subsidies in addition to PhP72.11 million (US$1.7 million) in distribution subsidies for the period 1988-1991 (Philippine Daily Inquirer, 1998). These large outlays by the NPC are due to the fact that although the electricity generation cost for SPUG is PhP4.5674/kWh (US$0.108/kWh), the average selling rate to the islands has been stagnant at PhP1.9635/kWh (US$0.046/kWh) since 1993. Since then, however, it 5-19 ook we he an gi eo ] remote areas is the low] plant utilization, which makes it im amipossible to spread out SPUG’s fixed costs. In order to address the large losses due to subsidies for the small island grids managed by SPUG, the NPC wants to increase the power rates of its remote island customers in order to rationalize power rates in these areas (Philippine Daily Inquirer, 1998). In June 1998 NPC requested a rate increase from the current average of PhP1.9635/kWh (US$0.046/kWh) to PhP4.5674/kWh (US$0.108/kWh), an increase of PhP2.6039/kWh (US$0.062/kWh). This substantial increase in rates will be difficult for the rural communities to pay, and implementing it will be difficult in light of resistance from local utilities and rural electric cooperatives. SPUG suggests that the rate increase will have to be accompanied by the unbundling of rates by utilities so that customers can see the true cost of producing electricity and all the other components that go into the delivery of power to end-users. The good news is that the gradual removal of the subsidies by NPC will create an opportunity for renewable energy that will now be able to compete with diesel on a level playing field. This will create an opportunity for diversification and providing additional capacity by using renewable energy/diesel retrofits. SPUG anticipates that, for example, wind turbines can provide electricity for PhP1.76/kWh (US$0.0419/kWh), resulting in a possible savings of more than 50% in cost of power production through the use of hybrid systems (Benavidez, 1997). Energy end-uses and consumer profiles Reflecting the wide range of resources available in the Philippines, its economy is diversified, with manufacturing running just ahead of agriculture, fishing and forestry in its contribution to gross domestic product (GDP), 25-26% compared with 22-23%, respectively. Although manufacturing contributes more to GDP, and is the source of the current economic recovery, the agricultural sector is of greater importance in terms of employment and ranks higher as a net earner of foreign exchange. While the Philippines produces a wide range of crops and a large number of these are exported, the agricultural sector is dominated by two crops: rice and coconuts. They accounted for 16% and 8% respectively of GDP in the agriculture sector in 1994. The transport and communications infrastructure is inadequate for the Philippines’ requirements, given their expected growth rates, but these areas are a high priority of the government and will be expanded through private sector investments. Agriculture is the principal economic activity and source of employment for the rural communities, except in extremely mountainous areas such as Rapu-Rapu Island. The large amounts of rice and coconuts that are grown could provide agricultural residue for biomass generation. In particularly windy areas, root crops predominate. Additional agricultural end-uses include milling, refrigeration for fish and dairy products, and water pumping. The biggest opportunities for renewable energy in the industrial sector are in 5-20 biomass co-generation related to the sugar and rice hull industries and rice hull drying. Small-scale industrial uses include lighting, sewing machines, and small-scale manufacturing. Other economic activities are fishing, forestry, mining, and tourism. During the agricultural off-season, many people in the rural communities engage in home industries, producing baskets, rope, fishnets and handicrafts for home use and sale. Some areas have higher technology industries, such as rubber manufacturing, commercial fishing, poultry and hog raising, mining and drilling equipment, wood furniture production, food processing, metal craft, and garment making (SPUG, 1996). Commercial sector end-uses include lighting, refrigeration, and entertainment (e.g., music or television). Rural loads are primarily residential, both in terms of the number of connections and the amount of consumption, with most communities having some commercial or industrial end-uses including electricity for some public buildings. The largest demand for renewable energy is projected to be from the residential sector, primarily from solar home systems and battery charging stations. This sector also is expected to consume 90% of total woodwaste demand for cooking, heating, lighting and other household purposes. Biogas utilization by the household sector is also expected to increase as more biogas systems are installed. To give a sense of the types of end-use activities in the rural areas, selected regions or communities that are currently served with diesel mini-grids are described below. Where the information is known on renewable energy resource potential, the possible applications are discussed. The source of all of the information that follows is the Strategic Power Utilities Group of the National Power Corporation. Batanes Province Batanes Province is composed of a number of islands, of which three are electrified: Batan, Sabtang, and Itbayat. The electricity is being provided by NPC diesel power plants. The Batanes Electric Cooperative (BATANELCO) is responsible for the distribution of power to the end-users. At present, the power plants in Sabtang Island and Itbayat Island are being operated for six hours daily. The livelihood of inhabitants is primarily agriculture and fishing. Basco, the capital of the Batanes province is found in Batan Island. Batan Island is one of the northernmost islands of the Philippine Archipelago. The rugged terrain, architecture of structures, and industries on the island, reflect the very strong winds and typhoons that frequent the island. The main sources of livelihood on the island are farming of rootcrops, cattle raising, and fishing. Electrical power in the island is provided by several diesel gensets for 12 hours per day. As of June 1997, all six municipalities on Batan Island had been energized, and 26 out of 29 barangays had been energized by the electric cooperative. NPC plans to increase substantially the installed capacity using diesel and/or bunker C fuel on the three islands. By the end of 2010, capacity will be increased in Basco from 5-21 1,189 kW to 9,900 kW, in Sabtang from 326 kW to 1,163 kW, and in Itbayat from 326 kW to 1,500 kW. This area has good wind energy resources, and therefore represents a potential site for wind-diesel hybrid systems. Aurora Province The main town of Casiguran is on the Pacific Ocean in the Aurora Province. In 1990 Casiguran had a population of 18,388 which was projected to reach 24,001 by the year 2000 based upon an assumed growth rate of 2.7%. The municipality consists of 24 barangays, 18 of which have been electrified. As of 1995, 1,461 households out of 3,195 were connected to the mini-grid. Sea transportation is very difficult during the rainy season. Tricycles are the chief means of going from the town of Casiguran to the nearby barangays. The main crops grown in this area are rice, corn, and coconut, which could provide agricultural residue for biomass generation. Other crops grown are vegetables, fruit and rootcrops. Other important end-use sectors are forestry, fishing and tourism. This area is situated on the East Coast, which has good wind resources. However, the development of renewable energy/diesel hybrids will be hindered by the NPC plan to interconnect the area to the Luzon grid when the electricity demand reaches 900 kW. This target is not far off given that as of March 1998, the power demand in the area was about 693 kW. Romblon Province Romblon Province consists of three major islands: Romblon, Tablas, and Sibuyan. Rainfall is continuous, without a pronounced rainy season. It is however exposed to southwest monsoon and cyclone storms. Romblon Island has a hilly terrain with maximum elevation of 444 meters above sea level in the southern part. Low hills and plains dominate the landscape of Tablas Island, with a low mountain range in the center. Sibuyan Island is thickly forested mountain mass with a limited rolling and flat terrain. The Province consists of 17 municipalities, which are further subdivided into 217 barangays. The primary industry in Romblon Province is agriculture, and the major crops are coconuts, bananas, rootcrops, and rice. During the off-season, farm workers engage in home industries, producing baskets, rope, fishnets and handicrafts. Fishing is a year- round activity, using both sea fishing and commercial fishpond operations. Another major industry in Romblon is mining, and it is noted for its marble industry. NPC is supplying the electricity in the province using diesel power plants through Romblon Electric Cooperative (ROMELCO), Tablas Electric Cooperative (TIELCO), and local government units. ROMELCO operates in the islands of Romblon and Sibuyan, while TIELCO is responsible for the power distribution in islands of Tablas and San Jose. The local government units in the islands of Concepcion, Banton, and Corcuera are responsible for power distribution to its constituents. At present, NPC 5-22 operates the diesel power plants 24 hours per day on Romblon and Tablas Islands and 6-8 hours per day on the other islands. NPC plans to increase the installed capacity in Romblon Province from 8,211 kW to 18,992 kW by the year 2010 using diesel and/or bunker C fuel. However, NPC is also looking into the possibility of using renewable energy in this area. The area has been reported to have good wind resources, but not comparable to the better resource potential that has been found in the north. Quantitative modeling of the feasibility of retrofitting the types of diesel mini-grids found on Romblon and Tablas Islands with renewable energy systems have been done as part of this study, and the results are included in Chapter 6 and the appendices. Rapu-Rapu Island, Albay Province Most of Rapu-Rapu Island is mountainous, although the southern part has flat lands and gentle slopes, suggesting that both wind and hydropower resource might be present. The primary livelihood in the area is fishing, but there are also income-earning activities in agriculture (coconuts, rice, corn, rootcrops, fruits and vegetables), livestock (carabao, cattle, goats, and hogs), and mining. There are some medium-sized cottage industries on this island. The islands are remote, taking 2.5 hours by pumpboat to reach. Some barangays can be reached through small bancas, while others can only be reached by hiking. As of 1995, there were 5,329 households. Electricity generation is provided by NPC and distributed by Albay Electric Cooperative (ALECO). Although ALECO was incorporated in 1972, it has only electrified one of the 34 barangays on the island. Rapu-Rapu Island only receives 6 hours of power service, supposedly due to low power demand. Renewable energy resource potential in this area includes solar and wind, but this has not been studied in detail. Palawan Province Palawan Island is the fifth largest island in the Philippines. Palawan province is composed of 1,768 small islands. As in other areas, agriculture is the primary end-use sector. About 74% of the population are engaged in agriculture, primarily growing rice and corn. NPC has 7 isolated diesel power plants situated in the mainland Palawan, namely in: Puerto Princesa City (the capital of the Province), Narra, Brooke’s Point, Roxas, Taytay, El Nido, and San Vicente. The other power plants are located in 8 small island municipalities, namely: Cuyo Island, Araceli on Dumaran Island, Coron on Busuanga Island, Culion Island, Linapacan Island, Agutaya Island, Cagayancillo on Cagayan Island, and Balabac Island. The power distribution is handled by two electric cooperatives, namely: Palawan Electric Cooperative (PALECO) and Busuanga Island Electric Cooperative (BISELCO) which 5-23 services the municipalities outside of Palawan's mainland. This area was energized in 1983. As of December 1995, 31 of 68 barangays, or only 45.6% were energized. Cuyo, an islet 275 km northeast of Puerto Princessa in Palawan Province, only has access to the site is by boat through commercial ships or by plane. The main sources of livelihood in the area are fishing, farming and cattle raising. The absence of large industries and remoteness of the area limits the power supply to diesel gensets. Because of the large wind resource potential in Cuyo, it is being analyzed for the possibility of retrofitting the diesel systems with renewable energy systems. Mindoro Island Mindoro, the seventh largest island in the Philippines, is composed of two provinces, Oriental Mindoro and Occidental Mindoro. Oriental Mindoro has a total land area of 4,365 square kilometers and has 15 municipalities. Rainfall is usually experienced between June and October. The two main industries in Oriental Mindoro are agriculture and tourism. About 36% of the total 436,472 hectares are devoted to agriculture with the largest area dedicated to rice production. Oriental Mindoro is also blessed with non- metallic and metallic minerals such as silica, coal, barite, marble, gold, silver, iron, copper, and chromite. Occidental Mindoro is situated in the western part of the island, where it is mountainous. The province is usually dry during the months of November to April and wet during the rest of the year. The Occidental Mindoro Province has 11 municipalities and 62 barangays. Situated in the northern part of the province is the capital city of Mamburao. The economy in Occidental Mindoro is based on agriculture. The most common agricultural products are rice, corn, vegetable, peanuts, fruits, mongo, and root crops. It is also the leading supplier of seafood products such as salt, prawn, milk fish, tuna, and octopus. The province of Occidental Mindoro is also known for its stonecraft industry, which supplements the requirements of other provinces. NPC is responsible in the generation of electricity, which includes 3 land-based and 5 barge mounted diesel power plants in the area. There is one privately-owned power plant augmenting the generation capacity of Mindoro Island and one hydropower plant operated by the local electric cooperative. The power distribution is handled by Occidental Mindoro Electric Cooperative (OMECO) and Oriental Mindoro Electric Cooperative (ORMECO). At the moment, the two electric cooperatives operate independently. However, with the completion of NPC’s 69 kV transmission line, the two electric cooperatives will be interconnected and operate as a single grid. As of June 1997, 95 out of 134 barangays or 71% were energized under the franchise area of ORMECO, while 280 out of 423 barangays or 66% were energized in Oriental Mindoro. NPC is planning to increase the installed capacity on Mindoro Island from 49 MW to 117 MW in year 2010 using diesel, bunker C, geothermal, and hydropower. 5-24 Catandaunes Province Catanduanes Island is situated in the Pacific Coast of Bicol Peninsula, southeast of Luzon. It has a total land area of about 1,511 square kilometers. The topography of the Catandaunes Island is rugged and mountainous, becoming more pronounced towards the central portion of the island. It is composed of 11 municipalities and 314 barangays, of which 63 are located in Virac, the capital of the Province. The major industry on Catanduanes Island is tourism. The projected energy demand is highly dependent on residential consumption, and eco-tourism is expected to be the primary driver for growth in the commercial sector. Electricity on the island is provided by NPC diesel power plants and a mini-hydropower plant. As of June 1997, 253 out of 314 barangays or 81% were energized by the First Catanduanes Electric Cooperative Inc. (FICELCO). The total installed capacity on the island is planned to increase from 8,332 kW to 17,316 kW by the end of 2010. The capacity expansion will mainly be done with diesel and/or bunker C fuels. Dinagat Island Dinagat Island is located in the northeastern part of Mindanao Island. This island was energized in 1990 through the Dinagat Island Electric Cooperative (DIELCO). It is composed of seven municipalities, namely: San Jose, Basilisa, Cagdianao, Dinagat, Libjo (Albor), Loreto, and Tubajon. As of June 1997, 32 out of 90 barangays, or 36% and 6 out 7 municipalities, or 86% were energized. At present, NPC has 3 isolated diesel power plants located in the municipalities of Dinagat, Loreto and Hikdop. The residential sector dominates the energy consumption followed by the commercial sector. Important industries for Dingat Island are forestry, fishing, and mining. A group of mining companies is currently operating in the municipality of Loreto. NPC is planning to increase the installed capacity on Dinagat Island from 1,650 kW to 29,461 kW by year 2010 using diesel and/or bunker C fuels. Dinagat Island has been identified as a potential site for tidal energy applications. Gaboc channel situated between Dinagat Island and Nonoc Island in Surigao del Norte has large steady currents that could be tapped for tidal power. NPC has made preliminary measurements to assess the resource, but no tidal power installations have been built. Basilan, Basilan Island The population in Basilan is very diverse. It is composed of Tausugs, who live on the mainland; Samals who live in houseboats; Badjaos who live in houseboats but speak a different language than the Samals; Yakan, a Muslim tribe; Chavacano; Cebuano; and Ilonggo. Slightly more than half of the population (50.3%) is illiterate, compared to an average regional literacy rate of 70.9%. There are daily boat trips to the island and inland public transportation is available by jeepneys and tricycles. 5-25 Like the other areas, the local economy is based on agriculture. There are several plantations producing coconuts, rubber, coffee, cacao, African palm oil, and peppers. Small farmers raise rice, cassava, corn, and bananas. Other income-earning activities include fishing, seaweed farming, and tourism. NPC operates two power plants which provide the majority of power to the region, one a land-based diesel power plant and one a power barge. Basilan Electric Cooperative (BASELCO) distributes the electricity and also owns and operates two mini-hydropower plants. At present, 169 of 261 barangays, or 65%, have been electrified and receive 24- hour a day continuous service. The area has mini- and micro-hydropower potential that is yet to be characterized in detail. The residential sector represents the largest amount of electricity consumption, followed by the commercial sector. Renewable energy/diesel retrofits The small islands and isolated grids in the Philippines are primarily located on or near the three major islands of Luzon, Visayas, and Mindanao systems (Benavidez, 1997). As Of December 1996, there were 57 islands and 8 isolated towns served by 41 electric utilities that were not connected to the main NPC power grid. Since there are few energy sources available in these islands, the supply option is often limited to diesel generating plants. Moreover, the islands’ geography and sparsely distributed population make power generation and transmission/distribution costly. This however presents an opportunity for renewable energy-based generation, specifically renewable energy/diesel retrofits. SPUG is responding to the escalating power demands in the remote areas by pursuing a diverse mix of electricity supply options. Trying to offset the use of diesel, SPUG has embarked on an aggressive plan to retrofit their existing diesel mini grids with renewable energy options. Their primary incentives are reduced costs, decreased_reliance on imported fuel, reduced environmental al impacts, -and_energy resource diversification _and_ - optimization. Before any new generating technology is added to an existing diesel mini- grid, the technical requirements of that technology must be considered, as well as whether the community is interested in such a project. Wind In the early years from 1980-1991, the Philippines in general had bad experiences with wind generators. In McNelis (1996) they state “Several wind generator pilot and demonstration projects undertaken by DOE and the Energy Research and Development Center of the Philippine National Oil Company (PNOC-ERDC) all resulted in equipment failures from 1980 to 1991. These poor results are generally attributed to equipment being of an experimental nature supplied as part of aid projects (i.e. the Philippines being used as an outdoor test laboratory for foreign equipment)”. Since the early 1990s, the opportunity for wind energy development has been more promising. Because of the large wind resource potential in the Philippines, SPUG has initiated a study on the possibility of integrating wind energy systems into their existing diesel mini- grids. They have conducted a preliminary wind resource assessment at three remote 5-26 A L a brisht ! sites, which indicate favorable conditions for renewable energy/diesel retrofits. A more detailed assessment of the wind resources across the Philippines is currently underway to identify and characterize possible wind/diesel retrofit sites. Photovoltaics There is considerable in-country and worldwide experience with small, typically 50 W, photovoltaic power systems. However, there is very little experience with photovoltaics _ being used in a hybrid configuration with the diesel grids of the scale operated by SPUG. This is probably due to the high capital costs of photovoltaics. If a diesel grid is being ‘run successfully, the plant has reliable access to diesel, spare parts, and repair equipment and personnel, the higher cost of photovoltaics cannot be rationalized by the community. Mini-hydropower The development of hydropower/diesel hybrid systems in the Philippines is still premature. However SPUG, in their ten-year Power Development Program have recognized the potential to retrofit existing diesel mini-grids with hydropower at 10 different sites (Benavidez, 1997). Biomass In the Philippines, there is a large potential market for small modular biomass gasifier units (SOkW-2MW) used in conjunction with diesel generators to turn agricultural residues into electric power. As noted previously, the Philippines currently produces large amounts of rice hull, bagasse, wood wastes, coconut husks and coconut shells, which could be used in a biomass gasifier system. Small gasifiers could be used by small agricultural and forest products businesses to provide on-site power and electricity for villages with mini-grids. In one system that is on the market, diesel fuel is used for startup and for engine timing during the operation; otherwise, it runs on biomass (e.g., wood or rice hull). This results in a 65-80% reduction in diesel fuel consumption (Energyworks, 1997). Because of the large biomass potential in the Philippines, this small biomass/diesel system holds great promise for supplying power to rural areas with isolated grids. Modeling of renewable energy/diesel retrofit configurations in the Philippines Using the Philippines as a case study, it is possible to illustrate the various quantitative modeling tools that are currently available to analyze the feasibility of retrofitting existing diesel mini-grids with renewable energy systems. The Philippines is a good example because of the large number of diesel mini-grids on small islands and in remote areas as well as the fact that SPUG is considering the incorporation of renewable energy systems into their diesel mini-grids to reduce consumption of diesel fuel and operating costs. Six different scenarios are summarized in Chapter 6. 5-27 Coe Chapter 6 FEASIBILITY OF RENEWABLE ENERGY/DIESEL RETROFIT OPTIONS IN THE PHILIPPINES’ The Strategic Power Utilities Group (SPUG) of the National Power Corporation (NPC) owns and operates 99 remote power plants, mostly fueled by diesel, ranging in energy production from about 15 kWh/day to 106,000 kWh/day. Reducing the consumption of diesel fuel in these plants, along with their associated financial losses, is a priority for SPUG. Therefore, SPUG is currently evaluating the potential fuel and cost savings that might be achieved by retrofitting existing diesel plants with renewable energy technologies to develop a hybrid system. As the term is used here, a hybrid system may include any combination wind turbine generators, photovoltaic modules, lead-acid batteries, an AC/DC power converter (either an electronic inverter or a rotary converter), and existing diesel yey: & erperrrees 7 4: meee ato On Wa The resources available for this study do not permit a detailed design We r each of the 99 plants. However, an illustrative subset of the diesel plants in the Philippines was analyzed using quantitative modeling tools. The following five-step process was used to illustrate the methodology and capabilities of the analytic modeling tools: 18 Important characteristics of all the plants were tabulated. Plants were divided into six categories (or classes) with similar characteristics. 33 For each class or category, one diesel power plant that is representative of the class was identified. 4. For each representative diesel power plant, a moderately detailed modeling and analysis was done of the various hybrid design options. D3 The results were summarized and interpreted. The analysis of each representative plant involves the use of time-series simulation computer models developed at the U.S. National Renewable Energy Laboratory (NREL): the Hybrid Optimization Model for Electric Renewables (HOMER) (Lilienthal, 1995) and Hybrid2 (Baring-Gould, et al., 1996). These analytic modeling tools can be used to estimate the fuel usage, maintenance expenses, and cash flow resulting from various renewable energy/diesel hybrid designs, and to search the domain of possible designs for the one leading to the lowest life-cycle cost. Cost items that would be unaffected by the retrofit, such as operator salaries and the capital cost of existing equipment, are not included in the analysis. The results are reported as cost of energy (COE) savings, i.e., the difference between the cost of the existing diesel-only system and that of an optimized renewable energy/diesel hybrid system, expressed in units of U.S. dollars per kWh of energy production (US$/kWh). ' Condensed from Barley et al., 1998b. The full text of this paper is presented as Appendices, at the end of the document. os dined, diesel Syclems, geo ctherenves ** er oyedts an KK See - - 1S 10) Classification of Plants Of all of the plants in the SPUG territories, 43% of the plants provide 6-hour service, 36% provide 24-hour service, and 21% provide a variety of other service periods. Based on this distribution, 6-hour and 24-hour service are identified as the most significant groupings in terms of the number of plants. In some of the 6-hour systems, a dump load is used to prevent the diesel generators from operating at less than 40% of their rated power. Low-load operation of diesel generators increases maintenance requirements. In other 6-hour systems, diesels may be operated at less than 40% of their rated power. The increased maintenance costs resulting from this practice are not known and therefore are not included in this study. In Table 6.1, six electricity load classes are identified based on the hours of service, energy production, and, in the 6-hour plants, whether or not a dump load is used. For each class, a representative example of a diesel power plant belonging to that class is also indicated in the table. Of the 99 plants owned by SPUG, 69 are represented by these six classes. Of those not included in these six classes, one is a hydroelectric plant, four are inoperative, 20 operate for a number of hours other than 6 or 24, and seven are 6-hour plants producing more than 500 kWh/day. One plant was combined with another plant, and three dual plants were separated into a diesel plant and a bunker plant for the analysis. These six classes form the basis for the quantitative modeling done to determine the Sey of aeironitning | the diesels with renewable energy systems. Table 6.1: Summary of different load cases for mini-grids Service Daily Average Number Example Class Hours kWh Load, Kw of Plants Plant 1 24 > 20,000 > 800 11 Tablas 2 24 10,000-20,000 400-800 10 Romblon 3 24 5,000-10,000 200-400 6 Cuyo 4 24 < 5,000 < 200 9 Kabugao 5 6 < 500 < 80 21 Palanan 6 6* < 500 < 80 12 Cagancillo *(Dump Load Used) Subtotal 69 Other 30 Fuel Prices The distribution of the delivered fuel prices (in pesos), based on average prices in 1997, is shown in Figure 6.1 for all of the SPUG plants. Two significant groupings emerge in the distribution. The first occurs in the range of 4.0-8.5 peso/liter (PhP/l), with an 6-2 average value of 6.5 peso/liter (PhP/I) and the second in the range of 8.5-12.0 peso/liter (PhP/l), with an average value of 9.9 peso/liter (PhP/l). At the 1997 average exchange rate of 29.5 Philippine Peso (PhP) per US$, the average values of these two groupings are equivalent to US$0.22/liter and US$0.34/liter, respectively. One approach to the analysis would be to include the fuel price in the grouping of the plants into classes. However, it is believed that the fuel prices may increase in future years due to increases in the world market price of fuel and the removal or reduction of subsidies affecting the fuel price paid by NPC. Therefore, the fuel price is treated as a variable in the analysis, so that the results can be reinterpreted as fuel prices change. For “the modeling, values of US$0.22/liter and US$0.34/liter were used to represent the two main groupings in the distribution, as well as the case of US$0.46/liter to account for the possibility of increased fuel prices in future years. There is a trend that the larger plants tend to have low fuel prices; however, fuel prices of about US$0.30/liter or more are seen at some plants producing as much as 20,000 kWh/day. Figure 6.1 Fuel price histogram Fuel Price Histogram $.22/ (3 2 ah 2 Se a? et & gh oP at YP gh 7h XS wh wm oh © eh 4? | Fuel Price, PHP/li | Poy Wind resource assessment A project is currently underway at NREL to assess and map the wind resources throughout the Philippines. Because these results are not yet available, the magnitude of the wind resource is treated_as a variable in this analysis, so that the results can be modified as more information about the wind resource becomes available. Although this approach leads to conclusions that are less specific, it has the advantage that the results may be applied to a wider range of applications. 6-3 Wes On “af y ROS A one-year set of hourly wind speed data was obtained from Basco, in the northernmost a4 | Batanes province. The average annual wind speed of this data set (adjusted for the \ res estimated long-term average) is 6.13 m/sec at a height of 12 meters. Although there may gs Q be some sites in the Philippines with a greater wind resource than this, it is generally true that the wind speed decreases from north to south through the country. In order to represent a reasonable range of wind speeds in the analysis, the data from Basco were scaled to annual averages of 4.5 m/sec, 5.5 m/sec, and 6.5 m/sec. Although some sites with wind speeds higher than 6.5 m/sec or lower than 4.5 m/sec may be identified, this range serves to illustrate the sensitivity of wind power cost effectiveness to the wind speed. The seasonal profile of the wind resource, based on this data set, is shown in Figure 6.2. Of course, actual weather patterns vary throughout the country; therefore, hourly data measured at actual project sites should be used for a more accurate characterization of the wind resource for more detailed analysis of potential retrofit projects. Figure 6.2: Seasonal profile of the wind and solar resources 25 ze nN a ° Wind Power, Avg kW/AOC 15/50 3 Insolation, Tilted, kWh/m*2/day a Solar Resource Assessment Estimates of annual average global insolation for 65 specific sites in the Philippines average 4.01 kWh/m7/day (Bonjoc, et al., 1985). In addition, daily values of global insolation were obtained for one site, at Science Garden, in Manila. The long-term average of this data set is 4.50 kWh/m’/day (World Radiation Data Centre, 1998). For the analysis, hourly values were extrapolated from one year of daily values at Science Garden. Although there are some sites with a higher estimated solar resource, the value of 4.50 kWh/m?/day is above the average for all the sites. 6-4 The approach used in this analysis was to assume a liberal estimate of the solar resource and a conservative estimate of the cost of photovoltaic modules. Then if photovoltaics does not appear to be a cost effective component in the optimized retrofit designs (which is in fact the result that was obtained), cases of lower resource or higher module costs are ruled out as well. If it is subsequently determined that a higher insolation or lower module cost would apply at a particular site, the analysis should be repeated for such a case. The seasonal profile of the insolation data set is shown in Figure 6.2, for comparison with the wind profile. Note that the seasonal load profile is assumed to be flat in this tropical climate. There is some complementarity between the wind and solar resources. For example, the solar is strong from February through May, when the wind is relatively weak. However, the months of June and October are notably weak for both wind and solar resources. Hybrid Designs A pictorial diagram of the type of renewable energy/diesel hybrid system considered in this study is shown in Figure 6.3. The dump load component is omitted from the diagram for simplicity, and the rotary converter is replaced with an electronic inverter in the smaller systems. The inclusion of a photovoltaic array and batteries are options in the optimization procedure, except in the 6-hour plants (Classes 5 and 6), where the use of batteries is assumed. This type of hybrid system — AC wind turbines, with shut-off of all diesels allowed — is a relatively new design with which there is limited field experience. In fact, some of the designs indicated in this analysis feature larger wind turbines than have previously been used in this hybrid configuration. Therefore, adequate technical support for such a venture would be especially important, and a recommend approach would be a turn-key installation by an experienced system integrator. Experience with this type of system is currently being gained in Wales, Alaska (Drouilhet, 1998) . Figure 6.3: Diagram of wind/diesel hybrid system f j \ } | AC Wind Turbines | | toot Rotary Converter Dc Bus Assumptions used in models A summary of the component costs and financial parameters that were assumed in the Hybrid2 and HOMER analysis is shown in Tables 6.2 and 6.3. Table 6.2 Component costs assumed in the analysis Assumed Component Model Price (US$) Comment Wind Turbine Bergey Excel $24,000 each 40 kW, w/24m tower, + 5% Inst., Maint. 10%/10 yr Wind Turbine AOC 15/50 $75,000 each 50 kW, w/25m tower, + 5% Inst., Maint. 10%/10 yr Wind Turbine Zond Z40FS (A) $600,000 each 550 kw, w/40m tower, installed; Maint. $50,000/10 yr Wind Turbine Zond Z40FS (B) $825,000 each 551 kw, w/40m tower, installed; Maint. $50,000/10 yr Photovoltaics Generic $6000/kW Battery Trojan L-16 $110 each + 5% Inst., Maint. 5%lyr Diesel Controls Generic $15,000/ds! Dump Load Generic $200/kW with controls Electronic Inverter ~AES $1000/kVA + 5% Inst. Synchronous Condenser Small, Generic $100/KVAR < 200 kVAR Synchronous Condenser Large, Generic $60/KVAR > 200 KVAR + Rotary Converter Generic +$20,000 + $200/kW Added to synchronous condenser cost Table 6.3: Financial parameters assumed in the analysis Parameter Value Annual Discount 0.12 Rate Inflation rate 0.07 Annual mortgage 0.15 interest rate Period of mortgage 20 years Period of analysis 20 years Annual rate of 0.09 increase in fuel expenses Annual rate of 0.07 increase in battery replacement expenses Down-payment as a 0 fraction of first cost Fractional salvage 0 value at end of equipment life Source: Strategic Power Utilities Group 6-6 Quantitative modeling Two computer simulation models were used in tandem to identify and analyze recommended hybrid retrofit designs. The Hybrid Optimization Model for Electric Renewables (HOMER), developed by the National Renewable Energy Laboratory (NREL), is a simplified simulation model with the added capability of comparing many possible designs in a search for the most cost-effective solution. Given solar and wind resource information, HOMER can be used to determine the optimal capacity of wind turbines, photovoltaic arrays, battery banks, power converters, and diesel generators to minimize the present worth life-cycle cost of meeting a community’s electric power load. HOMER can also be used to explore various system configurations, dispatch strategies, and load management strategies. Hybrid2 is a more detailed, more versatile, and more accurate simulation model developed by the NREL and the University of Massachusetts. Designs that have been identified by HOMER may be analyzed, verified, and fine-tuned with Hybrid2. The effects of variations in the renewable resources, village load, design variables, etc. can be studied. Hybrid2 can be used to perform economic analysis, including life cycle cost, simple payback period, net present worth, and investment rate of return, and to estimate levelized annual maintenance, fuel, repair, and capital costs. In this study, HOMER was used first to search for the best design. Hybrid2 was then used to verify that choice and to more accurately predict the performance and cash flow associated with the design. The results of this analysis follow. Classes 1 through 4 For the 24-hour plants (Classes 1 through 4), the results are summarized in Figure 6.4. From this graphical representation, hybrid designs are shown to be cost-effective at wind speeds of about 5.5 m/sec and higher and fuel prices above about US$0.20/liter to US$0.25/liter, with some trade-off between the wind speed fuel price. For the cases studied, cost savings as high as about US$0.12/kWh and fuel savings as high as about 65% are predicted from the model. The amount of battery capacity recommended for the least-cost designs ranges from none to about 10 load-hours, which generally increases as the size of the plant decreases and as the wind speed and fuel price increase. Since the storage component is less well-proven than the simpler wind/diesel technology, especially for the larger systems, a more detailed analysis of recommended designs should be done to include consideration of the trade-off between economics and simplicity for systems with and without energy storage. Figure 6.4 Results of modeling: Classes 1-4 0.50 -~———— 0.40 | | = | a g = 0.30 4 a 3 = Le 0.20 | . —— Diesel ee 0.10 4 5 6 7 Classes 5 and 6 For the 6-hour plants (Classes 5 and 6), the analysis indicates that wind/diesel hybrid retrofits are not cost-effective over the same ranges of wind speed and fuel cost (i.e., wind speeds up to 6.5 m/sec and fuel prices up to US$0.46/liter). However, in each case, the addition of one smaller diesel genset yields considerable cost savings. For Class 5, the modeling results indicate that adding a 90 kW diesel generator to the system significantly reduces the cost of energy. The savings are highly dependent on fuel prices, and this correlation is shown in Table 6.4. Table 6.4: Modeling results for Class 5 Fuel Price Cost of (US$/liter) Energy Savings (US$/kWh) 0.22 0.032 0.34 0.050 0.46 0.068 6-8 For Class 6, the results show that adding a 70 kW diesel genset also reduces the cost of energy savings, depending on the fuel price. These results are shown in Table 6.5. Table 6.5: Modeling results for Class 6 Fuel Price Cost of (USS$/liter) Energy Savings (US$/kWh) 0.22 0.093 0.34 0.144 0.46 0.195 Numerous studies have shown that, in general, renewable energy/diesel hybrid retrofits are less likely to be cost effective in part-day (e.g., 6-hour) diesel systems than in 24-hour systems, because: > For the same average load, more of the wind energy needs to be stored. A larger power converter is needed to meet peak load. More energy is lost in power conversion and energy storage. The cycle life of the batteries is exhausted more quickly. > For the same average load, the diesel-only base case features less diesel run time, so there is less money to be saved by shutting down diesels. Findings The five-step approach that was used in this study, in conjunction with the two computer modeling tools, HOMER and Hybrid2, proved to be an efficient and effective way to get an overview of diesel retrofit opportunities, using wind and solar energy, in the Philippines. These model results will be very useful for SPUG as they develop more detailed designs for hybrid systems that could be used in remote areas of the Philippines. In addition to the wind and photovoltaics diesel hybrid systems that were modeled in the Philippines, the quantitative modeling tools could potentially be enhanced to include other renewable energy technologies. It is therefore recommended that further modeling capabilities be developed for HOMER and Hybrid2 to compare micro-hydropower and biomass retrofit options, similar to the manner in which wind and photovoltaics are currently evaluated. This modification would expand the range of possible retrofit options that can be examined and evaluated with these models and perhaps increase their use in hybrid configurations. This analysis showed that wind retrofits to the existing small diesel power plants in the Philippines are most likely to be cost-effective for the plants that are currently providing 24-hour service, for wind speeds of approximately 5.5 m/sec and greater, and for fuel prices above about US$0.20/liter to US$0.25/liter, with some trade-off between the minimum wind speed and the minimum fuel price. Photovoltaics is not likely to be cost effective in this application for a solar resource of 4.5 kWh/m?/day or less and an installed module cost of US$6/watt or more. The cost of energy savings for the recommended designs range from about 0.02 to 0.12 US$/kWh, with associated fuel savings ranging from about 30% to 65%. In the smaller systems that were analyzed, including the 6-hour plants and the smallest class of 24-hour plants, adding a smaller diesel generator to the existing equipment could save between 0.04 and 0.20 US$/kWh. However, these conclusions might vary in a different situation, depending on: Seasonal profiles of the load, wind power, and solar power; Wind climate type (trade winds in the case at hand); Magnitude of the solar resource (assumed to be 4.5 kWh/m’/day in this study); Component costs; and Financial parameters. VVVVV When the detailed wind resource mapping for the Philippines is completed, more specific conclusions can be reached regarding possibility for wind/diesel retrofit projects at specific plants. Maps showing the layout of the existing mini-grids should be overlaid with the wind resource maps to identify recommended sites for wind turbines. Anemometers should be installed at those sites to collect data for a more accurate analysis. ° 6-10 Chapter 7 GUIDELINES FOR RETROFITTING DIESEL MINI- GRIDS WITH RENEWABLE ENERGY SYSTEMS Hybrid power systems hold strong promise to improve rural electricity service in developing countries. Most mini-grids in rural areas are powered by diesel generator sets. Unfortunately, diesel generators are expensive to operate and maintain and have adverse effects on the local environment. Because of the high cost, they are often only run for part of the day, forcing the community to go without electricity service most of the time. Because of the difficulty of supplying spare parts and the high maintenance requirements, diesel generators are often out of order, leaving the community without electricity at all. Given all of these drawbacks for diesel mini-grids, an opportunity is created to retrofit these systems with renewable energy systems to create a more reliable, cost-effective mini-grid. Many of these communities have large renewable resource potential, including wind, solar, biomass, and hydropower. Combining renewable energy with diesel should make it possible to tap the strengths of both, and result in decreasing costs and increasing reliability. The following are guidelines on common issues when considering the retrofit of existing diesel mini-grids with renewable energy systems. They are intended to provide broad guidance on social, economic, policy, and technical issues. This information can be useful in designing a new hybrid system or in retrofitting an existing diesel to include renewables. These guidelines were developed for use by government agencies responsible for rural electrification, Independent Power Producers (IPPs), utilities, electric cooperatives, project developers and other groups in the APEC region. Characteristics of rural areas that are likely candidates for retrofits Demand for increased and improved energy services On the surface, this may seem self-evident. However, additional electricity may not be the community’s priority. Energy services are considered along with other development priorities such as clean water, sanitation, roads, and communication. Because development funds are a scarce resource, the community’s priorities are the most important driver in deciding if renewable energy/diesel retrofits will be considered and implemented. True development meets the felt needs of the community, and enhanced electrification is more likely to be a priority if: > The current energy system is a bottleneck to socio-economic development due to insufficient energy supply or reliability. 7-1 » The current supply of electricity is used for productive (e.g., income generating) purposes. > The community wants enhanced electrification, and is willing and able to pay for it. >» There are health or educational needs that are not being met because the electric power is insufficient or unreliable. Additional capacity needed Additional capacity in the current power system may be necessary in order to begin providing 24-hour electricity service. If power demand grows due to an increase in the population, a rise in average household energy usage, or local economic growth, the need for increased electric power generation capacity will be felt by the local community. The addition of renewable energy in a retrofit configuration will not only result in diesel fuel savings, but in avoided cost of additional diesel capacity. Large and reliable renewable resource potential Having an adequate renewable energy resource is fundamental to implementing a renewable energy retrofit of diesel systems. The resource needs to be accurately mapped and monitored to help define the potential opportunities in the member economy and to determine the cost and benefits of the retrofit. Obviously, the greater the contribution renewable energy can make to the overall electricity mix, the more diesel fuel can be displaced and the more cost-effective the retrofit will be. Electricity used in income-generating activities Electricity used for household consumption can make dramatic improvements in the quality of life of the local community. However, electricity for productive uses can increase incomes and create jobs, making it possible for families to afford not only household consumption, but better nutrition, health care, education for their children, and savings for the future. Examples of income-generating activities in the rural areas include water pumping, sewing, battery charging, and crop drying. These types of activities can spur economic activity and increase cash flow to foster socio-economic development. The availability of power 24 hours per day greatly enhances the possibilities for the community to sustain the income-generating operations. No access to grid and/or grid extension not economically feasible There is a distance from the main grid at which the present value life cycle per kilowatt hour (kWh) cost of grid extension is equal to that of remote generation. For distances less than this, grid extension is less expensive. For distances greater than this, remote generation is less expensive. The cost of grid extension increases with distance and the difficulty of the terrain. The per unit cost of electricity depends on the load (the per unit cost is the total cost over the period being considered divided by the amount of energy used during that period). For example, a load density of 20,000 kWh/km can result in costs of only US$0.10/kWh, but a load density of 700 kWh/km can result in costs of US$1.00/kWh (Lovejoy, 1992). The break-even distance will vary with each technology, the discount rate, fuel costs, costs for operation and maintenance, the amount of electricity to be consumed, and the abundance of the renewable energy resource. As the member economy develops, it can be expected that the central grid will continue to expand and the rural community’s electricity loads will continue to grow. At some point, it may make more economic sense to connect the community to the main grid rather than increase local generation capacity. Unfortunately, for most mini-grids, that time is at least decades away. Repair and service capabilities exist in the local community The access to reliable service and maintenance of the renewable energy/diesel retrofits will be essential in providing customer satisfaction and creating sustainable operations. It has been shown that the most successful programs are those that have responsive service and maintenance programs in the rural areas, which helps to alleviate concerns about product reliability and performance. Repair shops in the community make it much more likely that problems with system equipment can be taken care of in a timely fashion. In addition, having local or regional repair facilities increases the likelihood that there is someone locally with the skills to perform routine operation and maintenance and that there is a distribution network that can supply spare parts when needed. Having trained people is very important to the reliability and long-term operating efficiency of the renewable energy/diesel retrofits. Unreliable access to fuel and high fuel costs Adding renewable energy capacity is likely to have the greatest benefits in terms of cost and reliability where there is poor access to fuel supply or fuel is expensive. On the other hand, the diesel-generating component of the hybrid, which should provide the peak and backup power for the renewables, is more likely to be successful if there is good access to fuel supply, or at least reasonable storage facilities for diesel. In areas where diesel supply is expensive or unreliable, adding renewables in a retrofit design can be justified in terms of both cost savings and substantially increased reliability of electricity generation. In areas where the cost of transporting diesel is more reasonable, and the supply is sufficiently reliable, renewables face much stiffer competition. Large enough market to justify institutional support An essential aspect of sustaining a village power system is establishing a mechanism for administering the operation, maintenance, and bill collection. The community or communities supporting the mini-grid system should be large enough to pay at least one trained person to do these functions. Without this, the system is less likely to be properly 7-3 operated and maintained, resulting in poorer performance. It may even result in the complete failure of the project. Community can afford to pay If there is no cost recovery, either the system must be subsidized in perpetuity, or the system will eventually stop operating. To ensure sustainability, there must be sufficient cost recovery to pay for maintenance, repairs, parts replacement, and fuel. At a very minimum, a system must have sufficient cost recovery to pay for operation and maintenance expenses, and the system owners must be allowed to enforce payment. Economic considerations in designing a retrofit Electrification and overall economic condition in the community A certain level of socio-economic development must be achieved before electrification can proceed. It has been noted that investments made in modern energy services can have more impact if socio-economic development is proceeding in tandem and per capita incomes are rising (World Bank, 1996). There is a clear link between infusion of capital to the rural areas, the overall economic well being of a member economy, and socio- economic development that will positively influence the transition to renewable energy systems. In considering the overall economic condition of the rural areas, it is important to determine if there is access to: Raw materials; Markets; Sufficiently skilled, nourished and healthy labor; Capital; and Conducive legal and business environment VVVVV If not, it may be a better use of resources to first correct some of these deficiencies, because electricity alone will not produce new businesses, jobs, or higher incomes. If some or all of the above mentioned elements are present, electricity can increase productivity in rural enterprises, leading to increased wages and formal employment. This income can in turn be used to raise the living standards of individuals, through better nutrition and health care, and for the community as a whole, by paying for better social services, such as health clinics, schools, community lighting, or potable water. Current and projected productive uses in the local community The term “productive” in this context refers to income generating, as opposed to consumption uses, such as lighting homes and running televisions and radios, which, while they improve quality of life, do not increase income. Entrepreneurs who are able to develop small-scale enterprises that generate income will foster socio-economic 7-4 development in the community. As a result, socio-economic development will spur demand and market expansion for energy services in the rural areas. Rural business enterprises also provide important linkages to agriculture and a secondary means of livelihood, reducing the risks to the communities that solely rely on incomes from farming. Small rural enterprises allow local manufacture of items necessary for agriculture, such as plows and the processing of agricultural and other raw materials so that they can be sold and shipped, either as finished goods or for further processing. Through these income-earning opportunities, families have an additional source of income during those years when harvests are bad. Productive uses in rural areas could include: > Agricultural - food processing - ice making - milling - refrigeration for milk, other dairy products, or fish - water pumping for irrigation and livestock - potable water (pumping, storage, distribution, and disinfection) > Small-scale industrial - lighting - manufacturing - production of food items - processing of agricultural material (e.g., rice husking) - production of low-technology items, such as pots, handicrafts, and furniture - micro-enterprise development (boat building, machine shops, and wood working) - higher technology uses, such as drilling and dental clinic > Commercial - lighting - telecommunication - battery charging - refrigeration - entertainment Willingness of end-users to pay for energy services Willingness to pay is a measure of the worth of a good or service as determined by potential customers. Unfortunately, unreasonable expectations on the price of energy services have been created due to the existence of subsidies. Once subsidies are phased out or rationalized, people would be willing to accept much higher electricity prices in order to enjoy reliable energy services. It has been shown that people in rural areas are 7-5 willing to pay for basic electrification (lighting, radio, and possibly television). The challenge becomes how to make appropriate financing mechanisms within the reach of the rural energy consumers so that the energy services are affordable and the goal of universal access could be achieved. In addition, businesses dependent upon electricity may be more likely to pay than average residential consumers because they may be more likely to have a relatively secure income stream and a greater need for the increased reliability. Social and development issues Public services In this context, “public services” refers to all end-uses which benefit the community in general, not just those able to obtain a connection and use the electricity in their household. The extent to which increasing the supply or reliability of electricity translates into improved social services depends on how many hours of electricity the community currently has and whether these public services are currently being provided. A community may need additional capacity to provide public services, but it is essential to consider the community’s willingness and ability to pay for these additional energy services. Such public services include health care, education, public safety, and communication. > Health care Health care services can be improved and made more convenient through electrification of rural health care clinics. For example, clinic hours can be extended into the evening, allowing more people to be served, and making access easier for those with formal employment. (‘Formal” employment means they work for an employer who is typically not a family member, in exchange for wages, and have set work hours.) Electricity also makes it possible to refrigerate vaccines, an extremely effective method of improving local health. However, this refrigeration needs to be reliable because any break in service will cause the vaccines to overheat and become worthless. >» Educational services Electrification can improve educational services and learning. Lighting may make night classes possible, allowing working adults to become literate or improve other skills. In addition to the presence of a school and teacher, this necessitates either additional money to pay the teacher or a teacher willing to work additional hours as a community service. Some countries have school programs broadcast over radio or television to supplement rural education (Sunworld, 1993). School electrification eliminates the need to continually buy batteries for radios and may make it possible to provide a television or other audio-visual aids in the classroom. 7-6 > Public safety Improved public safety through the installation of community street lighting has been demonstrated by decreased crime rates and better ability to find one's way in the evening, without getting lost or tripping over unseen obstacles. > Communication Access to communication services is important in improving the social welfare of people living in rural areas. Television and radio are the primary modes of communication. Sharing of these services in the community, either by allowing non-electrified household members to watch television or listen to the radio in electrified households, or simply in the secondary dissemination of information, makes communication a social good, as opposed to one only gained by the electrified household. The absence of mass media limits access to political information and thus limits the extent to which the political process can operate freely. The rural use of radios and televisions provides the opportunity to educate and inform the rural populace about topics ranging from local politics, to world events, to health alerts. Community preferences For electrification to be the optimum use of limited financial resources, it must be a priority for the community being served. A participatory process where the local community is engaged in the decision-making is necessary to determine whether electrification is a priority; to enable the people i unity to voice their felt needs; to obtain information in order to design a project that the community will want; and to instill a sense of ownership. Without popular participation, the project is less likely to be responsive to the particular needs of the community and the realization of benefits can be severely impeded. A participatory process makes it easier to identify and remove social or institutional biases that may hinder a renewable energy/diesel retrofit project. Popular participation assists in the evaluation of a project by soliciting feedback from the community about the success or failure of the existing diesel system. The most basic information to gather from the community is how well the current state of electricity generation is meeting their needs; what problems does the community have with the current system, and what types of energy services do they want? If it is decided that enhancing the electrical system with renewable energy is a priority, the community may have other priorities and preferences that should be taken into account in system design. These may include: > Visual aesthetics While this concern may complicate project design and implementation, it is better to address it from the beginning than have it serve as a cause for community resentment. 7-7 > Environmental impact Many communities may prefer adding renewable energy to a system simply because it will not generate the noise or air pollution that they have experienced with diesel generators. Or environmentally concerned communities may prefer run-of-the-river hydropower systems to larger dam systems to preserve their local environment. Experience is showing that some people are even willing to pay slightly higher rates for electricity if it comes from a more environmentally friendly source. > Need for reliable power As mentioned previously, communities that need power for productive uses may require greater reliability, even if it means additional expense. Likewise, wealthier communities may be willing to pay higher rates in exchange for greater reliability. Cost of renewable energy/diesel retrofits One of the most obvious criteria for choosing between different options is cost, which includes the up-front purchase price for the system and the costs of operation and maintenance. Comparing the costs requires looking at the different power capacities, lifespans, and operating costs of the various options. Most of the costs for renewable energy systems are upfront, while most of the costs for diesel systems are ongoing. Calculating life-cycle costs on a per unit basis, in terms of their present value, makes it possible to compare the various options on a level playing field. The life-cycle cost is a function of the initial cost, operation and maintenance costs, fuel expenses, the capacity factor? and the discount rate. Initial costs Initial costs include the capital costs, the costs of transporting the equipment to the site, and installation. These costs should be calculated for each technology option. Note that installation costs for mini-hydropower plants are site specific and vary widely. Operation and maintenance costs Operation and maintenance costs are typically highest for diesel and mini-hydropower, and lowest for photovoltaics (Office of Technology Assessment, 1992). For example, diesel generators have very high maintenance requirements and are notoriously unreliable. Whereas, photovoltaics and wind systems require much less maintenance and are typically more reliable. Fuel Costs The price of diesel-powered electricity is extremely sensitive to the cost of the fuel. For example, the cost on a per/kWh basis increases by 72% if the price of diesel is doubled (Office of Technology Assessment, 1992). An increase in prices, whether due to the 2 Capacity factor is the energy use divided by the energy available. 7-8 removal of a subsidy or due to another world oil crisis, may make it impossible for the community to afford electricity and impossible to repay the loan. However, estimating the future price of diesel given different scenarios can help to incorporate this uncertainty into the decision-making process. Externalities The externalities that are relevant to renewable energy power generation include environmental costs of using diesel, political benefits of reducing dependence on foreign sources of fuel, and increased reliability of power supply by avoiding diesel generator outages and interruptions in diesel supply. Different methods could be used to incorporate externalities into the decision-making process. One method would be to attempt to value these costs and benefits in the form of a tax or subsidy. A tax on diesel would rationalize prices, however a subsidy for renewable energy over a set time frame could also level the playing field. Although accounting for externalities in the costs is an option, it is extremely difficult and politically sensitive to determine monetary values for intangible costs or benefits. A similar option is to use the determined monetary values, not as a tax or a subsidy, but as a weighted factor used in the present value of life cycle cost calculations. This would “weight” the analysis towards renewables. A simpler option is to use a mixture of quantitative and qualitative factors, rather than attempting to account for all qualitative factors using quantitative measures. This would mean leaving externalities out of the cost calculations, but not using cost as the only, or even the primary decision-making criteria. Present Value Comparisons The preferred method for selecting among different options is by comparing their present values (UNIDO, 1972). The present value of the life-cycle costs of various systems is equal to their initial costs plus the present discounted value of their ongoing costs for the expected lifetime of the system. Because the equipment used in different types of systems has different lifespans, future replacement costs must be factored in so that the cost comparison can be made of the same service over the same time frame. Initial steps in using present value life cycle costing for retrofitting diesel with renewable energy systems involves determining the current cost of power generation and transmission and estimating present and future power needs with 24-hour service. The question is how much will it cost to meet the power needs with the various options that are being considered. At this point, all present capacity is a “sunk cost.” In other words the equipment and infrastructure are already bought and installed. If no additional capacity is needed, then the cost of continuing to use the diesel is limited to costs associated with operation, maintenance, and fuel. By determining the present value of those costs over the set time period, it is possible to determine the rate at which 7-9 renewables must compete over their life cycle. If additional capacity is needed, then the capital cost of providing that capacity with diesel can be incorporated into the life cycle analysis. The present value of the life-cycle costs should be determined for each of the options, and calculated on a per kWh basis for accurate comparison. To ensure the validity of the cost comparisons, future replacement costs must be factored in so that the time period for each of these calculations is the same, even though the life span of the different technologies will vary. Technical issues Load analysis The load is the demand placed by the end-uses on the electrical system. As stated by Flowers et al. (1994), “The design of a village power system begins with a definition of the current, anticipated, and long term electrical loads. The loads definition process should include average power levels, start-up surge power levels, and a diurnal distribution, which is usually based on hourly averages. If the village currently has a diesel generator, this definition is best accomplished using manual or automatic load monitoring. . . Projections on future load growth are also made and systems are typically sized for anticipated needs two to ten years after commissioning.” In addition to determining the peak load and average power levels, it is helpful to know the pattern of energy use during the day and over the course of the year. For example, some of the end-uses, such as agricultural processing, may be seasonal or the community may be subject to large population fluctuations if migrant labor is used during the community during certain agricultural seasons. These fluctuations will likely affect energy consumption in the community. If the load can be broken down into primary, deferrable, and optional categories, and the distribution system set up accordingly, it will be possible to develop a less expensive system by avoiding the need for excess capacity and making optimal use of renewable energy. Primary loads are defined as loads that must be met at a particular time (e.g., / lighting, television, and medical equipment). Whereas deferrable loads are those that still , must be met, but the timing is somewhat flexible (e.g., water pumping and ice making). | Optional loads may or may not be met, depending on the availability of energy (e.g., ) water heating or space heating). Detailed resource assessment A detailed resource assessment is critical in identifying cost-effective renewable energy/diesel retrofit options. Characterization of the renewable energy resources will facilitate designing a system capable of meeting the load while optimizing the costs and will yield benefits in a well-conceived program of deploying renewable energy technologies. 7-10 Solar resource assessments are fairly straightforward because insolation data can often be gathered from in-country meteorological stations, universities, or government ministries. Wind resource measurement, on the other hand, can be more complicated and time- consuming. Methods of determining the wind resource available include direct, year- long measurement; direct measurement with extrapolation to other data; and using existing resource maps (e.g., Battelle Pacific Northwest Laboratory and the National Renewable Energy Laboratory). The maps are helpful for judging where a high wind resource may exist and allows a wind energy project developer to choose a general area of estimated high wind for more detailed assessment. Micro-hydropower resources are determined by the stream’s head and flow. If the waterway has been gauged, then records can be obtained from the responsible government agency. It is important to note that renewable resources not only can vary throughout the year, but also from year to year, making it desirable to have resource data collected over many years. Quantitative evaluation of retrofit options Detailed evaluation of the retrofit options should include determination of available resources, load requirements, and cost analysis. For the most efficient use of resources, life cycle analysis must be done and system components must be optimized. This can be extremely difficult and time consuming. However, two new tools are available that make this a much more manageable task. The Hybrid Optimization Model for Electric Renewables (HOMER), developed by the National Renewable Energy Laboratory (NREL), is a simplified simulation model with the added capability of comparing many possible designs in an iterative search for the most cost-effective solution. Given solar and wind resource information, HOMER can be used to determine the optimal capacity of wind turbines, photovoltaic arrays, battery banks, power converters, and diesel generators to minimize the present worth life-cycle cost of meeting a community's electric power load. HOMER can also be used to explore various system configurations, dispatch strategies, and load management strategies. Hybrid2 is a more detailed, more versatile, and more accurate simulation model developed by the NREL and the University of Massachusetts. Designs that have been identified by HOMER may be analyzed, verified, and fine-tuned with Hybrid2. The effects of variations in the renewable resources, village load, and design parameters can be evaluated. It is a tool capable of modeling the full range of hybrid power technologies for making comparisons of competing technology options, including photovoltaic/diesel hybrids, photovoltaic/wind hybrids, and more efficient diesels. Hybrid2 can be used to perform economic analysis, including life cycle cost, simple payback period, net present worth, and investment rate of return, and to estimate levelized annual maintenance, fuel, repair, and capital costs. An example of the use of these two models to evaluate the feasibility of hybrid retrofits to typical diesel mini-grids in the Philippines is presented in Chapter 6 and the appendices. In-country capacity 7-11 If a renewable energy/diesel hybrid system is to be sustainable, the local community must be able to maintain and service the system. This can be achieved through training and capacity-building of the village. There should be clear responsibility for operation and maintenance, either with a local individual(s) or with a specific institution. That person or institution should be capable of performing operation and maintenance, including parts accessibility, service, and bill collection. When making choices between competing technologies, it is important to only consider proven, commercially available options. This will lead to improved customer satisfaction with the performance and expectations of the system. Sustainability of the project will be enhanced by: > Adequate training for those responsible for installation, operation, and maintenance; > Objective evaluation of the performance of the system and customer satisfaction; and > Mechanisms to share experiences and record lessons learned. Barriers to be overcome There are numerous barriers to increased use of renewables for village power. These barriers will vary for each member economy, but there are some common issues that should be considered. Policy bias toward fossil fuels Many member economies, deliberately or unintentionally bias the market away from renewables through policy measures that support the use of fossil fuels. One of the primary ways this is done is through the provision of unequal subsidies or tariff rates to renewable energy and diesel. Subsidizing diesel fuel distorts the market, making diesel- generated electricity priced at far below market rates, making it difficult for renewable energy to compete. Tariffs that are lower for diesel equipment likewise discriminate against renewable energy equipment. Unfamiliarity with the renewable energy technologies Policymakers and regulators may be unfamiliar with the various renewable energy technologies. Consequently, renewable energy project developers may be subjected to regulations that are appropriate for diesel power but not for renewable energy systems. There may not initially be in-country capacity to develop, install, operate or maintain a renewable energy system. Therefore, it may be appropriate to engage foreign investment in this sector in order to develop a member economy’s expertise. However, renewable energy technologies are often viewed by investors as unproven which makes them view a renewable energy investment as high risk. This unfamiliarity with the technologies can greatly deter lenders from making an investment. In order to overcome this barrier, 7-12 (uly Kt | | { project developers and manufacturers will need to demonstrate the technologies’ reliability by further establishing a track record of performance, cost-effectiveness, and applicability to the rural areas. Unequal Access to Investment Capital Once the end-users in the community are willing and able to invest in renewable energy solutions, the next step is to make the private sector comfortable risking capital in loans or investments in this market. Investors have long struggled with erroneous perceptions about renewable energy. Most of these relate to unfamiliarity with the customer and the technology that makes assessing risk difficult. But the investor also needs confidence that rates of return are reasonable when compared to the risk taken. Access to capital through the capital markets is essential to expanding the reach of renewable energy systems to the rural areas. In the case of diesel mini-grids, lenders are more familiar with diesel generators, and are therefore more comfortable financing these types of systems. Whereas, renewable energy systems are perceived as being more risky investments, they are charged higher interest rates, if financing is even available. Until capital is available on competitive terms, renewable energy projects will be difficult to finance through the private sector. The good news is that community-based energy service companies, international manufacturers of renewable technologies, local entrepreneurs, and global investment bankers, are recognizing the need for energy in the rural areas and seeing opportunities. Each is at work creating techniques to access the capital through creative financing mechanisms at favorable terms and returns (See Chapter 4 for more details). Limits on foreign ownership Some member economies place strict constraints on foreign ownership of power plants. However, a local partner can be very important in facilitating the development of projects and market outreach and will ultimately benefit the foreign project developer or investor. One challenge to a foreign developer is to find a local partner willing to invest in a field in which it may have no experience, and is able to come up with a share of the capital investment. While not impossible, this complicates the process. Limited track record for village power/diesel retrofits. One disadvantage of renewable energy/diesel hybrid systems is their increased complexity when compared to, individual household systems like solar home systems. | Integrating the different components is more difficult and requires advanced electronics. There is not a large body of experience with this worldwide. However, as the track record is further established for hybrid systems, the experience gathered and the lessons learned will help move this technology forward. 7-13 High up-front capital costs. Renewable energy systems typically have high initial capital costs, which tend to hinder them in the market place. However when considered in the context of their lower lifecycle costs, renewables will be, in most cases, more cost-effective than diesel. Savings in fuel and other operating costs could offset the higher up front costs, and longer time horizons for the investment will improve their viability. In addition, financing for the end-user will help relieve the first-cost burden. High transaction costs Transaction costs include planning and developing project proposals, arranging the financing, obtaining necessary permits, and negotiating contracts. For smaller projects, transaction costs can become such a large part of the overall cost of the system, affecting the economic viability of the project. Overlapping jurisdictions and unclear authority among government agencies, long time delays for processing permits, extensive negotiations for each contract, including rate setting, all serve to make transaction costs extremely high. Transaction costs can kill a project or prevent companies from considering such an investment. Local and national policies to support rural electrification Business environment conducive to private investment All private investment in energy services will benefit from operating within a business- enabling environment. The most fundamental thing governments can do to encourage investment is to get proper macroeconomic policies in place. As mentioned previously, businesses need access to markets, capital, and clear and enforceable legal and regulatory measures. Governments, through the policies they enact, can indirectly encourage or discourage that access. Governments can enact regulations to strengthen the integrity of the banking system. Critical to encouraging private investment in emerging markets are laws that support transparent legislation and regulations that will help promote better macroeconomic fundamentals. In addition, the implementation and enforcement of regulatory and legal measures that protect the investor and the developer are necessary. Policies to make the banking system more accessible to non-traditional savers and borrowers, perhaps through micro-credit schemes, will also increase the amount of capital available for rural investment. In addition to broad policies, governments can themselves invest in energy infrastructure in the rural areas. This can be done in conjunction with investors who want to establish new business ventures in rural areas to take advantage of closer access to raw materials and a cheaper labor force. 7-14 Specific policies encouraging renewable energy development > Real pricing of power One of the most basic, and important things a member economy can do to encourage renewable energy development is to “level the playing field” so that renewables compete on an equal basis with fossil fuels. This necessitates removing subsidies and tariffs that bias the market away from renewables. Tariff (and duties) reduction/elimination Because most of the costs for a renewable energy system are up-front capital expenditures, tariffs and import duties hit renewable energy proportionately harder than diesel generators. Reducing or eliminating the tariffs on imports of electrical generation equipment would help to “level the playing field” for renewables. Short-term subsidies for renewable energy development Although it would distort the market, one option is to subsidize renewable energy equipment over a limited time period. Subsidies and tax credits on imported capital equipment and protection for local manufacturers, dealers, and project developers would help to promote local transfer of technology through licensing and strategic alliances with foreign manufacturers/developers. If renewable energy technologies were subsidized to the same extent as diesels, it would remove the market distortion between these generating options. However, by artificially decreasing energy prices, there is still the risk of inhibiting market forces from operating freely and would discourage energy conservation. Externalities incorporated into prices Burning diesel fuel causes environmental damage. Importing diesel increases a member economy’s vulnerability to outside supply disruptions. Assigning a monetary value to these externalities, and taxing diesel accordingly incorporates these costs into the prices. Unlike a subsidy, which distorts the market, this tax would make the market more rational. Whereas a subsidy costs the government money, a tax raises revenues. Reducing transaction costs Most large investors, with ready access to capital, are not interested in small projects. Transaction costs are simply too high relative to the project size when they have other opportunities for larger margins on their investment. Allowing an IPP to work on several village projects, on the other hand, allows the IPP to reduce its per-project transaction costs, and to learn from its experience. Reducing transaction costs can encourage private investment in village power. Standard contracts and rate setting procedures and streamlined permit procedures and requirements are valuable practices that substantially reduce transaction costs and risks to investors. 7-15 > Allowing foreign investment/partners As the Philippines discovered in the early 1990’s when faced with critical power shortages, opening up a sector to foreign investment is an excellent method of improving a member economy’s infrastructure despite limited government funds. This is a particularly good course of action with renewables, because there may not initially be sufficient in-country expertise or financial resources. Clear and careful regulation, combined with firm contracts, can afford a member economy many of the benefits they seek by controlling the percentage of foreign investment, without discouraging that investment. At the same time, it frees up government funds and domestic capital for other investments. > Access to financing and capital Government policies can be put in place to facilitate efforts of the private sector involved in financing rural renewable energy development through the creation of sound fiscal policies and creation of a business-enabling environment. By supporting macro-economic policies that encourage private investments and by investing in the complementary infrastructure such as roads, sanitation, and water systems, local and national governments will be able to attract the private sector to investment opportunities in rural areas. If public policies support an environment conducive to the spread of renewable technologies then entrepreneurs and investors should be attracted to the opportunity offered in the rural areas. A conducive business environment, including favorable macroeconomic conditions, the removal of policy biases against the rural sector and the establishment of an integrated and efficient financial market that puts credit within the reach of the rural population will facilitate access to capital. Governments can work to strengthen and regulate the financial institutions that serve the rural areas. Accomplishing this would increase the transparency, accountability, and risk bearing capacity of these institutions. It will also be easier to obtain financing with firm, bankable contracts with fixed rates for power purchased, rather than variable rates based on short-term avoided costs. > Encouragement of hybrids as well as “pure” renewable projects Given the advantages that renewable energy/diesel hybrids have over pure renewable or pure diesel systems, any policies designed to support renewable energy projects should apply, at least partially, to hybrid projects as well. Since diesel systems are widely used in the APEC region, policies should be broadened to include both hybrid and renewable energy projects. Checklist for analyzing opportunity for renewable energy/diesel retrofits Presented in an abbreviated form, listed below are some of the important issues to consider when evaluating the possibility of retrofitting diesel mini-grids with renewable energy systems. 7-16 se Characterize the local communit Sources and level of income Number of households or villages Fluctuations in income over the course of a year £nd-uses for electricity, with particular attention paid to productive uses Problems with existing energy services Current and projected energy requirements (peak loads, average daily loads, and seasonal fluctuations) _€urrent energy services being provided and price being paid by end-user Willingness to pay for additional and/or more reliable electricity Previous experience and familiarity in the community with renewable energy ‘Demand for the product Effective willingness to pay for environmentally friendly electricity Religious or cultural characteristics that might influence attitudes towards renewable energy \Xocal organization or partner interested in renewable energy development Evaluate technical issues » Renewable energy resource potential Diesel fuel cost Types of electricity loads (primary, deferrable, and optional) Capital equipment and infrastructure requirements Performance standards Optimal size of system components Source of the system components (locally produced or imported) Possibility of doing local assembly Requirements for installation Operational history of the equipment Capability for project monitoring Equipment maintenance requirements Access to fuel and spare parts Access to repair facilities and mechanics Assess costs Total cost of retrofit (e.g., fuel, operation and maintenance, and equipment) Working capital needed Projected sales, prices, and revenue stream Projected internal rate of return Risk exposure (e.g., exchange rate, interest rate, power purchase agreements, and government policies) Financing available (e.g., multilateral, concessional, and grants) Transaction costs for financing Cash flow (costs of maintenance, service, end-user payment default, future purchases, staff support, etc.) 7-17 Cost/benefit of different options for which there are sufficient resources and technical abilities Develop cost recovery mechanism Financing scheme appropriate for community (e.g., fee for service, credit, or purchase) Existing rural credit, savings, and banking institutions to utilize Method for collection of fees and rate payment levels Policy to handle defaults on loans and terms of repossession Local financial intermediaries that could be used to manage end-user financing Determine service and maintenance scheme Responsible party for operation and maintenance Method and timing of project evaluations Mechanism for sales, installation, and service Existing institutions able to expand into service and spare parts delivery Training and capacity-building of local community in operation of system Consumer protection measures including warranties, service, and education 7-18 Chapter 8 CONCLUSIONS The reliance on isolated diesel systems, combined with the renewable energy resource potential in the rural areas of the APEC region, presents a large opportunity for retrofitting the diesel mini-grids with renewable energy systems. These hybrid systems can be important in reducing the operating costs and the fuel usage with the added benefits for the environment. In addition, the increased use of renewables will reduce the reliance on imported fuels and help to create energy self-sufficiency. Now that governments are faced with increased fiscal austerity in their budgets, subsidies for rural energy development, specifically those allocated for fossil fuels, are more difficult to maintain. Therefore, APEC member economies are embracing the concept of self-sustaining projects that can recoup their costs. This means that subsidies will have to be reduced or eliminated, creating a level playing field for the entry of renewable energy equipment into a competitive market. This is being financed through a combination of multilateral, government, and private sector sources. By leveraging capital from different sources and using innovative financing mechanisms, it is possible to maximize the limited resources of each investor, while maintaining their rural development agenda. The transition to renewable energy/diesel hybrid systems will require that there is a commitment to the following: > A policy and regulatory environment that is conducive to the adoption of renewable energy in the energy supply portfolio of a member economy. By creating policies that create a level playing field where renewables can compete, member economies will help to open up and accelerate their renewable energy markets. Once subsidies and other price supports such as duties and tariffs are reduced or eliminated the transition to renewables can occur. > A rationalization of electricity generation and supply prices in the rural areas. Looking at the true costs of electric generating options and incorporating those costs into the price will help to rationalize the market. Alternatives to traditional grid extension from the urban to the rural areas, such as renewable energy/diesel hybrid systems, need to be considered in light of the lower costs, the increased energy self-reliance, and fuel diversification, which will enhance rural energy development. The task of electrifying the rural areas will then become more affordable. > The operation of open financial markets and access to capital markets for renewable energy options. Infusing capital into the rural areas will require that investors are comfortable risking their capital and that communities are willing to spend their capital on renewable energy/diesel hybrid systems. A smooth functioning of the general economy will facilitate this by creating transparent and 8-1 enforceable regulations that will help promote better macroeconomic fundamentals and encourage private sector investment. Financing mechanisms that are tailored to the people living in rural areas. Access to capital and making energy services affordable to the rural communities is critical to the implementation of renewable energy/diesel hybrid systems. Financing that is tailored to the income stream of the end-user, through mechanisms such as micro-credit, energy service companies, or credit through local cooperatives, can help communities pay for their energy systems and sustain the projects. As more multilateral agencies and commercial banks develop dedicated programs to finance rural energy development, capital that is distributed through these more localized financing channels will increase. Rural energy development linked to socio-economic development. An important aspect of providing energy services to the rural areas is the impact that it will have on the socio-economic development of the community. With renewable energy/diesel hybrid systems, the quality and service will be improved so that electric power can be provided over the course of the entire day, rather than just a few hours in the evening. This expansion of service will allow the community to pursue income-earning opportunities that will help create jobs and improve the overall economic condition of the rural areas. Some of the income-earning operations that can have a significant impact on the rural areas are irrigation pumping, water supplies, crop processing, refrigeration and motive power. 8-2 ABBREVIATIONS AND ACRONYMS GDP gross domestic product GW gigawatt (10° watts) GWh gigawatt-hour of electricity IPP independent power producer km kilometer kW kilowatt of electricity kWh kilowatt-hour of electricity m/sec meters/second MMBFOE million barrels of fuel oil equivalent MW megawatt (10° watts) MW, peak megawatts of electricity NO, nitrogen oxides NPC National Power Corporation NREL National Renewable Energy Laboratory PhP Philippine Peso PPA power purchase agreement PV photovoltaics SES Sustainable Energy Solutions SHS solar home system SO, sulfur dioxide SPUG Strategic Power Utilities Group ted tons of cane per day Twh terawatt-hour (10! watt-hours) W watt Wy peak watt of electricity Wim? watt/meter® 9-1 BIBLIOGRAPHY Asian Development Bank, Solar Photovoltaic Power Generation Using PV Technology, Volumes 1-3, Infrastructure, Energy, and Financial Sectors Department (East), (1996). 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McBeth, J., "Energy: Stripped of power - Philippine electricity crisis hits small firms the hardest", Far Eastern Economic Review, 24 June (1993). McCandless, D.H., “Combining hydro and diesel generation in small grids”, In Proceedings of the Asia-Pacific Initiative for Renewable Energy and Energy Efficiency, October, (1997). McNelis, B., "Solar & Wind Energy Study", Draft report submitted to the Asia Alternative Energy Unit of the World Bank, IT Power, July, (1996). Morris, E., G. Santibanez-Yeneza, Y. Witjaksono, S. Vaupen, and Z. Wang, APEC High Value End-Use Applications Analysis, Asia-Pacific Economic Cooperation Expert Group on New and Renewable Energy Technologies, December, (1997). Morris, E. and A. Price, APEC Guidebook for Financing New and Renewable Energy Projects, Asia-Pacific Economic Cooperation Expert Group on New and Renewable Energy Technologies, December, (1998). 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U.S. Agency for International Development, Nationwide Survey on Socio-Economic Impact of Rural Electrification, USAID, Washington, D.C., (1979). U.S. Energy Information Administration, Country Analysis Brief: Philippines, United States Department of Energy, (1996). U.S. Energy Information Administration, 1996 International Energy Annual, United States Department of Energy online publication at URL: http://www.eia.doe.gov/emeu/iea/, April, (1997). U.S. Energy Information Administration, “Regional Indicators: Asia-Pacific Economic Cooperation (APEC)”, United States Department of Energy online publication at URL: http://www.eia.doe.gov/emeu/cabs/, April, (1998). Weingart, J., R. Ganga, P. Hoover, G. Huttrer, Opportunities and Constraints for Accelerating and Expanding Renewable Energy Applications for Grid-Connected Power Generation in the Philippines, Winrock International Institute for Agricultural Development, March, (1998). Williams, R.H. and E.D. Larson, “Biomass gasifier gas turbine power generating technology”, Biomass and Bioenergy, Volume 10 (2-3), (1996). World Bank, “Rural Electrification Policy Paper”, (1975). World Bank, Rural Energy and Development: Improving Energy Supplies for Two Billion People, Development in Practice Series, (1996). 10-4 World Radiation Data Centre URL, http://wrdc-mgo.nrel.gov/, maintained for the World Meteorological Organization by the Russian Federal Service for Hydrometeorology and Environmental Monitoring, A.I. Voeikov Main Geophysical Observatory, St. Petersburg, Russia. Zamora, C., "Renewable Energy Power Program", In Proceedings of First Philippine Wind Power International Conference: 8-10 November, Arlington, Virginia, Winrock International, (1994). 10-5 Report of the Chiloe Islands Rural Electrification Project Initiated by the Comision Nacional de Energia of Chile and the Intendencia de Lose Lagos Written and compiled by E. lan Baring-Gould National Renewable Energy Laboratory U.S. Department of Energy Golden, Colorado, USA And Javier Castillo Antezana Comision Nacional de Energia Santiago, Chile August 6, 2002 Introduction In cooperation with the National Renewable Energy Laboratory (NREL) of the United States, the Comision Nacional de Energia (CNE) and the Intendencia de Lose Lagos the islands within the Golfo de Ancud have undergone an analysis for rural electrification. The point of interest has been the electrification of the islands, with a strong consideration towards the use of renewable technologies. The work can only be considered a collaborative effort between all parties, due to the level of data collection, analysis and system specification that has been undertaken to provide options for electrification. This report describes in detail the methods undertaken to date to assess the possibility of providing electric service to these regions. The work on this project started in 1998 and has progressed through a number of different stages since that time. This includes the installation of a pilot power system on the island of Tac in the middle of the Golfo de Ancud. This system has provided a host of information of the use of electric service in the region, the impact of electrocution on the community as well as a platform to determine what issues should be addressed in the wider replication activities. After a short description of the project and region, the this report details the methods of collecting The Islands Region In total 32 islands are being investigated for electrification. All of the islands are located around the Gulf of Ancude in the Chiloe Sound. The islands span the range of 12 to 453 homes with expected loads from 17 to 1004 kWh/day. Although the standard of living in the islands is high compared to other rural settings, the wealth of the inhabitants of the islands varies considerably. The wealthier islands support commercial fishing operations, including some ocean- based salmon farms, while the remaining islanders rely on animal husbandry and/or agriculture. Background In order to obtain an understanding of the analysis that has gone into the development of this project, it is important to lay out a time line for this development work. This section provides a brief overview of the steps have been completed prior to the final analysis and the development of the load demand that is being used in the final project analysis. It is only through this process that a true assessment of using renewable technology can be achieved. . 1. Awind resource assessment for the Chiloe Islands was conducted, specifically mapping of the Gulf of Ancud and the primary islands in the region. This work was conducted by NREL and is provided at the end of = this document. 2. To validate the wind resource assessment and to provide specific time series data for further analysis a wind monitoring station was installed on the island of Tac. 3. Digitization of Chilean census data and maps for each island to determine the number of inhabitance and their approximate location. This was then used to complete an initial assessment of the optimum method to provide power to each family on the islands and obtain an initial project cost. 4. Completion of the initial Chiloe Project HOMER/ViPOR Analysis which consisted of a complete analysis of each of the 37 original islands looking at initial grid and power system design. This document was then used to demonstrate the validity and cost of the project to local and federal officials. The analysis also provides an indication of the most efficient method to provide electric service to all of the inhabitance of the islands. Through this analysis it was determined that the cost difference in 2 electrifying all of the loads on each island was only marginally larger than cost of installing an optimal system that would leave some dwelling relying on individual power systems. Because of this it was determined that the installed grid would connect all dwellings. (5. Completion of Islands Power System Analysis: Using the Hybrid2 software, also developed at NREL, each island underwent analysis to determine the most appropriate power system to be implemented. In addition to the hybrid system design, an optimal diesel power system was also determined to act as a comparison to the hybrid power solution. This data was then used in obtaining final support for the project from the regional and federal government. Descriptions of the HOMER and ViPOR and Hybrid2 modes are provided as an appendix to this document. Detailed island surveys were completed by the consulting organization Mega Red to identify precisely the location of all of the homes, schools, health posts and all other structures on the islands. Assessments were also conducted of the port facilities and any particularly large loads. An initial island survey was then conducted by the National Rural Electrification Cooperative Association (NRELCA) and the regional government. This initial assessment allowed for visitation of several islands by rural electrification experts to assess the economic level of the islands. Each island visited was also assessed for project viability, transportation access and project feasibility. This allowed for a much better understanding of the project scope and what would be required to make the project successful. Following this a detailed economic and loads survey of the islands was completed in cooperation with NREL, NRECA and the regional government. This economic assessment for 17 of the 37 islands under investigation looked at the economic level, power usage and productive use applications on each of the islands visited. ‘9. Completion of the island loads and economic assessment. Based on \ experience in other parts of Latin America and further detailed assessments of the islands a document was created to provide an assessment of the loads for each island in combination with economic assessments of the islands inhabitance. This data, in combination with more recent census data for each of the islands, was used to develop a 20 year expected load profile for each of the islands. This assessment has become the basis for further assessment as it defines the expected “—— energy and power requirements for each of the islands. 10. Implementation of the pilot power system on the island of Tac. As part of 11. the learning experience in the area of renewables, the NREL and the Intendencia de Lose Lagos oversaw the installation of the power system on Isla Tac. This pilot power system has been used as an example for what may be installed on the rest of the applicable islands. The pilot system provides interested parties with a learning experience in the operation of hybrid power systems and also acts as a test facility to test specific components before they are applied regionally. This system has provided a host of important information that can be implemented in the development of the regional project. As part of the Isla Tac power system a data acquisition system installed to allow remote system monitoring. The instrumentation of the pilot power system has allowed the determination of power usage levels by the local island community. The use of the data acquisition system also allows study of system operational problems and issues so that they can be avoided in general project implementation. 12. Based on energy usage data collected on the Isla Tac power system a daily and seasonal load profile was generated to be used in the final | system specification for the Islands Project. This usage profile is the last key element needed to complete final power system optimization and . design analysis for each of the islands. As can be seen, the analytical rigger that this project has received provides good confidence to the results of the final system design analysis. However to fully understand the steps in the analysis, each process will be discussed in more general detail so that the connections between the different analysis can be see more clearly. Demand calculation One of the key factors required in the design of the hybrid systems was to perform an accurate assessment of the loads on each of the islands and then obtain an understanding of how these loads would change over the life of the | project. This process had evolved into a very detailed screening model using ~ expertise not only developed in Chile, but also based on experience in other remote area from different parts of the world. In total six separate analyses were conducted to allow the final calculation of the loads for the different islands. The steps are listed below and are described in greater detail in the following sections. Figure 1 is provided below to pictorially describe the flow of data in the process of calculating the load for the islands. Geographic survey of the island communities Initial island socio-economic survey Islands demand analysis Impact on energy efficient lighting Demand curve for rural electrification Island demand assessment calculation SOON Geographic survey of the island communities The first part of this work consisted of reviewing maps and census based data on the populations. This was expanded with a detailed topographical assessment of each island to document the location of homes, key geographic and key infrastructure locations. The islands were also assessed to determine the local activities, accessibility of roads and other infrastructure issues. This work was combined into a study produced by the consulting group Mega Red for the regional government. The data from the reports were incorporated into a Graphical Information System (GIS) database for further use in the project development. The GIS layers and maps of each island are provided in the appendix of this document. Geographic survey of the island communities Analysis of rural grid electrification projects Impact on Development of energy progressive demand efficient curves for rural lighting electrification Initial island socio-economic survey v Islands demand analysis Assessment of project Experience Island demand assessment lation Tac Power Calcite} System Analysis of each island using the NREL HOMER and Hybrid2 computer software programs [Figure 1: Flow Chart of Loads calculation Following this initial work, a further study was done to survey the island from a socio-economic perspective. The assessment consisted of cataloging different applications or micro-enterprise activities ongoing, assessed load usage or expected usage and the economic ‘strength of the islands populous. Assessments were conducted for 18 of the 35 islands included in the original project definition. The rest of the islands were considered based on other geographic and social data to determine the basis for the electrification project. This work acted as the basis for determining the expected loads of each island as well as describing any unusual or extra energy needs, such as extensive ~ water pumping or industry. These reports-are provided in the electronic ~ attachments to this document. ne? , p Initial island socio-economic survey The socio-economic evaluation of each of the islands was then condensed into a demand survey that classified the island inhabitance, a process that is used in all other rural electrification.and other development projects. A four tear system is ~ typically used in Chile with the majority middle class making up the two center groups. Based on general socio-economic data for rural communities in the region, the two middle classes make up about 85% of the population. Initially it was assumed that there would be no inhabitance of the islands region that would fit into the fourth and most wealthy class so a three tear system was implemented in the island surveys with the top two class levels being combined. However, after analyzing use patterns on the island of Tac, it was determined that consumption patters followed more closely the regional experience which combines the two middle class groups. This was implemented in the final estimations of the load. In total 19 of the islands were surveyed and the percentage of the population in the different class levels estimated, in the remaining islands the average was assumed. This is presented in Table 1. Islands demand analysis Based on other electrification projects, primarily using grid connection, a base line of use was determined as typical for each of the different class levels. With this a baseline of energy usage could be established for the population of each island. In addition, a typical load profile was generated for each of the three usage classes based on the island surveys, which compare well to the results based on grid usage estimates. The results of this study are included as an electronic attachment to this document. Impact on energy efficient lighting Due to their cost, all off grid applications will include energy efficiency in their design and implementation. Energy efficiency was also considered in the loads analysis. Since the loads assessment by class was completed using experience gained from grid extension, the reduction in power consumption based on the use of energy efficiency needed to be determined. As an initial base it was assumed that 45% of the loads could be reduced by 25% due to energy efficient measures, specifically lighting. This was applied equally to all class levels. Demand curve for rural electrification Also using experience gained from looking at the energy consumption rates of communities electrified from the grid, it was possible to generate a non-linear __ demand curve for consumption increases over the project life. This point will be discussed in greater detail due to its importance and difference from accepted practice. Tin Table 1: Socio economic conditions of the Chiloe Islands Socio-economic standing of the population of Islands Percent of population of each social economic class level Island Name Class A Class B Class C (CAS 3) (CAS 2) (CAS 1) Tauculon (Incl. Voigue) In most rural electrification projects to date, both within Chile and around the world, a linear load increase is assumed. Using this method to determining electric demand one projects an energy usage based on a steady state energy consumption, usually predicted for a specific year, five or ten years into the project life. From this point the demand will increase in a linear fashion with a specified growth rate, such as 1.5 percent, over the life of the project. This concept is demonstrated as the linear curves for all three class levels in figure 2. However, looking at consumption data from other rural communities connected to the grid in southern Chile, this is not accurate. In most cases the load will start near zero and increase quickly as appliances are purchased. The wealthier classes likely already have some electrical devices or have capital available to immediately invest in appliances so their consumption will start off at some level larger than zero. After the first few years energy consumption begins to level off, approaching a value of 90% of the estimated monthly consumption for the 20" year in the fifth year of the project. These curves are also shown in figure 2. Monthly Energy Usage for different demand classes - Acuy island Comparison between linear and progresive demand excelation rates 140 7— 2 , Sa = S S ! | | | | | | | | | | Monthly Usage (kWh/mo) 0 1 2 3 4 5 6 it 8 9 10 11 12 13 14 15 16 17 18 19 20 Year —+— linear CAS A JC-A Curve | ——#— linear CAS B JC-B Curve —*-- linear CAS C —*— JC-C Curve | iB IS SECOMA AAI REH PALES. TY PrSASR LAMA AgvAlamant standpoint as anast in Hee areas wil ne continue = elie es more items, thus the different electric devices that iy require and only Simi upgrade these appliances as time goes on. In some cases the energy consumption may decrease as inefficient equipment, either purchased second hand or obtained from relatives, is replaced by more efficient technology. The non-linear, progressive approach was used in determining the final demand assessments for each of the islands. It should be noted that the final energy consumption is lower using the progressive method, thus allowing a smaller, and possibly less expensive system to be used to provide power over the life of the project. In addition, the total energy consumption, as shown by the area under each of the curves, is lower in the progressive case, thus impacting the tariff design. However, as will be seen when this approach is compared with data collected from the power system on the island of Tac, the tariff rate charged to the consumers and the economic status is what dictates the amount of energy each client is able to purchase, thus greatly impacting these curves. Island demand assessment calculation The final step in this process was the calculation of the demand for each of the islands. As is demonstrated in figure X, data from all of the studies were combined in three spreadsheets produced by the National Rural Electric Cooperative Association of the United States. The load calculation used the progressive energy demand curves for rural electrification, the economic assessment of each island as well as parameters established in NRECA’s extensive rural electrification experience such as the average connection rates of rural users and losses within the distribution network. The result of this analysis is the Islands Project Loads Summary which predicts the demand and capacity requirements for each of the islands The final result of this work in an expected energy consumption for each of the islands, as expressed in table 2. Due to the shape of the new progressive consumption curves, the 5 year demand and capacity values are quite similar to the complete 20 year values. For this reason it is expected that system designs will be based on the full 20 year life of the project. Table 2: Individual island load calculation - 4 v Average household} Average le System household # Homes Acuy Ahullini Alao Anihue Butachauques Caguache Cailin Chaulinec Chaullin Comparison with Isla Tac pilot project As a final check of the loads estimation procedure, the expected loads were compared with the loads experienced in the Isla Tac power systems. This system has only been operational since September of 2000, so only initial results can be discussed. However, saying this the results are still convincing on certain levels. Figure 3 provides a comparison of the energy usage of the three different socio-economic classes between the actual usage and the usage projected by the progressive demand curve. This figure demonstrates that for the upper socio-economic groups, the energy consumption is quite similar to what is expected. However, consumption of the lower groups is being retarded. However, the residents of Tac are paying on average 100% more for electric service than their grid connected counterparts. For the highest economic group, this will have little impact as their willingness to pay for energy is much higher. In the lower classes, there is not the willingness or ability to purchase more power based on the current tariff structure. Since these users are currently spending more than users in the grid connected case, there is every reason to assume that if a new tariff structure were implemented that more fairly addressed consumption by the lower class groups, their consumption would increase. This clearly indicates that the tariff structure implemented under this project will have to be carefully considered. A spreadsheet providing more details on this comparison between demand and expenditures of the progressive model and the experience on Isla Tac is provided as an electronic attachment to this document under the name “Analysis of Isla Tac energy use and cost.xls” Comparison of theoretical yearly energy usage assumed in the analysis to usage on Isla Tac based on the combination of the middle two socio-economic levels of population Time, project years —?- Expected class 3 —#~ Expected class 2 Expected class 1 ~ Isla Tac class 3 —*~—Isla Tac class 2 —®—Isla Tac class 1 igure 3: Comparison of theoretical yearly energy usage assumed in the analysis to usage on Isla Tac ased on the combination of the middle two socio-economic levels of population Wind Resource assessment In 1997 NREL completed a wind assessment for the majority of the islands in the region. This map is provided in Figure 3. In addition, the wind speed on the island of Isla Tac has been measured for several years and has been compared to the historical data for the region. Since the hourly wind speed data collected on Tac is considered typical of the free stream wind speed found on the islands, it is possible to use this data for the basis of the analysis, scaling the annual average up or down to reflect the wind speed provided on the wind resource map. Currently wind speed measurements are being completed in four other locations around the Gulf of Ancud, which will provide further input into the wind resources of the region. These stations will also provide information for islands that are not included in the geographic region of the original regional resource assessment. Based on all of the data currently available it is assumed that all of the islands in the major grouping will have access to winds at an annual average of approximately 6 m/s at an altitude of 30m above the point of measurement, usually the high point of the island. More specifically the following should be assumed until more data becomes available. Table 3: Wind speed expected on island based on the NREL wind resource map. Wind speed (m/s) | Islands 6.3 to 7.0 Ahullini, Alao, Apiao, Aulin, Butachauques, Caguache, Caucahue, Chaullin, Chelin, Cheniao, Chuit, Chulin, Mechuque, Meulin, Nayahue, Quehui, Quenac, Talcan, Tauculon (inc. Voigue). Tabon and Queullin: Specific data is unavailable but should have similar wind resource to other islands in the central part of the Gulfo de Ancud 5.5 to 6.3 Acuy, Anihue, Cailin, Laitec, Linlin, Llingua, 5.0 to 5.5 Coldita Unknown at this Huar, Llancahue, Llanchid, Quenu time However, although each island should have areas exposed to the above wind speeds at 30 m above ground surface, no general assessment has been undertaken to determine if key locations are available for use. It should be assumed that the numbers given in table 3 are the maximum annual averages available on each island. Graphical information Specific graphical information on each island was obtained during the initial island surveys. This information includes topographical data on each island, the location of homes, schools, health posts and other facilities as well as possible locations for either wind resource assessment of plant siting. Initial evaluations An analysis was completed using the Hybrid Optimization Model for Electric Renewables (HOMER) to assess the initial design of the power system. Based on the economic assumptions presented in the appendix to this document, HOMER designed the most optimal power system for each island. These results should be considered preliminary as further analysis will be conducted. The estimated cost for the grid is based modeling conducted using the Village Optimization Model for Renewables (ViPOR) based on the original geographic data collected as part of the original census. Although this data could be re- analyzed given the more accurate locations specification of each load, the change in system cost is believed to be minimal. Initial system and cost estimations are provided in table 4 on the following page. Isla Tac project experience The Isla Tac - Wind Diesel Rural Electrification Project was initiated under a cooperative agreement between the United States Department of Energy (DOE), Chilean National Energy Commission (CNE) and the Intendencia de Lose Lagos under the asepsis of Chilean Rural Electrification Program (PER) to evaluate operational performance and social benefits of a prototype wind diesel power system in Chile’s 10" Region. The project was designed and contracted by a project team from the National Renewable Energy Laboratory (NREL), National Rural Electric Cooperative Association (NRECA) and CNE. The private Chilean company Wireless Energy Ltd. initiated phase one of the contract, importation of generation components, in December 1998 and awaited government approval of phase two of the contract, domestic equipment manufacture and installation, which was granted for Isla Tac in March 2000. The wind diesel generation system was installed in July 2000 followed with electric grid and residential installations by SAESA Ltd, the local electric utility and service administrator, in August 2000. The system on the island of Tac was designed and installed as a pilot system, basically to demonstrate and gain experience with the use of wind energy technology for rural electrification in Southern Chile. With this in mind, the system is in part a learning experience for all of the people and organizations involved in the development of the project. The methodology of using a demonstration project prior to the implementation of a larger project has been shown effective in many areas and results in a better success rate for the following projects than if no pilot system is used. Because of this it is assumed that a number of installation and operational issues will be uncovered in the first year of operation of the system who’s solution can be incorporated as lessons learned and will not be repeated in the implementation of any larger project. Table 4: Initial system design and cost $176,981 $298,539 $285,605 $440,375 $210,044 $484,216 $309,648 $306,211 $403,801 $180,054 $181,290 $215,575 $279,368 $1,115,870 $357,143 $391,982 $243,573 $175,330 $369,852 $409,907 $424,490 $179,652 $728,867 : 30 49 $429,667 5.5 10 17 A $203,386 6.3 20 49 $300,138 6.3 30 49 $361,915 6.3 10 17 id $209,328 6.3 5 10 17 ; $185,554 (1) Grid for the town of Voigue included in in this design (2) Power system for the town of Voigue included here As can already be seen, the information gained from the operation of the Isla Tac system has already been used in refining and proofing the demand and energy consumption data used in the development of the larger Island project. Other specific technical issues that have become clear after operating this system over the last two years are given below. For more information, a summary of the first year of system operation is provided in the electronic appendix of this document. There have been a number of problems that have been identified over the last year of system operation. These items have been identified by one or more of the project partners and deals primarily with the way that the system is operated or forced to operate. As with the problems identified during the commissioning process, this is the primary reason that pilot projects are implemented prior to the implementation of a larger electrification project. 1. Low load operation of the diesel generator. Analysis: Observations of plant operating have indicated that the diesel is running unloaded or at light loads for periods that may last up to six hours. One cause may be due to pronged float charge that is incorporated into the inverter charging algorithm, which forces the diesel to provide a very small current to finish charge the battery. Because of this low load operation the diesel is not kept at a proper operating temperature which allowed unburned fuel to seep into the oil pan. This resulted in a higher level of system maintenance and increased engine ware. Solution: Place controls to reduce engine run time at light loading including reducing the battery float charge parameter in the inverter control menu. 2. Shorts on the grid shutting down the inverter Analysis: The circuit breakers used in the step down transformers along the distribution network act slower than the inverter short circuit sensing. When there is a short on the low voltage grid, either caused by natural or unintended reasons, the inverter senses the short circuit and shuts down before the circuit break at the step down transformers have time to throw. Thus the whole island power system is brought down instead of just one section of low voltage line. Solution: Place fast acting fuses or circuit breakers at each of the local transformers that will function before the inverter so that the power for the whole community is not lost due to one short. 3. Energy efficiency training on the island and implementation of energy efficient lighting Analysis: Initial training sessions were conducted as part of the program implementation. Although this did include general electricity safety and a review of the tariff, it did not cover energy efficiency and utilization issues to the extent necessary. Training on the use of electric service, the true costs of not using energy efficient appliances and providing guidance on proper component purchase needs to be completed. In addition, more permanent energy efficiency and safety displays need to be created or obtained and posted at popular locations within the community for those unable to come to training sessions. Such places could include the school and community center. In addition, the use of higher efficiency transformers when installing the grid would increase distribution efficiency. 4. Control of the fuel delivery process Analysis: It was brought to the attention of the managing group that there is concern over the control of the fuel delivery process and the possibility of graft in the fuel delivery system. Solution: Although the control of the fuel delivery is quite clear, discussions were held between NREL, Wireless Energy and the Representative from the Regional Government on a more exact record keeping process that could be undertaken to determine more closely the system consumption of fuel how this record keeping could be completed. This can be backed up with computer modeling if required. Given the high kWh per litter ratio of the diesel in this case it is unlikely that this is a critical issue. 5. Unusually high power factor seen on the power system. Analysis: An unusually high power factor has been observed on the power system, in the range of 0.6 to 0.8, independently by SAESA and Wireless Energy data acquisition. It was determined that this was likely due to the use of low efficiency compact fluorescent lighting installed in the homes as part of the interior installations. Because the inverters do not register power factor, they are unable to account for the additional load when undertaking system control functions. The physical ramification of this is that during times of diesel operation the inverters were overloading the diesel and causing the diesel circuit breaker to throw, thus causing system shutdown once the batteries had been depleted. To alleviate this problem, the charge setting for the diesel had to be reduced dramatically, essentially reducing the unit capacity by almost 40% so that the inverter would not overload the circuit breaker. Because of this the diesel has not been able to charge the battery during periods of high loading as was originally designed. This problem has resulted in more diesel operation than predicted in system design. Solution: Installation of high efficiency ballast’s in fluorescent lighting with a high power factor rating. Consideration of the power factor in the design of system loading and control and in installation of power factor correcting capacitor based phase shift devices on the power system to eliminate some of the loading due to reactive power. Appendix: Descriptions of NREL computer Simulation Models Hybrid Optimization Model for Electric Renewables: The HOMER model is broad based optimization tool that is used to determine a basic system design given a specified resource, community load and certain economic parameters. The model considers wind, PV, battery and diesel technology in its analysis while a micro-hydro and small modular bio-power are currently being implemented. It is a very good screening model that allows a system designer to determine the basic system configuration before detailed design and analysis begins. It includes a sensitivity analysis capability that automatically reruns the model over a user-specified range of key input parameters. The results are rank-ordered to identify the optimal and near optimal solutions, which are then compared to an extension from a central grid. Results can be viewed with HOMER’s powerful graphical analysis capability. HOMER is available from the NREL web site free of charge in a bata test version. Village Power Optimization Model for Renewables ViPOR is an optimization model for designing village electrification systems. Given a map of a village, some information about load sizes, and output from the HOMER software on the cost and performance of power systems, ViPOR calculates the cost of creating a village-level AC distribution system. The software decides which houses should be powered by isolated power systems (like solar home systems) and which should be included in a centralized distribution grid. The distribution grid is optimally designed with consideration of local terrain, levels of voltage and transformer size. The software incorporates a graphical information system reference and can be used to decide which location on a distribution network the installation of a power system will provide the best system cost performance. The software has been primarily used for NREL sponsored projects although a draft version is available to the public. Hybrid2: Hybrid Power System Simulation Model The Hybrid2 code can model many combinations of wind turbines, photovoltaic arrays, diesel generators, power converters, and battery storage, both in AC, DC, or two-bus systems. Hybrid2 also allows for more than 100 different dispatch configurations with multiple diesel generators, renewable sources, and battery storage. The model has been designed with an easy to use graphical interface, an in-depth library to facilitate system design, and a detailed glossary of frequently used terms to assist users who are not familiar with hybrid power system terminology. The code also includes a comprehensive economics module that considers new or retrofit systems, operation & maintenance costs, equipment overhaul costs, installation costs, taxes, and system salvage value. The Hybrid2 software uses logistical modeling approaches although it also incorporates statistical analysis too more accurately model what occurs during a given time step. The Hybrid2 software is designed as an engineering software, allowing very detailed analysis of a particular system design or configuration. The software allows specific comparison of different system options including renewable and conventional energy technology. The Hybrid2 software has been available since 1996 following a $2M development effort lead by USDOE and NREL. The software is currently the world standard for the engineering analysis of hybrid power systems and has in fact been successfully used for crude distributed generation options analysis in its current, hybrid system configuration. Financial Assumptions ao ; Wind turbine Cost Bergey) Building . Turbine $ 18,400.00 ____ Step up transformer [Tower and Grounding | 11,628.00 Other supplies : “Tinstattation 4,000.00 < DC source center with disconnects Shipping 2,000.00 | $36,028.00 O&M 200.00 lyear Annual Operation and Maintenance Cost Wind turbine Cost ( Northern Power) Fixed Annual cost # Cost Turbine $ 7,700.00 _ Site service 12 Tower and Grounding 9,328.00 Transportation to site 8 : Installation 2,500.00 Technical Administration 5 i Shipping 2,000.00 | $21,528.00 Local operator 12 A O&M 100.00 |year E = a Battery bank Maintenance Fuel price calculation (CP/L) _ j Trojan L-16 15 General fuel price $232.60 | (Castro basic fuel price 10/23/00 (P282.1/1) and 1 1/01 (P183]SEC 6-IM100-17 15 Tax rebate for prime power -40.9 |(10/23/01)) SEC 6-M100-33 15 Transport to site 140 Delivered fuelcost(CP/L) | $331.70 Trojan L-16 $11,200.00 Delivered Fuel Cost ($/L) | $ 0.471 SEC 6-M100-17 $37,320.00 SEC 6-M100-33 $ 5 Yearly transport Exchange rate: CP per $ Overhaul (Major every 174 Size (kW) Major (609Minor (30%) Wind turbine Cost ( Westwind 10.0) 2.3 Turbine 15,560.00 48 [Tower and Grounding 13,791.94 6.5 Installation 4,000.00 75 Shipping 2,000.00 | $35,351.94 75 O&M 200.00 |year $ 6,750 4,050 $ 13,799 8,279 $ 7,426 4,456 20| $ 8,500 5,100 $11,744 | $ 7,047 30] $ 13,286 | $ 7,971 $14,589 | $ 8,753 $ 15,635 | $ 9,381 $ 17,604 | $ 10,562 $ 18,410 | $11,046 $ 19,145 | $11,487 70] $ 20,448 | $ 12,269 $21,577 | $12,946 90] $ 22,573 | $13,544 100] $ 23,463 | $14,078 110] $ 24,269 | $14,561 | Specific Diesel Quotes from Chile Size KVA kW Cost US$ 15 13799 18 $6,746.90 22 $9,192.86 50 $15,635.71 Wind turbine Cost ( Westwind 5) Turbine 9,544.00 Tower and Grounding 6,339.00 Installation 3,000.00 Shipping 2,000.00 O&M 150.00 Wind turbine Cost ( Westwind 2.5) Turbine 4,900.00 Tower and Grounding 6,339.00 Installation 2,000.00 Shipping 2,000.00 | $15,239.00 O&M 100.00 |year Aaleololelaliaea aalala la ow aaleglolololalo a wala lala ow Electronic Appendix r10_ichiloe_wind.gif: Wind resource assessment map of the Chiloe region completed by NREL in 1997. Analysis of Isla Tac energy use and cost.xIs: An analysis of the load and cost analysis for the Isla Tac pilot power system. Based on the metered and billing data collected by SAESA for each user. Chiloe project demand calculation overview.xls: Summary of the load calculation for each of the 32 islands associated in the islands project Chiloe project demand calculation book A.xls: Detailed calculation of the loads for the islands in which a specific socio-economic study of the islands inhabitance was conducted. Chiloe project demand calculation book B.xls: Detailed calculation of the loads for the islands in which a specific socio-economic study was not conducted. Percentage of populations in each of the different socio-economic level based on the average for all of the islands in which a study was conducted. Islands demand survey.xls: Spreadsheet detailing the demand curve based on gird connected rural populations and the assessment of energy efficiency in the remote systems. Loads analysis from Tac data.xls: Specific loads analysis for the pilot project on Isla Tac, based on the hourly data collected from the NREL data acquisition system. Rural electric demand curve.xls: Calculation of the expected daily load for each of the three social classes based on the socio-economic surveys conducted on the island. Other reports and documents: Mega Red Report (Folder): The report of the island assessments conducted by Mega Red which includes the global positions of most of the inhabitance of each of the islands. Socio-economic survey (Foulder): The complete island surveys, in Spanish and translated English, for each of the 19 islands that were investigated. Work completed by Drago Bartulin, Hernan Siva and the rest of the rural electrification group from the Intendencia de Lose Lagos. Final Tac Report 1 Yr. b.pdf (document): A report produced by Wireless Energy and the National Renewable Energy Laboratory on the first year of operation for the Isla Tac power system. This report makes up the bases for the pilot project results expressed in this document. Photos (Folder): General photos of the islands region including Isla Tac and the surrounding islands. All photos represented by E. Ian Baring-Gould of NREL. They may be used for the promotion of the Chiloe Islands project if the photo credit is given. DRAFT 7/22/2003 Initial report on power system design. Ian Baring-Gould February 26, 2003 Introduction: I looked at three different power system architectures in my analysis, considering a number of wind turbines, from 68kW to 272 kW of installed capacity. In this analysis I have also looked at a number of different sites, but have basically focused this analysis using data from the Cerro La Cruz site as this is the site with the most collected wind data. I did complete some analysis looking at the different variations of wind speed and also looked at the site of Cero St. Centinela from a cost point of view. I also compared the different power system to a diesel plant, both a simulation of the existing one and then a more optimized diesel plant that would use automated diesel controls. The following comparisons with an all diesel plant, specifically with the diesel plant on site is rather difficult. Although we do have detailed information about the plant, we don not know the fuel consumption rates of the two prim diesels. Without this information it will be hard to do accurate comparisons with the existing plants. In addition, since plant operators and other service personnel will not change as a result of this project, they have not been considered in the cost analysis. Modeling: Modeling of each power system was completed using the Hybrid2, hybrid power system simulation software. Input Data/Systems The following describes the data that was used in this analysis Cost data: In almost all cases the cost data that was used in these calculations is based on commercial data and attempts to reflect best commercial practice. However, I do feel that I have been conservative in my cost estimates. The basic cost figures used in the calculations are provided in the attached spreadsheet. Different sites: Wind data from the site at Cerro La Cruz was used for this analysis, specifically at 30m and 50m heights. The initial decision to use this site was based on the results of the wind resource analysis as well as environmental concerns in regards to the Salsipuedes. A short analysis comparing the site at Salsipuedes is provided as well as initial investigation of the site Cero St. Centinela site, although this site has not been investigated as part of the wind resource assessment to date. Given current data it seems that the site at Cerro La Cruz is better than Planta Electric, though this decision is not final. DRAFT 7/22/2003 From an implementation perspective, either the sites of Cerro La Cruz and Cero St. Centinela would be preferred. The site at Salsipuedes will be quite problematic from an installation and maintenance point of view. In addition there is limited room at the site and it may be impossible to install 50m towers at this site. The site of Planta Electrica is very good from an proximity standpoint, but sits on past land slide debris. A detailed foundation study will need to be completed before the site could be developed. Both Cerro La Cruz and Cero St. Centinela would require the construction of a road to the site, but this would be possible. The site at Cero St. Centinela would require the extension of the existing grid approximately 5 km but otherwise would be easy to develop. Different power systems modeled: All diesel option: Two all-diesel options were considered in this analysis. The first is comprised of two diesels, a 163kW and a 250kW, and was designed expecting the use of automated controls. The second option investigated used a 225 kW and a 448 kW generator. The cost of this system did not include the price of automated controls. Low Penetration power system: This power system is primarily comprised of installing wind energy onto the existing diesel generators. The three diesels included in this system would be automated but one would be required to operate full time. The wind turbine would be expected to reduce the energy supplied by the diesels and allow for the operation of a smaller diesel genset than would be required without the renewable input. This system does not make use of a Control System Figure 1: Schematic of low penetration wind/diesel hybrid DRAFT 7/22/2003 power converter or power storage. This system does incorporate a controlled resistive dump load to get rid of excess power on the AC grid, which would otherwise lead to system stability issues. A system of this architecture would improve power quality and reduce the consumption of diesel fuel. This type of system is demonstrated in figure 1. High Penetration power system based on rotary technology: As shown in figure 2, this type of power system is more complicated then the low penetration system just introduced. In this power system, all of the diesels would be allowed to shut down if there is enough energy being produced by the renewable sources. This power system used rotary conversion technology and NiCad batteries and is similar in topography to the high penetration wind-diesel power system installed in Wales Alaska. The drawback to this system architecture is two fold, initially the expense and secondly the lower efficiency of the rotary converter unit. This type of power system does not include integrated control systems and thus these would have to be developed specifically for this power system, thus increasing the system cost in terms of engineering support. This system does have the advantage in that it is similar to other high penetration power systems that have been installed and tested in areas more harsh and remote then Isla Robinson Crusoe. Rotary Converter Thermal Loads Figure 2: Schematic of high penetration wind/diesel power system using a rotary power converter High Penetration power system based on solid-state power converter technology: An alternative to the use of rotary converter technology is the availability of high power solid state power converters. These units take the place of the costly rotary converter and power system control, all of which is handled in the power converter. However, unlike the systems using rotary converter technology, this equipment has not been heavily tested DRAFT 7/22/2003 with AC driven induction wind turbines. Work conducted in the US and Australia have demonstrated that these inverters are capable of providing and controlling the reactive power requirements of inductive wind turbines, but to date no systems have been installed, though several are planned. Systems using solid state power converters would also be easer to install and commission. Analysis The following list of analyses were completed: r Bank size [Hybrid Engine size (kW) eee Type of Turbine Height of |Type of peed turbine # turbine battery kWh Ds! 1 Dsl 2 m/s) |All diesel system (Manual) 225 448 n/a |All diesel system (Automated diesel plant) 250 140 n/a High Penetration Wales style power systems (AOC 2 50Alcad (NiCad) 136 225 65 Rotary 5.84) AOC 2 30Alcad (NiCad) 136 225 65 Rotary 5.14 AOC 3 50Alcad (NiCad) 136 225 65 Rotary 5.84 (AOC 3 30Alcad (NiCad) 136 225 65 Rotary 5.14) (AOC 4 50Alcad (NiCad) 136 225 65 Rotary 5.84 Increases in wind speed of high penetration Wales style power system AOC 3 50Alcad (NiCad) 136 9-225 65 Rotary 5.84 (AOC 3 50Alcad (NiCad) 136 225 65 Rotary 6.2 AOC 3 50Alcad (NiCad) 136 9225 65 Rotary 6.5 (AOC 3 50Alcad (NiCad) 136 225 65 Rotary 6.75, Possible designs for Cero St. Centinela OC 3 50Alcad (NiCad) 136 225 65 Rotary 6.50) OC 4 50Alcad (NiCad) 136 225 65 Rotary 6.50} Low Penetration power system (AOC 1 30 None None 225 65 None 5.14 (AOC 2 30 None None 225 65 None 5.14 (AOC 1 50 None None 225 65 None 5.84 (AOC 2 50 None None 225 65 None 5.84 (AOC 1 50 None None 225 65 None 6.23) Possible designs for Cero St. Centinela (AOC fl 50None None 225 65 Rotary 6.50) High Penetration Solid State Power System (AOC 3 50SEC (LA) 128 225 65 Solid State 6.50} OC 3 50SEC (LA) 128 225 65 Solid State 5.84 OC 4 50SEC (LA) 128 225 65 Solid State 5.84) AOC 2 50SEC (LA) 128 225 65 Solid State 5.84) DRAFT 7/22/2003 Preliminary Results: Unfortunately, given wind speed assessments up to 6.75 m/s, none of the potential designs can provide power for a lower cost than the diesel only alternative. Installing diesel controls will save a limited amount of fuel and can provide power for approximately $0.19/ kWh, which only considers operating cost and not staff or other constant expenses. The least expensive option for system redesign is also the one that saves the least amount of fuel. This is a low penetration wind turbine installed at either Salsipuedes or potentially Cero St. Centinela. It is expected that an installation at such a site incorporating a 68kW wind turbine cost approximately $373,000 and save approximately 30,000 liters of fuel per year. This system would produce power for slightly more then the all diesel alternative, approximately $0.013. This specific case is identified as LPS in the attached spreadsheet. Considering the high penetration options, the solid state option is the least expensive of the two. The highest impact option would be a power system installed at Cerro La Cruz consisting of 130 kW of wind on 50m towers. This system would save approximately 72,000 liters of fuel, cost on the order of $550,000 and would add about $0.03 to the cost of akWh of energy, case HPSS4. This cost could be lowered by approximately 0.01 cent if the wind speeds at Cero St. Centinela are as high as the wind map and historical data continues to be accurate. Conclusion. The initial analysis seems to indicate that a high penetration wind installation at this location is marginal due too two issues, 1) the wind speeds at the sites of Cerro La Cruz or Planta Electrica are not high enough to provide a cost effective solution, the costs and complexity of installing the system at Salsipuedes do not make up for the observed increased wind speed at this site. There are two wild cards in this analysis however, 1) the wind map produced at NREL show a wind speed at Salsipuedes to be higher than has been recoded at the site thus far. 2) The use of the site of Cero St. Centinela. This site has good potential, good operating area and would be road accessible. The NREL wind map shows a potential wind speed of up to 7.5 m/s at the site and measurements taken by Nexxo Ltd in 1993 at an unknown height was reported to be 6.49 m/s. DRAFT 7/22/2003 Appendix Explanation of columns in the Spreadsheet Results: Fuel Used: The expected fuel usage of the system incorporating the specified components. L/year Fuel Saved: The expected fuel savings between the modeled hybrid system and the all diesel alternative (Case B1). L/year Fuel saved: Percentage of fuel saved by using hybrid Hours of operation of the diesels specified. Note that the third diesel does not operate in this simulation. This is only because it was not required based on this analysis. Starts: The number of diesel starts that would be expected per year. Note that this number is likely higher than would actually be expected due to the operating logic in the Hybrud2 software. Starts/year Excess: The amount of excess energy (energy that could not be used by the loads) produced by the system. This energy could be used to operative devices like ice makers, refrigerators or clean water. Economics: COE: The cost of producing energy using the system as specified. $/kWh COE dif: The difference between the cost of energy using the hybrid system and the all diesel alternative (Case B1). A negative number indicates that it costs more to produce energy using the hybrid system while a positive number indicates the hybrid system is less expensive. $/kWh NP cost: The next percent cost of the power system. This is the cost of operating the plant over the 20-year project life in 2003 dollars. It basically represents the total cost of the system by adding up every expenditure over the life of the project. The lower the number, the less expensive the plant. $ Capital cost: The expected capital cost of the modeled system. This includes the equipment, shipping, installation, commissioning and engineering. See the spreadsheet “Econ Assump” for a detailed description of these costs. Fuel Savings: The expected yearly savings in fuel between the hybrid and all diesel case. This analysis is based on a fuel cost of $0.50/L which is slightly more than the current price of $0.485/L (315 CP/L) quoted by Gonzalo de la Fuente at the Municipality. In $/year. Annual Savings: The total annual savings of the hybrid system compared to the all diesel option (case B1). This includes the annual costs of fuel, Operation and Maintenance and major service/equipment replacement expenses. In $/year. DRAFT 7/22/2003 Cero St. Centinela Analysis Assumptions — 50m tower. annual average wind speed from the wind map at 50m: 8.0 m/s Fuel price used: $0.36/1 Wind speed data set average: 5.85 m/s @ 30m \ Dataset Expected Scale factor 5.85 6 1.026 5.85 6.5 1.111 5.85 7 1.197 5.85 75 1.282 5.85 8 1.368 5.85 8.5 1.453 Issues: Must check to be sure that the total fuel consumption in both cases are the same. This may shift one direction or another depending on total fuel consumption in both cases. - 3002 Vall il( age Name tegen col) exh Menlo “96h lon OT Pa Chyna y Cases Villas Ladtde lansihde— Min Teng Mes p Ae Wind Speed HbD | NREL/CP-440-22108 * UC Category: 1213 * DE97000083 An Analysis of the Performance Benefits of Short-Term Energy Storage in Wind-Diesel Hybrid Power Systems Mariko Shirazi Stephen Drouilhet Prepared for 1997 ASME Wind Energy Symposium Reno, Nevada January 6-9, 1997 f. Ons z= Sud NREL National Renewable Energy Laboratory 1617 Cole Boulevard Golden, Colorado 80401-3393 A national laboratory of the U.S. Department of Energy Managed by Midwest Research Institute for the U.S. Department of Energy under contract No. DE-AC36-83CH 10093 Work performed under task number WE712360 Revised April 1997 NOTICE This report was prepared as an account of work sponsored by an agency of the United States government. Neither the United States government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercialproduct, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States government or any agency thereof. The views and opinions of authord expressed herein do not necessarily state or reflect those of the United States government or any agency thereof. Available to DOE and DOE contractors from: Office of Scientific and Technical Information (OSTI) P.O. Box 62 Oak Ridge, TN 37831 Prices available by calling (423) 576-8401 Available to the public from: National Technical Information Service (NTIS) U.S. Department of Commerce 5285 Port Royal Road Springfield, VA 22161 (703) 487-4650 ay we Printed on paper containing at least 50% wastepaper, including 20% postconsumer waste AN ANALYSIS OF THE PERFORMANCE BENEFITS OF SHORT-TERM ENERGY STORAGE IN WIND-DIESEL HYBRID POWER SYSTEMS Mariko Shirazi Stephen. Drouilhet National Wind Technology Center National Renewable Energy Laboratory Golden, Colorado, USA Abstract A variety of prototype high penetration wind-diesel hybrid power systems have been implemented with different amounts of energy storage. They range from systems with no energy storage to those with many hours worth of energy storage. There has been little consensus among wind-diesel system developers as to the appropriate role and amount of energy storage in such systems. Some researchers advocate providing only enough storage capacity to supply power during the time it takes the diesel genset to start. Others install large battery banks to allow the diesel(s) to operate at full load and/or to time-shift the availability of wind-generated electricity to match the demand. Prior studies indicate that for high penetration wind-diesel systems, short-term energy storage provides the largest operational and economic benefit. This study uses data collected in Deering, Alaska, a small diesel-powered village, and the hybrid systems modeling software Hybrid2 to determine the optimum amount of short-term storage for a particular high penetration wind-diesel system. These findings were then generalized by determining how wind penetration, turbulence intensity, and load variability affect the value of short term energy storage as measured in terms of fuel savings, total diesel run time, and the number of diesel Starts. Introduction The main performance objective of a wind-diesel hybrid power system is to maximize fuel savings relative to a diesel-only system. The role of energy storage in accomplishing this goal has been addressed in previous studies.'"* In a system without storage, the diesels must either be run continuously or switched on and off to meet the instantaneous net load, defined as the consumer load minus the available wind power. Fuel savings will be small for the continuous diesel case, and the diesel start/stop frequency will be high for the intermittent diesel case.'**689 While the diesel start/stop frequency can be reduced by imposing a minimum run time on the diesels, this has the effect of decreasing the fuel savings.’®* In addition, since diesel generator sets cannot be started and This paper is declared a work of the U.S. Government brought on-line instantaneously, fuel savings is further limited in no-storage systems by the need to maintain a spinning reserve (additional on-line diesel capacity) to meet net load peaks, due to wind and load fluctuations. It has been shown that the introduction of even a small amount of energy storage increases the fuel savings while significantly reducing the number of diesel starts.'**"* Our purpose is to further investigate the value of energy storage as measured in terms of fuel savings, total diesel Tun-time, and the number of diesel starts relative to a no- storage system. We restricted our attention to short-term storage, i.e., storage that is used to cover peaks in the net load due to stochastic wind and load variations, not to time-shift the wind resource to match the diurnal load pattern. This study attempts to quantify the benefit of short-term storage in a particular high penetration wind- diesel system and then to generalize the findings by determining how wind penetration, turbulence intensity, and load variability affect this value of storage. It was our intent both to corroborate and to extend the prior studies cited above. Although our results are not specific to batteries as the storage medium, in this study we have assumed battery storage, since it is currently the only field-proven industrial storage technology with sufficient capacity and power delivery capability. The study site is Deering, Alaska, a small diesel-powered village of approximately 160 inhabitants, where Kotzebue Electric Association, in partnership with the National Renewable Energy Laboratory and the Alaska Department of Community and Regional Affairs, is planning to install a high penetration wind-diesel demonstration project. The system was modeled using wind speed and load data collected from Deering and NREL’s hybrid system simulation model, Hybrid2. Hybrid2 is a computer software tool which can predict the long-term performance, including fuel use, diesel run- time, and diesel starts, of hybrid power systems under user-specified renewable resource and load conditions.'*!© In addition, we were able to use Hybrid2 to perform a sensitivity analysis using different levels of wind penetration, turbulence intensity, and load variability, allowing the results to be applied to power and is not subject to the copyright protection in the United States. systems at different sites and of different size and wind penetration levels than the Deering system. This paper presents the methodology and results of the Hybrid2 analysis. Methodolog We selected fuel use, diesel run-time, and diesel starts as the criteria by which to judge the value of energy storage, all of which are simulation results provided by Hybrid2. Hybrid2 was thus a good tool for evaluating the benefit of various amounts of energy storage for the Deering wind- diesel system. After determining the benefit of energy storage under the conditions applying in Deering, we used Hybrid2 to determine the sensitivity of these results to varying levels of wind penetration, turbulence intensity, and load variability. The performance of a hybrid system depends on wind penetration, wind power variability, and load variability. Wind penetration, as used here, is the ratio of the generated wind power to the primary system load. Most often, we are referring to average wind penetration, for example, the annual wind energy generated divided by the annual electric demand. In our analysis, we have expressed wind power variability as turbulence intensity, which is a property of the local wind. Turbulence intensity is defined as the standard deviation of the wind speed divided by the mean over a given averaging Wind Turbines Rotary Converter ol a interval. The term turbulence intensity is normally used in the context of short averaging intervals (up to several minutes). At the time scales we are interested in here (several minutes to half an hour), it may be more correct to speak of the coefficient of variation of the wind speed. The mathematical definition is the same, and in this paper we use the term turbulence intensity merely to be consistent with the terminology of Hybrid2, our principal modeling tool. The actual relation between turbulence intensity and wind power variability depends on the specific model of wind turbine and the number of wind turbines used. Load variability is defined as the standard deviation of the load divided by the mean over a given averaging interval. System Configuration The existing Deering diesel power system consists of four diesel gensets rated at 60 kW, 113 kW, 125 kW, and 135 kW. The planned Deering wind-diesel hybrid power system (see Figure 1) consists of the smaller three diesel gensets, three 65-kW wind turbines, a rotary power converter, a battery bank, an 180-kW optional resistive heating load (“dump” load) and associated power controllers, and a main system controller. The village load varies from around 30 to 130 kW. Over the data collection period (Jan 26 - July 14, 1996), the average village load was 53 kW while the expected average wind power (from Hybrid2 results) was 42 kW, giving an average wind penetration of 80%. a TT Battery Bank 60 kW Diesel a Cn 113 kW Diesel a 2 ———, rT i 125 kW Diesel School ; 1 Waste Heat 3 4 *_ System Resistance SCR Controller Heater Village Distribution System Figure 1. Layout of the Deering Wind-Diesel System Choice of Simulation Time Step Hybrid2 is a combined _ probabilistic/time-series simulation model which uses a time-series to predict long-term performance and applies statistical analysis to predict short-term behavior within each time step.*"® To Tun a simulation in Hybrid2, the user must input time- series of wind speed and load data, as well as specify the complete power system and control (dispatch) strategy. The system dispatch strategy determines the interaction between the storage and the diesel generators and how each will be used to supply the load. For this study, the selection of an appropriate dispatch strategy and the simulation time step turned out to be non-trivial. In the Deering system, batteries will be used for “peak shaving.” Diesels will be dispatched as necessary to meet the average net load (based on, for example, a 15-minute moving average of the net load). Power will only be drawn from the battery to eliminate the need to bring a(nother) diesel on-line to meet a short-term increase in net load that exceeds the diesel capacity already on-line. In Hybrid2, this operating strategy is effectively modeled if one specifies the “Multiple Diesel Load Following” dispatch strategy, which dispatches only enough diesel capacity to cover the average net load for each time step. Hybrid2 uses a statistical algorithm, based on the user- specified standard deviation of wind and load during each time step, to determine the maximum net load during each time step. If, according to Hybrid2's battery model, there is not enough available energy stored in the battery to meet the peaks within that time step, then additional diesel capacity is run for that time step. In this Hybrid2 dispatch strategy, the battery is only discharged to cover any (probabilistically determined) transient peaks above the rated power of the on-line diesels within each time step. Consequently, this method will only model battery charge and discharge events which are shorter in duration than the time step. If the simulation time step is small, e.g., one minute, then the batteries will only be used to cover net load peaks smaller than one minute, and enough diesel capacity will be dispatched to cover the minute-average load. In this case, Hybrid2 will underestimate the battery usage, and overestimate the diesel cycling frequency. In order to use Hybrid2 to model longer storage discharge events, we were obliged to use a longer simulation time step. Conversely, since Hybrid2 cannot model diesel state transitions within a time step, it requires that the minimum diesel run-time be greater than or equal to the simulation time step. However, the longer the diesel minimum run-time, the lower the fuel savings. Thus, we were forced to strike a balance between a time step long enough to allow the batteries to cover SO ie rae Se a ne ee ore to allow for a useful minimum run time. As a yd compromise, we selected a time step of 30 minutes. The specified time step and diesel dispatch strategy ensure that there is enough diesel spinning reserve to meet the 30-minute average load. Thus, on average, battery discharges (to cover net load peaks) would be limited to 15 minutes in duration. Consequently, our method (using the 30-minute time step) cannot accurately evaluate the performance of a system in which the battery storage is used to cover net load peaks of more than 15 minutes duration. This is not a major shortcoming, however, because, as will be seen, the performance gain due to the addition of energy storage decreases rapidly beyond around 10-minutes nominal storage capacity (10 minutes at average system load). Model Inputs The data inputs for Hybrid2 are time-series of wind speed and load data from Deering for Jan 26 - July 14. The wind speed was logged over this time interval as one- minute averages and standard deviations. One-minute load data was only available for June, so the June data was scaled for the rest of the months using monthly load averages from Deering. The one-minute data was converted to 30-minute data for use in Hybrid2. The nominal turbulence intensity of the 30-minute wind speed data was calculated as 0.12. Since standard deviation was not included in the load data, a constant load variability of 0.10 was specified. Both of these values, as well as the average wind penetration, were scaled up and down for each of the test cases in the sensitivity analysis to determine each parameter’s effect on the value of energy storage. The Deering system and all of the modified systems were run with various amounts of storage. The storage size is indicated by its nominal energy capacity in kWh, which is its rated amp-hour capacity times the nominal battery bank voltage. Storage size is also expressed as the amount of time that the nominal energy capacity, if fully available, could cover the average system load. These values are nominal battery sizes presented for purposes of comparison only and do not necessarily represent the amount of energy storage actually available to the system at any given time, which is dependent on charge history and discharge rate. In a no-storage system, the diesels would need to be dispatched to cover the instantaneous net load (load Tricky minus wind power). The Hybrid2 code “knows” what the future maximum net load will be (calculated from time- series data and statistics within each time step) and therefore can dispatch the minimum amount of diesel capacity necessary to ensure that the load can always be met. Real wind-diesel systems cannot predict the future, and so a system without storage must maintain enou! ae ee) Therefore, the fuel savings in a real system will be less than as predicted by Hybrid2 for the no-storage case. To approximate a real system in Hybrid2, we have added a fixed 20 kW offset to the maximum net load. The zero offset cases were included to show the theoretical fuel savings possible with a hypothetical no-storage system capable of accurate short-term load and wind prediction. Finally, along with the “Multiple Diesel Load Following” dispatch strategy and 30-minute minimum diesel run time, we specified the minimum battery % State of Charge (below which the batteries will not be allowed to discharge) at 20%. In addition, the minimum allowed power of all diesels was specified at 20% of rated power. Results The Reference Case: The Deering Wind-Diesel System The results for the Deering case are shown in Figures 2 through 4. We ran simulations varying the storage capacity from no storage to 65.8 kWh nominal, equivalent to a nominal 74 minutes of energy storage at average load. Fuel consumption, diesel run-time, and diesel starts all decrease sharply, relative to the no-storage case, with increasing storage, up to a storage equivalent of approximately 10 minutes at average load. A nominal 10-minutes equivalent worth of storage reduces the fuel use by 18%, the diesel run-time by 19%, and the number of diesel starts by 44% (from an average of 7.6 starts/day to 4.2 starts/day) compared to the no-storage case. In this case, there does not appear to be any benefit to increasing the amount of storage beyond a nominal 18 minutes at average load. In order to determine the extent to which the amount of battery capacity that Hybrid2 shows to be sufficient is artificially limited by step-size, we ran a second set of simulations using 60-minute time steps. The 60-minute time step results did show slight improvement in performance from the nominal 18- to 37-minute storage sizes, however the difference is small. In addition, the shape of the 60-minute curve is almost identical to the shape of the 30-minute curve: the “knee” of the curve, where the majority of the benefits of storage have been realized, occurs at approximately 10-minutes nominal storage capacity for both time step results. While the use of longer and longer time steps will continue to show slight performance improvement for the larger storage cases, the rate of improvement becomes much smaller. Thus we conclude that there will in fact be little economic benefit to further increasing the storage size, considering the high cost of batteries. The optimum amount of storage for the Deering system appears to be 9-14 kWh nominal or 10-15 minutes nominal at average load. Figure 4 shows that a small amount of energy storage greatly reduces the amount of “dumped” energy, i.e., the amount of wind (or diesel) energy generated (here expressed as a percentage of the village demand) in excess of the village demand. While it is intended in Deering to use all excess wind and diesel energy in space and water heating applications, thereby saving heating fuel, the value of this energy is not as high as that of the energy that goes to meet the village electric load. For a given level of wind penetration, the lower the excess energy the better the economics of the wind-diesel system. Sensitivity Analysis The value of short-term storage is apparent for the Deering specific case, but the question is, how does this value change as the wind penetration, turbulence intensity, and load variability of the system change? A sensitivity analysis on these variables enables us to generalize the results of the Deering analysis to other sites and other wind-diesel systems with more or less wind penetration. Wind Penetration Figures 5 through 7 show the effect of wind penetration on fuel use, diesel run-time, and diesel starts. The fuel use trends are similar to those shown by Beyer et al., namely that even a small amount of storage has a strong effect on fuel savings relative to the no-storage cases, and that increasing the amount makes relatively little difference’. However, we are still faced with the question: to what extent is the lack of difference in performance between the storage sizes larger than 18-nominal minutes equivalent a reflection of our time step and operating strategy? Again, we ran a second set of simulations with 60-minute data. The results showed only marginal improvement in performance from an 18-nominal minute storage to a 37- minute storage. We conclude that for all these systems, the majority of the benefits of storage are realized by our strategy of using it only to cover peaks up to 15 minutes duration. Therefore the results in Figures 5 through 7 will still approximate actual tends concerning the value (or lack thereof) of increasing storage. The value of short-term storage, in terms of fuel savings and diesel run time, increases as the wind penetration increases, because there will be an increasing amount of time that the available wind power exceeds the load. At 50% wind penetration the systems with storage have approximately 20% greater fuel savings-and-20% fewer diesel run-time hours than the no-storage,-20-kW_ offset case. Beyond 50% wind penetration, these benefits increase only slightly. The diesel cycling trends are similar to those shown by Beyer, et al..> Because the wind-hybrid diesels are approaching continuous operation at the lowest wind penetrations, the number of diesel starts approaches the diesels-only number of starts (2.4 starts/day). The number of diesel starts for all the hybrid cases increases sharply as wind penetration increases and then levels off at about 80% wind penetration. The inclusion of storage significantly mitigates this increase in diesel starts, so that above 80% wind pen etration, diesel starts per day are reduced by: 50% relative to the no-storage, 20-kW offset case. Turbulence Intensity Figures 8 through 10 show the effect of turbulence intensity on the value of storage. It has been shown that whereas the fuel use relative to the diesels-only case climbs as the wind | turbulence intensity (and hence the wind power variability) increases, the greater the energy storage the less the impact of wind — variability’. At high turbulence intensities (high wind power variability), there is apparent benefit to increasing the nominal storage size well beyond 15 minutes, even though the simulation is subject to the same 15-minute discharge limitation discussed earlier. This is to be expected, because under conditions of high wind power variability, there will be high magnitude net load peaks. The effective battery capacity drops with increasing discharge current. For the same delivered energy, the higher the battery power required to meet the net load peaks, the larger the battery must be. The trend for diesel run-time is similar. Since most sites will have a turbulence intensity in the range from 0.1 to 0.2, it is evident in Figure 9 that some amount of energy storage is necessary to preserve the diesel-run-time- reducing benefit that addition of wind power offers. The trend for diesel starts is similar but more pronounced. Anytime the storage is unable to cover a transient peak in the net load, another diesel must be started. The diesel may not need to be run for a long time, but it must be started. In addition, the performance of the smaller storage sizes not only decreases with increasing turbulence intensity, but also begins to approach or even fall below the performance of the no- storage cases. This is because the no-storage case diesels are dispatched according to the maximum net load (plus offset), but the storage-case diesels are dispatched according to the average net load with the storage covering any transient peaks (above the rated capacity of the on-line diesels) if possible. Thus there will be situations in a high turbulence intensity, small storage case, where depending on the size of the transient peak, a diesel may be required one time step but not the next, potentially leading to a higher number of diesel starts than with the no-storage case, in which the diesel in question would have been running continuously. In any case, Finally, we must point out a potentially misleading aspect of our turbulence intensity analysis. Note that at high turbulence intensity, it appears that no-storage cases can have greater diesel run times and consume more fuel than if there were no wind power at all. This is due to the algorithm Hybrid2 uses to estimate the maximum net load in a particular time step. Diesels are dispatched to meet the maximum expected net load, which is the average net load plus the expected net load variation. The latter is determined by statistically combining the expected wind power variation (based on turbulence intensity) with the expected village load variation. In cases of very high turbulence intensity, and thus high wind power variation, this calculation leads to high values of net load variation, which can result in maximum net loads that actually exceed the maximum expected village load. This causes Hybrid2 to dispatch more diesel capacity than it would for a diesel-only system. If the peak net load is higher than the village load, then there are moments when the wind turbines are drawing power from rather than delivering power to the bus. This can in fact occur with certain wind turbines in gusty wind conditions. The results presented in Figures 8 through 10 would therefore be accurate if the turbines were allowed to motor at significant power levels for short periods of time, because in that case, the maximum diesel load would indeed be greater than in the diesel-only case. Most wind turbines, however, are designed to preclude large motoring currents. With such turbines, we would expect the fuel use and diesel run-time curves to level off below the diesel-only values as turbulence intensity increased. Load Variability Figures 11 through 13 show the effect of load variability on the value of storage. Load variability is different than the other parameters we investigated in that the diesels-only performance itself changes as the load variability changes which means that as the load variability increases, the fuel consumption in all cases (storage and no-storage hybrid as well as diesel- only cases) increases, so that the performance of the hybrid cases relative to the diesels-only case may be the same or even increase. This is the case for fuel use, where the no-storage cases show only a slight decrease in performance from 0.1 to 0.3 load variability, while the storage cases actually show a slight increase in performance. The trend for both fuel use and diesel run-time is for the value of storage to increase as the load variability increases; however, the actual amount of storage only makes a small difference. At low load variability (less than 0.1) the benefit of all storage cases above no-storage cases is essentially constant (17% reduction in fuel use and diesel run-time), because at low load variability, the variability of the net load is dominated by wind variability. Beyond 0.1 load variability, the storage cases begin to differentiate slightly, with the larger storage sizes showing slightly increasing benefit over the smaller storage sizes and all storage cases showing greater benefit relative to the no-storage cases. Load variability most significantly impacts the number of diesel starts. The basic trend is similar to that for turbulence intensity in that as the load variability increases, the storage cases begin to separate, with the performance of the smaller storage cases approaching that of the no-storage cases. For load variability, however, the number of starts for the diesels-only case also begins to approach that of the no-storage cases, and exceeds the number of starts for all storage cases at any load variability above 0.15. This is another manifestation of the energy storage’s beneficial effect of eliminating diesel starts that occur only to handle short-term peaks in the net load. Conclusions We evaluated the effect of various amounts of energy storage on the operating performance of the wind-diesel system planned for Deering, Alaska, and found that a modicum of energy storage, 10-15 minutes nominal capacity at average load, greatly reduced diesel fuel consumption, diesel run-time, and diesel starts, relative to the no-storage case. When modeled with three 65-kW wind turbines, using actual measured wind and load data, the fuel savings by the no-storage hybrid system, relative to the diesel-only case, were about 21%. The savings increased to about 37% with the addition of a nominal 15-kWh battery. We also examined three factors that significantly effect the benefit of, and need for, energy storage. These are wind penetration level, wind power variability (expressed as turbulence intensity), and load variability. The benefits, relative to a no-storage case, of including energy storage increase to varying extents as each of these factors increase. At wind penetration levels below 25%, energy storage contributes very little, but even a small amount of storage contributes a great deal in most high penetration systems. However, there is not significant benefit to adding larger amounts of storage except in cases of high wind power variability. In a very steady wind, (e.g. trade wind) the benefit of energy storage will be much less than in a wind regime with higher turbulence intensity. A large enough storage can effectively eliminate a hybrid system’s reduction in performance as turbulence intensity increases. The same trend is observed for load variability, but to a lesser degree. At low levels of load variability, however, the benefit of energy storage is somewhat insensitive to the actual value of load variability, since at those low levels, the variability of the net load is likely to be dominated by the wind power variability anyway. In much larger wind-diesel systems than our reference case, say 1- to 2-MW average load, the potential performance gains from energy storage may be reduced, since both the short-term load variability and the wind power variability may be less than with a smaller system. The wind power variability would be less if a much larger number of similarly sized machines were used. On the other hand, it is just as likely that a small number of larger wind turbines would be used. A determination of the need for energy storage in large wind-diesel systems must be based on a similar analysis based on the actual system architecture and local wind and load conditions. Note on Energy Storage System Design The authors wish to stress that the results presented here are not sufficient in themselves to properly design a battery energy storage system, which consists not only of a battery but a power conversion system to interface it to the AC power bus. A variety of factors must be considered in such a design, including the real and reactive power demands, the conversion efficiencies of the power converter, and the actual pattern of charging and discharging that will be experienced by the battery. Knowing the actual charge and discharge profile is also essential to predicting the life of a given battery bank in a particular application. Hybrid2 is designed to be used with a relatively long simulation time step (typically in System,” Proceedings of the European Wind e range of 15 to 60 minutes) and is therefore unable to Energy Conference, Rome, 1986, pp. 305-310. urately model the actual high-rate short-duration 8. Lipman, N.H., De Bonte, J.A.N., Lundsager, P., harge and discharge events experienced by short-term “An Overview of Wind/Diesel Integration: mergy storage. To overcome this limitation, we have Operating Strategies and Economic Prospects,” developed a simple wind power surplus/deficit analysis Proceedings of the European Wind Energy program that determines the actual magnitude, duration, Conference, Rome, 1986, pp. 75-92. and frequency of occurrence of battery charge and discharge events in a hybrid power system with energy 9. Bullock, A.M., Musgrove, P.J., “The Effects of | storage. This program uses one-minute average wind and Turbulence Spectra and Load Profiles on the load data as input. Examples of this analysis will be Operation of a Modelled 60 kW Wind/Diesel presented in a separate paper on battery life prediction. System,” Wind Energy Conversion 1987, i Proceedings of the Ninth British Wind Energy References Association Wind Energy Conference, Edinburgh, 1987. 1. Beyer, H.G., Degner, T., Gabler, H., “Operational Behaviour of Wind-Diesel Systems Incorporating 10. Infield, D.G., Bleijs, J.A.M., Coonick, A., Bass, Short-Term Storage: An Analysis via Simulation J.H., White, J.T., Harrap, M.J., Lipman, N.H., Calculations,” Solar Energy, Vol. 54, , No. 6, pp. Freris, L.L., “A Wind/Diesel System Operating 429-439, 1995. with Flywheel Storage,” Proceedings of the European Community Wind Energy Conference, 2. Scotney, A., Infield, D.G., “Wind-Diesel Systems Herning, Denmark, 1988, pp. 367-372. Pepe nioaina Commits.” published in echnology eveloping Countries, Frank Cass, 11. Skarstein, O., Uhlen, K., “Design Considerations London, 1995. with Respect to Long-Term Diesel Saving in Wind/Diesel Plants,” Wind Engineering, Vol. 13, 3. Beyer, H.G., Degner, T., Gabler, H., Stubbe, G., No. 2, 1989, pp. 72-87. Cheng-Xu, W., “Effect of Wind Field Properties on the Fuel Saving Potential of Wind-Diesel Systems,” 12. Manwell, J.F., McGowan, J.G., Jeffries, W., Proceedings European Wind Energy Conference, “Experimental Data from the Block Island Madrid, 1996, pp. 675-679. Wind/Diesel Project,” Wind Engineering, Vol. 13, No. 3, 1989, pp. 111-131. 4. Beyer, H.G., Degner, T., “Accessing the Maximum Fuel Savings Obtainable in Simple Wind-Diesel 13. Infield, D.G., “An Assessment of, Flywheel Energy Systems,” Proceedings European Union Wind Storage as Applied to Wind/Diesel Systems,” Wind Energy Conference and Exhibition, Goteborg, Engineering, Vol. 14, No., 2, 1990, pp. 47-60. Sweden, 1996. 14. Toftevaag, T., Uhlen, K., Skarstein, O., 5. Slack, G., Sexon, B., Collins, R., Dunn, P., “Wind/Diesel/Battery Systems - The Effect of Lipman, N., Musgrove, P., “Wind Energy Systems System Parameter Variations on Long-Term Fuel with Battery Storage and Diesel Back-up for Savings and Operation,” European Wind Energy Isolated Communities,” Proceedings of the Second Conference, Amsterdam, 1991, pp. 505-513. British Wind Energy Association Workshop, 1980, pp. 134-142. 15. Baring-Gould, E. Ian, The Hybrid System Simulation Model, Version 1.0, User Manual, National 6. Freris, L.L., Attwood, R., Bleijs, J.A.M., Infield, Renewable Energy Laboratory, Golden, CO, June D.G., Jenkins, N., Lipman, N.H., Tsitsovits, A., 1996, NREL/TP-440-21272. “An Autonomous Power System Supplied from Wind and Diesel,” Proceedings of the European 16. Manwell, J.F., Rogers, A., Hayman, G., Avelar, C.T., Wind Energy Conference, Hamburg, 1984, pp. McGowan, J.G., (University of Massachusetts), 669-673. DRAFT Theory Manual for Hybrid2, The Hybrid System Simulation Model, National Renewable 7. Contaxis, G.C., Kabouris, J., Chadjivassiliadis, J., Energy Laboratory, Golden, CO, June 1996, “Optimum Operation of an Autonomous Energy NREL/TP-440-21182. Nominal Storage Size (minutes at average load) Figure 4. "Dump" Energy vs. Storage Size 0.95 3.3 —?e—fuel use 09" 3.1 ——run time = 5 _ 29. oie Starts & 3 30.85 5 ges 276 2 oo 3 ge 08 25 8 = § Ss 3075 230 =o > za3s 218 28s 07 4.9 © _Wind Penetration = 0.80 a . Turbulence Intensity = 0.12 0.65 17 Load Variability = 0.10 0.6 15 Nominal Storage Size (minutes at average load) Figure 2. Relative Fuel Use, Diesel Run-Time, and Diesel Starts vs. Storage Size 22 6 —@— run time 21.5 75 a starts E a4 72 = = 2 205 650 — I> os es 20 6 3s 38 195 sso 5 = ss =— a3 19 5 oa cy S 185 452 g P Wind Penetration = 0.80 <3 us Turbulence Intensity = 0.12 17.5 3.5 Load Variability = 0.10 17 - 3 0 o Nomina Storage Size {Minutes at avedge load) 5 Figure 3. Absolute Diesel Run-Time and Diesel Starts vs. Storage Size 0.43 0.42 3 0.41 By o4 & 5 0.39 = 8 Fs 0.38 Be 2 2 037 2 = 0.36 Wind Penetration = 0.80 0.35 Turbulence Intensity = 0.12 Load Variability = 0.10 0.34 - 0 20 40 60 80 11 o 9° oo oO ° q Relative Fuel Use (fraction of diesels only case) 0.6 0.5 0 0.5 1 1.5 2 2.5 3 Average Wind Penetration 3.5 Figure 5. Fuel Use vs. Wind Penetration —?@—No Storage, 20 kW Offset —fl— No Storage, No Offset ~~~ 8.2 KWh (9 minutes) —<— 16.4 kW (18 minutes) —%— 32.9 kWh (37 minutes) —@— 65.8 kWh (74 minutes) Turbulence Intensity = 0.12 Load Variability = 0.10 Average Diesel Run-Time (hrs/day 0 0.5 1 1.5 2 25 3 Average Wind Penetration 3.5 Figure 6. Diesel Run-Time vs. Wind Penetration —?@— Diesels Only —i— No Storage, 20 kW Offset ~Se~ No Storage, No Offset —3<— 8.2 kWh (9 minutes) —*— 16.4 kW (18 minutes) —@— 32.9 kWh (37 minutes) —+— 65.8 kWh (74 minutes) Turbulence Intensity = 0.12 Load Variability = 0.10 Average Diesel Starts (starts/day ———__— 1.5 2 2.5 3 3.5 Average Wind Penetration Figure 7. Diesel Starts vs. Wind Penetration —?@— Diesels Only —il— No Storage, 20 kW Offset ~Ge~~ No Storage, No Offset —<— 8.2 kWh (9 minutes) —*— 16.4 kW (18 minutes) —@— 32.9 kWh (37 minutes) —+— 65.8 kWh (74 minutes) Turbulence Intensity = 0.12 Load Variability = 0.10 Relative Fuel Use (fraction of diesels only case) 0. Figure 8. Fuel Use vs. Turbulence Intensity eu 0.2 Average Turbulence Intensity 0.3 0.4 —@— No Storage, 20 kW Offset —i— No Storage, No Offset —ie~ 8.2 KWh (9 minutes) —<— 16.4 kW (18 minutes) —¥*— 32.9 kWh (37 minutes) —@— 65.8 kWh (74 minutes) Wind Penetration = 0.80 Load Variability = 0.10 Average Diesel Run-Time (hrs/day 12 + 0. Figure 9. — + ll 0.2 0.3 Average Turbulence Intensity 0.4 Diesel Run-Time vs. Turbulence Intensity —@— Diesels Only —t— No Storage, 20 kW Offset —~ée~~ No Storage, No Offset —%*— 8.2 kWh (9 minutes) —*— 16.4 kW (18 minutes) —@— 32.9 kWh (37 minutes) —+— 65.8 kWh (74 minutes) Wind Penetration = 0.80 Load Variability = 0.10 Average Diesel Starts (starts/day 0.1 0.2 0.3 Average Turbulence Intensity 0.4 Figure 10. Diesel Starts vs. Turbulence Intensity —— Diesels Only —i— No Storage, 20 kW Offset ~~-iew No Storage, No Offset —<— 8.2 kWh (9 minutes) —*— 16.4 kW (18 minutes) —®— 32.9 kWh (37 minutes) —+— 65.8 kWh (74 minutes) Wind Penetration = 0.80 Load Variability = 0.10 10 Relative Fuel Use (fraction of diesels only case) 0.05 0.1 0.15 Load Variability 02 0.25 0.3 Figure 11. Fuel Use vs. Load Variability —@— No Storage, 20 kW Offset —i— No Storage, No Offset ~~ 8.2 kWh (9 minutes) —<— 16.4 KW (18 minutes) —*— 32.9 kWh (37 minutes) —@®— 65.8 kWh (74 minutes) Wind Penetration = 0.80 Turbulence Intensity = 0.12 SRREBBSRB Average Diesel Run-Time (hrs/day Ro @ = Nn 0.05 0.1 0.15 Load Variability 0.2 0.25 0.3 Figure 12. Diesel Run-Time vs. Load Variability —?— Diesels Only —i— No Storage, 20 kW Offset ~~~ No Storage, No Offset —><— 8.2 kWh (9 minutes) —*— 16.4 KW (18 minutes) —@— 32.9 kWh (37 minutes) —+— 65.8 kWh (74 minutes) Wind Penetration = 0.80 Turbulence Intensity = 0.12 Average Diesel Starts (starts/day 0.05 0.1 0.15 Load Variability 0.3 02 0.25 Figure 13. Diesel Starts vs. Load Variability —?— Diesels Only —H— No Storage, 20 kW Offset ~~~ No Storage, No Offset —%*— 8.2 kWh (9 minutes) —*®— 16.4 kW (18 minutes) —@— 32.9 kWh (37 minutes) —+— 65.8 kWh (74 minutes) Wind Penetration = 0.80 Turbulence Intensity = 0.12 11 NREL/TP-440-21499 e UC Category: 1213 e DE96007951 Testing of a 50-kW Wind-Diesel Hybrid System at t National Wind Technology Center David A. Corbus, H. James Green April Allderdice, Karen Rand Jerry Bianchi National Renewable Energy Laboratory Ed Linton New World Village Power Prepared for AWEA Windpower ‘96 Denver, Colorado June 23-27, 1996 a. @As NREL National Renewable Energy Laboratory 1617 Cole Boulevard Golden, Colorado 80401-3393 A national laboratory of the U.S. Department of Energy Managed by Midwest Research Institute for the U.S. Department of Energy under contract No. DE-AC36-83CH10093 Prepared under Task No. WE617310 July 1996 NOTICE This report was prepared as an account of work sponsored by an agency of the United States goverment. Neither the United States government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States govemment or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States govemment or any agency thereof. Available to DOE and DOE contractors from: Office of Scientific and Technical Information (OSTI) P.O. Box 62 Oak Ridge, TN 37831 Prices available by calling (423) 576-8401 Available to the public from: National Technical Information Service (NTIS) U.S. Department of Commerce 5285 Port Royal Road Springfield, VA 22161 (703) 487-4650 ae 4 a % oe Printed on paper containing at least 50% wastepaper, including 10% postconsumer waste TESTING OF A 50-kW WIND-DIESEL HYBRID SYSTEM AT THE NATIONAL WIND TECHNOLOGY CENTER David A. Corbus Jim Green, April Allderdice, Karen Rand & Jerry Bianchi National Renewable Energy Laboratory 1617 Cole Blvd. Golden, CO 80401-3393 United States of America Ed Linton New World Village Power One North Wind Road PO BOX 999 Waitsfield, VT 05673 United States of America INTRODUCTION In remote off-grid villages and communities, a reliable power source is important in improving the local quality of life. Villages often use a diesel generator for their power, but fuel can be expensive and maintenance burdensome. Including a wind turbine in a diesel system can reduce fuel consumption and lower maintenance, thereby reducing energy costs. However, integrating the various components of a wind-diesel system, including the wind turbine, power conversion system, and battery storage (if applicable), is a challenging task. To further the development of commercial hybrid power systems, the National Renewable Energy Laboratory (NREL), in collaboration with the New World Village Power Corporation (NWVP), tested a NWVP 50-kW wind-diesel hybrid system connected to a 15/50 Atlantic Orient Corporation (AOC) wind turbine. Testing was conducted from October 1995 through March 1996 at the National Wind Technology Center (NWTC). A main objective of the testing was to better understand the application of wind turbines to weak grids typical of small villages. Performance results contained in this paper include component characterization, such as power conversion losses for the rotary converter system and battery round trip efficiencies. In addition, system operation over the test period is discussed with special attention given to dynamic issues. Finally, future plans for continued testing and research are discussed. System Description The hybrid power system includes a synchronous generator that provides 3-phase power to the load. This is coupled to a DC machine on one side and through a clutch to a diesel engine on the other side. AC current is converted to DC current when the DC machine runs as a generator, thereby allowing the batteries to be charged. When the clutch is disengaged on the diesel, the batteries may power the DC machine and the DC machine can supply torque to the AC generator. Frequency on the system may be controlled either by the diesel governor (diesel on) or the DC machine and programmable logic controller (PLC) (diesel off). An AOC 15/50 wind turbine is connected in parallel to the load to reduce diesel fuel consumption, with excess wind power charging the batteries or being dissipated by a resistive dump load. Table | lists the major components of the system [New World Village Power, 1994], and Figure 1 shows a system schematic with the location of the sensors used in the data acquisition system. TABLE 1. System Components Rotary Converter | DieselEngine AC Synchronous Machine |DC Machine —"_| Northern Lights Lugger 480 V, 3 phase, 60 Hz 240 V armature (300 V generating) rated 75 Hp, 1800 RPM for 309 A @ 200 V 50 kWe and 62 KVA continuous | 150 V field, 3 A nominal, 6 A maximum 4 cylinder, turbocharged 75 kWe peak (30 sec) 55 kW, 4 Pole Shunt Wound Radiator cooled 1800 RPM Controller 480 V, 3 phase Omron PLC Controller C&D HD700, vaive-regulated, absorbent glass mat, lead-calcium batteries TCP Jr. Local Operator Interface 114 cells, 700 AHr (nominal 5 Hr rating to 1.88 V per cell) 75 KW continuous New World Village Power Remote Operator Interface Resistive Load Bank Villoge Lood ‘Not used during test? Output Power Kw UE} i on Vind Speed AC PANEL BOARD 480/277VAC 3 PHASE b-Voltage Q ee pee eee Gaesesess==—S == System Controller eet fr kV kVAR-G 1 1 ' 1 c 1 ' 1 , Frequency nt) 62.5SKVA/S0kW SSkW, 309ADC DIESEL ENGINE SYNCHRONOUS FU MACHINE MACHINE CLUTCH as D— Arr Chorge & Discharge P- Bottery Voltoge comes BATTERY BANK Bottery Tenperoture —Ge—— 55 DC NOMINAL FIGURE 1. System Schematic COMPONENT CHARACTERIZATION TESTS The initial hybrid system testing focused on component characterization. We calculated component efficiencies of the rotary converter and battery bank for different operating states, and we measured wind turbine power output. Evaluation of fuel efficiency (i.e., liters/kWh) is pending until installation of a fuel flow meter. AOC 15/50 wind turbine. The AOC 15/50 is a downwind, stall regulated, 15 meter rotor-diameter turbine that is rated at 50 kW for a 11 meter/sec wind speed. Maximum continuous power output from the turbine, based on the published power curve, is 65 kW [Atlantic Orient Corporation, 1994]. Test data for the 15/50 turbine connected to the utility grid showed maximum peak power of 83 kW for a two-second average wind speed, as shown in Figure 2. Figure 2 also shows minimum power reaching -25 kW. (Because of the air density variation due to the altitude at the NWTC, the average power data shown in Figure 2 differ from the published power curve.) 100 80 60 Power (kW) > o N o 0 5 10 15 20 25 Wind Speed (m/s) @avg a max amin FIGURE 2. AOC Power Output (2 sec. avg.) Rotary converter efficiency. To evaluate the rotary converter efficiency, we measured power input to and from the AC synchronous generator, power to and from the battery bank, battery bank voltage, and diesel run time (see Figure | for sensor locations). The system dump load was used as a power sink for power out of the AC synchronous generator. Data was taken every tenth of a second and recorded as ten-minute averages. For energy flowing from the battery bank to the AC bus, a data set of 104 time steps with zero diesel and zero wind turbine run time was used. The graph of power out of the AC machine versus power from the batteries is shown in Figure 3. The performance of the rotary converter was found to obey the relationship: y =1.135x + 2.98. 60 For energy flowing from the AC bus to z= 50 the battery bank, a concatenated data = 40 set of 360 time steps with the wind 2 30 turbine as the source of power was s used (i.e., zero diesel run time and zero s 20 battery discharge). The graph of © 10 power to the battery bank versus <9 | power into the AC machine is shown 0 10 20 30 40 50 in Figure 4. The performance of the rotary converter was found to be: eee @ AC Machine In, KW =""Linear (AC Machine In, kW) y= 1.135x +2.85 . FIGURE 3. Converter Performance AC to DC In these equations, y is the power input to the rotary converter in kW and x is the power output from the rotary converter in kW. The y-intercept (2.85 and 2.98 kW) represents the fixed losses for the system, or the standing losses, and are constant because the rotary converter operates at a fixed speed. (These losses are slightly different depending on the direction of power flow, i.e., DC-AC 0 5 AO beet 1S chee 20 Sebel os teen some 35. or AC-DC, because of the difference in conversion efficiency of the AC and Deen: ee Battery Discharge kW = N > 2 ooo 8 o gs So DC machines.) Electrical losses scale @ DC Discharge kW “Linear (DC Discharge kW) with the amount of power through the rotary converter and may be calculated FIGURE 4. Converter Performance DC to AC from the slope of the curve in Figures 3 and 4; they are about equal. A graph of overall rotary converter efficiency as a function of power is given in Figure 5. Battery charging efficiency. The hybrid system uses valve regulated lead acid (VRLA) batteries. The battery efficiency depends on temperature, depth of discharge, length of tapering charge, rate of charge and discharge, age and condition of batteries. We characterized batteries for the actual operating conditions of the system, and this included analysis of the battery efficiency under both a constant load and a preprogrammed diurnal “village” load. Conversion Efficiency % 0 10 20 30 40 50 Power Out, kW BAC to DC @DC to AC FIGURE 5. Rotary Converter Efficiency To characterize the battery efficiency for a constant load, the battery bank was charged by the diesel generator at a constant current and then discharged for a constant load for four battery charge/discharge cycles. The batteries performed at a 90% watt-hour efficiency. The temperature of the battery bank measured between 25° and 35° C. When compensated for high temperature, the watt-hour battery efficiency was about 80%, which is within the expected 65%-80% range for VRLA batteries [Berndt, 1993]. A graph of battery voltage, current, and temperature during this test is shown in Figure 6. Battery performance was also characterized for a simulated village load profile, without using the wind turbine. The batteries performed at an 88% watt-hour efficiency. The temperature of the battery bank measured between 30° and 40° C. When compensated for high temperature, the battery efficiency is also about 80%. A graph of battery voltage, current, and temperature during this test is shown in Figure 7. In both cases, the transducers monitored only the battery bank, so rotary converter losses are not included in these efficiencies. Overall rotary converter/battery system efficiency. For energy from the wind turbine and passing through the battery bank before meeting a village diurnal load, the system has a round-trip overall efficiency of 62% at full load: 83 * .90 * .83 = .62 (i.e., 83% conversion efficiency one way and battery efficiency of 90%). EXTENDED OPERATION OF SYSTEM System Tests. We conducted system testing from December 1995 through March 1996. Because of competing uses for the turbine and dynamic issues associated with operation of the system, testing of the system was intermittent. The majority of the testing was conducted using a typical village load profile that Battery Round Trip Efficiency over 4 cycles Load = 20kW KWh in [kWh out [Net Loss [Efficiency 404.71 365.48 39.23 0.90. Voltage 8g 2 3 > & 25 TIME (DAYS) g Current 8 2 ° 2 8 § 4 Temperature e a 2s © a a a 25 ‘TIME (DAYS) FIGURE 6. Constant Load Condition DEGREES C Battery Round Trip Efficiency over 5 cycles Village Diurnal Load kWhin_ [kWh out_|Net Loss _|Efficiency | 636.71 559.69} 77.01 0.88} Voltage ‘TIME (DAYS) Current TIME (DAYS) TIME (DAYS) FIGURE 7. Diurnal Load Condition is shown in Figure 8. The resistive dump load was used to simulate the 3 village load for system testing. 30 Although the dump load comprises = 2 resistive elements, the power factor on = 20 the system was usually low because of g ‘5 harmonic distortion created by the a 10 silicon controlled rectifier (SCR) ; Switches in the phase-controlled dum; load controller. ° c s ge iC 2 os Hour of Day The data acquisition system recorded operating parameters in ten-minute FIGURE 8. Diurnal Load Profile averages. Based on the ten-minute averages, weekly summaries for the system were produced that show on-line time, diesel run time, total wind turbine energy, total load, dumped energy, diesel starts, and battery cycles. In addition, operating parameters such as wind power, load setting, dumped power, and battery state-of-charge were plotted. An example on one of these plots is shown for 7 days in Figure 9. Note the dumped power is high when the batteries are fully charged and the wind speed is high, and that the system is off when the load power is zero. Rotary converter. In March 1996, large vibrations were noticed on the AC synchronous generator, so the system was shut down and disassembled. Inspection showed severe wear on the spline connection from the AC generator shaft to the diesel clutch. The AC generator was converted from a single bearing to a double bearing system to reduce transverse loads on the clutch-to-spline connection. The system was up and running again in June, but operating data and analysis results for this paper are included only through March. Batteries. One of the problems encountered with operation of the batteries was temperature control. Temperature control of VRLA batteries is important, because if cells are allowed to operate at too high a temperature, their lifetime may be shortened as a result of loss of electrolyte. VRLA batteries are “maintenance free,” hence their electrolyte cannot be replaced. Although the exact correlation between cell lifetime and operating temperature is poorly understood, it is always prudent to operate batteries near their rated temperature of 25° C. One of the advantages of VRLA batteries is that they can be stacked on top of one another, thereby reducing the space required to house them. However, the stacked battery cells are harder to keep cool; hence, we will install an air conditioner to keep batteries cool during testing when ambient temperatures are high. An alternative to VRLA batteries is flooded lead-acid batteries. For systems of this type, especially those installed in warm climates, we recommend that flooded lead-acid cells be considered because of their tolerance of higher temperatures and their reduced costs. Disadvantages of flooded lead-acid batteries are their larger space requirements and need for maintenance. The degree of maintenance (e.g., watering of batteries) varies for different types of flooded lead-acid batteries. Dynamic issues. Three dynamic issues arose during system testing: negative power from the wind turbine, larger-than-anticipated power transients from the wind turbine, and high battery voltage excursions. The first two issues are primarily a New World Village Power Data result of integrating the AOC sanaaty A> = 20. tase 15/50 turbine with the NWVP 3 WTG Power system, while the last issue is iN control of the rotary converter oihes 5 a fa a pa Pp as system. TIME (DAYS) The first dynamic issue, Load Power negative power from the wind 8 turbine, occurred during z extremely turbulent, high wind ns 40 conditions. As shown in Figure es Me Mi 16 we (avs) %8 a) ae 2, power output from the AOC 15/50 wind turbine is negative at times. In fact, negative power g Dumped Power excursions as low as -70 kW were observed on the system in very high turbulent wind 13 14 15 16 17 18 19 20 conditions. (During this testing TAGE we did not identify the cause of these extreme excursions; Dicges Ruins Viens’ however, we will investigate this» g (STITT the negative power surges, the . rotary converter system supplies "Me oavs)” power to the turbine to motor it, but in many cases the current was over the DC machine 8 FLT AI TL rating, so the PLC would shut aC ato Lf a iH down the DC part of the system. | (During a DC fault, the diesel its 19 20 generator takes over control of *resenra” the system so that the load continues to be met, which is an FIGURE? P Weekly Summary important feature of the hybrid system.) We changed the PLC to disconnect the turbine whenever the power went below -10 kW. Although this resulted in significant turbine downtime during periods when the turbulent conditions existed, these conditions were infrequent, so overall turbine downtime was not excessive. (Because the testing was intermittent, total downtime from this condition at this site is hard to estimate, but might be on the order of 10 days during the peak four months of wind.) There are two approaches to mitigate this problem. A high speed tachometer could be added to the turbine to detect transient underspeeding of the turbine and shut it down during negative power events before the hybrid system grid tried to motor the turbine. (The existing turbine tachometer does not have enough resolution to detect very short-term changes in turbine speed and hence could not be used.) The approach would result in a situation similar to the existing solution of cutting the wind turbine out at -10 kW; both could put excessive wear on the turbine breaking system. The second approach is to install an asynchronous controller on the turbine so that it could go below synchronous speed momentarily and have the power regulated on the grid. These two approaches will be considered in follow up testing. f : The second dynamic issue, higher-than-anticipated power output from the wind turbine, was a problem for a . aura system testing because the existing 75 kW of dump load capacity could not absorb the peak 83 kKWof oY AO C power from the turbine during extremely high winds. As a result, the turbine would overspeed and shut itself down, although the hybrid power system would continue to operate. The turbine would go into a normal 7-minute cool down before restarting itself and reconnecting to the system. This condition would not be a problem for actual installations in most villages, because a village would have a continuous base load of about 10 kW. However, the higher-than-anticipated turbine output did require the addition of extra test load capacity to the dump load. For village systems, we recommend sizing the dump load for the maximum short-term turbine power output minus the minimum expected base load. High battery voltage was the third dynamic issue we identified. When the wind turbine is charging the batteries, current is supplied to the batteries until a high voltage set point on the batteries is reached, then the current is supplied to the dump load. However, power spikes from the turbine resulted in transient high battery voltage excursions because the PLC was not able to shift power from the batteries to the dump load fast enough. Although changes to the dump load controller gain were made, further changes are required to mitigate this problem. This could include changing the size of the dump load increments or implementing PID dump load control. System Startup. In the beginning of the testing the hybrid system grid could not handle a “hard start,” (i.e., the hybrid system could not motor the turbine up to synchronous speed), because the in-rush currents to the turbine were too high for the hybrid system grid. Hence, the PLC was changed to allow the turbine to coast up to synchronous speed before connecting to the hybrid system grid. Dump load. Harmonic noise (20%-25% total harmonic distortion ) was created by the phase controlled dump load, and this set off a voltage alarm on the turbine and caused other problems. For future systems, changing to a binary step, zero crossing solid-state-relay dump load should eliminate this problem. General maintenance. Routine diesel maintenance was required for the system (e.g., changing oil and oil filters). In addition, water was frozen in the breather for the system which resulted in a broken seal on the turbo that had to be replaced. Aside from the major generator retrofit to the double bearing system, equipment maintenance on the NWVP system was low. FUTURE WORK We plan to make additional changes to the PLC software to mitigate the high battery voltage events, and to further test the system response to step changes in load, loss of load, and power quality for various events, such as severe phase imbalance and induction motor starts. Short-term power quality measurements will also be performed to help further understand dynamic issues, and we will record fuel flow measurements and estimate fuel efficiency (i.e., liters/kWh) for the system. Finally, the negative power from the AOC 15/50 will be investigated to determine why it is happening and under what type of conditions, and various approaches will be implemented to mitigate the effect that negative power has on the hybrid system grid. CONCLUSIONS Testing of the system has demonstrated the challenges of integrating specific wind turbine characteristics into a small, weak grid (i.e., a grid typical of a small village), as is demonstrated by the NWVP 50-kW system. In our testing, we had to make changes to the NWVP system’s controller so that the hybrid system could handle the AOC 15/50’s negative power events and so that high battery voltage events caused by transient peak power from the turbine could be minimized. For hybrid systems of this type, a good PLC code is required for system control, and changes to this software will be needed depending on the specific turbine connected to the system. REFERENCES New World Village Power. 1994. “Renewable Energy Modules for Village Electrification.” Waitsfield, Vermont: The New World Power Corporation. Atlantic Orient Wind Systems. 1994. “Producing Tomorrow’s Wind Turbines Today. ” Waitsfield, Vermont: Atlantic Orient Wind Systems Inc. Berndt, D. 1993. Maintenance-Free Batteries. Somerset, England: John Wiley and Sons. ote Golden, Colorado NREL/TP-442-7227 Village Power Hybrid Systems in the United Sta « > =. i ose Ne= Library NREL/TP-442-7227 * UC Category: 1210 » DE95000247 evelopment L. Flowers, J. Green, M. Bergey, A. Lilley, L. Mott Prepared for European Wind Energy Conference October 10-14, 1994 Thessaloniki, Greece sf PNREL National Renewable Energy Laboratory 1617 Cole Boulevard Golden, Colorado 80401-3393 A national laboratory of the U.S. Department of Energy Managed by Midwest Research Institute for the U.S. Department of Energy under contract No. DE-AC36-83CH10093 Prepared under Task No. WE517210 November 1994 NOTICE This report was prepared as an account of work sponsored by an agency of the United States government. Neither the United States government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States government or any agency thereof. Available to DOE and DOE contractors from: Office of Scientific and Technical Information (OSTI) P.O. Box 62 Oak Ridge, TN 37831 . Prices available by calling (615) 576-8401 Available to the public from: National Technical Information Service (NTIS) U.S. Department of Commerce 5285 Port Royal Road Springfield, VA 22161 (703) 487-4650 se Yat Printed on paper containing at least 50% wastepaper and 10% postconsumer waste VILLAGE POWER HYBRID SYSTEMS DEVELOPMENT IN THE UNITED STATES L. Flowers and J. Green, National Renewable Energy Laboratory, USA M. Bergey, Bergey Windpower Company, USA A. Lilley, Westinghouse Electric Corporation, USA L. Mott, Northern Power Systems, USA j INTRODUCTION The energy demand in developing countries is growing at a rate seven times that of the OECD countries, even though there are still 2 billion people living in developing countries without electricity; most of these people live in remote villages, far from the established grid. Line extension is generally uneconomical; and diesel gensets are expensive to operate and maintain, and have proven to not be environmentally and economically sustainable for remote applications. Renewable energy technologies offer an economical and environmentally sustainable solution for bringing power- and its educational, economic development, health, and quality of life benefits- to remote villages. Many developing countries have social and econamic development programs aimed at stemming the massive migration from the rural communities to the overcrowded, environmentally problematic, unemployment-bound urban centers. It has been estimated that $1 invested in rural communities potentially offsets $6 required to provide support services and mitigate impacts on an urban setting. To address the issue of providing social, educational, health, and economic benefits to the rural communities of the developing world, a number of government and non- government agencies are sponsoring pilot programs to install and evaluate renewable energy systems as alternatives to line extension, diesels, kerosene, and batteries. These programs are underway in Mexico, Brazil, ’ Indonesia, Bolivia, Guatemala, Mauritania, the Caribbean, the Philippines, and India. These programs are aimed at generating the experience and performance data required to develop large loan requests to the financial community for multiple village-power applications. Several of these loan requests are on the order of $100 million. An official of the World Bank’s Environmentally Sustainable Development Department recently stated that the World Bank and multilateral institutions should strive to incorporate renewable energy options into ongoing and pending Projects in the developing world. The use of renewables in remote international villages has yielded mixed results over the last 20 years. However, recently, photovoltaics, small wind turbines, and micro- hydro systems have gained increasing recognition as reliable, cost-effective alternatives to grid extension and diesel gensets for village-electricity applications. At the same time, hybrid systems based on combinations of Pv/wind/batteries/diesel gensets have proven reliable and economic for remote international telecommunications markets. With the growing emphasis on environmentally and economically sustainable development of international rural communities, the U.S. hybrid industry is responding with the development and demonstration of hybrid systems and architectures that will directly compete with conventional alternatives for village electrification. Assisting the US industry in this development, the: National Renewable Energy Laboratory (NREL) has embarked on a program of collaborative technology development and technical assistance in the area of hybrid systems for village power. Following a brief review of village-power hybrid systems application and design issues, this paper will present the present industry development activities of three U.S. suppliers and the National Renewable Energy Laboratory. APPLICATION ISSUES Off-grid applications in developing countries typically fall into three broad categories that differ in level of energy demand and system configuration: (1) individual home or dwelling power systems for lighting and small appliances; (2) dedicated productive use or rural community facilities applications such as communications, commercial enterprises, health clinics, and water pumping; and (3) general-purpose electrification of rural communities. The systems options for these applications fit into two basic configurations: (1) distributed stand-alone systems that are each dedicated to physically localized load use, and (2) centralized generation systems with a local “minigrid" that distributes power to a number of physically separated loads. The mini-grid category represents multipurpose electrical power service to communities with populations of several hundred to several thousand (perhaps 50 to 500 households or more), with overall energy demand ranging from several tens to several hundred kWh per day. Depending on the physical layout of the community and load density, the appropriate technical options can range from the distributed individual stand-alone systems to centralized wind hybrid system generation with a local distribution network, to an appropriate mix of the two that is tailored to the local needs and load distribution of the community. The higher overall energy demands for the centralized community power system options discussed here will typically require the use of multiple wind generators of 5-50 kW capacity. The appropriate technical options for off-grid power needs depends on the available energy resources; the end-use energy requirements and anticipated demand for power, and social, economic, and cultural factors that impact the practicality, acceptance, and sustainability of the various possible technical approaches. There will always be trade- offs between achieving optimum technical performance in any given system and providing a practical solution for meeting an energy need that is both acceptable and sustainable under local conditions and constraints. There are three practical guidelines to follow when considering appropriate technical options: (1) ensuring a good match between the available energy resources, the end-use needs, and the end-user culture; (2) reducing energy requirements where possible through conservation and efficiency measures; and (3) designing and implementing systems and support services with long-term sustainability in mind. DESIGN ISSUES The design of a village power system begins with a definition of the current, anticipated, and long-term electrical loads. The loads definition process should include average power levels, start-up surge power levels, and a diurnal distribution, which is usually based on hourly averages. If the village currently has a diesel generator, this definition is best accomplished using manual or automatic load monitoring. If no power generation exists, then an analysis must be performed to calculate the anticipated loads and their time profile. This analysis is usually based on assumptions of specific appliance use (e.g., homes will have four 10-W fluorescent lights operating 4 hours per day, etc.). Projections on future load growth are also made, and systems are typically sized for anticipated needs two to ten years after commissioning. System capacity requirements are normally expressed in terms of energy (kWh/day) and peak power (kW). The next step, and often the most challenging, is to define the resources (the wind and solar resources). As a first cut, the 1980 U.S. Department of Energy "World Wind Energy Resource Map" provides reasonable estimates of yearly average wind speeds. (However, it should be noted that wind resources can be very site-specific). The wind resource information available from local meteorological sources in developing countries is notoriously inaccurate, usually underestimating available resources by a wide margin. The problem is that wind data are often taken from sheltered urban or airport sites. Higher quality data are available from military, upper air, and maritime sources, but collecting and processing these data can be time consuming and expensive. For large-scale projects, either in size or scope, site resource monitoring is prudent, even if only for a few months to verify the resource. On very small, single-system projects, site monitoring may not be justified economically. From the loads information and wind/solar resource estimates, the designer can explore various component- sizing options. In almost all situations, the system includes a battery bank for short-term energy storage, an inverter to supply the AC power, and a system controller, switchgear, and back-up diesel generator to cover the loads during periods of low wind. From a hardware perspective, wind turbines have a cost advantage over PV and often an advantage over diesel systems; so, wind is often chosen as the dominant supply option when an adequate wind resource is available. Least-cost (life-cycle) design is normally the major goal, but other customer-driven factors like the renewable energy Contribution ratio, environmental benefits, maintainability/ support, and initial capital: costs can significantly influence the process. Design tools are limited and are largely . proprietary. Least-cost designs arrive at relative energy contributions of 50%-75% from renewables and the remainder from the diesel genset, depending on a number of local economic and site-specific resource factors. Currently, system integration is not a prescriptive science, yet a number of firms have gained wide experience in village system design. U.S. industry can now install com- plete systems that provide a quality of service and reliability levels approaching grid-based utility service. INDUSTRY DEVELOPMENT ACTIVITIES While the market for hybrid village power systems is still in its infancy, several companies in the United States have invested in system and market development activities that will generate the experience and equipment that are necessary to open this potentially large remote electricity market. The current systems offered by these companies have resulted from their experience in the related telecommunications and small, stand-alone wind and photovoltaic remote applications in international markets. Each of the three hybrid systems suppliers discussed in this paper have selected system designs based on what they believe will meet the multiple needs of the international village marketplace. BERGEY WINDPOWER COMPANY (BWC) Bergey Windpower Company is a manufacturer of small wind turbines in the size range of 0.85-10 kW. BWC turbines utilize passive controls, fiberglass blades, direct- drive permanent magnet alternators, and integrated structures to provide for mechanical simplicity that results in high reliability turbines and low maintenance costs. Approximately 1400 BWC turbines have been installed in more than 60 countries. These systems are primarily used for rural electrification, water supply, and remote telecommunications. In addition to supplying wind turbine and balance-of-system equipment, BWC also serves as a system integrator, installer, trainer, and after-sales service contractor. BWC is pursuing village power systems in the size range from 1.5 to 80 kW. Village power systems utilizing BWC wind turbines have been installed in twelve countries, including India, Indonesia, Australia, Russia, and Mexico. Pilot installations are underway in the Philippines, Uruguay, and Brazil. These systems typically include one to ten turbines, a DC bus, batteries, a bidirectional inverter/charger, a back-up diesel generator, and on smaller systems, photovoltaics. The wind turbines and PV arrays are connected to the DC bus through separate, non- communicating voltage regulators. Battery banks are typically configured for 120, 220, or 240 VDC and are sized at 18-48 hours of load support. Static inverters usually include a reverse-mode battery charging capability and have a sinusoidal output waveform. Most systems operate automatically with the back-up generator start and other control functions. being. activated based upon battery bank voltage. On an annual basis the typical system derives 60- 90 % of its energy from renewables and the balance from the back-up source. Several of the village power systems are instrumented to monitor system performance; the system in Xcalac, Mexico, was heavily instrumented to evaluate system and subsystem performance. The Xcalac system was installed in August, 1992, and is comprised of six 10-kW turbines, an 11.2-kW PV array, a 400-kWh battery, and a 40-kVA inverter. It is monitored by a 40-channel data acquisition system which telemeters the data records to the Instituto de Investigaciones Electricas (IIE) in Cuernavaca, Mexico. The analysis of the data from this site has provided useful insights into the design and operation of DC bus-based village power systems, including subsystem interactions. From a development perspective, BWC is working on both advanced equipment and new applications to improve its products and expand its markets. BWC, under contract to NREL, is developing a 15-kW IGBT high-frequency link, full- digital-control inverter to provide high reliability at low cost for its stand-alone AC systems. Also, BWC is developing, collaboratively with NREL, wind-electric ice-making systems for fishing and agriculture-based villages. INTEGRATED POWER CORPORATION (IPC) Integrated Power Corporation, a subsidiary of Westinghouse Electric Corporation, has installed PV/wind hybrid systems in Mexico and Indonesia. These installations have successfully demonstrated the application of pv/wind-based hybrid systems for rural village electrification. The following is a brief description of IPC’s existing and imminent hybrid village projects. Mexico experience: IPC, in collaboration with Compania de Luz y Fuerza Del Centro (CLYF), and Pronasol (the Mexican rural-development fund) installed two hybrid systems in the villages of Santa Maria Magdelena and San Antonio de Aquas Benditas, Mexico. The system that was installed in Maria Magdelena (54 homes) in 1991 has a nominal capacity of 45-kWh/d and is composed of 4.3-kW PV, 5-kW wind generator, 18.4-kVA diesel genset, a 132 kWh battery bank, and a 7-kVA, single-phase inverter. The system that was installed in Aquas Benditas (100 homes) in 1992 has a nominal capacity of 125 kWh/d; and is comprised of 12.4-kW PV, two 10-kW wind turbines, a 60 kVA genset, a 250 kWh battery bank, and two 7.5 kVA inverters operating in parallel. The system serves 100 homes. The systems were designed to support both residential and commercial loads, and to accommodate load growth. Typical loads include household lights, radios, televisions, commercial refrigerators, and grain mills. Each system provides 24-hour available, utility-grade, 120-VAC power; IPC's Alliance inverter was specially designed for village power applications. Local labor was used for the foundation construction and wind turbine and PV array erection at both sites. The system at Maria Magdelena utilized a modular, factory-built system that was trucked to the site. The system at Aquas Benditas was site built using local contractors and equipment. Both systems have proven extremely reliable, having been Operated unattended, with virtually 100 % availability since installation. Anemometers were recently installed at the sites so that the system performance data can be analyzed. The analysis will be done collaboratively among IPC, NREL, and the appropriate Mexican agencies. Indonesia experience: IPC has installed two identical systems in 1993 to supply electricity to Julingan and Tanglad, two villages of 200 homes each, on Nusa Penida Island, near Bali, Indonesia. Each system has a rated capacity of 100 kWh/d and is comprised of 9.6-kW PV, one 10-kW wind turbine, a 10-kVA diesel genset; a 2000-Ah battery bank, a 7.7-kVA sine-wave inverter, and a microprocessor controller. An interesting design feature of this installation is the use of two parallel hybrid systems on a single distribution system, thereby demonstrating the feasibility of building up local mini-grids by adding modular hybrid power plants as load demand grows. Another important feature of this installation is the use of remote monitoring and control capability that utilizes a direct link to a low earth-orbit satellite, VITASAT. The VITASAT link permits uploading and downloading system status and performance data, as well as permitting remote diagnostics and control. This first-of-its-kind application of a satellite for remote village electricity monitoring and control was a collaborative effort between IPC and the Volunteers in Technical Assistance (VITA). Currently the systems are operating at about 50 % of their design capacity, thereby providing the potential of doubling the load with no loss in reliability or system efficiency. Nearly 90% of the current electrical energy is supplied by renewable sources. Load growth, primarily through new hook-ups by PLN, the national utility, is anticipated. Currently, IPC is taking its next major step in commercialization of PV/wind hybrid systems by initiating a project to electrify up to 70 villages in the eastern islands of Indonesia. The project will combine the lessons learned to date with a volume-manufactured, standardized system. The next generation system will embody the following improvements: AC-bus, factory assembly and test, transportability, and simplified installation. The AC-bus design allows the diesel to be operated in parallel with the inverter (as compared to the DC-bus design that requires the diesel energy to be stored in the batteries and then inverted to AC). This architecture improves system efficiency by avoiding the diesel rectification, battery run- around losses, and inversion. This system design can meet higher peak loads (both the diesel and the inverter can combine to meet peaks). Additionally, the inverter will be bidirectional and operate as a battery charger, storing excess diesel energy during low to intermediate village loads. The systems will be factory assembled and self- contained to minimize the expense and problems of site- built structures. The systems can be transported in a 6-ton truck and installed in 2 days. Phase 1 of the project will be completed in 1995 and will include the electrification of up to 10 villages; the systems have the following specifications: 110/120/220/240 VAC, 50/60 Hz, single phase; 25-kW nominal peak power; 50- 100-kWh/d energy output; 7.5-kW PV; 10-kW WTG; 25-kVA diesel genset; 625-Ah battery bank; 7.5-kVA, single-phase, bi-directional inverter. Following the successful completion of this initial phase, IPC, in collaboration with the government of Indonesia and technical assistance from NREL, will embark on the replication phase that will include installation of systems to service an additional 60 villages. NEW WORLD POWER CORPORATION (NWPC) New World Power Corporation is utilizing its experience in wind, solar, and hybrid power systems, primarily in remote telecommunications and small isolated power applications, to develop the balance of systems components required to reliably integrate renewables into remote mini-grids. NWPC is in its second year of a 5- year program to develop and commercialize a renewable-based, packaged hybrid-power system. NWPC is currently focusing its product development and initial marketing toward harsh, far northern climates, and in the Latin America/Caribbean region. The core of the prepackaged system is an electronically controlled, renewable energy-based, diesel/battery cycle charging unit. The novelty of this system is the use of a rotary converter, which replaces the need for large-scale power electronic inverters. The combination of an AC alternator and a DC motor/generator inverts the battery- stored and generated DC electricity to AC. The potential benefits in reliability, serviceability, and economics of rotary technology (which has been used for emergency hospitals for years) are the drivers for NWPC to develop larger scale - versions for remote village, mini-grid applications. This development is being cost-shared with Sandia National Laboratory and NREL. The prepackaged system consists of a diesel engine clutch- coupled to a synchronous alternator, which is in turn shaft- coupled to a DC regenerative-drive unit. The DC drive is linked to the battery bank. This architecture allows the load to be supplied either from the diesel or from the battery bank (via the same synchronous alternator). The PLC master-controller monitors the power flows, and - automatically makes judgements from preprogrammed data, or for remote commands, allowing for efficient operation of the power sources. Additional controls are included in the package for AC-output and DC-input supervision/protection, and PV and wind turbine generator control. The system is housed in a prefabricated shelter. The rotary converter can be readily reconfigured to accommodate a variety of village-power electric specifications, including 50/60 Hz, 120/208/240/480 AC, single or three phases. The rotary package has two basic configurations, with or without an integral engine. In most cases, the integral engine will be the preferred configuration . @S a complete power system. However, in those cases that do not require an engine/genset, the rotary package can be provided without it, and the PV and/or wind generator(s) will be interconnected and controlled by the package. Another feature of the package is the ability to operate multiple Packages in parallel, to accommodate load growth. Interconnection of the rotary packages is simpler than the current diesel-genset parallel operation control requirements, not requiring the use of a synchroscope-type controller. The rotary package can be configured to adapt to a number of different architectures, depending on the renewable resources, the load, and relative economics of the generating sources. Typical generating architectures that the rotary package could accommodate include stand-alone PV, PV/engine, PV/wind, PV/wind-engine, and wind/engine. This last architecture is particularly interesting since the NWPC package can integrate AC and DC wind turbines into the village grid. In large village applications, the wind turbines will most likely use induction generators; NWPC’s design provides a stable AC grid without the engine operating (reactive power can be supplied by the engine or the battery bank). NWPC believes this feature is a Significant advantage of this architecture. NWPC's first stage of commercialization focused on systems in the 50-100 kW range. Currently, they are expanding their scope to larger systems in the several hundred kW to multi-megawatt range, using the same principles. These large systems typically do not include batteries. The larger systems employ synchronous alternators/condensers and fast acting "dump loads" for Power and frequency control. With this architecture, loads can be met solely by each power source subsystem or with a combination of any or all of them. The key to grid stability is the synchronous alternator acting as the primary power supplier in all the generation modes, resulting in AC power that is free of harmonic content, supplies reactive power, and absorbs large impulse loads. NWPC has installed its system in southern California for Southern California Edison Company. Additional systems are currently being installed in Alaska, Argentina, and in Para, Brazil. HYBRID SYSTEM R & D AT NREL The U.S. DOE has designated NREL as its lead laboratory for wind technology research and development, including wind-hybrid systems. The objective of the hybrid system R&D activities at NREL is to collaborate with the wind industry in the development of technology, analysis tools, and applications analysis for wind-based hybrid systems in off-grid applications. The major activities for 1995 are described below. Development & Beta-Testing of the Wind/Hybrid Performance Model, "HYBRID2". In 1993, NREL made an assessment of the available tools from the United States and Europe for predicting the long- term performance of hybrid-power systems. The conclusion was that there was no single tool capable of modeling the full range of hybrid-power technologies being considered for village power in the 1990s and beyond. The existing tools especially lacked flexibility in system configuration and dispatch of components. As a result, NREL developed a specification of a model for making comparisons of competing technology and systems options on a “level playing field." Development of this tool, called HYBRID2, by NREL and the University of Massachusetts (UMass) is now underway. It builds on the wind/diesel model, HYBRID1, developed previously by UMass with DOE funding, and expands that model to accommodate the wider array of technologies and system architectures now being considered for hybrid village-power systems. In order to accommodate a variety of potential analysts, UMass will incorporate the analytical software into a user-friendly format, using Microsoft Visual Basic. An initial version of HYBRID2 will be completed late in 1994 and beta-tested early in 1995, both internally and by a group of users outside the lab including private and public analysts. The executable version of the code should be available in mid-1995. Construction & Operation of NREL’s Hybrid Power Test Facility. Because of the need to gather performance data from operating hybrid-power systems, NREL will develop in 1995 a Hybrid-Power Test Facility at the National Wind Technology Center in Golden, Colorado. This facility will test state-of-the-art packaged hybrid power systems developed by the U.S. industry. The facility will include a village load simulator, at least two wind turbines, a photovoltaic array, and a data acquisition system. Repeatable testing will be possible with energy source simulators capable of imitating either wind turbines or PV arrays, either AC or DC connected. i Develop Predictive Tools for Small Wind Turbine Performance. Predicting the performance of small wind turbines is complicated by the fact they typically operate at variable- speed and are used in a variety of applications. The three most common applications are battery-charging (as ina hybrid system configuration), wind/electric (direct connection to an induction motor), and grid-connected through an inverter. Each application imposes a different electrical load on the wind turbine which impacts the performance of the generator and rotor. As a result, the performance of small wind turbines have been observed to vary significantly depending on the application. In 1995, NREL will assemble existing models of wind turbine rotor and generator performance into a unified tool for the prediction of small wind turbine performance under various electric loads. Dynamometer testing of one or more generators will be conducted. This data, along with field data on turbine performance, will be used to verify the overall performance model. This model will subsequently be used to develop guidelines for alternator design and for motor selection (in wind/electric applications). Parametric Experimental Study of Wind/Diesel Configurations. In 1994, the U.S. DOE initiated a 5-year, cost-shared research collaboration with the U.S. Department of - Agriculture (USDA) to investigate a range of wind/diesel system configurations. The goal of this collaboration was to develop systems powered entirely from renewable sources (e.g., wind, solar, and vegetable oils) that would be reliable and cost competitive. The experimental study will focus on performance and stability for various system configurations and will identify necessary controls. This study will be performed in a wind/diesel test facility at the USDA research laboratory at Bushland, Texas. Field Performance Data. In order to improve systems’ field performance and economics, it is essential that data from power systems operating in field applications be acquired and analyzed. To accomplish this, NREL has a two-pronged program: system monitoring protocol and equipment development, and field data acquisition. NREL will develop and test a portable data acquisition system suitable for commissioning and long-term monitoring of hybrid-power systems in remote locations. This will include demonstrating the capability to down-load data sets by phone or by satellite link. Additionally, NREL will engage in a program with industry and in-country institutions to equip existing and newly installed hybrid systems with data acquisition system in order to develop a data bank on system performance under the variety of conditions that exist in the field. It is anticipated that field performance data will be collected and analyzed from hybrid systems in Mexico, Brazil, and Indonesia. While some of the collected data may be industry sensitive (and will be treated accordingly), there will be valuable general information gleaned from such monitoring that can lead to technology improvements and applications developments. Renewables for Sustainable Village Power (RSVP) Initiative. The development of a field performance data bank is an element in NREL's new initiative to address the many issues associated with deploying renewable energy systems in villages in an economically sustainable manner. In addition to supporting technology development appropriate for village-scale systems, RSVP will offer technical assistance to U.S. companies and in-country institutions which are interested in evaluating and deploying renewables. Technical assistance includes training, both through workshops and an on-site visiting professional program, resource assessment, preliminary analysis of alternatives, program/project development, and performance monitoring and evaluation. It is anticipated that RSVP will become a clearing house for experience, technology development, and analysis for both U.S. companies and international institutions involved in village power. CONCLUSIONS The developing world will experience rapid growth in the application of electricity to meet community economic and social needs over the next decade. Because renewable resources are abundant (and varied) around the world, renewable hybrid-energy systems offer reliable, economically competitive, and environmentally friendly power for many currently non-electrified villages throughout the developing world. It will be important that emerging hybrid technologies and system architectures be designed such that they consider the communities’ needs, including loads, system reliability, ability to pay, economic development opportunities/limitations, and social needs. Although there are many places in the developing world where the current hybrid systems are economically competitive today, it is also important to make improvements in the systems and technologies so that they may be competitive in a larger set of rural situations. The U.S. industry, with assistance from NREL, is on the way to demonstrating the economic and environmental sustainability of alternate hybrid-system configurations and control strategies. Sino/American Cooperation for Rural Electrification in China William L. Wallace and Y. Simon Tsuo National Renewable Energy Laboratory, 1617 Cole Blvd., Golden, Colorado 80401, USA Abstract: Rapid growth in economic development, coupled with the absence of an electric grid in large areas of the rural countryside, have created a need for new energy sources both in urban centers and rural areas in China. There is a very large need for new sources of energy for rural electrification in China as represented by 120 million people in remote regions who do not have access to an electric grid and by over 300 coastal islands in China that are unelectrified. In heavily populated regions in China where there is an electric grid, there are still severe shortages of electric power and limited access to the grid by village populations. In order to meet energy demands in rural China, renewable energy in the form of solar, wind, and biomass resources are being utilized as a cost effective alternative to grid extension and use of diesel and gasoline generators. An Energy Efficiency and Renewable Energy Protocol Agreement was signed by the U.S. Department of Energy with the Chinese State Science and Technology Commission in Beijing in February, 1995. Under this agreement, projects using photovoltaics for rural electrification are being conducted in Gansu Province in western China and Inner Mongolia in northern China, providing the basis for much wider deployment and use of photovoltaics for meeting the growing rural energy demands of China. BACKGROUND China has an abundance of renewable-energy resources in the form of solar, wind, biomass, hydro, geothermal, and ocean tidal resources. China is also already one of the world’s largest users of renewables, primarily in the form of hydropower and biomass energy, and the development of large wind farms for grid power and the use of solar and wind energy for rural energy development has also been given a high priority (1). The solar and wind resources of China are enormous. The potential of wind energy alone has been estimated at about 240 GW, which is approximately 10% of the estimated total wind resources in China. Solar and wind resources are also strategically located in areas of greatest need in terms of rural energy development. More than 120 million rural people, mainly in northern and western China, and more than 300 coastal islands currently have no access to the electric power grid and no near-term prospects for grid connection. There is an excellent match of solar and wind resources to meet these rural electrification needs. For example, the richest solar energy resources in China are located in Inner Mongolia, the Qinghai-Tibet Plateau region, Ningxia, and Gansu. These are regions where the population density is low, and it is often too costly or impractical for grid extension to reach many of the CP394, NREL/SNL Photovoltaics Program Review, edited by C. Edwin Witt, M. Al-Jassim, and J. M. Gee. AIP Press, New York © 1997 529 potential users. There are also good solar resources in the coastal region of China. The regions of China which have good solar resources also tend to overlap with regions of high wind availability. In February, 1995, the U.S. Department of Energy (DOE) signed the Energy Efficiency and Renewable Energy Protocol Agreement with the State Science and Technology Commission in Beijing. This Protocol established a broad umbrella for Sino/American cooperation to develop renewable energy technologies and markets in China. Under this Protocol, an annex agreement was signed with the Chinese Ministry of Agriculture (MOA) in June, 1995 establishing joint U.S./China cooperation for rural energy development. The cooperation with the MOA focuses on the use of photovoltaic and wind technologies for remote rural household and village electrification, and the development of village-scale biogasification systems for electric generation and thermal applications. STATUS OF PV DEVELOPMENT IN CHINA The development of terrestrial applications of PV in China was initiated more than 20 years ago, in 1974, with the introduction of small systems for remote applications. Commercial production of terrestrial solar cells began in 1976. The current installed capacity of PV systems in China is small, but is growing rapidly. In 1993, the installed capacity of PV systems was about 3.8 MW,; in 1994, the installed capacity was about 5.1 MW,; and in 1995, the installed capacity was about 6.6 MW,. Some 65% of this capacity is power for telecommunications applications (2). About 1.1 MW, of the installed PV generating capacity, about 16%, is installed in remote household and village power applications, for which opportunities exist throughout China. The remainder is installed in remote agricultural and industrial applications. As of 1995, there were more than 32,000 rural household systems installed in China. There are 10,000 household PV systems installed in Qinghai alone, with the remainder distributed in Inner Mongolia, Tibet, Xinjiang, and Gansu. Household systems generally range from 20 to 80 W and are used for lighting and small consumer electronics. Larger hybrid systems are being developed in Inner Mongolia in the 400 Watt to 500 Watt range, that consist of a 300 Watt wind energy generator combined with PV capacity. Such systems will support additional loads, such as a small freezer and washing machine. The potential market is very large for increased use of PV solar home systems in China’s northwest and western provinces and autonomous regions, where a minimum of 2 million unelectrified households have been identified as a near term remote market by local agencies (3). There are six stand-alone PV power stations in China in the range of 7 kW to 25 kW, five of which are in Tibet and one in Gansu. A 30 kW, stand-alone power station is under construction in Tibet. China also has experience with wind/PV hybrid systems in the range of 200 W to 35 kW. In Inner Mongolia there are also at least twelve village power hybrid systems based on wind and/or PV systems containing battery storage, and some containing back-up diesel generators. There is no grid-connected experience with PV in China to date. However, the quality of grid-connected electricity is a pervasive problem, and the use of PV for grid-support, uninterruptible power supplies, and peak-shaving applications in the potential urban market is of great interest. The total manufacturing capacity for PV modules in China is about 5.5 MW, in six imported production lines. Most PV module production in China is based on single-crystal silicon technology, with some amorphous silicon production. However, most manufacturing facilities are not operating at full capacity because of a combination of the following: i) outdated equipment since all of China’s PV cell and module production lines were imported before 1991, ii) high manufacturing costs due to lack of automation and small-scale production, and iii) a shortage of silicon wafers. The current PV market is also limited, but is growing at about 30% per year. Presently, only six organizations in China have an annual production level of PV modules of more than 200 kW,, including, the Qinhuangdao Huamei Photovoltaics Electronics Corporation Ltd., Yunnan Semiconductor Device Factory, Kaifeng Solar Cell Factory, Ningbo Solar Power Supply Factory, Shenzhen-Y.K. Solar Energy Company Ltd., and Harbin- Chronar Solar Energy Electricity Corporation. Chinese-made modules have a significant price advantage over American- made modules when the module size is less than 50 W, because of lower labor costs, use of small diameter 3 inch ingot silicon crystal growth, and a combined 30% import tariff and value-added tax for imported modules. When the module size is 50 W, or greater, U.S. manufactured modules have a price advantage. Presently, Chinese module production cannot keep up with demand, and the average sales price has steadily increased during the last 2 years. RURAL ELECTRIFICATION IN WESTERN CHINA High cost, lack of a marketing and distribution infrastructure, and variable quality of modules and balance-of-system components are barriers to the widespread deployment of photovoltaics in China. Several cooperative projects are being conducted in China to address these problems. Under the Energy Efficiency and Renewable Energy Protocol agreement, NREL is working with the MOA and the State Council Office for Poverty Alleviation and Rural Development in Beijing to develop a cost-shared program to provide household PV electricity systems to rural families in western China. This solar home System project is being conducted with the Solar Electric Light Fund (SELF), a non profit organization in Washington D.C., and the Gansu Solar Electric Light Fund (GSELF) a non profit organization in Lanzhou in the province of Gansu in western China. The project in Gansu is designed to expand and strengthen the distribution and post-sales support infrastructure previously established in Gansu Province to promote the commercialization of PV for remote solar home systems. This infrastructure involves a partnership with several organizations, including: i) the tural energy office network supported by the MOA throughout China at the county and township level, ii) provincial government agencies associated with the poverty alleviation program in China, and iii) local PV system integrators operating in the province of Gansu. Rural energy offices exist at the township, district, and county levels and offices are found in 1,800 of the 2,300 total counties in China. The rural energy office network can help facilitate rural electrification projects throughout China, providing a widespread infrastructure for technology deployment. The use of revolving funds for credit and cash sales for financing the purchase of household systems to expand the market for PV is a critical component of the project. The total value of Gansu solar home system project is $440,000, cost shared 50/50 by the U.S. DOE and Chinese partners. The Chinese partners in the project include the Gansu Provincial Poverty Alleviation and Rural Development Office (54%), the Gansu Planning Commission (18%), the Gansu State and Economic Trade Commission (18%), and GSELF (10%). The project is managed by the Solar Electric Light Fund in the United States and by the Gansu Solar Electric Light Fund in China. GSELF was established in 1993 for the specific purpose of promoting solar home systems in western China. With previous funding from the United Nations Development Program and the Rockefeller Foundation in the United States, SELF and GSELF had installed over 400 solar home systems in Gansu prior to the DOE project. The current DOE project is based primarily on cash sales, with a 80% overall cost recovery for the project based on an average selling price for local vendors of solar home systems. A revolving-fund account has been set up at the Lanzhou Branch of the China Construction Bank for purchasing additional systems. During the project cycle of 18 months (April 30, 1996 to October 31, 1997), at least 600 solar home systems will be installed. These systems are based on nominal 20 Watt solar home lighting systems that include a 20 Watt PV module, a 12 volt/38 amp-hour battery, a charge controller, and two 8 Watt fluorescent lights. Several 50 Watt school systems are also being installed as part of a renewable energy education program in Gansu. PV panels and sealed lead-acid batteries are being purchased from the United States and other balance-of-system components (including charge controllers, compact fluorescent lights, and wiring) are being provided by three local system integrators: the Gansu PV Company, the Gansu Zi Neng Automation Engineering Company, and the Zhong Xing Electronic Instruments Factory. Some complete systems are also being supplied by the United States. For the project, a set of test procedures have been established for certification of system components. The training of rural technicians and management staff of local service networks is included in the project. PV CASE STUDIES IN INNER MONGOLIA In collaboration with the Chinese Academy of Sciences (CAS) in Beijing and the Center for Energy and Environmental Policy (CEEP) at the University 532 of Delaware, NREL is also working with several agencies of the Inner Mongolian government to develop PV/wind hybrid projects in Inner Mongolia. The government of Inner Mongolia is committed to a village electrification program over the next five years that will, in the near term, electrify 38 villages and township centers by the end of 1997 using renewable energy hybrid village power systems. Inner Mongolia also has a well developed distribution infrastructure at the district, county, and township level consisting of new energy service stations that deploy renewable energy systems for remote households. To date, over 118,000 small wind generators and 3,800 PV systems have been installed for remote household applications using this network. By the end of 2000, Inner Mongolia has a goal of installing approximately another 80,000 household systems using a combination of wind, PV, and PV/wind hybrid systems. In 1995 and 1996, the CAS, CEEP, and NREL performed a rural electrification options analysis for household rural electrification examining renewable energy and conventional fossil energy (based on diesel and gas gen- sets) case studies (4). Detailed case study data was collected from four counties in central and northern Inner Mongolia, including wind and solar resource data and performance/load data from 10 PV systems, 22 wind systems, 6 PV/wind hybrid systems, and 3 wind/gasoline gen-set systems which were in the 22 Watt to 600 Watt size range. Four sizes of gasoline gen-sets in the size range of 450 Watts to 1 kW were examined for comparison. Data was also collected for a wind/diesel village power system. All systems include battery storage. Levelized cost analyses have been performed using the data collected for the household systems. Analyses indicated that for stand-alone electrical generation, wind generators are the least cost option for household electricity at $0.21 to $0.38 per kWh for the four counties. Small wind generators in the 100 Watt, 200 Watt, and 300 Watt size range are manufactured locally in Inner Mongolia for the household market. Small PV/wind hybrid systems were in the range of $0.30 to $0.55 per kWh. Small PV systems alone were in the range of $0.68 to $0.71 per kWh. Levelized costs of the four gasoline gen-sets for household use were in the range of $0.70 to $1.10 per kWh as a function of how the gen-sets were utilized. While wind energy tends to be the lowest cost option for rural applications in the case studies examined, the seasonal variability of wind and solar resources makes hybrid PV/wind systems with battery storage for household and village Power systems an attractive option in areas where there is a seasonal complementarity between solar and wind resources. This complementarity of Tesources exists in Inner Mongolia and may be important in other provinces of China as well. Current cooperation with the Inner Mongolia government involves Consultation on the design of hybrid systems optimized for local wind and solar Tesource compositions at the county level. ACKNOWLEDGEMENT This work was supported by the U.S. Department of Energy under contract number DE-AC36-83CH10093 to the National Renewable Energy REFERENCES (1) Q. Zheng, Solar Energy in China, L. Yan and L. Kong, eds., Beijing, China, April, 1995, pp. 38-52. (2) Wang Sicheng, Solar Energy in China, L. Yan and L. Kong, eds., Beijing, China, April, 1995, pp. 105-111, updated with private communications. (3) A. Cabraal, et al., "China Renewable Energy for Electric Power," September, 1996, World Bank Report No. 15592-CHA. (4) J. Byme, et. al., "Levelized Cost Analyses of Small-Scale, Off-Grid Photovoltaic, Wind, and PV-Wind Hybrid Systems for Inner Mongolia, China," March 1996, Center for Energy and Environmental Policy, University of Delaware, Newark, Delaware. Paper presented at the 1996 Annual Conference of the American Solar Energy Society Asheville, North Carolina April 13-18, 1996 AMERICAN INDIAN RESERVATIONS: A SHOWPLACE FOR RENEWABLE ENERGY Stephen L. Sargent U.S. Department of Energy Denver Regional Support Office 1617 Cole Boulevard Golden, Colorado 80401 Ss CT The Indian Energy Resource Development Program, authorized by Title XXVI of the 1992 Energy Policy Act, provides funding to American Indian tribes to develop Indian renewable energy and other energy resources. In fiscal years 1994 and 1995, 35 grants totalling $6.5 million were awarded to 29 tribes and Alaskan native corporations in 13 states. The projects cover the development range from feasibility studies to purchase and installation of equipment for commercial projects. Technologies include photovoltaics, biomass, wind, building energy efficiency, hydroelectricity, integrated resource planning, coal-fired cogeneration, and multi-sector natural gas. The Title XX VI program provides an important opportunity for assessing the technical and economic feasibility of renewable energy on Indian lands, and also for demonstrating DOE-developed technologies in real-life settings. 1. INTRODUCTION Title XXVI of the Energy Policy Act of 1992, entitled "Indian Energy Resources", established a program for development of energy resources on Indian reservations. The Title is aimed at promoting tribal energy self- sufficiency and fostering employment and economic development on America's Indian reservations. Two sections are of primary interest. Section 2603 promotes the development of a vertically integrated energy industry on Indian reservations, and includes renewables, fossil energy, Ernest J. Chabot U.S. Department of Energy Office of Technical and Financial Assistance 1000 Independence Ave. Washington, DC 20585 and cogeneration. Section 2606 establishes a financial assistance program for tribes to develop energy efficiency and renewable energy projects on reservations. In 1994, the program's first fiscal year of authorization, it received an appropriation of $5 million, and was assigned to the DOE Office of Technical and Financial Assistance for program management, and to the Denver Regional Support Office (DRSO) for field implementation. A competitive solicitation by DRSO resulted in 17 projects, of which two were under Section 2603 and 15 were under Section 2606. In FY 1995, the program had available approximately $2.5 million in new and carryover funding, with Congressional language limiting it to Section 2606. A second DRSO competitive solicitation resulted in 18 funded projects. In FY 1996, a total of $8.6 million was appropriated, but all Congressionally earmarked for 3 tribes; therefore, no general proposal solicitation was undertaken. This paper describes the projects funded by the FY 1994 and 1995 solicitations. 2. PHOTOVOLTAIC PROJECTS PV water pumping in remote areas is being used commercially by two tribes. The Ute Mountain Ute tribe in southwestern Colorado brings in considerable income from its cattle-ranching operation, with a herd of nearly 2000 head . Since annual rainfall is only 10-15 inches and the only stream is dry part of the year, the tribe must rely on groundwater for cattle watering. Traditional wind pumpers have been used but are not satisfactory due to seasonally inadequate winds and high maintenance costs (est. at $1200 per well per year). Power line extensions by the local electric cooperative would cost some $4400/well-year The tribe is therefore replacing about 35 wind pumpers with PV pumps, which have an estimated annual maintenance cost of $500. In this project, the performance of several selected pumping installations will be monitored for a year. A typical installation is shown in Fig. 1. Fig. 1. PV water pump for stock watering on the Ute Mountain Ute reservation The Hualapai tribe of northwestern Arizona suffers from nearly 70% unemployment and has limited income sources A tourist facility on the Grand Canyon rim currently draws some 500 day visitors but lack of water limits expansion potential. DOE is co-funding the purchase and installation of a PV system to pump water 26 miles from a well to the facility. System data will be collected for one tourist season after installation. The tribe plans to expand the Grand Canyon West facility to include a hotel and casino, which will require a water distribution system and wastewater management system. The expanded facility is expected to provide substantial employment opportunities for the tribe A PV pumping station is shown in Figure 2. ns Reins. son aah a Fig. 2. PV water pumping station on the Hualapai reservation. PV water pumping for human consumption is also the subject of a feasibility study being conducted by the Zuni Pueblo of northwestem New Mexico. The current supply is from wells with an insufficient output of water which tastes bad and is contaminated with sulfates and uranium Several wells at Ojo Caliente, 13 miles south of the village, produce an adequate supply of clean water, but there is no electricity available there for pumping. A line extension would cost an estimated $700,000. The feasibility study is comparing the cost of a PV pumping system, possibly with diesel backup, to the line extension. The Laguna Pueblo west of Albuquerque has a plant that assembles electronic components for the Defense Department. Laguna Industries, Inc., in partnership with Spire Corporation, is studying the feasibility of converting part of the plant to assembly of PV modules. The Nambe Pueblo is examining the technical and economic feasibility of constructing and operating a 1-MW PV power system on Pueblo land north of Santa Fe. A key factor is the ability of the tribe to secure firm purchase agreements from local utilities. 3. BIOMASS PROJECTS DOE funded a feasibility analysis of a co-generation system at the White Mountain Apache tribe's Fort Apache Timber Company lumber mill in northeastern Arizona. A previous resource assessment, funded by the Westen Regional Biomass Energy Program, had confirmed that a plant up to 37 MW could be fueled from lumber mill and logging waste. The economic feasibility study, conducted (c) The Atka Native Village is located on the island of Atka in the Aleutian chain, some 1250 miles southwest of Anchorage. Commercial fishing provides the main income source, and a larger freezer is needed to expand the industry. This will put a further strain on the village's already overburdened diesel generation capacity, which produces electricity at 38¢/kwh accompanied by local air pollution. The DOE-funded feasibility study for a 40-270 kw hydro system is examining the area topography, routes for the penstock and transmission line, permitting requirements, equipment costs, and overall power plant economics. The only “lower 48" hydro project is being conducted by the Jicarilla Apache tribe of northern New Mexico. The Bureau of Reclamation's Heron Dam, part of the San Juan- Chama water project, is located on reservation land and offers the potential for up to 16 MW of hydroelectric generation. The tribe is studying the technical and economic feasibility of such a plant, including preliminary plant design, transmission and interconnect requirements, and compatibility with the tribe's long-term energy and economic development objectives. 7. INTEGRATED RESOURCE PLANNING PROJECTS In the center of South Dakota, the Lower Brule Sioux reservation has significant natural resources, including: A 250,000-acre land base A lake with surface area of 80 mi? Artesian wells of geothermal water Average wind speeds of 10-15 mph, and + Hydropower potential. The tribe aims to become as energy self-sufficient as possible, in ways that protect the environment. DOE is funding their effort to develop an Integrated Resource Plan that will tie together energy consumption and production in an optimum manner. Specific aspects to be investigated include: current energy usage by sector, a farm energy system (ethanol and methane); a community energy system (batteries and fuel cells); photovoltaic, hydro, geothermal, and wind potential; and potential for demand-side management. In addition, the tribe is investigating the possibility of establishing its own utility authority, in part to qualify for an allocation of WAPA hydropower The Koniag Native Corporation, encompassing an area around the Kodiak Archipelago of the Alaskan Peninsula, is engaged in a five-year program to upgrade the residential and commercial energy infrastructure for its members, as well as to safeguard the environment. A prime motivating factor is diesel-gen lectricity cost, which ranges from 30 ¢ - Diesel fuel is also the main energy source lomestic water heating, at costs ranging from $1 to $3 per gallon, significantly higher than in the lower 48. DOE is co-funding Phase I of the program, which encompasses development of a baseline energy analysis and profile; feasibility and design studies for 3-5 priority villages; drafting tailored model energy contracts, analysis of renewable energy potential; and technical and business training for village members, to enable them to manage subsequent phases of the energy upgrade program. In the second phase, the Corporation will implement energy upgrade projects at the targeted priority villages, and in the third, the program will be replicated at other villages in the Corporation's area. Straddling the border between North and South Dakota, the Standing Rock Sioux reservation encompasses some 3600 square miles and, like many Indian reservations, has high rates of unemployment and poverty. DOE is co-funding the development a tribal Integrated Resource Plan in conjunction with the Western Area Power Administration and the XENERGY company, a subcontractor. The first project phase is examining current (baseline) energy usage and resources; the second will project future demand; and the third phase will evaluate potential supply- and demand- side resources, including renewables, and integrate this information into the final IRP. 8. VERTICAL INTEGRATION PROJECTS Two projects were funded in FY 1994 under Section 2603 of the Energy Policy Act: The Crow tribe of southeast Montana owns the rights to a large.amount of coal which is currently mined by an outside company under a royalty agreement. The tribe, acting through its wholly-owned Crow Energy Corporation, is performing a feasibility study of a 260 MW mine-mouth co-generation plant, the waste heat from which could be used in an industrial plant. The targeted application is a fuel ethanol manufacturing facility, which could provide a market for locally-produced grain crops as well as employment for tribal members. The preliminary project report concludes that the powerplant could produce electricity in 2002 at a busbar cost of about 3.25¢/kwh, which will be between the current short-term spot market price of 20-25 mills and the average local utility rate of 40- 50 mills. This price is expected to be competitive in the local market. Natural gas is the energy source for a planned multi-faceted vertical integration project of the Colville Confederated Tribes of eastem Washington, which will include: + A gas pipeline from British Columbia + — A local gas distribution company + A combustion-turbine-based cogeneration plant of up to 450 MW + Avsteam sales company, and + An industrial park utilizing local raw materials. This is a 10-year project which the tribes initiated in 1992, using both tribal and non-tribal funds. The DOE grant is funding the feasibility study phase, which also includes marketing and distribution investigations. The overall project cost is estimated to approach $500 million. 9. CONCLUSION The Title XX VI program provides an important opportunity for assessing the technical and economic feasibility of renewable energy on Indian lands, and also for demonstrating DOE-developed technologies in real-life settings. ACKNOWLEDGEMENTS The authors thank the{Indian Energy Resource Development Program grantees for their contributions to this paper. for the tribe by the NEOS Corporation, examined a number of cogeneration options and predicted energy costs ranging between 4.4 and 9.3¢/kwh. Waste steam would be used to power the plant's lumber kilns. The tribe is considering the construction of a pulp mill, which would justify a 15-20 MW plant; otherwise, a 2.4 MW facility would be adequate. Establishment of a tribally-owned utility would be an advantage because (1) it would permit wheeling to non- tribal customers on the reservation, and (2) it would make the tribe eligible for an allocation of inexpensive hydropower from the Western Area Power Administration. A similar feasibility study is being conducted for a 35-MW cogeneration plant by the Keweenaw tribe of Michigan's upper peninsula. The study is considering the relevant aspects of fuel availability, power sales agreements, transmission requirements, and environmental studies. The Nez Perce tribe of western Idaho is constructing a pilot plant to produce biodiesel fuel from vegetable oil and waste animal fat. The feedstocks are reacted with alcohol in the presence of a catalyst to produce the fuel. The plant will be located on the reservation and will produce up to 1000 liters per batch (one batch per week), which will be tested in tribally-owned vehicles. 4. WIND PROJECTS Northwestern Montana, home of the Blackfeet tribe, has a very substantial wind resource. The Northwest Power Planning Council estimated in 1991 that an area of 3,250 square miles on the reservation could support up to 15,000 MW of generation if transmission constraints could be overcome. (The Bonneville Power Administration identified 100-140 MW of transmission capacity in the area). Wind measurements have been taken periodically since 1980, which data are being consolidated in the tribe's 1994 project. Several locations showed long-term average wind speeds between 17 and 18 mph at 10m height. As expected, sites on ridgelines had significantly higher speeds. The 1995 Blackfeet project involves the installation and operation of a utility-grade wind turbine at a site near the main town of Browning. The project is being conducted in concert with the Zond Corporation, which will supply the turbine, and with Glacier Electric Cooperative, which will supply an interconnection with their grid. Turbine performance will be monitored for a minimum of one year. Together, the two Blackfeet projects should provide a sound basis for a decision on proceeding to development of a commercial wind farm. ‘ Demonstration turbines will also -be erected and monitored as part of projects on the reservations of the Devil's Lake Sioux and Turtle Mountain Chippewa tribes in northern North Dakota. Both are in high-wind areas with significant potential for commercial wind farm development. The Fort Peck Assiniboine and Sioux tribes in northeastern Montana are conducting a wind resource assessment at five sites on their reservation, in conjunction with the Bechtel Corp. Preliminary data conducted in mid- 1995 showed average wind speeds between 16.3 and 16.8 mph at four of the sites. The Western Area Power Administration performed a transmission study which indicated that additional transmission capacity will need to be constructed to carry the output of a commercial-scale wind farm. A similar wind resource assessment is getting started at the Jemez Pueblo in northern New Mexico. The Manzanita Band of Mission Indians in southern California is pursuing wind development by establishing a Wind Energy Project Office. This office will examine environmental and legal issues, perform market research, identify additional lands for possible acquisition, and examine wind energy projects by other tribes that can serve as models. In addition, the office will put on workshops and other educational activities for Manzanita members, including touring windfarms in nearby San Gorgonio Pass. 5. BUILDINGS PROJECTS An influx of tribal members back to the reservation has motivated the Oneida Tribe, near Green Bay, Wisconsin, to undertake an ambitious six-year plan to construct 222 new housing units and rehabilitate another 345. Thirty five of the new units will be energy "Dream Homes", constructed to the Canadian "R-2000" superinsulation standards, and including such features as: (1) structure orientation to take advantage of passive solar heating, earth berming, summer shading, and wind breaks; (2) R-25 insulation in walls, R- 54 in attics, R-20 in foundations, and R-3 windows, (3) air- to-air heat exchangers; and (4) low-wattage fluorescent fixtures. The 1994 Title XXVI grant is funding a portion of the cost to install these features in the 35 "Dream Homes", as well as to purchase and install one active solar hot water system as a prototype unit. Preliminary utility data showed an average heating cost, using natural gas, of $45 per house for December 1995, well below the cost for houses with conventional energy features. An active solar water heating system is part of the equipment being purchased by the Hoopa Valley tribe of northern California with their 1994 grant. The tribe is converting their community pool to year-round operation by covering it with an inflatable fabric dome, heating the water with the solar system and a new high-efficiency gas backup heater, and upgrading the old pump/filter system. Under a 1995 grant, the tribe is performing an extensive energy efficiency upgrade to a 3700 ft? commercial building which they are converting into a youth center. The ceiling will have R-38 insulation and the walls R-22, both incorporating "Reflectix", a commercial multi-layer insulating material with reflective foil on both sides and two layers of bubblepack. A zoned high-efficiency heating/cooling system will be installed, along with low-wattage fluorescent lighting fixtures and occupancy sensors. The new energy system is expected to reduce the building utility bill by 32%. The Mohegan tribe of Connecticut obtained title to a former DOE facility, used to assemble nuclear submarine engines, and is converting it into a tourist destination resort. The tribe is using its Title XX VI funding to develop an integrated energy management plan for the facility, in order to minimize energy costs and mitigate environmental impacts. Energy efficiency options being considered include: high efficiency glazing, lighting, and business equipment; added thermal insulation; window films; co- generation; and occupancy sensors. Renewable options include: solar hot water, ground-source heat pumps; daylighting; photovoltaics for on-site electricity such as parking lot lighting; wind generation; fuel cells; and alternative-fueled shuttle vehicles. A desire to combine traditional tribal architecture with contemporary energy efficiency features led the 750-year- old Picuris Pueblo of northern New Mexico to undertake an energy study for their new community center building. A HUD grant is funding the basic building and the Title XX VI grant is paying for an energy study and selected energy- saving hardware. The project's first phase of 10,000 ft? will contain a multi-purpose gymnasium and associated facilities. Phase II will increase the facility to 19,000 ft? and add space for daycare, classrooms, arts and crafts shop, and administrative offices. The basically round building will obtain passive heating through a long south facade, and an 80 x 4 foot clerestory window will supply daylighting for the gym and locker room. This will be supplemented by dimmable fluorescent lighting controlled by a light sensor. Current plans call for a passive solar hot water system using two 40-gallon tanks covered with a selective coating mounted in a clerestory space, to function as a pre-heater for the gas hot water heater. Additional features to be studied include: (1) solar hot water system with heat exchange in the slab; (2) ventilation heat recovery; (3) compact fluorescent lights; (4) increased insulation in ceiling, walls and foundation; (5) low-emittance window coatings; (6) occupancy sensor, timers, and light level management. The tribe plans to use locally-manufactured adobe for the structure as much as possible, in order to provide employment for tribal members. 6. HYDROELECTRIC PROJECTS Six hydroelectric projects are supported by the Title XX VI program, five of them in Alaska. The Agdaagux tribe, located in the town of King Cove, near the western end of the Alaska peninsula, received DOE funding to partially finance their 800-kw run-of-river generation and distribution system, which became operational in December 1994, The system includes a 9000-Ib flywheel for stability (since it is not grid-connected), 6000 ft of buried penstock, five miles of buried cable, and a remote control and data system. The plant produces electricity for the town's 700 inhabitants and fish processing plant more cheaply than the old diesel system, and without the local pollution from burning up to 400 gallons of diesel fuel per day. The Native Village of Chignik Lagoon, on the tip of the Alaska peninsula, has suffered for many years from the lack of a village electrical system. All residents rely on personal diesel generators, which burn fuel costing $1.35/gallon and which must be transported at great personal and environmental risk from the depot to the village aboard small fishing vessels. The lack of a central power system has disqualified the Village from HUD housing assistance. The Village received a 1994 Title XXVI grant for a feasibility study of a run-of-river 200 kw hydroelectric plant located on a nearby creek. A follow-up 1995 grant is providing funds for purchase of materials for an underground distribution system to all village buildings. Initially, power will be provided from a new central diesel generating system funded by the state of Alaska; when the hydro plant is constructed, the diesel plant will function as a backup. Three other Alaska hydro feasibility studies are currently underway: (a) The Haida Corporation is completing a feasibility study, funded by 1994 and 1995 grants, of a 1.5 MW plant on Prince of Wales Island in the southeastern part of the state. Hydro generators could be placed on creeks flowing between an upper lake and a lower lake, and between the lower lake and the ocean. The plant is projected to produce power at 11¢/kwh versus 18¢ from the current diesel plant. The project includes preparation of a license application to the Federal Energy Regulatory Commission. (b) The Cape Fox Corporation also received 1994 and 1995 grants for a feasibility study of a 9.6 MW hydroelectric plant based on an innovative approach known as a "lake tap", in which water is withdrawn directly from the bottom of a lake and transported through an underground pipe directly to a turbine. The project includes NEPA review and FERC license preparation. “TABLE OF CONTENTS ACKNOWLEDGMENTS PREFACE EXECUTIVE SUMMARY I. INTRODUCTION Il. THE ELECTRIC UTILITY INDUSTRY AND TRIBAL RENEWABLE ENERGY RESOURCE DEVELOPMENT A. Electric Utility Industry Restructuring 1. Federal Initiatives: The FERC’s Open Access Rule 2. State Initiatives: The Prospect of Retail Wheeling 3. Regional Developments: Policy Initiatives of Power Marketing Administrations. 4. Implications for Tribes of Industry Restructuring and Policy Initiatives Environmental Factors Renewable Energy Technologies ea) lM. TRIBAL RESOURCES Natural Energy Resources Political Resources: Tribes as Independent, Sovereign Entities Legal and Institutional Resources Environmental Ethics Financial Resources MOOS > Conventional Financial Mechanisms for Financing Project Development: Bond Issuance Trust Status and Sovereign Immunity Tax Incentives Federal Grant Programs: Title 26 Other Tribal Resources that Can be Leveraged for Financing Purposes COs IV. TRIBAL NEEDS Economic Development and Job Creation Electric Service Needs Technical and Business Training Financial Needs Energy Resource Planning and Market Research mMOOW> V. CONCLUSIONS AND IMPLEMENTATION STRATEGIES APPENDIX A: Participants in the Task Force on Developing Renewable Energy on Tribal Lands APPENDIX B: Global Climate Change APPENDIX C: Direct Solar Radiation on Native American Lands APPENDIX D: Wind Energy on Native American Lands APPENDIX E: Biomass Energy on Native American Lands APPENDIX F: Geothermal Energy on Native American Lands ii ili DAP RPRWNNN co 10 11 11 11 12 12 13 13 14 14 14 15 15 15 16 16 ACKNOWLEDGMENTS This paper would not have been possible without the generous contribution of the task force on Developing Renewable Energy in Indian Country, organized and facilitated by the Center for Resource Management. The mission of the task force is to encourage development of renewable energy on Indian lands consistent with tribal culture and goals. Members of the task force represent tribal organizations, private industry, government agencies, academic institutions and non-governmental organizations. Task force members have made significant contributions to the conceptualization and writing of this paper. Special thanks are owed to Harris Arthur, Navajo Nation; Rob Bakondy, Enron; Sidney Dietz, University of California at Berkeley; Zurreti Goosby, Yurok Tribe; Steve Grey, Lawrence Livermore Laboratory; Lori Jablonski, Coalition for Energy Efficiency and Renewable Technologies; Connie Lausten, Bechtel Group, Inc.; Vernon Masayesva, Hopi Tribe/University of Arizona; Brian Parry, Western Area Power Administration; Chet Pino, Laguna Industries, Inc.; Ann Button and Buffy Naake, Center for Applied Research; Wyatt Rogers, III Sigma Co.; Steve Sargent, USDOE; Jesse Smith, Seattle Northwest Securities Corp.; Jim Williamson, Heritage Technologies /Council of Energy Resource Tribes; and Paul Parker and Nancy Nelson, Center for Resource Management. PREFACE Crossing the Threshold The "threshold" is the point above which something will happen and below which it will not. In chemistry for example, the threshold is crossed when, after successive levels of heat have been applied, water starts to boil. In ordinary experience the threshold is crossed when "everything comes together," like when a product roles off the production line for the first time, or an event alters one's life forever. The contributors to the Center for Resource Management White Paper believe that the renewable energy industry is about to cross a threshold. The White Paper in fact, offers a good deal of evidence why a "threshold experience" in a renewable energy development is imminent. Indeed, the U.S. Department of Energy, in partnership with the energy producers, equipment manufacturers, other governmental entities and utilities, has shown convincingly that environmental benign renewable energy technology has a legitimate and important role in supplying the Nation's energy needs. In the words of DOE Assistant Secretary Christine Ervine: "By leveraging federal resources with market players, and in partnership with the States and other public sector intermediaries, [DOE] will provide the leadership needed to achieve the following major objectives: By 2000, increase the market penetration of renewable generation technologies(wind, biomass, solar thermal electric, geothermal, photovoltaic) to produce 20,000 megawatts of electricity generation capacity... By year 2005, establish the U.S. as a leader in deploying energy efficiency and renewable energy technologies and services throughout the world.” One of the most compelling reasons for a bullish outlook on renewables is that an important, new constituency has joined the parade. Indian tribes have discovered, or more correctly, rediscovered the promise and potential of renewable energy. Reservations are in fact, poised to become the Nation's show- place for renewable energy development. They are not only situated in the most concentrated renewable resource zones (as the White Paper shows), but they also represent new sources of aggregate demand. Reservations offer logical sites for bulk generation facilities, logical settings for remote applications, logical settings for distributed generation and logical settings for new transmission interties. Reservations are, in short, the vital link that can "bring renewables to market." Tribal governments are also well positioned politically to play an aggressive role in the Country's renewable future. Their sovereign status makes tribes logical players in the new "restructured" electric utility industry. And we should not forget that many tribal governments have a wealth of experience with conventional energy development. From 1937 to 1995 Indian reservations were the source of nearly $18 billion in coal sales, $5 billion in gas sales, $9.8 billion in oil sales, and $2.5 billion in sales of other energy sources. The total value of energy produced on Indian reservations since 1937 now exceeds $25.5 billion! Finally, the White Paper discusses the important distinction between the terminal nature of this conven- tional energy production and the sustainable nature of renewable energy production. The benefits of sustainable energy development will only grow over time. For tribes, it is an opportunity too tangible to pass up; and reservations can be the catalyst for industry, the U.S. Department of Energy and state and local governments to cross the threshold to America's renewable energy future. —Vernon Masayesva Hopi Tribe ti IN EXECUTIVE SUMMARY The unique resources and lands of American Indian tfibes | are poised to become the Nation’s showplace for renewable energy development. Indian lands have abundant solar, wind, biomass, and geothermal resources and provide attractive locations for generation and transmission faciliti Due to the unique political and legal status of Indian they are well positioned to be significant players in the new restructured electric utility industry and to draw on their special political, institutional, and financial resources to meet internal needs for rural electrification and contribute to the Nation’s renewable energy supply. = The paper is a collaborative effort of the Task Force on Developing Renewable Energy on Indian Lands whose members include representatives from various tribes, private companies, non-profit organizations, and gov- ernment agencies. The paper deals primarily with tribal roles and opportunities related to electric power genera- tion as discussed in four parts: 1) The Electric Utility Industry and Tribal Renewable Energy Resource Development; 2) Tribal Resources; 3) Tribal Needs; and 4) Conclusions and Implementation Strategies. The Electric Utility Ind 1 Tribal R ble Ene Resource Development The electric utility industry is undergoing significant changes at both federal and state levels. At the federal level, competition in the provision of wholesale electric generation services is being promoted through a series of policy initiatives. At the state level, many legislatures are considering bills to establish competition in the areas of retail electricity sales and direct customer access. This “restructuring” of the utility industry from monopolies to markets will have a substantial impact on renewable ener- gy development and the tribal role in that development. Renewables may generally be at a disadvantage in the new marketplace because of higher costs, but increased environmental awareness and customer’s ability to demand unique products such as environmentally friendly “green power” or green priced electricity may result in new opportunities for renewable energy development. In the face of the changes occurring in the electric utility industry and the simultaneous potential barrier of price and opportunity presented by “green power,” tribes are in a position to structure their resource development to respond effectively to different likely market scenarios. Tribes could establish or become “independent renewable power pro- ducers” (IPPs), distribution utilities, power generators and/or operators of transmission, or joint venture partners in resource development or power generation projects. In any of these pursuits new organizations (structures) will have to be adopted by tribes, and this will require extensive deliberations by governing councils and tribal members, and ultimately, financial commitment and leadership. | iii Several other utility industry-related factors will influence the development of renewable energy and the potential for tribes to develop renewable resources on their lands. ¢ Recent changes in management of federal hydro facili- ties and Power Marketing Administrators may result in opportunities for tribes to supply renewable power through the Replacement Resources Process to these regional markets. ¢ The environmental effects of traditional fossil fuel gen eration of electricity includes various air emissions which have a negative impact on human respiratory health, greenhouse gases, and visibility. Various regulatory and voluntary measures to reduce emissions affect the market place for electricity and may provide economic incentives to purchase power from non-emitting sources such as renewable energy. ¢ Renewable energy technologies have made major advances over the past decade in both reliability and cost effectiveness and costs are expected to continue to come down as manufacturing e economies of scale lower costs. Tribal Resources Tribes have a broad spectrum of resources which they can bring to bear in developing their renewable energy resources including the following: ¢ Tribes have abundant quantities of solar, wind, geother- mal, and biomass resources. Specific surveys for each resource are needed to fully evaluate local tribal project rtunities. Tribes are independent, sovereign entities with govern ment powers to tax, regulate, administer, and enforce laws on reservation lands. As governments, tribes have an opportunity to cultivate a powerful voice in the polti- ical debate over deregulation of the utility industry and other important energy policies and strategies. ¢ Tribes possess a number of legal and institutional resources important to renewable energy development including power to create tribal business, issue tax exempt bonds, and regulate energy projects on their lands. ribes have several financial resources and mechanisms which can be leveraged for energy project development | including: task exempt and taxable bonds, tax incentives, | \ federal grant programs, and inter- -tribal financing. Zi Because tribal lands are held in trust status they cannot be mortgaged as security for loans, however tribes can use their assets in ways to secure loans without jeopar- dizing their trust status or tribal sovereignty. Tribal Needs Because of long-standing, depressed socioeconomic condi- tions on the majority of American Indian reservations, there exists a continued need for commitment, innovation, and investment to improve economic opportunity and quality of life. Renewable energy development is an | attractive development option for many tribes but it will/ require much assistance and support to bring many pot \ jects to fruition. Specific tribal needs include: A \ PX ~\ Tribes should carefully evaluate the employment needs and other economic benefits of energy projects and ana- lyze how these needs fit with the tribe’s labor resources and overall development plans. Many tribes are in need of basic electricity service. The Navajo Nation, for example, has almost 18,000 home without electricity. Tribes ¢ Develop tribal energy policies consistent with long-terr tribal goals. * Develop inter-tribal energy policies that foster coopera- tion, sharing of resources and serve to strengthen tribal positions in national policy development and financial markets. Assess implications of utility industry restruc turing and take an active role in influencing policy outcomes. e Analyze how tribal renewable energy resources and projects fit into regional markets. Many tribes require technical /business training programs \\ Corporate Community and should analyze these needs early in project planning. Tribes lack predictable and diversified revenue sources and access to capital. Tribes must create a climate favor able to investment by addressing internal decision mak- ~ing policies and the means to identify investment oppor- tunities and target resources effectively. There is an urgent need for a comprehensive program to collect and evaluate site specific data concerning the geographic extent, size, and quality of renewable ener- gy resources on Indian lands. Tribes in cooperation with public and private institu- tions must conduct energy market research on a tribal and regional basis. Conclusions and Implementation Strategies Indian tribes are taking a proactive role in pursuing the development of their renewable energy resources as part of their efforts of becoming more self reliant and expand- ing economic opportunities that are compatible with cul- tural and environmental values. However, tribes have needs and limitations which if not addressed through a cooperative partnerships with private and public sector entities may prevent tribes from realizing their goals of developing renewable energy. Some of the most urgent and critical actions which tribes and other stakeholders should undertake include: ¢ Establish partnerships which utilize the tribes’ potentiz tax and regulatory advantages in developing resources ¢ Establish organization to organization relationships for common business interests through communication an understanding of tribal culture and needs. Government ¢ The President and Congress should adopt and pursue cohesive long-term, inter-agency strategy to achieve tribal renewable energy development. ¢ Congress should appropriate adequate funding for tribes to inventory renewable energy resources on a regional and tribe-by-tribe basis, and provide funding from technical assistance and seek funding for renew able energy projects. * States should adopt fiscal and regulatory policies supportive of tribal renewable energy development. I. INTRODUCTION Indian tribes, through a unique combination of natural resources, Ee and increased ability to meet internal needs have the potential to make a signifi- cant contribution to the development and utilization of the nation’s renewable energy supply. Deregulation of the electric utility industry, national environmental policy changes, and the ability of tribes to use their unique legal status to promote the development of renewable energy represent important opportunities, both for tribes and for non-Indian entities. Several renewable energy projects are , already underway on Indian reservations across the coun- | try, however, the potential for tribes to meet their own energy needs, as well as the growing demand for renew- able energy in other markets, is largely unfulfilled. Many of the constraints which have excluded tribes from playi a meaningful role in public policy formulation or economi: development on their lands continue to be barriers to acti tribal participation in renewable energy development. ay Tribal lands have historically played an important role in the development of uranium and fossil fuels. These devel- opments have brought both benefits and adverse impacts to tribal lands and cultures, as the development often occurred with little direct tribal participation. The prospects for renewable energy development present a rather different picture: the drive toward renewable ener- | gy development is occurring at the initiative of the tribes themselves. This is happening because tribes perceive their role as something more than leasers of resources and because of the apparent fit of renewable technologies with tribal cultures and development goals. Tribes are pursu- ing renewable energy projects for a number of reasons, including the following: ¢ Tribes have abundant solar, wind, biomass, and_ geothermal resources. ¢ Renewable energy is often the most cost effective , solution for rural electrification and remote power — needs. ¢ Renewable energy technologies have low environmen- tal impacts and are generally compatible with tribal cultures. ¢ Renewable energy projects can be built in modular 2 _ Ways, requiring lower capital costs. | + Tribal legal status provides unique financing options. | * Renewable energy development may provide an oppor- tunity to offset declining revenues from fossil fuel production. ¢ Developing renewable energy can be an integral com- ponent of tribal self-sufficiency, sovereignty, and nation- building. This paper is the result of a collaborative effort to define the unique role and potential contribution of Indian tribes in developin; icies and markets for the nation’s grow- ing need for renewable energy. The authors of the paper are all members of a task force on Developing Renewable Energy on Indian Lands. The mission of the task force is to encourage development of renewable energy on Indian lands consistent with tribal culture and goals. Members of the task force represent tribal organizations, private indus- try, governments, academic institutions and non-govern- mental organizations. For a listing of task force partici- pants, please see Appendix A. Tribal renewable energy development generally falls into one of three categories: 1. generation of electric power for use on the reservation; 2. electric power generation for bulk power sales off-reservation; and 3. non-electric applications of renewable energy (space heat, etc.). The paper deals primarily with issues related to electric power generation, and focuses particularly on tribal opportunities and roles as power producers capable of meeting internal needs as well as participating in external electric markets. In examining the tribal role in renewable energy develop- ment, the paper first explores the current context of utility restructuring and other factors affecting the development of renewable technologies and their implications for tribes. Tribal resources are discussed in the next section of the paper with particular emphasis on the unique institution- al, physical, and legal attributes of tribes and their lands. The paper discusses tribal needs from a broad perspective of energy and economic needs. Finally, the paper outlines conclusions and recommended actions necessary for tribes to be able to fulfill their role in developing renewable energy resources. II. THE ELECTRIC UTILITY INDUSTRY AND TRIBAL RENEWABLE ENERGY RESOURCE DEVELOPMENT The electric utility industry is currently undergoing signif- icant changes, to respond to demand for more deregulat- ed, competitive markets, as well as increased awareness and concern among consumers regarding quality and v price of service and environmental preservation. This phenomenon is creating important new opportunities and risks, both for traditional industry stakeholders and for new market entrants.! Indian tribes that have been involved in conventional energy resource development, as well as tribes that are exploring ways to utilize new tech- nologies and renewable energy resources, must assess these emerging opportunities and risks within the context of the goals, values and resources of their respective tribal governments and reservations. Tribes that are currently developing or that are considering developing renewable energy resources must reconcile the objectives of self-suffi- ciency and self-determination with the new market oppor- tunities both on and off the reservation. The following section describes electric utility industry- related factors that will influence the development of renewable energy resources, and their potential implica- tions for Indian tribes considering developing renewable energy resources on their reservations. A. Electric Utility Industry Restructuring. The regulatory and market environment (including resource supply markets) of the electric utility industry throughout the United States is undergoing various and rapid changes at the federal, state and regional levels. This dynamic is often referred to as “industry restructuring.” At the federal level, competition in the provision of whole- sale electric generation services? is being promoted through a series of policy initiatives. One recent (April 1996) and major initiative is the Federal Energy Regulatory Commission’s (FERC) promulgation of Order 888, a com- prehensive rule to promote open, competitive wholesale transmission access. At the state level, many legislatures are considering bills to establish competition in the areas of retail electricity sales and direct customer access. These changes are happening rapidly, and their effect on tribal energy development is likely to be significant. 1. Federal Initiatives: The FERC’s Open Access Rule Federal Initiatives: The FERC’s Open Access Rule;. In April 1996, the FERC issued a final rule, Order 888, requir- ing all public utilities that own, control, or operate facili- ties used for transmitting electric energy in interstate com- merce to file tariffs that offer others the same transmission services they provide themselves. These tariffs must be nondiscriminatory, meaning that utilities must take trans- mission services for their own wholesale transactions under the same terms of conditions that they offer others under the tariffs. The final rule also allows utilities to recover the costs that are “stranded” when a customer (wholesale or retail) changes power suppliers. The FERC’: goal in issuing the rule was to remove impediments to competition in the wholesale bulk power marketplace, anc to bring more efficient, lower cost power to consumers. The final rule has several important provisions that have the potential to enhance opportunities to promote renew- able energy resources. For example, any entity engaged in wholesale purchases or sales or energy or retail pur- chases of energy is eligible to request transmission access from a transmission-owning utility under the terms of its tariffs. This means that tribes would not necessarily have to be utilities or utility authorities, per se, to request transmission services to move their renewables-generated power to market. _Because Order 888 was passed by FERC just a few months: prior to the publication of this report, it is difficult to pre- dict the myriad ways in which the industry will respond to the Order. One thing is sure: competition in the whole- sale electricity marketplace will only intensify. As this occurs, tribes will want to monitor wholesale markets that may have previously been considered out of reach for the type and scale of renewable energy projects they may be considering developing. Related to this, tribes will also want to monitor FERC’s treatment of states with respect to jurisdictional issues, particularly as they may relate to retail power markets. In the Order, the FERC asserts its authority over the rates, terms, and conditions of unbundled retail transmission in interstate commerce, and says that states will retain juris- diction over local distribution services and the delivery of power to end-users. However, the FERC does not make a distinction in the rule between distribution and transmis- sion facilities (and thus, does not make a distinction between federal and state jurisdiction). The FERC has asserted jurisdiction over retail transactions turned whole sale through “municipalization” and over “retail wheel- ing” rates. Additionally, the FERC’s jurisdiction over inter-tribal sales of electricity has yet to be clarified. ¢ 2. State Initiatives: The Prospect of Retail Wheeling With California and the New England region in the lead, some 40 states have begun industry restructuring and reform initiatives, ranging from the establishment of stud: committees and model tests or open electricity markets to the adoption of comprehensive deregulation plans such a: that recently enacted in California. Propelling this move- ment are a number of factors and conditions: a 20-year legacy of state and federal policies designed to encourage 1-New market entrants” include some wholesale power brokers, independent power producers, energy service companies, and Indian tribes. 2Wholesale electrical service is electrical power sold to other electric utilities or public authorities for resale purposes. Retail electric service is the sale of electric energy to directly to the ultimate consumer of electricity. These initiatives include the Energy Policy Act of 1992 (EPAct). 4See FERC’s Order 888 and 889, finalized April 24, 1996, Promoting Wholesale Competition Through Open Access Non-Discriminatory Transmission Services by Public Utilities; Recovery of Stranded Costs by Public and Transmitting Utilities. 2 independent, alternative electricity suppliers to enter the market; past utility investment decisions that have result- ed in relatively high electricity rates in many regions; a growing frustration with long, cumbersome, and expen- sive regulatory proceedings; and a political climate gener- ally disdainful of government mandates. While there is general consensus in states’ restructuring debates that competition in the electric utility industry is desirable, there is little agreement about how the competi- tive industry should be structured. Some advocate for competition to be confined to wholesale electric markets and managed according to a system in which all utilities sell electricity to a centralized pool and buy electricity at the pool’s “market clearing price” for distribution to their customers. Others advocate for competition in retail elec- tric markets (“direct access”) in which individual or aggre- gate groupings of customers negotiate contracts for prices and services directly with power providers. State regulators and lawmakers nationwide are facing the dilemma of balancing customer demands for lower rates and open markets against the potential for significant financial losses to a utility industry generally unprepared for competition. In the face of these changes, supporters of renewable energy resources, energy efficiency invest- ments, and other environmental programs want assur- ances that clean energy investments and purchasing opportunities and conservation programs are provided for in the coming electricity market. 3. Regional Developments: Policy Initiatives of Power Marketing Administrations The federal power marketing administrations (PMAs) in the western United States (the Western Area Power Administration [WAPA] and the Bonneville Power \ Administration [BPA]) are undergoing significant changes \ as a result of specific provisions in Energy Policy Act and | as a result of new flow requirements> and power market- ing criteria at federal hydro facilities stemming from envi- ronmental concerns. For example, BPA is facing serious limitations on its hydropower resources due to the impacts on salmon and other fish populations, and WAPA must replace up to 800 MW lost due to new operating cri- teria established to mitigate environmental impacts at Glen Canyon Dam. The changes affecting western PMAs, particularly WAPA, are complex and are the result of several significant and overlapping public policy, regulatory and market forces. There are four major factors influencing the changes affect- ing PMAs in the western United States: (1) Title XVII of | the Reclamation Projects Authorization and Adjustment Act of 1992, known as the Grand Canyon Protection Act; (2) the Glen Canyon Dam environmental impact statement prepared by the U.S. Bureau of Reclamation; (3) the Glen Canyon Dam electric power marketing environmental impact statement prepared by WAPA; and (4) the energy planning and management program environmental impact statement prepared by WAPA, which stipulates how WAPA customers will comply with the integrated resource planning (IRP) principles of EPAct. One result of these four major initiatives is a serious limitation on the development and use of hydroelectric resources through- out the Colorado River Storage Project region and the entire western United States. To respond to these constraints, WAPA is developing a Replacement Resources Process to identify economically and technically feasible replacement resources to its tradi- tional hydro supplies. The Replacement Resources Process Will also address transmission system enhancements required to deliver power from the identified resources and the environmental impacts of all newly identified resources and proposed transmission enhancements.® WAPA plans to release a “Methods Report” in the fall of 1996, which will describe the approach that will be used to acquire replacement resources. Because IRP principles will guide the resource selection criteria, tribal govern- ments may have a unique opportunity to provide competi- tively priced, environmentally sensitive resources through the Replacement Resources Process In addition, tribal governments are considered “preference customers” of power marketing administrations. As pref- erence customers, they can enter into contracts with PMAs for firm wholesale power, regardless of existing PMA con- tract commitments to its other customers. Although tribes do not have to establish “tribal utility authorities” to become preference customers, they do have to acquire the means for accepting and distributing any power received from a power marketing administration. If a tribe were to develop electrical generation (whether conventional or renewable), it could use its status as a PMA preference customer to obtain hydroelectric power at wholesale (ie., reduced) prices, to “firm” its electrical generation capabili- ty and output. While a tribe obtaining wholesale power from a PMA can not resell the power for a profit (except as authorized), tribes that develop generation and wish to market surplus power may be able to take advantage of the new FERC Rules 888-889 (described in Section II.A.1 of this paper, Federal Initiatives: The FERC’s Open Access Rule) to obtain transmission to potential markets. SFlow requirements govern the volume and timing of water releases from hydroelectric dams, which affects the timing and amount of electricity that can be generated. SWAPA wili use the principles of IRP as a tool for developing criteria for selecting replacement resources; this means that WAPA will consider both sup- ply-side and demand-side opportunities, as well as the environmental impacts of resource selections. Consequently, renewable resources may be consid- ered very attractive as replacements for the lost hydro resource. 4. Implications for Tribes of Industry Restructuring and Policy Initiatives The restructuring of the electric utility industry presents both barriers and opportunities for tribes in their pursuit of renewable resource development. The primary barrier will be the question of price. The movement in the indus- try toward competition already has resulted in many utili- ties — particularly those with considerable potential for stranded cost exposure” — to gain short-run cost savings, in order to remain competitive. Unfortunately, long-term planning has been the path generally associated with bringing renewable energy to market. As a result, the development and marketability of potentially more costly renewable energy resources could be jeopardized. Any higher costs of renewable energy (e.g., above-market capi- tal costs for energy) or real or perceived transaction costs for utilities (e.g., utility costs to learn about and deploy unfamiliar technologies, or to purchase such unfamiliar technologies from tribes) may prevent or impede utilities’ use of renewable energy, regardless of the life-cycle cost- ffectiveness of various applications.® On the other hand, the onset of competition in the electric- ity industry may also present opportunities for tribal renewable resource development. The primary opportuni- ty may be through increased environmental awareness and customers’ ability to demand unique products such as “green power” or “green pricing”? of electricity generated from renewable resources. Already, market research and pilot programs have indicated that many electricity cus- tomers are interested in green pricing options. This premise is supported by similar pricing regimes in other industries, where customers pay a premium for recycled products, or mutual funds that invest only in environmen- tally responsible companies, even if they are more expen- sive than alternative products. In the face of the changes occurring in the electric utility industry and the simultaneous potential barrier of price and opportunity presented by “green power,” tribes are in a position to structure their resource development to respond effectively to different likely market scenarios. “| Tribes could establish or become “independent renewable\ | (and conventional) power producers” (IPPs), distribution’ * utilities, power generators and/or operators of transmis- sion, or joint venture partners in resource development or power generation projects. In any of these pursuits new organizations (structures) will have to be adopted by tribes, and this will require extensive deliberations by gov- erning councils and tribal members and, ultimately, finan- cial commitment and leadership. This means that, in addition to possessing the renewable energy resource, tribes must meet some minimal organizational priorities. The concept of an “energy board” or an independent development arm of the tribe is frequently suggested as an appropriate organizational structure to pursue ener- gy development on the reservation. The concept has appeal because such a board could function outside of the main tribal political system, thus maintaining an indepen- dent incorporated status vis a vis the industry and other governments. B. Environmental Factors The previous section of this report discussed various poli- cy initiatives at the federal, state, and regional levels that are leading to significant changes in the electric utility industry. These initiatives are borne out of consumers’ desire for lower prices, as well as increased awareness, by the public and policy makers, of the environmental effect: of traditional fossil-fired generation of electricity. This sec tion will address the environmental factors that are affect: ing the electric utility industry today. One important factor in accelerating the demand for renewable energy is public concern about deteriorating ai quality, the prospects of global climate change, and gener al environmental degradation (e.g., water quality, land us impacts), all of which result, in part, from fossil-fired elec tricity generation. A widely recognized advantage of renewable energy is the potential to reduce specific pollu tants associated with fossil-fired electrical generation that impact air quality and visibility, as well as the negative environmental effects of coal mining and nuclear waste disposal. The environmental impact of electricity genera tion in the United States is significant; as shown in Table electric utilities contribute 72% of the SO, in the country that causes acid rain, 33% of the NOx in the country that leads to smog and lung disease, and similar percentages other pollutants. % of Total U.S. Output of Each Pollutant from Electric Utilities Acid rain Global climate change Ozone smog \lung disease Respiratory problems Water and air pollution Long-term radioactive threa Table 1 (Source: Federal EF Sulfur dioxide Carbon dioxide 36 Nitrous oxides 33 Particulate matter 32 Toxic heavy metals Nuclear waste 7For a discussion and definition of stranded costs, please see Section IL.A.1., Federal Initiatives: The FERC’s Open Access Rule. 8Life-cycle cost-etfectiveness includes costs over the entire life of the plant. In the case of renewable energy, costs in later years are relatively small, while upfront capital ci can be significantly more than for fossil-based generation. 9Green pricing is broadly defined as a customer’s willingness to pay a premium for electricity produced by “clean” technologies. In the electricity marketplace of the future, some pur- chasers of power will consider, in addition to straightfor- ward monetary considerations, such factors as the envi- ronmental benefits of power generated by renewable resources. At times, these environmental benefits may in fact translate directly into economic benefits for the power purchaser, as explained below. Air quality benefits to be realized from utilizing renewable energy, as compared with electricity generated from fossil fuels, are particularly notable in the case of decreased coal use. Air quality benefits associated with the reduction of coal or gas use include the reduction of several emissions: (1) greenhouse gases, such as carbon dioxide (CO), which contribute to global climate change and are addressed in President Clinton’s Climate Challenge for Electric Utilities, (2) acid rain precursors, such as sulfur dioxide (SO) and nitrogen oxides (NOx), regulations for the reduction of which were promulgated in the Clean Air Act Amendments of 1977 and 1990; and (3) other EPA-regulat- ed criteria pollutants, such as particulate matter (PM), which contribute to decreased visibility and are currently in the process of being addressed nationally and through regional initiatives, such as the Grand Canyon Visibility Transport Region. The following section of this report addresses these three air quality issues, as they affect potential purchasers of power from renewable resources. Climate Challenge The Climate Challenge Program is a joint, voluntary effort of the U.S. Department of Energy and the electric utility industry to reduce greenhouse gas emissions. (For a detailed discussion on greenhouse gas emissions, please see Appendix B.) The Program consists of voluntary commitments by individual electric utilities to undertake actions to reduce, avoid, or sequester green- house gas emissions. Climate Challenge participant utili- ties report their greenhouse gas emissions annually in accordance with guidelines established under the Energy Policy Act of 1992, as well as through an annual report to DOE describing their actions and achievements under their individual participation accords. Under the Climate Challenge, utilities design their own programs for reducing greenhouse gas emissions. As of July 1995, 104 utility organizations had signed agreements to participate in the Program, representing 487 utilities. Utility commitments are to reduce greenhouse gas emis- sions by the year 2000 to at or below 1990 levels. Examples of utility commitments include the Sacramento Municipal Utility District’s commitment to reduce its emissions to 30 percent below its 1990 baseline by the year 2000. Types of projects being pledged to by utilities include demand-side management measures, transmission and distribution efficiency improvements, and increased use of renewable energy generation technologies such as hydropower. e extent that utilities are involved in the Climate [ Challenge or want to be further involved, the purchase of power from renewable resources may prove an attractive option for the displacement of power from fossil fuels and the concomitant reduction of greenhouse gases, particularly COy. For these utilities, purchasing renewable power from tribes could have the added advantage of increasing their Climate Challenge goals or easing other already pledged ctions in greenhouse gases that may be more costly. Clean Air Act Amendments Title IV (the Acid Rain Program) of the Clean Air Act Amendments of 1990 mandated reductions in utility SO, emissions. Title IV also designed an allowance system to achieve this goal. An allowance represents the right to emit one ton of SO). Utilities must have enough allowances to cover their own emissions. They can reduce their emissions in line with allowance levels, or reduce their emissions below their allowance level and bank (i.e., save) or sell their excess allowances. In general, SO, allowance trading among utilities is expected to create trading market in the range of hundreds of millions of dollars per year, because com- pliance costs differ significantly across utilities. Also established under the Acid Rain Program, the Conservation and Renewable Energy Reserve (the Reserve) is a pool of 300,000 SO, allowances set aside to award to utilities that initiate renewable energy and ener- gy efficiency programs. Through the reserve, a utility can earn one SO, allowance for every 500 megawatt hours of energy saved through demand side efficiency or renew- able energy generation.10 Allowances awarded to utilities from the Reserve can be used for compliance with the Acid Rain Program or banked for future use (Title IV required reductions increase significantly in the year 2000). The existence of the Acid Rain Program and the quantifi- able value of SO, allowances will add explicit monetary value to the environmental benefits of the purchase of renewable power. This value will, however, not be quan- tifiable until after the SO, allowance trading market becomes active. Visibility The Clean Air Act Amendments (CAAA) of 1977 provided for protection of visibility (to remedy exist- ing impairment of visibility caused by human activity and to prevent future impairment) in “mandatory Class I 10 United States Environmental Protection Agency, Acid Rain Program, Conservation and Renewable Energy Reserve: Update, EPA 430-R-94-010, November 1994. on areas,” a designation that includes large national parks and wilderness areas. The CAAA of 1990 required the Environmental Protection Agency (EPA) to establish inter- state visibility transport regions and commissions to address visual air quality in Class I regions. One such commission is the Grand Canyon Visibility Transport Commission (GCVTC). The GCVTC was established in November 1991, and consists of the following: governors (or their designees) from the states of Arizona, California, Colorado, Nevada, New Mexico, Oregon, Utah, and Wyoming; the President of the Navajo Nation, the Chairman of the Hopi Tribe, the Governor of the Pueblo of Acoma, and the Chairman of the Hualapai Tribe; and ex-officio members from various federal government agencies. The Commission’s mission was to address visu- al air quality in the Grand Canyon National Park, as well as other Class I areas on the Colorado Plateau (in Arizona, Colorado, Utah, and New Mexico). The Commission established a system of committees to enable them to carry out their work; committee members include representa- tives from private industry, including utilities. The GCVTC has spent a number of years (and dollars) studying and analyzing various options for improving vis- ibility and reducing regional haze on the Colorado plateau. The Commission issued its final recommenda- tions to the EPA on June 10, 1996. The recommendations include different options for improving visibility in the GCVT region, including increased use of renewable resources. To the extent that reductions in emissions and promotion of renewables are implemented in the GCVTC region, there will be added incentive to purchase power from non-emitting sources. C. Renewable Energy Technologies Historically, utilities in the western United States have relied primarily on the following supply resources: coal, oil and gas, nuclear and hydropower. Of these resources, coal has been the most prominent. In 1994, coal-burning power plants in the western U.S. provided approximately 52 percent of the region’s electricity.12 The Energy Information Administration of the US Department of Energy projects that electric generation from fossil fuels is expected to increase to 79% by 2015, mostly due to increased use of natural gas. This projection, however, is based the assumption that natural gas prices will remain stable, and have a low rate of increase, which may not necessarily prove to be true. The levelized cost of electricity production includes the time—discounted cost of construction (capital costs), fixed and variable operations and maintenance costs, and fuel lithe Center for Applied Research serves as the Chairman’s designated representative costs. The choice of technologies in the future will depend - on changes in these components of levelized costs.13_ The levelized cost of fossil fuel technologies is highly dependent on the fuel price component. Should there be a marked increase in fuel prices, the amount of generation from fos- sils fuels in the future would decrease commensurately. Renewable energy resources, naturally replenished after they have been harvested or consumed, are not subject to changes in fuel prices. Hence, they are increasingly being _ deployed as part of utilities’ resource portfolios, as a hedge against the risk of fuel price fluctuations. In recent years, much progress has been made, both by industry and by national research facilities to develop reliable and cost- effective technologies for renewable energy production. While the capital costs for renewable energy technologies are currently higher than those for conventional fossil fuel resources, these costs are expected to continue to come down over the-near term. As more utility and industry development of renewable energy is pursued, experience with the technologies and manufacturing economies of scale lower the costs. In addition, the need for new capacity, combined with lower capital costs of renewables and the preference of many electric customers for environ mentally sound resources, are encouraging further devel- opment of renewable resources. For example, the Land and Water Fund (LAW Fund) of th Rockies recently completed an analysis which projects a demand for energy resources in the western United State: to be approximately 15,000 MW by 2015.14 Renewable resources are projected by the LAW Fund to meet appro» imately 45 percent of the total generation resource mix that will be required to meet this demand by 2015. This analysis highlights the increasing importance renewable resources will play in the electric utility industry. Renewable energy technologies to harness the power of the wind, sun (photovoltaics and solar-thermal) and eart! (geothermal) have made major advances over the past decade, and water has been used as a cost-effective gene: ator of electricity (hydroelectric power) for several decades. Figure 1 illustrates the findings, described in a recent report by the Energy Foundation and the Rockefeller Brothers Fund,}5 that renewable technologie: have experienced a significant decrease in costs. The relii bility of renewable energy technologies has also improve markedly. ind energy is currently the most cost-effective renewal resource being developed. Because of dramatic improve the Commission. 12 annual Energy Outlook 1996, With Projections to 2015, Energy Information Administration, Office of Integrated Analysis and Forecasting, U.S. Department of Energy, DOE/EIA-0383(96), January 1996. 3ppid. 14How the West Can Win: A Blueprint for a Clean and Affordable Energy Future, The Land and Water Fund of the Rockies, March, 1996. 15“Boosting Prosperity: Reducing the Treat of Global Climate Change through Sustainable Energy Investments,” Douglas H. Ogden, January, 1996. ments in the technology, the levelized cost of energy gen- erated using wind turbines has dropped from more than $1.00 per kWhr in 1978 to less than 10 cents\kWhr in 1988.16 Generally, installed capital costs of wind capacity are between $900 and $1,000 per kW, with annual opera- tion and maintenance costs of about 1 cent\kWhr. Ona levelized basis, the cost of energy from wind farms located at Class IV sites or better is 5-7 cents\kWhr. The U.S. Department of Energy has projected that the capital costs for wind could fall to approximately $750 per kW by the year 200017 with wind energy costs in the range of 3-6 cents /kWhr. While the costs for various solar energy technologies have dropped considerably in recent years, these technologies, particularly photovoltaics, remain fairly expensive relative to many other electric resources, including wind, geother- mal and conventional resources such as coal and natural gas. Currently, photovoltaic module prices in the United States range from $4,500 to $5,000 per kW.18 Total system costs, which typically include metering, labor and inter- connection charges, range from $6,000 to as high as $20,000 per kW. Levelized costs for energy generated using photovoltaics range from 20 cents\kWhr to as high as 60 cents\kWhr. In spite of these relatively high costs, photovoltaic technologies have already proven to be very Renewable Energy Costs are Dropping. B 8 8 3 Be i to é 2 é g Figure 1. Renewable Energy Costs are dropping (Source: DOE, Energy Foundation, 1996) l6ppid. 17ppid. 8ppid 19ppid. 20ppid 2\ pid. cost-effective for distributed generation and remote appli- cations, because relatively expensive transmission line extensions can be avoided. There is also substantial sup- port and commitment among energy industry stakehold- ers, including Enron, the Electric Power Research Institute and technology vendors, to promote solar technologies in a variety of settings. These dynamics should continue to drive capital costs downward.19 Estimating the costs of geothermal energy is more difficult because it is highly dependent on site quality, technology choices, the size of the facility, the assumed capacity factor, discount rates and costs for operation and maintenance. There are many possible project design options, which also have a significant impact on the overall cost of geot- hermal energy. The Department of Energy estimates con- struction costs for geothermal projects to be as low as $1,800 per kW and as high as $3,000 per kW. Generally, geothermal energy has a levelized cost of approximately 5 cents\kWhr, which is highly competitive with convention- al resources. To the extent geothermal projects can be expanded to have higher capacities than presently (e.g., up to 100 to 300 MW), these costs will be even lower.22 Biomass energy (i.e., energy from growing plants such as trees, corn, wheat, and cane or from animal, agricultural, municipal, and household wastes) has been developed on a relatively large scale in the United States and technologies and applica- tions have been proven effective. Conventional biomass power plants are similar to coal-fired power plants, which makes the capital costs also similar. The current average cost for bio- mass is approximately 7 cents \kWhr.21 However, biomass resources are highly variable and unpredictable, making the resulting energy supply somewhat unreliable. Thus, any bio- mass development initiative would likely require a “firming” power source. y Although some of the cost data presented he for various renewable energy resources may _ seem prohibitive, Indian tribes have abundant) renewable resources and unique economic development tools, which may make them | more likely developers of these resources than traditional industry organizations. Further, renewable energy offers value to both the / power provider and the consumer. When renewables are included as part of a utility’s | resource mix, the utility can benefit from reduced reel requirements, elimination/ deferral of transmission and \ distribution costs and dispatchability / remote operation. Customers can benefit from improved environmental quality, access to more diversified services, reduced risk of fluctuations in fuel prices, and potentially lower costs for electricity.22 III. TRIBAL RESOURCES Section II of this paper addressed the recent changes in the electric utility industry in the United States, and the impli- cations of these changes for tribal renewable energy devel- opment, including the potential for tribes to develop and market a desirable product. The following section (Section II) will discuss the various resources tribes can bring to bear in developing their renewable energy resources. These include natural energy resources, legal and institu- tional resources, the political status of tribes, environmen- tal ethics, and financial resources. A. Natural Energy Resources Many Indian tribes possess abundant renewable and con- ventional energy resources that may be utilized to satisfy both tribal needs and to contribute to regional and nation- al energy supplies. Table 1, below, presents a summary of the sales volume, sales value, and royalties from Indian mineral leases between 1937 and 1994.23 As can be seen from the table, in 1994, over $1 billion dollars worth of minerals were extracted from Indian lands, with tribes receiving $160 million in royalties from these extractions. Coal Sales Volume (tons) | 28,921,412 T 572,432,386 Sales Value | $558,105,134 | $7,476,095,166 = ities I $ 68,904,413 [____S_587,968,163 aS Sales Volume (MCF) 209,030,250 | 4,817,454,133 Sales Value $338,707.87 | $4,817,770,945 Royalties | $ 47,497,637 $_ 645,203,132 | Oil Sales Volume (BBL) I 13,567 482 I 357,061,926 Sales Value $202,562,715 | $9,657,502,559 Royalties | $ 32,734,330 $1,396 468,472 Other Sales Value I $83,669,645 [__$2,483,879,186 Royalties | $11,116,506 |S 271,252,367 Total Sales Value | $1,183,045,371 | $24,435,247,856 Total Royalties | $160,252,886 | $2,900,892,134 Table 1. U.S. Indian Mineral Revenues Summary of sales volume, sales value, and royalties. (Source: Center for Applied Research, based on data from U.S. Department of Interior, Minerals Management Service, 1995) Renewable energy technologies have made great strides, . in terms of cost-effectiveness and reliability, in recent decades. Many tribal lands are located in prime renew- able resource locations. The decentralized nature of renewable energy provides tribes with tremendous quantities of solar, wind, geother- mal, and biomass resources proportional to the size of land holdings and dependent upon the local climatic zones. While macro studies of renewable resources pro- vide some indication of the renewable resources, micro-sit ing analysis are required for any particular development or project. The variety of renewable resources ensures tha each tribe will have some development potential within the portfolio of emerging technologies: northern plains _ tribes have high wind resources, southwestern tribes have large solar energy potential, and other tribes have abun- dant biomass or geothermal resources. The National Renewable Energy Laboratory in Colorado, has an exten- sive database of renewable energy resources for the United States. Their network of data collection sits pro- vide multi-year data for all of the renewable resources or a macro scale. Appendices C,D,E, & F includes national renewable energy resource maps for solar, wind, geother mal, and biomass energy. Major tribal lands are also highlighted to indicate the potential for tribal renewable energy development. Solar energy resources in the U.S. are obviously greatest i the southwest. However, northern regions also have sig- nificant solar resources which are usable for many applic tions. The combination of solar intensity and latitude influences on the direct solar component and the number of annual sunlight hours will both reduce the cost-effec- tiveness of solar technologies for the northern tribal land Extensive solar energy development on less that 1% of th tribal lands in the four states of New Mexico, Arizona, Colorado, and Utah could provide enough electricity to meet the entire national demand. Many tribes are already using solar energy in the south- west to power homes and remote electrical loads. The combination of high solar resource and large numbers 0 homes without electricity on the Navajo reservation pro- vides the cost motivation for an ongoing tribal program install photovoltaic systems on remote homes. The Ute Mountain Utes are using photovoltaic solar energy to power remote water pumps for livestock. Solar orienta- tion of homes is a traditional consideration for housing throughout the southwest. 22Currently, California, Arizona and the Pacific Northwest have the highest electricity prices. 23sales volume represents the quantity reported as sold during the year; sales value represents the dollar value of the commodity reported sold during the year; royalties ¢ the annual payments received for the mineral extraction. Wind energy resources are categorized by a class scale of 1 to 6 on wind intensities and duration. Since most wind energy systems work best in steady winds of 20 to 40 mph, unusually high wind speeds or short diurnal wind periods are less advantageous. Macro wind stud- ies and maps can be misleading for the detailed design of specific projects because of localized wind effects of terrain and “wind-channeling.” Higher wind speeds and “smoother” wind profiles are also greatly affected by height. Most micro-wind studies collect wind speed and direction at multiple tower heights for at least a full year before wind systems can be effectively modeled. . Although the world’s largest wind farms have been developed in the moderate winds of California, the most promising wind regions of the United States are in the | northern plains states. Wind resources have been studied on the Blackfeet reservation in Montana for nearly 15 years. Other tribes with active wind studies include the, Fort Peck Tribes, the Standing Rock Sioux, Turtle Mountain Chippewa, and the Jemez Pueblo. These tribes allhave wind resources in the 5 or 6 classes and the potential for wind energy developments with annualized electricity costs of approximately 5 cents/kWhr. Demonstration tur- bines have been, or are being installed on several tribal reservations. These demonstration units are powering local reservation loads and will assist in the analysis of technology readiness and environmental impacts. While large sprawling wind farms, such as those in California, are unlikely to be developed on tribal lands, the potential for many moderate sized wind farms are extensive. Current studies have recommended wind farms in the size range of 40 MW to 100 MW with the potential for further expansions if transmissions issues can be solved. However, many tribes have geothermal reservoirs of either hot steam, hot water, or dry hot rock which can all be developed into producing geothermal electricity. The majority of geothermal development is located in California and Nevada, but geophysical surveys have indicated geothermal activity in local areas throughout the U.S. Extensive well surveys are needed before tribal geot- hermal resources can be categorized and developed. Direct-use systems and applications are already developed in most shallow geothermal areas. Applications include hot water baths and heating and old technologies are still very viable for those uses. The independence of weather has inherent advantages for geothermal development over solar and wind seasonality. Geothermal development is suitable as base-load electricity generator. Low-temperature geothermal applications have been used throughout history, but recent technology advances have been made in using lower temperature geothermal water for power generation using binary fluid plants. Significant eel progress in geothermal heat pumps has also increased the development potential for geothermal resources. Geosciences used in locating reservoirs, to characterize development potential and well location derive from the drilling technology of the petroleum industry. The oil and gas development of tribes provide a direct transfer poten- tial and information resource for geothermal energy. Unfortunately, the difficult permitting process for drilling also transfers to the potential for geothermal development. Biomass energy is a term used to define a range of prod- ucts derived from photosynthesis. Solar energy is convert- ed through photosynthesis in green plants and is stored in the plant material. Biomass is therefore a form or stored solar energy. Biomass includes wood fuels, agricultural residues, forestry residues, urban wastes, liquid organic wastes, and energy crops. These biomass resources can be converted by different technologies into heat, electricity, or liquid and gaseous fuels. By far the most common conver- sion of biomass is through direct combustion to provide heat or to fire a boiler and to ultimately generate electrici- ty. The dispersed nature of biomass requires a collection, or consolidation process, which can be very costly. The most utilized biomass resources center around existing collection mechanisms, such as municipal wastes or indus- ’ \trial wastes. Competing applications for some biomass feedstocks, such as wood chips and sawdust, may reduce the biomass energy cost-effectiveness. While biomass con- version technologies are always improving, the characteri- zations and dependability of the feedstock is of primary concern for biomass energy developers. The shear volume of biomass, in its may forms, provides all tribes with some measure of biomass resource. Additionally, collection services from nearby non-tribal sources may increase the viability of specific projects. Hydropower is another form of renewable energy being utilized by some tribes, such as the Warm Springs, Tule River, and Salish-Kootenai, among others. Numerous potential low-head hydro sites exist on Indian land. Renewable energy technologies are most often considered as options to more conventional energy forms: oil, gas, or coal. However, hybrid systems which combine two or more renewable or conventional fuels can be very cost- competitive. Tribal energy resource development should also include investigations of hybrid systems as a means to reduce the cost of stand-alone renewable energy genera- tion. Additionally, hybrid systems may offer an environ- mental advantage such as the synergistic effect of co-firing high-sulfur coal with biomass to reduce emissions. The historical national and tribal energy development focus on coal, oil, and gas has resulted in a general lack of understanding of the potential for renewable resources. Additionally, the “competition” between fossil fuels and renewables has created a confrontational climate among energy developers that seeks to minimize the value of the competing resource. The emergence of advanced and more cost-effective renewable energy technologies coupled with a strong environmental concern for energy develop- ment provides an opportunity for tribes to reevaluate their renewable energy resources. Specific surveys for each of the renewable resources are necessary to fully evaluate the local tribal opportunities. B. Political Resources: Tribes as Independent, ) Sovereign Entities. Sovereignty is a critical feature of the status and power of federally recognized Indian tribes in the United States. Sovereignty is a complex concept and can be defined as “the supreme power from which all specific political pow- | ers are derived.”24 Sovereignty is inherent; it comes from within a people or culture. Ideally, sovereignty is the unrestricted right of groups of people to establish them- selves in the political, social and cultural fashions that meet their needs. It is the right of a people to freely define ways in which to use land, resources and manpower for their common good. Finally, sovereignty is the right of people to exist without external exploitation or interfer- ence. Indian tribal governments, as representatives of Indian reservations (which are technically considered nations) possess all the inherent power of any sovereign government (e.g., of a state), except as those powers may have been qualified or limited by treaties, agreements, or specific acts of Congress. Included among these inherent powers of Indian governments are the following:26 1. The power to determine the form of government. 2. The power to define conditions for membership in the nation. 3. The power to administer justice and enforce laws. . The power to tax. 5. The power to regulate domestic relations of its members. 6. The power to regulate property use. > Sovereignty is the foundation upon which tribal relation- ships with other government and private organizations are built. In this context tribes interact with federal, state, and local governments in a “government-to-government” rela- tionship. Similarly, interactions between private industry and tribal governments should acknowledge the legal authority of the tribe. Tribal sovereignty has not always been respected, however, particularly in the use and management of natural resources ( on tribal lands. Early episodes in the management of tribes’ natural resource base for the ostensible economic well-being of reservation residents were characterized by inexperience on the part of tribal representatives and by blatant oppor- tunism and exploitation on the part of industry and state and federal government agencies. This practice continued until well into the 1970s, and resulted in unfavorable (to tribes) energy mineral leases, many of which are still in place currently. While many tribes have made significant progress in rectifying the unfavorable leases and business deals of the past and in improving the management of nat- ural resources on their reservations, further progress needs to be made.27 Most tribes are seeking both greater levels of self gover- nance and self sufficiency which requires a careful balance of political and economic aims in order to foster overall tribal welfare. Indian tribal leadership has become much more informed, educated and pro-active with respect to the conduct of business matters and the management of energy-related industries on tribal lands. Many tribes nov recognize that their natural resource base, including both conventional and renewable energy resources, represents something far more valuable than has been traditionally reflected in royalties and lease payments to non-Indian businesses. Tribes view the energy resource supply and electric utility industry as presenting lucrative economic development opportunities that can be pursued in a way that is reconcilable with self-determination, sovereignty \ ha environmental protection. \7/ <.) The increased capabilities of tribal leadership and the SS cise of tribal sovereignty gives tribes a powerful political tool in managing the entire spectrum of energy develop- ment on their lands. With the opportunity for energy resource development on their lands, tribes will have greater political strength to control and define their partici pation in development, production, transmission, market- ing, and distribution. The combination of resource devel- opment opportunities and tribal political powers will assi: tribes in negotiating energy resource agreements and increase their capabilities to supply energy products and services to expanded markets through such pursuits as: Inter-tribal compacts, contacts with power marketers, and arrangements with national laboratories, and agencies. As energy policy and the deregulation of various energy industries — specifically the electric utility industry continu: to demand the attention of state and federal lawmakers, Indian tribal governments committed to pursuing energy | development have the opportunity to cultivate a powerful voice in the political debate about national energy strategie 24-Tribal Sovereignty and Ethics in Tribal Government”, Bill Helmich Associates, September, 1992. 2Btpid. 26Tbid. 27 For example, refer to the history of Peabody Coal Company's relationship with the Hopi Tribe and the Navajo Nation with respect to Peabody’s management of the Black Mesa-Kayenta Mine Complex. 10 me for the natural environment; many tribes still maintain this GC: Legal and Institutional Resources ~\. commitment. However, too often tribes have been con- There aré a number of legal and regulatory mechanisms available to tribes for natural resource management and economic development, many of which support tribal sovereignty and self-determination. Tribal governments also have the power to create tribal businesses and to extend important benefits (e.g., tax exemption) to busi- ness partners. Tribal sovereignty exempts reservation res- | idents from state taxation, and tribal governments have the authority to issue tax-exempt bonds and to participate | in other forms of structured debt. Tribal companies with a tribal charter share the exemption from state tax, and some special economic development corporations can participate in tribal debt financing arrangements.28 Tribal governments also have the ability to exercise power of eminent domain, whereby the tribal gove can purchase the assets of a utility that already exists on tribal lands, and then operate the utility for the benefit of reservation electric consumers. A tribe pursuing this course of action would have the power to set rates for ce power sales, control the operation of the utility, and choose methods for delivering electricity to consumers in its ser- vice territory, including reservation consumers. This means that a tribe interested in renewable energy and ener: gy efficiency could use its utility to provide renewable power plants for its unserved (e.g., remote, off-grid) cus- tomers and could purchase power for its grid-connected customers from tribal or non-tribal renewable power providers. Tribes also have the power to regulate energy projects 0: their lands. This power includes, but is not limited to, thi ability to control utility rights-of-way, to enforce environ- mental regulations, and to enforce labor, building, busi- ness, and health codes. Any conventional energy, renew- able energy or energy efficiency project on Indian lands is subject to the regulatory power of the tribal government. This power includes both the power to enforce federal regulations, and to enact and enforce tribal regulations. For instance, tribal environmental protection agencies _, have, on some reservations, begun enforcement of the | Clean Air Act Amendments and the Clean Water Act and a host of other federal environmental laws. D. Environmental Ethics Historically, Native American culture, values and customs have reflected an unparalleled commitment to and respect ment30 f » Nea ec fronted with extremely unfavorable choices between pre- serving their identity, securing economic opportunity, and protecting the environment. As a result, many tribes have had to compromise traditional values in the name of eco- nomic progress.2? In attempts to identify less environ- mentally impacting economic development opportunities, an increasing number of tribes are considering the devel- opment of renewable energy projects (as well as projects utilizing or combining natural gas) as realistic and attrac- tive ventures. Because of tribes’ historical and renewed commitment to environmental protection, they represent logical partners for non-Indian businesses wishing to >- develop renewable energy projects. Renewable energy evelopment also represents an opportunity for tribes to link their environmental ethics and priorities with those of self-determination and sustainable economic develop- Financial Resources w tribes have independent sources of revenue and many have historically relied to a great extent on federal support, both for economic development and for day-to- day financing of tribal governmental functions and ser- vices. Unlike in non-Indian communities, a vigorous pri- vate sector is largely absent on many reservations, and changing this situation will require substantial invest- ment, training and improvement of both physical and institutional infrastructure.3! Some tribes have been suc- cessful at establishing business ventures, arranging joint tax agreements with states, or adopting their own limited tax systems to raise revenues required for tribal govern- ment functions. The advent of casino gambling on certain reservations has provided a source of revenues for some tribes, which has been reinvested in reservations.32 Because of tribal sovereignty and the unique legal and political standing of tribes, there are several financial resources and mechanisms which can be leveraged for economic development and energy project development. Equity financing optio: more available to tribes.now than they have been eee ee eee tribes now _have financial resources available for project development. “Tribes have also been more successful at attracting equity investment from non-Indian firms. Tribes can also now take full advantage of various debt financing options. These mechanisms are described in detail in this section. 28it is possible for tribes to use tribal charters and contracts to carefully structure any partnership relationship and to provide for an equitable balance of risks and benefits. For example, two uranium companies are on the verge of being licensed to begin an in-situ leaching recovery operation on some tribal lands in the southwest, despite very serious concerns about the impacts of the operation on water quality. Another tribe has been bitterly divided about a proposal to site a nuclear waste disposal facility on the Teservation, to provide jobs and economic development opportunities for reservation residents. 30Renewables are not without environmental impacts, however. For example, eagle habitats and other aviary habitats are often located in the vicinity of good wind genera- tion sites and transmission lines have possible human health impacts (e.g., electromagnetic field exposure). Tribes considering renewable energy development will need to consider these potential impacts and develop comprehensive polices to guide their initiatives. 31 Tim Smith, “Financing Economic and Business Development on Indian Reservations: Fulfilling the Promise of Self-Determination”, Northwest Report, April, 1990. 32Fora study of the economic effects of Indian gaming in one state, see “The Benefits and Costs of Indian Gaming in New Mexico,” prepared for the New Mexico Indian Gaming Association by the Center for Applied Research, January 1996. ad Se 1. Conventional Financial Mechanisms for / Financing Project Development: Bond Issuance One source of project financing is bonds, both tax-exempt and taxable, issued by tribal governments. Though more limited in their use than taxable bonds, tax-exempt bonds for many projects offer a viable low-cost project financing tool. In 1982, Congress enacted the Indian Tribal Government Tax Status Act, which extended many of the tax advantages enjoyed by states and local governments to tribal govern- ments. This Act greatly strengthened the ability of tribes to levy taxes, and provided tribes with an opportunity to devise new tax schemes to support the provision of essen- tial services. The Tax Status Act was amended in 1987 as part of the Omnibus Reconciliation Act. The amendment effectively limited tribal authority in issuing tax-exempt bonds to two categories: (1) general obligation bonds, and (2) tax-exempt manufacturing bonds.33 General obligation bonds are tax-exempt bonds that may be issued to finance “essential governmental functions.” Tribes are eligible for these bonds as long as the projects for which they seek financing are not already bonded by states or local governments. The types of projects that can be financed with general obligation bonds include schools, street and road construction and repair, and sewer and waste management systems. These bonds can also be used to finance utility development, including generation facilities and transmis- sion and distribution facilities34 Tax-exempt manufacturing bonds are considered “private purpose” bonds, and can be issued to purchase, construct or improve tribal manufac- turing facilities. However, these bonds cannot be used to purchase land or to finance working capital for start-up or expanding enterprises. The tax-exempt manufacturing bonds also have a stringent employment criterion, which effectively requires that, for every dollar of bonds out- standing, tribes must pay a predetermined amount of wages to tribal member employees (these wages are, in | turn, subject to federal income tax withholding). Tax- exempt manufacturing bonds have a very specific and limited use and, while they are appropriate for specific ventures, they are not always the mechanism of choice | for many projects. 2. Trust Status and Sovereign Immunity Trust status characterizes the unique relationship that Indian tribes have with the federal government. The trust relationship is a doctrine that helps support progressive federal legislation enacted for the benefit of Indians, and provides tribes with federal assistance in protecting their natural resources and enforcing time-honored treaties and statutes.5> The trust status of tribal land means that it can- 33Smith, 1990. “not be mortgaged as security for a loan. Lenders frequent: ly view trust status as an obstacle to investing on reserva- tions, but tribes can use their land and other trust assets in ways that can still secure loans without jeopardizing their trust status. On many reservations, land leases represent a continuing source of revenue, which can be used to secure a loan in lieu of a mortgage. Interest earned on trust funds held in tribal accounts by the Bureau of Indian Affairs represents anothe: important economic asset of tribes. As a result, tribes have the ability to leverage these financial resources to secure financing for capital projects, as well as public services.36 As discussed in Section IILB., Legal and Institutional Resources tribal sovereignty is an important legal feature of Indian tribes. A related feature of tribal status is sovereign immu nity, which serves as a unique element in tribal financing, as explained below. Sovereign immunity is a legal doc- trine to protect federal, state or tribal governments from lawsuits which might otherwise cause these government: to surrender assets from their treasuries. For an Indian tribal government, sovereign immunity assists the govern: ment in protecting its assets held in trust for all tribal members. Immunity can be waived only by the tribe or by Congress. In order for a tribe to establish regular business relationship with both debtors and creditors, the tribe must be able to enter into enforceable contracts. Lenders may be reluctant to loan money to a tribe unless they can be assured that the tribe has provided sufficient security to permit the repay- ment of all amounts that will be due. If the tribe borrows money and agrees to repay it over time but does not waive its sovereign immunity, the lender has no assurance that th | tribe will not claim sovereign immunity if a suit is brought by the lender for the repayment of the loan.3” A waiver of sovereign immunity may be limited or genera in its design. Examples include: a. A limited waiver based on a specific entity. A tribe can establish a subordinate or separate entity for purposes of the transaction and provide for a waive of immunity of the subordinate entity only, as opposed to the tribe itself. . A general waiver based upon the nature of specific claims asserted. This could be a waiver only for claim for payment of the amount owed on a bond or loan. A limited waiver based upon the type of legal relie sought. A limited waiver could be made for only This method of financing is a primary source of revenue for municipal and state governments. It is worth noting that in 1994, state and local governments issued more thi $160 billion in long-term, tax-exempt bonds. 35The American Indian Resources Institute, a 36Tim Smith, “Financing Economic and Business Develogiaans on Indian Reservations: Fulfilling he Promise of Self-I (-Determination”, Northwest Report, April, 1990. Sit is important to clarify here that a tribe that chooses to waive tribal sovereign immunity has not waived its sovereignty. The tribe can maintain its sovereignty (i.e., its independence) and still waive its immunity for the purposes of entering into a contract. 12 certain types of relief, such as to realize a specific AS Federal Grant Programs: Title 26 security for the loan or repayment from a specified ( Title 26;. While Indian tribes are eligible for numerous source. | competitive and non-competitive federal grant programs d. A limited waiver based upon a specific court or designed to promote economic development on reserva- forum. Often waiver provisions are limited to legal _|_ tions, one initiative deserves special mention because of actions in specific courts such as a tribal court or its specific relevance to the development of Indian ener= SS federal court or may be broader and include a gy resources, particularly renewable resources. Title 26 waiver for legal actions brought in a state court. of the Energy Policy Act, titled “Indian Energy Resources”/ irms a Congressional commitment to advance Indian 3. Tax Incentives ibes and Indian reservations as integral forces in the The Omnibus Budget Reconciliation Act of 1993 contains ation’s overall energy policy. Equally important, the unique provisions designed to establish reservation-based guage of Title 26 explicitly recognizes tribal sover- federal tax incentives available throughout all of Indian eignty through its admonition that the Title be imple- country, and only in Indian country. These tax incentives ented in a way that is consistent with positive govern- are referred to as the “Indian Investment and Employment thent-to-government relationships between tribes and _ Tax Incentives” and can be a constructive tool for influenc- _ the federal government. ing the decisions of new businesses to locate, or existing businesses to expand, on Indian reservations. The Indian Title 26 contains six sections; however, since the passage of Investment and Employment Tax Incentives legislation EPAct, only two sections of the Title have had Congressional consists of two primary parts: (1) Accelerated Depreciation funds authorized: (1) Section 2603, which is intended to for Property on Indian Reservations, and (2) the Indian help tribes establish or strengthen the industrial and Employment Tax Credit. administrative capacities for developing, refining and marketing energy resources on their reservations; and (2) Under the accelerated depreciation incentive, the recovery Section 2606, which authorizes financial assistance for schedule (i.e., annual depreciation deductions) for speci- renewable energy and energy efficiency projects. fied depreciable property is accelerated in relation to the recovery schedule normally allowed (on non-Indian lands) _‘In fiscal years 1994 and 1995, the U.S. Department of Energy for a particular class of property. A company or organiza- undertook a competitive grant program to provide tribes tion investing on an Indian reservation can take advantage With financial resources to analyze the feasibility of vari- of accelerated depreciation, thereby gaining access to the ous energy development initiatives on their reservations. early tax savings which can then be used for other invest- To date, 35 competitive grants totaling $6.5 million were ment purposes. The applicable acceleration period ranges awarded to 29 tribes and Alaskan native corporations in from a two-year recovery period for property otherwise 13 states. The projects range from feasibility studies for deductible over a three-year period, up to a 22 year recov- renewable energy development projects, acquisition and ery period for non-residential real property (such as anew \_ installation of technology and equipment, energy manage- building or modification to an existing building) which ent and policy development, and construction of infra- would ordinarily be depreciable over a 39 year period.38 structure and facilities. In fiscal year 1996, three tribes were successful at obtaining Congressional earmarks for The employment tax credit was established to encourage their individual Title 26 projects; these earmarks totaled companies doing business on Indian reservations to hire $8.6 million. While the Title 26 grant program has provided tribal members and to stimulate increased wages and much-needed financial resources for tribes to assess and health insurance benefits for tribal workers. Employers pursue renewable energy development on their reserva- qualifying for this tax credit are entitled to a credit of tions, it is only authorized through 1997. The Department twenty percent of the qualified wages paid or incurred of Energy did not request appropriations for the Title 26 during a taxable year, plus qualified employee health program for fiscal year 1997 and the Department has not insurance costs paid or incurred during a taxable year, been able to mobilize a successful technical assistance pro- for each tribal member employed. The credit is applica- gram or follow-through initiative to assist tribes who may ble only to the employee’s first $20,000 of wages and determine, through their Title 26 projects, that they have a health insurance costs, and the credit can be taken only feasible opportunity to proceed with renewable energy for employees whose total wages from the employer do resource development. not exceed $30,000 during the taxable year.39 381pid. 3%pid. 13 In the absence of funding for critical resource assessments, feasibility studies, and project planning as was available in very limited amounts until recently under Title 26, renew- able energy development on Indian lands will be seriously impaired. Most tribes simply do not have sufficient discre- tionary financial resources to underwrite these important pre-development activities. Tribes recognize the importance of fostering productive relationships with private industry to sustain and ive ly manage any energy resource development initiative on i reservation land, and programs such as Title 26 provide important opportunities for government-to-government cooperation and to demonstrate the effectiveness of renew- able energy technologies. 5. Other Tribal Resources that Can be Leveraged for Financing Purposes Another finance option that is being explored by some tribes is the concept of inter-tribal financing. For example, tribes who have successful gaming operations could invest in project development on non-gaming reservations that lack investment capital. Several tribes have successful gaming _ operations and are seeking investment opportunities. Inter- tribal compacts involving renewable energy development can provide expanded markets for those tribes interested in developing these resources. |_Tribal lands can be contributed to a project or made aV i able on lease terms more favorable than can be found in non-Indian communities. Not having to make an outrig! urchase of land lowers a projects start-up costs. of lowering costs and increasing profitability for specific ‘ojects. Indian tribal members are able and willing to trained and are not unionized and therefore represent an attractive, local labor pool (note also the tax advantages associated with employing tribal members, discussed in earlier in this section, in IILE.3., Tax Incentives). Firms with— minority Indian ownership qualify for preferential treat- | Tribal governments and tribally owned corporations are | not subject to state taxes, which has the obvious advantage | }} { | ment under various federal contracting regulations and——" | often make attractive joint venture partners for non-Indian owned companies. Tribes are also able to take advantage of federal programs which can be used to subsidize or capitalize business or project development initiatives.40 _ CF —FZ 40Dbid. / IV. TRIBAL NEEDS An unfortunate legacy of American history is the long- standing depressed socioeconomic conditions on the major- ity of American Indian reservations.*! Indians have made tremendous progress in recent years, but are still the poorest minority in the United States, have the highest unemploy- ment rates, and suffer from some of the poorest health conditions, lowest education levels, and highest incidences of other social problems.42 For example, 45% of the Indiar population in the United States lives below the poverty level and 75% of the Indian work force earns less than $7,000 per year. The average unemployment rate among Indian people _ is 45% and unemployment on some reservations is as high | as 90%.43 The disparity between the income of Indians and those in mainstream economies continues to widen. eae Nees In spite of significant progress being made on many reser- vations, these statistics underscore the need for continued commitment, innovation and investment on Indian reser- vations to improve economic opportunity and quality of life. As has been described earlier in this paper, many tribe: are interested in taking control of their natural resource base and are examining potential new opportunities in the electric utility industry and energy supply industry. Renewable energy development is a particularly attractive development option for many tribes because of the abun- dance of the resources on tribal lands and the consistency these projects have with traditional tribal environmental — ethics. However, tribes need much assistance, including echnical and financial resources, education, and planning and policy development support, in order to bring many of their promising renewable energy projects to es A. Economic Development and Job Creation Economic development is not simply an issue of accessing financial resources. Sustainable economic development o1 dian reservations must also address such issues as geo- inadequate infrastructure, and institu-__ tional weaknesses. In order for tribes to be successful in | their renewable energy project development initiatives, they need to understand how the project might address the economic development and employment needs of thei reservations. Tribes considering renewable energy project: as economic development opportunities need to carefully consider the ownership arrangements for their projects, to ensure that tribes benefit from increased royalties, tax 41 according to the U.S. Census Bureau, in 1990 there were 1.85 million American Indians in the United States, and 47.6% of this population resided west of the Mississippi River (US. Census Bureau, 1990, and American Indian Digest, 1995 Edition). 2for example, fetal alcohol syndrome is 33 times higher than non-Indians and tuberculosis is 7.4 times greater than non-Indians and Diabetes is 6.8 times higher than non- Indians. 43 american Indian Digest, 1995 Edition. 14 revenues and\or profits and fees resulting from the pro- ject, which can then be reinvested in positive ways on the reservation. Tribes need to understand the indirect and cumulative economic costs and benefits of their renewable energy projects as well, so that this informa- tion can be integrated into other tribal economic devel- opment planning initiatives. Tribes pursuing renewable energy projects need to Ly evaluate the employment needs of reservation residents and t requiremen , Often, } renewable energy projects are not labor intensive and may not represent a substantial source of jobs, but the jobs that are created are usually for skilled and semi-skilled workers and pay above average wages. B. Electric Service Needs Indians, like most low-income Americans, spend a dispro- portionately large percentage of their household income on residential energy and automobile fuels. These expen- ditures could be made on other goods and services both on and off the reservation if reservation households and businesses were better served with a full range of electrical services, including demand side management applications, energy efficient appliances, weatherization assistance, and other basic energy conservation measures. Many tribes still face enormous needs for expanded elec- trification on their reservations. For example, the Navajo Nation still has almost 18,000 homes that are without elec- tricity. The lack of full electrification has contributed to substandard living conditions on many reservations and has served to inhibit various economic development initia- tives. Indian tribes interested in tapping their renewable resources to meet energy demand on their reservations need to develop ways of documenting and forecasting this demand so that the feasibility of becoming energy self- sufficient and\or serving remote locations on the reserva- tion can be adequately evaluated. The firm and non-firm energy needs of the reservation should be reconciled with the firm and non-firm attributes of the specific renewable energy project being considered. Indian tribes interested in managing energy use on their reservations and in managing the development of energy supplies on their reservations need to develop a process for prioritizing the energy needs of the reservation. For example, if basic service to reservation households and businesses is inadequate or unreliable, tribal members and the tribal government need to foster a more effective busi- | ness relationship with their current power providers or seek alternative suppliers. Reservations represent impor: tant segments of the customer base of many utilities and, in an increasingly competitive industry, customer deman and preferences (including those of tribes) will be more and more important for utilities to address. Ultimately, 15 tribes may have the opportunity to leave their current power provider for a different provider if their needs are not addressed. Further, tribal members and tribal govern- ments need to understand and become active participants the state regulatory process; tribes can and should make themselves known as consumers with legitimate needs and complaints to their state public utility commission. C._ Technic. Business Traini maT j essential component of developing renewable energy | | } projects on Indian reservations is an effective utilization of local human resources. While it is true that a tribe’s renewable energy project may require a wide range of professional, technical, administrative, unskilled labor, this range carr in fact be found on virtually every Indian reservation. In order to realize the technical and business training benefits that renewable energy devel- opment projects may present fot reservation residents, tribes need to carefully analyze the skills and expertise required for their specific project. This analysis will enable tribes to obtain the needed training and to accu- rately represent the availability of labor and the specif- ic employment benefits associated with the project to outside investors. In order to understand the technical and business training needs of potential tribal employees and project partici- pants, tribes need to become better educated about renew- able energy generally and about the specific technologies and requirements of their particular application. Tribal col- leges and community colleges can play an important role in this regard; tribes need to explore ways to cultivate and improve their relationships with these institutions. These colleges could be encouraged to strengthen their ties with Indian tribal governments and organizations, to provide- technical and business training in the fields that are most relevant to renewable energy development. In developing or pursuing appropriate renewable energy development training programs for tribal members, tribal governments also need to explore the possibility of improving inter- tribal working relationships, so that information and expe- riences can be shared and transferred across tribes and tribal institutions. In addition, tribes need to begin to cultivate business rela- tionships with private industry, including utilities and renewable energy technology vendors and manufacturers, because these entities are also valuable sources of education and technical assistance. Finally, the network of national laboratories conducting research on renewable energy tech- nologies, as well as the Department of Energy itself, can be sources of technical assistance and training as well. D. Financial Need As a result of the growing movement among tribes for self-determination, many tribes are now seeking more | | semi-skilled, and \ / | active roles in owning, developing and regulating energy and natural resource enterprises on their reservations. However, tribes still lack predictable and diversified rev- enue sources with which to capitalize the development and regulation of industries on their reservations, includ- ing renewable energy projects. Access to capital is a pre- requisite to any economic development initiative, and financial resources are needed for investment in infrastruc- ture, services and businesses.*4 Indian communities in general have not experienced advanced development of their financial systems or institutions. Banks, mortgage companies, venture capital firms and other finance institu- tions are almost nonexistent on Indian reservations, and off-reservation institutions frequently do not adequately serve Indian communities.4° In order to improve their opportunities for generating rev- enue and creating a climate favorable to financial invest- ment, tribes need to address several important prerequi- sites to development and long-term sustainability of eco- nomic activities. These include: 1. Policies that delineate the roles and responsi- bilities of the public and private sectors and are supportive of economic activities; 2. Access to capital financing on terms and conditions that are appropriate for a range of investment needs; 3. Development of economic and financial institu- tions that can identify investment opportunities and mobilize and target resources effectively; 4. Alegal system that facilitates investment and pro- tects the interests of all parties engaged in financial or commercial transactions.*6 Tribes interested in pursuing the development of renew- able energy projects need to examine a diverse range of financing options; many of these options can actually be considered to be financial resources of tribes and are dis- cussed in Section III.C., Financial Resources. Tribes need to explore in depth the various advantages their uniq' legal, sovereign status can have in packaging financing options and in structuring economic development institu- tions and projects on the reservation. E. Energy Resource Planning and Market Research As noted throughout this paper, many tribes have abun- dant renewable resources on their reservations. Unfortunately, progress in utilizing these resources has been impeded by a lack of data concerning the geographic extent, size, and quality of these resources on individual reservations. This section addresses the tribal need for energy resource planning and market research. Inventories and measurements of solar, wind, biomass, - and hydro potential on Indian reservations is seriously lacking. While solar radiation and isolation data are available for areas near many tribal lands, data specific to many tribal lands have yet to be developed. Wind data are likewise not available for the vast majority of Indian reservations, except the Blackfeet, the Fort Peck Tribes, the Standing Rock Sioux, the Turtle Mountain Chippewa, and the Jemez Pueblo. Due to the site-specific data requirements of most renew- able energy projects and the lack of such data for most Indian lands, an urgent need exists for a comprehensive program to collect and evaluate such data. Resource assessments are an essential precursor to full-fledged eco- nomic feasibility studies and subsequently to specific pro- ject plans. Market analysis is a critical area that must be also be addressed if renewable resources in Indian country are to be developed. Each tribe that desires to be competitive in the electric utility industry must be able to establish and penetrate markets based reliable on information. Opportunities for Indian tribes to become involved in the electric utility industry and to become experts in renew- able energy development require an increased under- standing of the reservation resource base and industry market conditions. At a minimum, tribes, in cooperation with both public and private sector institutions, need to undertake the following: * Renewable energy resource assessments on a regional and tribe-by-tribe basis; ¢ Electric energy market research on a regional and tribe-by-tribe basis; © Project specific engineering feasibility and planning studies; and * Cooperative research and demonstration projects that highlight the renewable resource available to tribes. V. CONCLUSIONS AND IMPLEMENTATION STRATEGIES The role of Indian tribes in energy development is changing No longer interested in passively leasing their natural resources, tribes are becoming more aggressive in managin; their own resources and more active participants in regional markets and national policy development. The circumstances and characteristics of renewable energ development are consistent with tribal goals of becoming 44Tim Smith, “Financing Economic and Business Development on Indian Reservations: Fulfilling the Promise of Self-Determination”, Northwest Report, April, 1990. 4Stbid. 46bid. more self-reliant and expanding economic opportunities that are compatible with cultural and environmental val- ues. Many tribes have extensive renewable resources which, if developed, may serve the needs of rural electri- fication on the reservation or provide a possible revenue stream in the event that power is sold to markets off the reservations. In the past, energy development that has occurred on reservations has been initiated by private sector companies and federal agencies. Renewable energy development on reservations is now being initiated by tribes, to meet tribal goals. This new approach to energy development may require new relationships with out- siders, as tribes interact with private sector entities and various government agencies, and new structures on the reservation, such as tribal utility authorities. There are over 500 different tribes in the US. Their needs and aspirations vary greatly, as do their resources. Not all tribes have the capabilities or desire to aggressively develop renewable energy resources. However, all tribes do share a common philosophy of preserving their culture and the natural environment, and share a desire to become more self-sufficient. Renewable energy technologies can play an important role in this common philosophy. Although this new role for tribes in energy development may be emerging as a result of their own initiative, the vast opportunities cannot be fulfilled without the support and positive actions of government and the private sector. Tribes have needs and limitations which, if not addressed through a cooperative partnership with private and public sector entities, may prevent tribes from realizing their goals of developing renewable energy. The realization of tribal goals to become independent players in the energy industry will require significant knowledge-sharing from those private sector entities that have already negotiated the process. Based on the information and analysis presented in this paper, the Task Force on Developing Renewable Energy on Indian Lands has identified recommendations for tribal, state, federal and industry representatives to consider as they continue to pursue the development of renewable energy. While the list is not exhaustive, it simply high- lights initial actions that can be taken by all stakeholders interested in the common objective of enhancing the mar- ketability of renewables. 17 Tribes ¢ Develop tribal energy policies consistent with long- term tribal goals. ¢ Explore tribal organizational structures such as tribal utility authorities or energy boards which would facilitate tribal energy role. * Develop inter-tribal energy policies that foster coopera tion, sharing of resources and serve to strengthen tribal positions in national policy development and financial markets. Assess implications of utility industry restruc- turing and take an active role in influencing policy outcomes. ¢ Analyze how tribal renewable energy resources and projects fit into regional markets. ¢ Expand tribal technical capabilities and information resources concerning renewable energy resources and technologies. Corporate Community ¢ Establish partnerships which utilize potential tax and regulatory advantages of partnering with tribes in developing resources. ¢ Establish organization to organization relationships for common business interests through communication and understanding of tribal culture and needs. Government ¢ The President and Congress should adopt and pursue a cohesive long-term, inter-agency strategy to achieve tribal renewable energy development. ¢ Congress should appropriate adequate funding for tribes to inventory renewable energy resources on a regional and tribe-by-tribe basis, and provide funding for technical assistance and seed funding for renewable energy projects. © States should adopt fiscal and regulatory policies support ive of tribal renewable energy development. ¢ US Department of Energy (DOE) should conduct energy market research on a regional basis with data dis- aggregated by individual tribes. ¢ DOE should facilitate business relationships between power providers and tribes. ¢ DOE should provide technical assistance in project feasibility analysis, project development and project finance. ¢ DOE should include tribes in research and demonstration projects with DOE's national laboratories. ¢ Insure tribes are represented in policy making or advisory bodies related to utility restructuring and renewable energy development programs. * States should deal with tribes in a government-to- government fashion. Appendix A Participants in the Task Force on Developing Renewable Energy on Tribal Lands * Include tribes in state/regional resource inventories. Harris Arthur Navajo Nation Rob Bakondy ENRON Capital & Trade Resources Todd Bartholf Winrock International Hap Boyd Zond Systems, Inc. Ray Dracker Bechtel Group, Inc. Jack Ehrhardt/Cisney Havatone Hualapai Tribe Zuretti Goosby Yurok Tribe Steve Grey Lawrence Livermore National Laboratories /Navajo Community College Roger Hill Sandia National Laboratories Lori Jablonski Center for Energy Efficiency and Renewable Technologies Rose McKinney-James CSTRR Connie Lausten Bechtel Group, Inc. Vernon Masayesva Hopi Tribe University of Arizona, Tucson, American Indian Studies Program Gary Nakarado National Renewable Energy Laboratory Paul Parker Center for Resource Management Brian Parry Western Area Power Administration Chet Pino Laguna Industries, Inc. Robert Robinson Center for Applied Research Wyatt Rogers Ill Sigma Co. Steve Sargent USDOE - Denver Support Office, Indian Resource Development Jesse Smith Seattle Northwest Securities Corp. Ron Solimon Laguna Industries, Inc. Robert Velarde Jicarilla Apache Tribe Jim Williams University of California, Berkeley Jim Williamson Heritage Technologies For further information contact: Center for Resource Management 1104 East Ashton Ave., Suite 210 Salt Lake City, UT 84106 ph: 801-466-3600, fax: 801-466-6800 Appendix B Global Climate Change In addition to causing emissions of various regulated air pollutants, the burning of fossil fuels for electrical gener- ation also results in emissions of carbon dioxide (CO2). CO? contributes to atmospheric and climatic changes com- monly referred to as global warming. The International Panel on Climate Change (IPCC), an international group of 2,500 climate scientists from 55 countries assembled under the authority of the United Nations to monitor global climate changes, recently released a report forecast- ing an average 3.6 degree Fahrenheit increase in the earth’s temperature over the next 100 years — a change the panel warns could cause widespread economic, social and environmental dislocation over the next century. While this predicted rise in average global temperature is slightly lower than what the IPCC concluded in its earlier report from 1990, it nevertheless represents the first time the seven-year-old panel has unanimously agreed that the bal- ance of the evidence suggests a discernible human influ- ence on global climate. The IPCC report notes that the effect of global warming over the next century will depend in large measure on the choices society and governments make with respect to protecting the environment and public health. In 1992, the United States joined 146 other nations in signing the non-binding Framework Convention of Climate Change (FCCC) agreement to return greenhouse gas emissions to 1990 levels in eight years. This agreement commits the signatory countries to undertake their best efforts to reduce global greenhouse gas emissions through the implementation of national programs and policies. The FCCC agreement provides for Activities Implemented Jointly (AIJ)47 whereby parties in different countries coop eratively implement a project that will reduce or sequeste1 greenhouse gas emissions. AJ] opportunities or other form of international collaboration may become a source of financial and technical assistance to Indian tribes in imple menting environmentally favorable renewable activities.4 The following organizations have participated in AIJ pro- grams and related activities aimed at reducing greenhous: gas emissions through renewable energy development. These organizations could constitute logical partners for tribal governments and organizations interested in pursu- ing similar initiatives. e Sacramento Municipal Utility District ¢ U.S. Department of Energy (Climate Challenge Program ¢ AIJJ Implementation Secretariat (U.S. Department of Energy, Department of State, and Environmental Protection Agency) ¢ Edison Electric Institute’s International Utility Efficiency Program ¢ Edison Electric Institute’s EnviroTech Venture Capital Fund ¢ Electric Power Research Institute Climate Change programs ¢ National Renewable Energy Laboratory’s climate change support services ¢ Global Environment Facility Units at the United Nation Development Programme, World Bank, and Internation Finance Corporation 48Qne other future ally of renewable energy project development may be the insurance agencies. As reported by Reuters America, Inc., Munich Rueckversichorungs- Geslischaft (Munich Re), the world’s largest reinsurance group, concluded that global warming has caused an increase in natural disasters and economic losses. In 1995, combined cost of tropical storms was $7.7 billion, the third highest level of damage ever. “Munich Re said rising world temperatures were causing growing problems arc urged the insurance industry to take an active part in ensuring politicians act to protect the environment.”. APPENDIX C Direct Solar Radiation on Native American Lands O48 a a3 r *; Shebit a Le as ewe fhibe de bos Redd Kee Be ) eageyy Seseresten Resmatintan ber toner 60 state APPENDIX F Geothermal Energy on Native American Lands Het Spriags 7 Sey Sg ia APPENDIX D Wind Energy on Native American Lands hence sce APPENDIX E Biomass Energy on Native American Lands November 2000 *« NREL/CP-500-28595 Renewables for Sustainable Village Power L. Flowers, |. Baring-Gould, J. Bianchi, D. Corbus, S. Drouilhet, D. Elliott, V. Gevorgian, A. Jimenez, P. Lilienthal, C. Newcomb, and R. Taylor Presented at the American Wind Energy Association's WindPower 2000 Conference Palm Springs, California April 30-—May 4, 2000 7 “@As _ « » NREL Cu National Renewable Energy Laboratory Ow 1617 Cole Boulevard Golden, Colorado 80401-3393 NREL is a U.S. Department of Energy Laboratory Operated by Midwest Research Institute * Battelle * Bechtel Contract No. DE-AC36-99-GO10337 NOTICE The submitted manuscript has been offered by an employee of the Midwest Research Institute (MRI), a contractor of the US Government under Contract No. DE-AC36-99GO10337. Accordingly, the US Government and MRI retain a nonexclusive royalty-free license to publish or reproduce the published form of this contribution, or allow others to do so, for US Government purposes. This report was prepared as an account of work sponsored by an agency of the United States government. 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Box 62 Oak Ridge, TN 37831-0062 phone: 865.576.8401 fax: 865.576.5728 email: reports@adonis.osti.gov Available for sale to the public, in paper, from: U.S. Department of Commerce National Technical Information Service 5285 Port Royal Road Springfield, VA 22161 phone: 800.553.6847 fax: 703.605.6900 email: orders@ntis.fedworld.gov online ordering: http://Awww.ntis.gov/ordering.htm a fa Printed on paper containing at least 50% wastepaper, including 20% postconsumer waste RENEWABLES FOR SUSTAINABLE VILLAGE POWER Larry Flowers, Ian Baring-Gould , Jerry Bianchi, David Corbus, Steve Drouilhet, Dennis Elliott, Vahan Gevorgian, Anthony Jimenez, Peter Lilienthal, Charles Newcomb, and Roger Taylor National Renewable Energy Laboratory 1617 Cole Boulevard Golden, Colorado 80401 USA Phone: (303) 384-6910 larry_flowers@nrel.gov Introduction In 1994, the National Renewable Energy Laboratory (NREL) formed a Village Power Group dedicated to matching renewable energy (RE) technologies with rural energy needs in the international market. While classic rural electrification consisted of extending the national grid and/or providing diesel gensets to remote, concentrated communities, it became clear that RE solutions had both economic and environmental advantages over conventional electricity in many remote communities. The key elements of NREL’s Renewables for Sustainable Village Power (RSVP) program were a multidisciplinary team, an application- and village-need-driven focus, a technology-neutral approach, a broad set of in-country activities, the development of complimentary partnerships, and the evolution of an integrated approach. The essential activities of the RSVP team included developing applications, testing systems, mapping resources, analyzing options, initiating pilot projects, and conducting outreach, training, and information activities. This paper describes these activities, updates the lessons learned, and proposes an integrated approach as a model for rural electrification with renewables. Applications Development and Systems Testing Village life is centered around energy-driven applications, such as water supply, lighting, communications, recreation, health services, education, food supply, and enterprise. Currently, these social and quality-of-life needs are supported either marginally or adequately by electricity or non-electrical energy forms. NREL’s role has been to adapt RE technologies to the application or vice versa. NREL has worked with industry on several applications, including ice making, water purification and desalination, battery charging, and water pumping. In 1999, NREL helped design, test, and commercialize village-based wind or photovoltaic (PV) centralized battery-charging stations that could provide basic home lighting and communications needs at the lowest cost. Figure 1. Battery-Charging System Because ice adds commercial value to village enterprises, NREL provided technical assistance to companies that were awarded Small Business Innovation Research (SBIR) Phase 2 projects in this area (see Lynntech, Inc. and Yankee Environmental Systems, Inc. 1999). To help electrification sector officials and non-government organizations (NGOs) understand the use and economics of renewables for village applications, NREL continued developing its application guidebook series, publishing a Spanish version of the Health Clinic guidebook, and developing guidebooks for rural schools, microenterprise, and water pumping. These guidebooks include a description of energy needs, RE system basics, an analysis of energy options, institutional considerations, case studies, lessons learned, references, and a bibliography. The guidebooks were co-authored by the Village Power (VP) team and by international application specialists. Because systems need to be robust to provide reliable service in remote villages, NREL continues to work with industry to test essential components and systems at the National Wind Technology Center (NWTC). With the development of the Hybrid Power Test Bed (HPTB), it is possible to simulate village loads, as well as solar and wind resources, to evaluate system and component control logic and hardware in typical village situations. Providing feedback from these tests to designers and manufacturers results in more appropriate and robust RE solutions. The characterization of component performance parameters is used in computer models to more accurately represent the commercial products in application settings. Figure 3. Rural Health Clinic Replication N Energia Renovable para Centros de Salud Rurales Figure 2. Cover of Spanish Version of Health Clinic Guidebook A particular emphasis at NREL is the development and characterization of RE-diesel hybrid village power systems. In 1999, the VP team replicated three village hybrid systems at the NWTC to compare performance with the same systems that have been deployed in international rural settings, including Chile, Mexico, and Alaska. Two particular projects of note include testing the Alaska high-penetration wind-diesel control system prior to its installation in Wales, Alaska, and the rural health clinic replication. To understand the performance of field systems, we emphasize performance data collection and the associated data acquisition system (DAS) protocol and analysis. In 1999, we installed various types of DASs, both on-site and remote reporting, on our NWTC and field pilot systems. NREL initiated an international collaboration on field performance data collection, analysis, diagnostics, and archiving of direct-current (DC)-based village hybrid systems. Several international workshops were organized to share results and discuss issues. Resource Mapping One of the most serious barriers to the rural application of renewable energy, and to wind energy in particular, is the lack of reasonable quality resource data. Without a firm idea of the resource at the Dominican Republic - Most Favorable Wind Resource Areas 89° me i ag 4 jhe z F } | > Wind Power Classification 208 gar | Resource Potential Wind Power | Wind Speed ir 20100 20 40 80 80 _100 Kitometers sity at 30m at 30m —se maa Utility Rural Wim2 ms 7 : US Dept. of Energy - National pees ce ier [tan o) aoe! A ieee ee, ‘The wind resource classification is specific for Renewabie Energy Laboratory ‘etadenie Good 200. 28061. 68 both utility scale and rural applications and ~ 250. 300 «86. 70 applies to areas with iow surface roughness. pes Good Excellent. 300- 400 7.0- 77 Dennis tilott Excellent 400-1000 77-108 Marc Schwartz @ Wind speeds are based on a Weibull k vaive of 3.0 ‘SA Haymes O4-MAY-1999 5.3 Figure 4. Wind Resources in the Dominican Republic village site, rural electrification officials apply the low risk (although not the low cost) conventional energy solution. NREL has developed a computer-based wind mapping methodology that combines digital topographical data with climatological wind data to generate regional wind maps (1-km? resolution). These maps are useful for educating regional officials about the extent of the wind resource as well as for highlighting areas where wind-energy-based solutions are appropriate. In 1999, NREL developed full country wind resource atlases for the Philippines, the Dominican Republic, and began one for Mongolia. These maps supplement previous maps developed for portions of Mexico, China, Indonesia, and Chile. Solar resource mapping activities are being carried out for the Philippines, Mexico, and portions of China. Analysis of Options The inadequacy of the currently available analysis tools to effectively compare renewable and conventional options is partly responsible for the perpetuation of conventional solutions. NREL developed a set of tools that allows objective, economic comparisons of energy systems for individual buildings and interconnected (isolated mini-grid) facilities to grid extension, using conventional and/or renewable sources. The computer models are called HOMER (generation system optimization and comparisons) and ViPOR (mini-grid system optimization and comparison to individual systems). A third model, Hybrid2, was developed for detailed hourly performance analysis for the serious hybrid-system analyst. The VP team uses these models to analyze and present options to regional officials and rural electrification providers. Through these collaborative analyses, the team can demonstrate the relative economics and service quality that different solutions offer. The models all require estimates of load profiles, renewable resources, and costs; and they offer a wide assortment of output presentation graphics. NREL is actively training rural energy analysts in the application of these tools. In 1999, representatives from the Philippines, China, Australia, Chile, and Brazil were trained to use HOMER. Licensing information and trial versions of HOMER and ViPOR can be accessed at: www.nrel.gov/international/homer and www.nrel.gov/international/vipor In 1999, the VP team applied Hybrid2 to projects in the Philippines, Argentina, Chile, Mexico, the Dominican Republic, China, Russia, Nepal, and Native American lands. Many of these projects involve potentially retrofitting diesel mini-grids in remote villages to either reduce the dependence on diesel or to expand the service to 24-hour power at a nominal marginal cost. With thousands of such mini-grid installations throughout the developing world, many opportunities exist. Currently, there are approximately 250 Hybrid2 users around the world; the model software and documentation are available for a nominal fee to cover transaction costs and can be accessed at: www.ecs.umass.edu/mie/labs/rerl/hy2/intro.htm . NREL contracts with the University of Massachusetts to provide user support and periodic upgrades. Hirncestery Fixed Gobel Solar = 4 Kvn 2at Fuel Price (§/L) Figure 5. Sample HOMER Output Showing the Effects of Wind Speed and Diesel Fuel on Power System Architecture. Pilot Projects An important element in RSVP is developing pilot projects. Over the years, these have proven to be the most instructive activities for country rural electrification communities, the equipment suppliers, the development agencies, and the technical assistance community. The value of the pilot projects is threefold: it demonstrates that the technology works (or doesn’t work); it provides a model to measure the economic costs and benefits against conventional options; and it tests the institutional infrastructure required to sustain the operations. NREL’s early VP efforts emphasized designing, purchasing, and installing the appropriate RE-based solution. The focus was on load estimation, resource assessment, and operational efficiency. While most of these pilots were successfully commissioned, several of them experienced a range of technical and institutional problems. Subsequent efforts included more emphasis on training various levels of operational and design personnel, as well as more attention to institutional issues, such as tariff design, metering, maintenance contracts, policy support, and installing more pilot projects. To demonstrate these concepts, four pilots will be highlighted: Chile, Mexico, Ghana, and Alaska. NREL International Village Power Pilot Projects Bees € Penis = ean Ee | Figure 6. Map Showing Location of Pilot Projects Chile During REIA’94, Chile’s Commission National de Energia (CNE) and the U.S. Department of Energy (DOE) entered into a cooperative agreement to explore the use of renewables in Chile’s rural electrification program (see Baring-Gould, Flowers 1999 and Holz et al. 1997). While the original pilot projects were in Region IX, which had the largest unelectrified population, replication has focused on Regions X and XII. The primary reason for this switch in regional emphasis was the continuity and interest of our partners and organizations in those regions. Because of the excellent wind resource in n southern Chile, the pilot projects were wind-fossil hybrids. The initial Region IX pilots served as a good learning platform to design the present pilots and replication programs. The pilots in Region X and XII are being watched closely by regional officials prior to large-scale replication, which will require serious operational and management attention by the regional utility. Mexico As a part of the United States Agency for International Development (USAID’s) Mexico RE program for rural communities, a number of wind-based remote hybrid and water pumping pilots were installed. Good- to-excellent wind resources exist in a number of Mexican states, especially in coastal and mountainous areas. The earliest hybrid pilot project at Xcalak, QR, provided both technical and institutional lessons. The salt environment, lightning, system complexity, and the lack of local maintenance capability or funds created serious performance problems. Institutional issues of system ownership and management, metering, and tariffs design fundamentally undercut the system’s Figure 7. This Wind-Fossil Hybrid System Installed on sustainability. Currently, there is a the Island of Tac will Supply Full-Time Electricity to collaborative effort to upgrade both the the 87 Families on the Island. generation and distribution systems, as well as correct some of the institutional issues. Subsequent projects improved system design, corrosion resistance, and lightning protection, but suffered from other institutional system oversight and operational issues, including the overriding one of insufficient number of projects to support a service business. The most recent wind-PV-diesel hybrid project is located in the fishing village of San Juanico, BS, and was developed collaboratively by CFE and the Arizona Public Service Company (APS). NREL provided design review, supporting analysis, performance monitoring, and a socioeconomic survey. While the remote monitoring has been somewhat problematic, the data was useful in diagnosing system performance through the development of a special protocol developed cooperatively with APS. The socioeconomic survey was designed to evaluate the effect of converting from part-time to 24- hour power. The initial results showed an increase in refrigeration and small appliance use in households and businesses; an increased sense of security resulting from public lighting; increased telecommunications; increased Figure 8. Wind-PV-Diesel-Hybrid Project at San Juanico educational environment (eliminated school generator); and interest in the local fishing coop in cold storage facility. However, some issues remain that should be addressed to improve user acceptance. These issues include improved communications, tariff design, user education, and access to credit and appliances. It is too early to assess the long-term viability of this solution for remote coastal fishing communities. Ghana As part of the United Nations Development Programme (UNDP) and the Global Environmental Facility (GEF) efforts to promote clean energy technologies, NREL worked with the Ministry of Mines and Energy (MOME) in Ghana to develop a plan for rural electrification in the East Mamprusi District in the northeast corner of the country. Officially launched in February 1999, this $3 million project is known as the Renewable Energy Services Project (RESPRO). It was established initially as a special project unit of Figure 9. Rural Electrification Project in East Mamprusi District, Ghana MOME and will operate in close collaboration with the Volta River Authority/Northern Electricity Department (VRA/NED). It will be operated as a for-profit enterprise, to be “spun off” as a private sector company following the GEF project period. End-users will contract for the energy services they need (grain grinding, commercial refrigeration, vaccine refrigeration, community water pumping, household lighting, etc.) and the RESPRO will own, maintain, and repair the electricity supply equipment and, in some cases, may supply and own the end-use appliances. The electricity services will be provided from freestanding photovoltaic (PV) units and, for a few larger communities, from local 220-volt A/C mini- grids using PV/diesel hybrid power units. Service fees will reflect the revenue requirements for sustainability and growth of the enterprise. The RESPRO will establish the technical, financial, institutional, and socio-cultural requirements for sustainable provision of renewable energy-based electricity services in Ghana. The project is conceived as a pre-investment project, designed to lead the way for future investments by the private sector or in public-private partnerships, in rural energy, and infrastructure services companies. Alaska As part of the system development process, NREL is involved in exploring new concepts that may significantly lower the cost and/or improve the performance of village systems. One such concept is the “high-penetration” wind-diesel retrofit system. There are potential substantial diesel savings (>50%) associated with a control strategy and system architecture that allows shutting down the diesel genset when the wind is sufficient to carry the load, and uses short-term battery storage to reduce diesel start-ups during instantaneous lulls in the wind. In northern climates, an added feature is using both waste diesel thermal energy and wind “dump-load” to supply space heating to community buildings. The control strategy and software development was central to adapting the wind and storage subsystems to the diesel genset in an optimal, scalable, fail-safe manner. The control hardware, software, and storage subsystem were tested and debugged at the HPTB under simulated dynamic operating conditions prior to shipping to Wales, Alaska, for field experiments (see Drouilhet, S. M. July 1999). The system is currently being installed and commissioned, and will be monitored closely for several years. The performance of this system architecture/dispatch strategy will be compared to other, more conventional, wind-diesel systems currently deployed in Alaska, in anticipation of replication in other villages in Alaska and in the developing world. Figure 10. The wind/diesel hybrid system in Wales, Alaska. Lessons Learned One of the most important contributions that the VP team can make is to pass along the explicit lessons we've learned in developing our pilot projects. While each pilot has specific lessons, we have looked across this experience and have summarized them into twelve primary lessons (not listed in order of priority). For a more detailed (and somewhat dated) list and explanation of NREL’s RSVP lessons learned, please see “Lessons Learned-NREL VP Program”, Windpower 98. Systems need to be thoroughly tested prior to deployment in remote, harsh environments. Systems should be robust and simple to operate; simplicity is often more important to effectiveness than lowest cost or highest possible efficiency. 3. Batteries are currently the weak link in rural RE systems, and often the most costly (life-cycle) component. 4. Energy meters and appropriate tariff design are critical to sustainable service. 5. Local training, including operating manuals in the local language, and regional O&M capability are critical for sustained operation. 6. Income generation activities, e.g., micro-enterprise/micro-finance development, are an important aspect of developing sustainable rural energy supply. 7. Singular isolated pilot projects, without a commitment to early replication, and regardless of technology and design rigor, fail due to lack of sustained support. 8. Rural electrification implementation processes discriminate against renewable solutions; there remains a critical need to level the analytical and subsidy playing field. 9. There is no universal best delivery model for rural energy services; the optimal approach requires matching the needs and capabilities of both the users and the service providers. 10. Integrating RE solutions into the country’s rural electrification/poverty alleviation agenda/program is necessary for RE to become a mainstream rural solution. 11. A multi-year commitment (both in time and money) is required to achieve sustainable solutions. 12. An integrated approach that addresses the characterization of the rural situation, policy issues, financing, institutional delivery options, local/regional/national capacity building, characterization of renewable resources, and the comparative analysis of options, through the development of a sizeable, regional pilot is the key to developing a sustainable rural electrification program involving renewables. ve The Village Power Initiative This last lesson, the integrated approach, was developed in concept by a number of public and private organizations and firms that specialize in RE-based rural energy solutions. It was the group’s consensus that the many well meaning efforts in the past and those currently underway to introduce or deploy renewables in rural areas around the world have fallen short of sustainability because one or more of these aforementioned elements was not adequately addressed in the pilot phase of the project/program. The pilot must be large enough in scope and funding, yet focused in a small enough region, to establish and sustain an operational “business unit” and a functional rural development approach, and thereby establish the institutional basis for wide scale replication. It is the group’s intention to communicate and foster this integrated approach in the development of future RE rural programs through the application of large- scale, regionally focused pilot projects. As this concept emerges, we anticipate that the bilateral and multi-lateral development organizations, as well as their client countries, will embrace the integrated approach as the means to address their goals of rural electrification and poverty alleviation. Acknowledgements The authors would like to thank the U.S. DOE/EERE, USAID, and NREL management for their support of the VP program and its activities. The authors would also like to thank their international partners and collaborators for helping us to see the crucial non-technical elements of rural sustainability. Special thanks go to the RSVP advisors for their vision and dedication to renewables, village power, and NREL’s RSVP program; these include Art Lilley, Doug Barnes, Judy Siegel, Jerry Weingart, Richard Hansen, Bud Annan, and Mike Bergey. References Baring-Gould, E. I.; Flowers, L. (June 1999). “Rural Wind-Hybrid Pilot Projects in Chile: Operational and Performance Results,""Proceedings of the 1999 AWEA Conference, Burlington, VT. Drouilhet, S. M. (July 1999). “Power Flow Management in a High-Penetration Wind-Diesel Hybrid Power System with Short-Term Energy Storage.” Prepared for the WindPower °99 Conference, June 1999. CP-500-26827. National Renewable Energy Laboratory, 10 pages. Holz, R.; Baring-Gould, E. I.; McAllister, J. A.; Corbus, D.; and Flowers, L. (June 1997). “The Initial Results from the Operation of Village Hybrid Systems in Chile,” Proceedings of the 1997 AWEA Conference, Austin, TX. Lynntech, Inc. (1999) Phase 2 SBIR Awards. “Variable Power, Voltage, and Frequency Insensitive Vapor Phase Compressor Cycle Ice Plant.” Lynntech, Inc., 7610 Eastmark Drive College Station, Texas 77840-4023. Proceedings of the 1998 American Solar Energy Society Annual Conference: Albuquerque, NM, June 14-17, 1998. Editors: R. Campbell-Howe; T. Cortez; B. Wilkins-Crowder. Publisher: Boulder, CO, ASES, 1998. Yankee Environmental Systems, Inc. (1999) Phase 2 SBIR Awards “An Economical Wind-Powered Standalone Icemaking System.” Yankee Environmental Systems, Inc.,101 Industrial Boulevard, Turners Falls, Massachusetts, 01376-1608 10 DECENTRALIZED WIND ELECTRIC APPLICATIONS FOR DEVELOPING COUNTRIES Lawrence T. Flowers Kevin Rackstraw National Renewable Energy Laboratory American Wind Energy Association Michael Bergey Art Lilley Bergey Windpower Company Westinghouse } Ron Pate if i Sandia National Laboratories os i [TRODUCTION bis estimated that 35%-40% of the world’s population does not have access to utility grid power. However, Many developing countries have recognized the societal value of bringing electricity (and the related beneficial ses) to their rural communities. As a result, the growth in electric demand in developing countries far out- fips that of the developed world. Still, the cost of grid extensions to rural villages and low-density population regions is generally economically unattractive and must therefore be heavily subsidized. The Sommon alternative to grid extension is diesel generation because diesel generators are usually relatively Expensive to install. Still, their operation and maintenance costs, as well as problems associated with Derz ating them in remote, less-developed country locations, are well documented. In many remote village ications, hybrid renewable systems offer advantages in terms of economics, reliability, sustainability, and Onmental impact. renewable resources are abundant and widely distributed, wind hybrid systems are appropriate for hany remote electric applications, even at moderate annual average wind speeds (4 m/s). The variability and Atermittent character of renewable resources does usually require the system to have storage or a back-up ENeration capability. Selecting the appropriate hybrid system architecture involves considering altemative systems, the level and variability of the associated resources, the current and future needs of the mmmunity, and, of course, the economic and financial aspects. The two examples of wind hybrid Stallations discussed in this paper demonstrate the application of integrated renewable subsystems in meeting E electrical needs of two isolated communities in Mexico. iiile hybrid systems are currently being installed in many developing countries, the U.S. Department of n (DOE) is sponsoring a complementary research and development program to improve the performance Od lower the cost of hybrid village systems. The program is being carried out at the national laboratories REL, Sandia National Laboratories [SNL], and Pacific Northwest Laboratory [PNL]) and through subcon- cts to the private sector and universities. It includes the development of innovative components, subsys- is Systems, and computer models, as well as the performance monitoring and evaluation of installed ms. 421 DEVELOPING COUNTRY ENERGY MARKET SITUATION Market studies of energy sectors around the worid tend to focus on the developed countries (Organization of K Economic Cooperation and Development [OECD]), but most of the growth in energy demand over the next : several decades will be in the developing world. Developing countries already account for 30% of global s energy use’ (commercial! and traditional). Developing countries’ share of commercial energy consumption has & increased from 17% in 1973 to 23% now (50% of the growth). The World Energy Conference estimates that, x by the year 2020, the developing countries’ share of commercial energy use will be 40% (accounting for 60% e of the growth). This is despite the fact that per capita consumption in the developing world is still dramatically % below Westem standards. For example, the People’s Republic of China (PRC) alone accounts for 10% of # world commercial energy use, even though per capita use in the PRC is only about 10% of U.S. levels. A stunning indicator can be found by comparing rates of growth of energy consumption; the growth of energy use in the developing countries is estimated to be over seven times the rates in the OECD countries (5.3% vs. 0.7% annually). In a recent World Bank study of 51 developing countries, installed capacity and generation per capita grew at an average of two times the gross domestic product (GDP) growth rate. In more than half of these countries, the rate was three times the GDP rate. At 4% growth of the GDP rate, total commercial energy consumption will be greater in the developing countries than in OECD nations within 15-20 years, even though per capita consumption will not reach 25% of OECD levels until around the year 2030. Many factors are driving this growth: population growth, urbanization, a switch to commercial from traditional fuels, higher energy intensiveness of materials used within the developing economies, and access through global marketing to energy-intensive appliances and products at an earlier stage of the development cycle than ever before. In addition, the continued subsidization of electricity prices (often covering less than 50% of the supply cost) creates an artificially high demand, discourages efficient use, and distorts supply decisions. The difficulty of meeting this demand with traditional solutions, such as grid extension, is exacerbated by the poor efficiency of developing countries’ electricity production. According to the World Bank study, existing, older power plants in developing countries consume 20%-45% more fuel per kWh than OECD plants 1 consume. Although many of these plants can be rehabilitated, others will be taken out of service. Even with 3 substantial efficiency gains at these plants, delivering electricity through traditional grid networks is : cumbersome, expensive, and increasingly unnecessary, especially as electrification projects attempt to reach out to rural populations. The tremendous capital demand that will be required to service electricity needs worldwide, estimated by the World Bank to be nearly $250 billion annually ($100 billion in the developing world and rising rapidly), has forced groups like the World Bank to rethink the way they have gone about making supply decisions based on large, centralized, conventional power plant models. A recent Office of Technology Assessment (OTA) study notes that grid extension becomes uneconomical at 2-_ 3 3 miles (compared to renewables and other options), depending on the local cost of extension*. This analysis ‘Commercial energy refers to coal, oil, gas, and electricity sources that are widely traded on organized markets. These sources are distinguished from traditional fuels such as firewood, charcoal, and animal and crop wastes (biomass). 2t $4,500/km (a low-end estimate), wind is more economical than grid extension at 7.5 km and micro- hydro is more economical at 2-1 km. At $13,000 (a high-end estimate), wind is more economical at 2.6 km, micro-hydro is more economical at 0.7 km, and PV is more economical at 4.8 km. This assumes 10 kW unit size. Fueling Development, p. 310. ee rn Anat nann ean nm A as | “yenewable-energy systems are often a least-cost option that provides a more appropriate energy supply match LTT ST does not fully account for transmission and di: , which average two to r in the developing world than in OECD countries. Energy planners around the world are beginning to recognize that for meeting end-use needs. This increased recognition is compelling decision makers to consider renewables. Developing countries that face significant environmental constraints and are highly dependent on imported fuels for energy are leaning more toward renewable energy options. SYSTEM OPTIONS Off-grid applications in developing countries typically fall into three broad categories that differ in level of energy demand and system configuration: (1) individual home or dwelling power systems for lighting and small appliances; (2) dedicated productive use or rural community facilities applications such as communica- tions, commercial enterprises, health clinics, and water pumping; and (3) general-purpose electrification of rural communities. The systems options for these applications fit into two basic configurations: (1) distributed stand-alone systems that are each dedicated to physically localized load use, and (2) centralized generation systems with a local "minigrid" that distributes power to a number of physically separated loads. A combina- tion of these two basic configurations is also an option for dealing with multiuse, rural pewer applications in which the load distribution is relatively large or dense in some areas and relatively small and sparse in others. The technology options for the three broad applications categories are discussed briefly below. 1. Individual home systems. This application is typically characterized by widely distributed dwellings with Telatively low individual energy requirements (typically in the range of 200-1000 Wh/day) and loads consisting mainly of lighting, radio, small television, and occasionally other appliances such as small refrigerators. This application can most appropriately be met with very small wind generators (100-500 W), photovoltaic (PV) modules, or a combination of the two, used in conjunction with battery storage. Such systems are generally low-voltage (12 V or 24 V) direct current (DC), where the PV or wind generators essentially serve as battery chargers. System losses are minimized by locating the system near the loads, keeping the length of wiring runs short, and using high-efficiency DC fluorescent lights and other DC appliances when practical. When practical, deep-discharge lead-acid batteries are preferred over automotive batteries for providing longer life and better system performance. 2. Dedicated productive uses or community facilities. This category includes higher-energy-demand applications such as water pumping and water treatment, communications, ice making/cold storage, grain grinding, small tool-based industries, health clinics, schools, and community centers. Energy demands typically range from 1 to 100 kWh per day for one or more load applications, with some loads being of a more critical or higher priority nature (e.g., health care, communications) than others. Technical options range from a directly coupled stand-alone wind generator (for water pumping) to various combinations of wind generators, other renewable generation sources (e.g., PV and hydro), energy storage via battery banks, inverters, and back-up engine generators that provide conventional grid-quality altemating-current (AC) power. Certain loads, such as water pumping, will often be more appropriately served by a dedicated stand-alone power system, while several community facilities loads might best be served by a single centralized power system connected to a local distribution network. Wind generators of 1-20 kW capacity will typically be appropriate within the technical options mix for these applications. 3. General-purpose rural community electrification. This category represents multipurpose electrical power service to communities with populations typically falling within a range of several hundred to several thousand (perhaps 50 to 500 households or more), with overall energy demand ranging from © several tens to several hundred kWh per day. Depending on the physical layout of the community and load density, the appropriate technical options can range from the distributed individual stand-alone 423 systems discussed above to centralized wind hybrid system generation with a local distribution network, to an appropriate mix of the two that is tailored to the local needs and load distribution of the community. Another option is the centralized battery charging station approach, which replaces the distributed individual home generation systems and the centralized generation and distribution network systems discussed above with a community battery-charging service center where household members can bring lead-acid batteries in for recharging. This option takes advantage of developing countries’ familiarity with and common usage of lead-acid batteries for providing modest levels of individual household power for lighting and small appliances in unelectrified rural communities. The higher overall energy demands for the centralized community power system options discussed here will typically require the use of multiple wind generators of 5-50 kW capacity. In summary, the appropriate technical options for off-grid power needs depends on the available energy Tesources, the end-use energy requirements or anticipated demand for power, and other social, economic, and cultural factors that impact the practicality, acceptance, and sustainability of the various possible technical approaches. There will always be tradeoffs between achieving optimum technical performance in any given system and providing a practical solution for meeting an energy need that is both acceptable and sustainable under local conditions and constraints. There are three practical guidelines to follow when considering appropriate technical options: (1) ensuring a good match between the available energy resources, the end-use needs, and end-user culture; (2) reducing energy requirements where possible through conservation and efficiency measures; and (3) designing and implementing systems and support services with long-term sustainability in mind. DESIGN CONSIDERATIONS The design of a village power system begins with a definition of the current, anticipated, and long-term electrical loads. The loads definition process should include average power levels, start-up surge power levels, | and a diumal distribution, which is usually based on hourly averages. If the village currently has a diesel generator, this definition is best accomplished using manual or automatic load monitoring. If no power generation exists, then an analysis must be performed to calculate the anticipated loads and their time profile. This analysis is usually based on assumptions of specific appliance use (i.e., homes will have four 10-W fluorescent lights operating 4 hours per day, etc.). Projections on future load growth are also made, and systems are typically sized for anticipated needs two to ten years after commissioning. System capacity requirements are normally expressed in terms of kWh/day. The next step, and often the most challenging, is to define the resources. (the wind and, if it is to be a wind/PV ” hybrid system, the solar resource). As a first cut, the 1980 DOE/PNL "World Wind Energy Resource Map" | provides reasonable estimates of yearly average wind speeds. The wind resource information available from local meteorological sources in developing countries is notoriously inaccurate, usually underestimating avail- able resources by a wide margin. The problem is that wind data are often taken from sheltered urban or airport sites. Higher quality data are available from military, upper air, and maritime sources, but collecting and processing these data can be time consuming and expensive. PNL has pioneered data processing tech- niques that can synthesize regional wind resource estimates from often disparate sources of wind data. For large-scale projects, site resource monitoring is prudent, even if only for a few months to verify the resource. On very small projects, site monitoring may not be justified economically. From the loads information and wind/solar resource estimates, the designer can explore various component- sizing options. In almost all situations, the system includes a battery bank for short-term energy storage, a0 = inverter to supply the AC power, and a system controller, switchgear, and back-up diesel generator to cover ~ the loads during periods of low wind. From a hardware perspective, wind turbines have a strong cost 424 . advantage over PV and a smaller advantage over diesel systems; so, wind is often chosen as the dominant _ supply option when an adequate wind resource is available. ' Least-cost (life-cycle) design is normally the major goal, but other customer-driven factors like the renewable » energy contribution ratio, environmental benefits, maintainability/support, and initial capital costs can significantly influence the process. Design tools are limited and are largely proprietary. Least-cost designs | arrive at relative energy contributions of 50%-75% from renewables and the remainder from the diesel, depending on the number of local economic and site-specific resource factors. Currently, system integration is both art and science, yet a number of firms have gained wide experience in village system design. U.S. industry can now install complete systems that provide a quality of service and reliability levels approaching | grid-based utility service. APPLICATION EXAMPLES ' To exemplify the application of the hybrid renewable systems to remote villages, the following brief case studies are offered. » Xcalac hybrid system. Xcalac is a small fishing village in the southern Quintana Roo province in the _ Yucatan Peninsula of Mexico. Xcalac has 80 homes, a restaurant, a 20-room ecotourism resort, and a perma- nent population of approximately 400 people. The town is wired for electricity, and electric power has been available periodically during the last 30 years whenever a new diesel generator has been installed. Diesel generators have been short lived at Xcalac because of inadequate maintenance. Even when the diesels have been operational, power supply was unreliable, primarily because of the tendency of operators to divert fuel 4 budgets to social "needs." The residents of Xcalac have been petitioning for a hookup to the utility grid for decades, but the national ' utility has been reluctant to spend the estimated $3.2 million necessary to bring power lines some 110 km _ from the town of Chetumal. In 1991, the State of Quintana Roo made a commitment to electrify the town | with a stand-alone renewable energy system. The system was designed and installed in 1992 by the Mexican ' company Condumex S.A. with the assistance of Bergey Windpower. _ The system was designed to provide 160 kWh daily of 240 V AC, 60-Hz, three-phase power. The design annual average wind speed was 5.2 m/s. However, because the customer wanted the system to meet the load year-round without recourse to back-up diesel power, the wind subsystem was sized using the lowest predicted ' average monthly wind speed of 4.4 m/s. At 4.4 m/s, the wind subsystem had a projected energy production cost half that of the PV subsystem (with a respectable 5.7 peak sun hours daily). The final design consisted of six 10-kW Bergey wind turbines, a 234-module, 11.2-kW Siemens PV array, a 396-kWh GNB deep-cycle lead-acid battery bank, a 40-kW sine-wave inverter, and a manual control system designed by Condumex. The system became operational in June 1992 at a final cost of $450,000. At 71.2 kW, it is the largest hybrid village electrification system in the Americas. The system was equipped with a 35-channel monitoring system (with SNL funding and technical support) in early 1993. The data are transmitted daily via cellular phone to Instituto de Investigaciones Electricas (IIE) for processing. Since installation, the average daily load has been more than 200 kWh, 25% higher than the design point. Fortunately, the wind resource has tumed out to be 6 m/s, higher than the design level. The most significant Operational problem has been a shorted alternator winding in one of the wind turbines. Because only one turbine was out of service during this period, and the winds were stronger than the design month wind speed, the overall system operation was not adversely affected. The residents of Xcalac are quite pleased with their 425 hew power system and, as a result, a new tourist hotel is under development. The system is experiencing load growth at a rate greater than anticipated; thus, the system may be expanded by four more turbines within the next year. Santa Maria Magdelena. Santa Maria Magdelena is a small, remote village in Hidalgo, Mexico. Compania de Luz y Fuerza del Cetro (CLYF), the electric utility that services the area, chose Maria Magdelena as a pilot for a program to extend electricity to many of the rural communities in Mexico. A hybrid wind/PV/diesel system was elected following an evaluation of the technical, economic, social, and environmental aspects of alternative rural electrification approaches. The hybrid system was selected over diesels, stand-alone PV or wind systems, and line extension. The anticipated advantages of the hybrid system included low life-cycle costs, moderate operating costs, utility-grade power output, and the ability to meet . varying loads. A centralized power system was selected over several distributed concepts that utilize dedicated be power systems for each building. FE w2TRREL The system was designed by Westinghouse Integrated Power Corporation (W-IPC) to meet the combined Tesidential and commercial loads that averaged 45-50 kWh/day, but with a potential of meeting significant future load expansion. The loads are primarily lighting but include televisions, radios, commercial refrigera- tors, a battery charger, and a satellite receiver for the school. The final system design is composed of a 5-kW wind turbine, a 4.3-kWp PV array, an 1100-Ah 120-V battery, a 21.6-kVa diesel genset, an IPC inverter, anda =f system controller. pe The system was installed and commissioned in January 1991 by W-IPC, using local personnel to install the distribution network and foundations for the wind turbine and power system shelter. CLYF provides the primary oversight of the system performance, while W-IPC makes semiannual performance assessments. . Electrifying Maria Magdelena has enhanced many aspects of village life. Lighting allows the residents to fe work and study during evening hours. The satellite hookup at the school, and the home radios and televisions, ~ a have enriched the educational experience of the community. Health care was improved with reliable refrigera- e tion for vaccines and antibiotics, as well as by providing communications and lighting for medical emergencies at any hour. Per ree ated Hs a eS ie a RELATED TECHNICAL DEVELOPMENTS DOE sponsors research and development that will directly impact the performance and capabilities of wind a hybrid systems. As outlined below, the related development projects currently funded by DOE’s Wind Energy ~ and Photovoltaics Programs include component development, subsystem development, system development a and evaluation, and computer model development and analysis. = ot A tA at Component development. The development of special airfoils for improved performance for horizontal-axis wind turbines has been ongoing at NREL since 1984. Recently, NREL has developed a new family of airfoils specifically for 3- to 10-m rotors (typically used in village power systems), which characteristically operate at lower Reynolds number than the larger windfarm-type turbine rotors. Although these airfoils have yet to be ™ a fabricated and tested, expected improvements in annual energy output for variable-speed rotors of this size will © ES) be somewhat less than the 20%-30% demonstrated in the larger, stall-regulated rotors. The performance @ improvement results from a design in which the maximum lift coefficient is relatively insensitive to roughness: = effects, and in which the design operates optimally at lower Reynolds numbers. 3 426 enhance the performance of hybrid systems, NREL selected Bergey Windpower to develop a family of Gmproved inverters and power processing units. The project includes designing the control hardware and soft- are, power circuit, and packaging. Plans call for fabricating and independent testing of three designs: (1) the asic unit that integrates the wind turbine variable output with the constant-frequency line voltage, (2) a ion that incorporates a battery storage interface, and (3) a version that can be used in wind/diesel systems. part of a wind/diesel hybrid system. The design incorporates NREL’s advanced airfoils, electromechanical tip es and dynamic brakes, an integrated gear box, improved drive train, and passive yaw control. The proto- As part of its balance-of-system (BOS) technology program, SNL is cosponsoring (along with the Alaska Science and Technology Foundation and NREL) Northem Power Systems’ development of a wind hybrid power system for use in remote applications. The system is designed to drastically reduce engine run time and thereby reduce fuel consumption and maintenance while increasing genset lifetime. The system allows the * renewable energy sources to provide energy directly to the load, while a battery bank acts as a buffer between "variations in the load and the renewable supply. The prototype will be tested in the late summer of 1993. The pre-commercial version is due to be installed in an Alaskan village in the summer of 1994. ’ The University of Massachusetts is analyzing and laboratory testing variable-speed diesel operation for the " generation of electric power. This technology will use a conventional diesel generator operating at variable | speed combined with power electronics to deliver electricity at a fixed voltage and 60 Hz frequency. An advantage of variable-speed operation is that both engine and generator efficiencies remain high at part load. } In addition, the diesel operating temperature and fuel/air mixture tend to remain at desirable levels, which _ minimizes the engine maintenance required with constant-speed diesel gensets operating at part load. This approach should improve the system’s ability to accept inputs from wind or other renewable energy sources ' without a serious loss in performance. _ System development and evaluation. The USDA and DOE are cosponsoring research on “all renewables" _ wind hybrid electrical generation systems for rural areas. Such systems could be designed to be powered - totally from renewable sources such as wind, solar, and vegetable oils. The research will be conducted at the ' Southem Plains Area Conservation and Production Research Laboratory in Bushland, Texas, with technical | Support from NREL. A grid-independent wind hybrid test facility will be developed at Bushland to conduct | testing of various system configurations and control strategies. The issues to be evaluated will be level of » wind penetration, electrical stability and dependability, and impacts of varying levels of storage capacity, ' including no storage. This facility will generate data sets to be made available for the validation of hybrid _ Power system models. In support of the joint Department of Defense (DOD)/DOE Strategic Environmental Research & Development Program (SERDP), SNL is providing technical support for project evaluation, technology development, pro- Curement, and monitoring. Current focus is on pilot DoD applications projects in the intermediate power Tange (on the order of 100-1000 kWh/day), with the installation of several renewable hybrid and portable power systems expected within the next 18 months. In support of DOE and the Committee on Renewable Energy Commerce and Trade’s (CORECT) Latin American initiative, SNL is monitoring project-related wind and solar resources, village loads, and installed village power systems. SNL is collaborating with utility groups in Mexico and Central American countries to identify, develop, and monitor wind-electric, PV, and hybrid system projects. SNL is also providing DOE with cost-shared technical assistance for project feasibility work in Indonesia in support of the IPC/ Westinghouse/BPPT/PNL Eastem Islands Renewable Energy Rural Electrification Project. Computer model development and analysis. The University of Massachusetts is developing two models that predict the performance of hybrid power systems. HYBRID1 uses a combined time-series and statistical approach to model a wide range of system configurations. Components that can be modeled include multiple diesels, multiple wind turbines, and PV either with or without storage. Time-series load and resource data are required as input. The second model, called WNDSCREEN, is a simplified version of HYBRID1 that requires only monthly average load resource data as input. The university is also exercising the HYBRID1 model to perform feasibility studies of wind hybrid systems at selected sites and to develop a wind/diesel guidebook. CONCLUSIONS The developing worid will experience a rapid growth in the application of electricity to industrial and community needs over the coming decades. Because the renewable resources are abundant (and varied) around the worid, renewable hybrid energy systems offer reliable, economically competitive, and environment- ally friendly power for many currently non-electrified villages throughout the developing world. It will be important that systems be designed such that they consider the communities’ needs, including loads, system teliability, economic needs, and social needs. Although there are many places in the developing worid where the current hybrid systems are economically competitive, it is also important that we make improvements in the technologies so that they may be competitive in a larger set of rural situations. NREL/CP-440-23237 * UC Category: 1210 Diesel Plant Retrofitting Options to Enhance Decentralized Electricity Supply in Indonesia E. Ian Baring-Gould, C. Dennis Barley, Steve Drouilhet, Larry Flowers, Tony Jimenez, Peter Lilienthal National Renewable Energy Laboratory Jerome Weingart Community Power Corporation Haryo Soetendro, D.P. Gultom PT. PLN (PERSERO) Presented at Windpower ‘97 Austin, Texas June 15-18, 1997 t G9. pay « DNR=I National Renewable Energy Laboratory 1617 Cole Boulevard Golden, Colorado 80401-3393 A national laboratory of the U.S. Department of Energy Managed by Midwest Research Institute for the U.S. Department of Energy under contract No. DE-AC36-83CH10093 Work performed under task number WE713010 September 1997 NOTICE This report was prepared as an account of work sponsored by an agency of the United States government. Neither the United States government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States goverment or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States government or any agency thereof. Available to DOE and DOE contractors from: Office of Scientific and Technical Information (OSTI) P.O. Box 62 Oak Ridge, TN 37831 Prices available by calling (423) 576-8401 Available to the public from: National Technical Information Service (NTIS) U.S. Department of Commerce 5285 Port Royal Road Springfield, VA 22161 (703) 487-4650 ae {qe Printed on paper containing at least 50% wastepaper, including 20% postconsumer waste DIESEL PLANT RETROFITTING OPTIONS TO ENHANCE DECENTRALIZED ELECTRICITY SUPPLY IN INDONESIA E. Ian Baring-Gould, C. Dennis Barley, Steve Drouilhet, Larry Flowers, Tony Jimenez, Peter Lilienthal 1617 Cole Blvd. NWTC National Renewable Energy Laboratory Golden, Colorado. 80401-3393 USA Jerome Weingart Community Power Corporation 15796 East Chenango Avenue Aurora, Colorado. 80015 USA Haryo Soetendro D.P. Gultom PLN Jakarta, Indonesia Abstract Over the last 20 years, the government of Indonesia has undertaken an extensive program to provide electricity to the population of that country. The electrification of rural areas has been partially achieved through the use of isolated diesel systems, which account for about 20% of the country's generated electricity. Due to many factors related to inefficient power production with diesels, the National Renewable Energy Laboratory, in conjunction with PLN, the Indonesian national utility, Community Power Corporation, and Idaho Power Company, analyzed options for retrofitting existing diesel power systems. This study considered the use of different combinations of advanced diesel control, the addition of wind generators, photovoltaics and batteries to reduce the systems overall cost and fuel consumption. This analysis resulted in a general methodology for retrofitting diesel power systems. This paper discusses five different retrofitting options to improve the performance of diesel power systems. The systems considered in the Indonesian analysis are cited as examples for the options discussed. Introduction One of the most prevalent means of providing power to remote communities is the use of diesel generators. The appeal of this approach is the relatively low capital cost of the generating equipment. However, increasing problems associated with burning fossil fuels are motivating many institutions to consider alternative means of meeting growing demands for rural electricity. Such means include improving the efficiency of the diesel plants and adding renewable energy sources to the systems. Because the renewables (primarily wind and solar) fluctuate, combinations of renewables with diesel gensets are often considered to be the most practical solution. If renewables are not cost effective, other options for improving the efficiency of diesel plants may be considered. Over the last 20 years, the government of Indonesia has undertaken an extensive program to provide electricity to the population of that country. Electrification in rural areas has been partially achieved through the use of isolated diesel systems. About 20% of the country's generated electricity is produced by small, isolated diesel power plants employing over 1800 individual diesel units. Many factors associated with the use of diesel generators, from fuel cost and transportation to system maintenance expenses, have caused the Indonesian government and PLN to consider alternative methods for providing power to remote communities. In collaboration with PLN and Community Power Corporation (CPC), the National Renewable Energy Laboratory (NREL) has analyzed options for existing isolated diesel power systems. This study considered the use of different combinations of advanced diesel control, wind generators, photovoltaics, and batteries to reduce the consumption of diesel fuel and the overall cost of power generation. Analyses were conducted looking at typical diesel systems of many sizes and considered parametric analyses on system size, configuration, and renewable resource to allow general conclusions to be formed. The analysis also considered the potential of increasing the operation hours of some diesel plants. In this report, five possible retrofit options are identified which can be used to reduce the use of diesel fuel. Each of these retrofit opportunities is described. Finally, several case studies are cited as examples of recommended designs. These case studies are based on analyses conducted as part of the NREL, CPC, and PLN study. This report does not provide discussion on methods to reduce energy consumption or increase energy capture. An energy audit of a community should be conducted prior too, or as part of, any retrofitting plan to identify energy saving opportunities. In many cases, the load on a plant can be greatly reduced by incorporating energy savings measures like florescent lighting and power switches. One should also look for methods to productively use waste energy and manage non-critical loads so as to obtain peak output from the power system. Advantages and Disadvantages of System Retrofits There are a number of advantages for retrofitting diesel plants, in addition to the obvious reduction in fuel consumption. One can expect to reduce the number of operational hours on an existing diesel generator with well designed system retrofits. Because diesels are usually the piece of equipment with the highest maintenance cost and the maintenance costs are a direct function of operating hours, this will reduce the required maintenance expense of the system. There will also be a reduction in the pollution due to the reduction in use of the generators. If an advance system control is also installed, a reduction in the number of system operators can be achieved, even with an expansion of service. In addition, most system controllers also incorporate a measure of system performance monitoring and data collection that can be useful in long term system monitoring. The benefits of diesel retrofits are dependent on the system design and retrofit option chosen; these results will vary from system to system There are a number of disadvantages to completing a retrofit on an existing diesel system. The primary disadvantage is the capital expense of the additional equipment; however in a well-designed system this is usually returned in a matter of years. The installation of new and additional equipment can cause technical difficulties due to the increased technical complexity of the system and the need to service and maintain multiple system technologies. There can be problems associated with the increased start/stop cycles experienced by the diesels with most high performance hybrid systems. Although the result of repeated start/stop cycling on diesel systems is documented (Bleijs et al. 1993), the decrease in diesel operation can greatly reduce the overall diesel maintenance. Retrofit Options for Diesel Power Systems Five different diesel system retrofit opportunities are described in this section. These five options are considered the most likely to have positive economic impact on the operation and maintenance expenses of the diesel system. As with any potential retrofit, the final retrofit option is highly dependent on the existing system architecture, generator sizes, and load profile for the community of interest. Depending on the system operational costs, it may be that no savings can be achieved through the retrofitting the diesel system. Any type or size of diesel system may be a candidate for retrofit, from the small, one diesel system providing power for only a few hours a day to large multi-diesel systems providing 24- hour utility grade power. The five retrofit options to existing diesel systems are: ¢ Type A: Adjust the size of installed diesels or install an additional engine to provide diversity in unit capacity. ¢ TypeB: Add automatic controls to existing diesel plant. ¢ TypeC: Install batteries and a power converter to cover low load periods. ¢ Type D: _ Install wind turbine generators and/or PV array to reduce diesel generation. ¢ Type E: Installation of an advanced renewable/battery/diesel hybrid power system. Type A: Adjust diesel size or install an additional diesel engine One of the ways of reducing the costs of operating an existing diesel plant is to insure that the generators are properly sized to the community load. Appropriate sizing of generators is important in systems of all sizes, from small, single generator systems to large multi-generator power plants. Typically the diesel engines in a remote power station are sized to adequately cover the yearly peak load and are thus oversized for normal day to day operations. Depending on the size of any existing generators and the community’s load aaa enn nnn — profile, the replacement of, or even the installation of a new, smaller diesel unit may result in a very quick return on investments. This is described graphically in Figure 1, where the fuel curves for two representative diesels are shown. A village with a maximum yearly load of 300 kW 0 100 200 300 400 may have a 330-kW diesel installed to meet this load. The average | daily load is only about : 100 kW, so installing a FIGURE 1. COMPARISON OF DIESEL SIZES TO MEET A smaller generator to cover the standard load SPECIFIED LOAD. could save about 15 liters of fuel for each hour of operation. The larger diesel would then be used during times of high load or as a backup when the first diesel is undergoing maintenance. Fuel usage, I/hr Type B: Add automatic controls to an existing diesel plant Larger diesel plants often contain multiple diesel engines of various sizes. In these systems, it is more likely that the diesels will be the appropriate size; however, the diesels operating at any given point may not be the most efficient combination to cover that load. In these systems, controls can be placed on the diesel generators to enable automated dispatch and more efficient operation. Each genset is provided with controls for auto starting, synchronization, and load matching while a master control is used to coordinate diesel dispatching and load sharing. Automated systems have the additional advantage of detailed operational data collection and monitoring. Fuel savings depend on the current system design and dispatch strategy, but tend to be cost effective in larger systems where the current dispatch strategy is either inefficient or labor intensive. The use of advanced controls may add a level of technical sophistication that will only be appropriate in larger communities. Type C: Install batteries and a power converter to cover low load periods This approach is applicable in a single-diesel system if the community has periods of the day with very light loading compared to the peak load. In these cases, the existing diesel is generally oversized for the low load period, thus it operates with poor efficiency. A retrofit battery bank and power converter, where stored energy from the battery is used to power the converter and cover the load, allows the generator to be turned off during periods of light loading. The batteries are then recharged when the generator is operating at higher efficiency. This approach may also be used to expand the hours of service of a particular plant without greatly increasing the system operation costs. In multiple-diesel systems, the addition of batteries can preclude the need to start an additional generator that must run at low loading to cover fluctuations in power over the rating of the primary generator. In either case, the generator recharges the batteries during other periods of the day. The decision of whether to install a converter/battery bank or a smaller diesel to cover these low load periods is dependent on the ratio of low load to diesel size and should be considered carefully. The potential cost savings depend on the load profile and the sizes of the diesel generators. The size of the battery bank depends on the energy requirements of the low load period. The size of the inverter depends on the magnitude of the load during the low load period. Both the initial cost and the periodic replacement cost of the batteries must be weighed against the reduction in operation and maintenance expenses. This concept is shown graphically in Figure 2. In this system the batteries cover the load in the early morning and then are recharged by the diesel later. 27 liters of fuel is saved each day versus the original all-diesel system. Type D: Install wind turbine generators and/or PV array to reduce diesel operation Wind retrofits to diesel power plants are primarily useful in large systems with good wind potential and high fuel costs. In plants with many large diesels, where there is always a demand for power, the wind power is used to r —__— - — — offset power Diesel 111 I/day, Hybrid 83 I/day, fewer diesel hours production by the generators. The addition of the wind power may also reduce the number of generators operating at any given time, thus reducing the diesel maintenance requirements. Because system dynamics and power stability are of {4 Alll Diesel and load _ _g_ — Hybrid System Diesel .. .,.. . Hybrid System Battery primary concern, at ———== => = —— least one diesel generator is operated continuously and the wind penetration is usually only a fraction, from 20% to 50%, of the average load. Advanced controls are usually included with these systems to allow for the shutdown of individual wind turbines and/or diesels depending on the resource, load, and system control requirements. This approach can be very cost effective but is capital intensive due to the cost of the wind turbines and controls. The potential cost savings depend on the wind resource, diesel maintenance costs, and the fuel price. Based on current prices, PV is usually not cost effective in large systems when compared strictly to the marginal cost of diesel fuel. Figure 3 shows the Power, kW Hours of the day FIGURE 2. DIFFERENT MODES OF OPERATION FOR A BATTERY/DIESEL ONLY POWER SYSTEM. hypothetical results of installing wind turbines and controls onto a diesel system. The wind power is used to directly reduce the load on the diesel engines. With the use of wind power, a smaller diesel may also be used to cover the remaining load, which will also result in larger operation and maintenance savings. Type E: Installation of an advanced renewable/battery/diesel hybrid power system In this case, a diesel system is retrofitted with both renewables and a battery bank. During times of high renewable production, wind and/or solar power is used to meet the community load and to charge the battery bank. When the renewable power is less than the load, either the batteries or the > generator cover the shortfall. If the batteries become 400 ems depleted, the 350 [ae generator(s) are 300 ff started to cover the = 250 load and perhaps = charge the batteries. g ak The combination of é 150 £ renewables and 100 fi batteries has the 50 potential of reducing 0 E the diesel fuel usage to a very small portion of the amount required in a | —¢— load —a—Wnd —a— Hybrid diesel | diesel-only system. — ——————— SS The fuel savings, ON OF along with savings in FIGURE 3. DIESEL POWER REDUCED BY THE INCLUSION diesel maintenance RENEWABLES. costs, must be weighed against the high system capital cost and the periodic replacement of the batteries. Diesel systems of any size can be retrofitted with renewables and batteries, although the system design and control will likely change dramatically. The size and purpose of the battery bank will also vary greatly depending on —— ae 71 ane TT the available resources and system costs. A general size description for batteries is given in the following section. Hybrid system cost- effectiveness is highly sensitive to the abundance of the renewable resource, diesel maintenance costs, and the diesel fuel price. A 24-hour graphical description of system operation is shown in Figure 4. This system shows the diesel operating in the morning to cover the load and charge the batteries. After this the batteries and renewables cover the load until evening when the batteries are again charged, but this time by the wind. Hours of the Day Power, kW FIGURE 4. OPERATION OF ADVANCED HYBRID SYSTEM Storage Requirements for Hybrid Power Systems The amount of storage capacity, based on the approximate time of load-coverage capacity, may fall into one of the following categories. The appropriate level of storage depends on the cost trade-off involved at each stage in this progression and the general size of the power system. 1 to 7 minutes: Used to cover short turbulent peaks in the wind and to start generators, if required. Batteries are designed for high rates of discharge over short time periods to maintain grid stability. 7 to 30 minutes: Meet fluctuations in the net load (load minus renewables), thus allowing any diesels to remain off until it is clear that the lull in the winds is not a short-term fluctuation. Hours: Allow diesels to run at rated capacity, rather than at part load, to maximize diesel fuel efficiency, storing the excess in the batteries to be used when beneficial for the system. Hours to days: Time-shift an abundance of wind or solar energy to match the load. This is mainly applicable in places with small loads or where the operation and maintenance costs of a generator are larger than the cost of storing renewable power in the batteries. Assessment Procedure The process of retrofitting diesel systems is rather complex and requires the collection of resource and existing performance data to evaluate the available retrofitting options. A performance and economic analysis should then be completed to determine the economic benefit of the different options. Before this task is undertaken, it is necessary to determine if a particular system should even be considered for system retrofit. The following are some general indications that a diesel power plant would be a good candidate for retrofitting. 1. A large difference between diesel system-rated power and the average load for the community being served. Large variations in the community load from the minimum to peak load. If the plant diesels are spending long periods running at low power levels or at idle. There are many system faults due to operator or systems errors. High fuel costs including both purchase and transportation charges. A local source of renewable energy such as sun, wind, or hydro. High system costs due to maintenance or other problems. SOE ATES) Case Studies: Small and Large Systems in Indonesia Indonesia, the fourth most populous country in the world, consists of 13,667 islands, of which at least 3,000 are inhabited. PLN operates in excess of 1,800 diesel power plants, which produce about 20% of the country’s generated electricity. Of these diesel plants, 1,100 are below one MWe in total nameplate capacity and are widely distributed geographically, making fuel delivery, reliable operation, and maintenance expensive, time consuming, and difficult. Regulated tariffs on the generated electricity are causing PLN to lose money on the diesel plants, even with the price of diesel fuel fixed at $.17/liter. To limit costs, electrical service is limited to a few hours per day in some areas. In response to this need, the Indonesian government and PLN are considering alternative methods for providing power to remote communities. Three case studies that were part of the original study conducted by CPC, PLN, and NREL are described below. These case studies provide examples for some of the retrofitting options discussed above. Case 1: Small system with good wind and solar resources The diesel plant at Pariti is typical of many in Indonesia in that electrical service is provided only 12 hours per day, with the load profile shown in Figure 5 (solid curve). In this analysis, we consider the addition of a small daytime load shown with a dashed line and various retrofit options. Providing 24-hour power opens the door to the development of productive uses of electricity, such as - _ _ - a micro-enterprises or small industry. The existing power system at Pariti consists of two 20- kW diesel gensets. Because the wind resource at this site is unknown, a scenario typical of many locations Load (kW) 123 45 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 throughout Indonesia, wind sour speed data set from (——Load = = = w/daytime load | the nearby site of : —_ a : : Sakteo, averaging FIGURE 5. LOAD PROFILE AT PARITI WITH A 3-KW DAYTIME 5.56 m/s at 30m, was LOAD ADDED. used in the analysis. Similarly, the annual average solar radiation, based on data from the nearby Kupang airport, is 4.4 sun-hours/day (kWh/m’ day). These analysis were conducted using the Hybrid2 software (Baring-Gould et al. 1996). Retrofitting the existing diesel plant with renewables and batteries to form an advanced hybrid system while providing 24-hour operation will result in only a minor increase in cost over the existing all-diesel system that provides power for only 12 hours a day. The results of the different options are given below. TABLE 1. ACOMPARISON OF VARIOUS RETROFIT OPTIONS System Service New Equip. Fuel Life-Cycle Cost Cost, $/kWh Type Period Cost, $ Use,Vy —$ (fuel @ $.17/1 (S.17M) (8.34) Existing 12-hour 0 30,397 430,144 0.28 0.35 Existing 24-hour 0 46,383 697,377 0.38 0.48 Type B 24-hour 10,000 46,383 551,037 0.30 0.40 Type C (w/ controls) 24-hour 27,240 34,093 501,581 0.28 0.35 Type E (Wind) 24-hour 60,440 26,979 482,718 0.27 0.32 Type E(PV) 24-hour 55,240 31,850 507,192 0.28 0.35 Some of the recommendations resulting from the analysis are as follows; 1. For 24-hour service, controls and batteries are cost effective. 2. Measured wind and solar resources are needed for candidate sites. Wind turbines are cost effective at Pariti for this load scenario and a fuel price of $.17/liter, at wind speeds of about 5.6 m/s or greater. Photovoltaics are cost effective at a fuel price of about $.34/liter or greater. 5, Pilot projects for small diesel grid systems are recommended to demonstrate the feasibility of the approach. Case 2: Large system with good wind resource The analysis conducted looks at the potential inclusion of wind power into the large diesel plant in So’e, Indonesia. The inclusion of the advanced system controls and wind power could significantly reduce the consumption of diesel fuel and reduce the total number of diesel run hours. The analysis was expanded using parametric analysis to consider systems of similar size, where the fuel and wind potential may be different. The analysis considered various average wind speeds, wind penetrations, diesel fuel price, and different financing mechanisms. The retrofit systems considered did not include solar power due to the system size and available solar resource. The average load for the site was 505 kW and was supported by four large diesel gensets. The power plant provided power 24 hours a day and was controlled manually. The basic result from the analysis is that given a delivered fuel cost of $0.17/I and an average annual wind speed of 5.56 m/s, the system is marginally feasible from a financial viewpoint. Similar systems in areas with higher fuel prices or wind speed should show dramatic economic viability, saving anywhere between $0.10 to $0.50 /kWh produced, as shown in Figure 6. In this type of system the potential for fuel savings increases as the installed capacity of the wind turbines is 2 ae fe increased. This is shown $0.040 $f Ei = 0.035 in Figure 7, where the = so030 fim number of 50-kW wind & = $0.025 turbines was increased g oot $0.51 from zero to 10 using a & $0.010 fi $0.34 : ‘ $0.005 wind speed with an | s $0.25 Fuel price (Si!) annual average of 5.56 | $(0.005) m/s. Above about 300 ! kW of installed capacity, £ 8 Average wind speed (m/s) there is a diminishing return on the installation, | aa = ok additional earn ines — FIGURE 6. PARAMETRIC SAVINGS FOR WIND INSTALLATION because, during high wind periods, more power is being generated than can be used. It should be again noted that above about 20% penetration of wind power, serious consideration must be given to power system dynamics to insure high quality, consistent power. In addition to the analysis of using wind power to augment the diesel production for the So’e power plant, a simple control retrofit was also studied. In this analysis, the operational characteristics of the present diesel plant were compared to a version of that plant operated by an advanced control system. In addition, an analysis was conducted in which one of the larger diesels was replaced with a smaller one that could more efficiently provide power for periods of low load. The analysis showed that the cost of implementing the controls could be paid back in as little as 2 years. It was also found that the number of diesel starts was increased using advanced control, but that the total diesel run time could be reduced by almost half. This results in a large decrease in diesel O&M and overhaul costs. System savings of between $0.03 and $0.05 /kWh were produced with a very small outlay of approximately $50,000.00 for system and individual diesel controllers. Installing a smaller diesel to provide a better diversity in unit capacity was also shown to be cost effective. Case 3: Moderately-sized diesel system without available renewable resources The town of Lonthoir, Indonesia, is a large community that is provided power using two diesel engines. The town has power for 13 hours a ai from 5 P. m. to 6 a.m., and a base load of approximately 60 kW for services like street r " ST TTT aT lighting and 900000 refrigeration. The load 18.0% 16.0% 2 800000 increases during the i i morning and evening Silman ere up to about 135 kW. = 600000 # 12.0% z Because power is not 500000 10.0% available during the © 400000 Ft 8.0% 5 day, mainly due to the 3 a H : ae $ current tariff structure, i tS no business or other Wand ay 40% productive uses of | 100000 ff 2.0% power are being oe aE si TE 0.0% realized. 0 50 100 150 200 250 300 350 400 450 500 550 Installed Capacity of Wind (kW) A power system was erg aa kWhiyr @— Ex pone aE ) Fuel on) : . . ee ~ -Wind power T) (cess tr) — & ‘uel Savings designed incorporating eae ” — — a battery storage bank mM iil | Wi HNN mI and converter to allow FIGURE 7. PERFORMANCE VARIATION WITH INSTALLED the generators to cover WIND CAPACITY the average load while using the battery bank to cover any fluctuations above the rated level of that generator. Due to the lack of data demonstrating a wind or solar resource, renewables were not considered. An analysis considering two fuel costs and converter/battery sizes was also completed. Incorporation of a small daytime load and upgrading the system to provide 24-hour power was also considered. These analysis were conducted using the Hybrid2 software. Using a battery and converter saves money for either 13-hour or 24-hour power systems. The projected savings ranged from | to 5 cents for each kilowatt-hour produced. During the evening, the average load never goes above the rating of the 140-kW diesel, but fluctuations in the load do. A 20-kW converter and battery bank combination covers these fluctuations and makes the second 100 kW diesel unnecessary, (Figure 8, next page). In a 24-hour system, the battery bank is used during the daytime. This allows both of the diesels to be shut off when the load is low. The battery bank is then recharged during the evening and early morning when a diesel is forced to operate. Conclusions In any existing diesel power plant, it is quite likely that some improvement in economy of operation can be achieved through one of the approaches discussed in this paper. In many systems the diesels are oversized and significant improvements are possible merely through improved genset sizing. When even properly sized diesels operate at low loading much of the time, the addition of batteries is likely to be cost effective. The cost-effectiveness of adding wind and/or solar generators to the system depends primarily on the abundance of the renewable resource and on the fuel price. Of all the retrofit options, the greatest diesel fuel savings may be obtained by combining renewables with batteries. A time-series model, such as Hybrid2, is needed to properly analyze and compare the design options. Often, the most challenging aspect of the assessment of diesel retrofit opportunities is obtaining accurate resource data. This analysis demonstrates two | main points. Initially 50 there are many Oe Rue aren | oe ee ee rr ere Ss ea options that 12345 67 8 9 1011 1213 14 15 16 17 18 19 2 21 2 23 4 governments, | utilities and local rete groups can use to “_¢— Load _, Existing _,— Controled w/ battery bank improve the | Ee operation of existing diesel power systems. Using the techniques discussed in this paper enables these organizations to free up funds now being spent on simple operation and maintenance. This capital can then be used to expand service to other rural areas. The second point that this paper makes clear is that there is a great deal of opportunity for the use of renewables and diesels, not only in new systems but in many older power systems worldwide. It should however be noted that this is a paper study and that systems implemented using these retrofitting options may result in different savings than are expressed. In addition, rural areas usually provide very different engineering experiences than urban centers and technology that has been proven in the latter may not provide the same performance in the former. However, with the expansion of power needs worldwide, the emphasis now being placed on environmentally friendly energy systems and the reluctance of many governments to be tied to volatile fuel prices, the potential for effective diesel retrofitting and the installation of new hybrid power systems has never looked better. FIGURE 8. RUNNING DIESEL CAPACITY FOR ORIGINAL AND RETROFIT SYSTEMS Acknowledgments The authors of this paper would like to thank all the members of the Village Power Team at the National Renewable Energy Laboratory who assisted in this analysis in both a technical and intellectual basis. The authors would also like to thank the Community Power Corporation and PLN for their assistance in this work. The research represented in this analysis and the Indonesia studies was funded by the U.S. Department of Energy, Office of Utility Technology and the Idaho Power Company. References Bleijs J.A.M., Nightingale, C.J.E., Infield, D.G. (1993) “Wear Implications of Intermittent Diesel Operation in Wind/Diesel Systems.” Wind Engineering, Vol. 17, pp. 206-218. Baring-Gould, E.1., Green, H.J., Manwell, J.F., VanDijk, V. (1996) “Hybrid2-The Hybrid Power System Simulation Software.” American Wind Energy Association WindPower Conference Proceedings; June 23 - 27, 1996, Denver, Colorado. NREL/TP-440-21506. Golden, CO: National Renewable Energy Laboratory; pp. 497-506.