Integrated Analysis of Hybrid Systems for Rural Electrification in Developing Countries Timur Gül Supervisor and Examiner Assoc. Professor Jan-Erik Gustafsson Division of Land and Water and Water Resources Engineering Royal Institute of Technology Supervisor in Germany Dr. Dirk Aßmann Wuppertal Institute for Climate, Environment, Energy Reviewer Michael Bartlett Department of Energy Processes Royal Institute of Technology Stockholm 2004 TRITA-LWR Master Thesis ISSN 1651-064X LWR-EX-04-26 Abstract I Abstract Around 2 billion people world-wide do not have access to electricity services, of which the main share in rural areas in developing countries. Due to the fact that rural electricity supply has been regarded as essential for economic development during the Earth Summit on Sustainable Development in 2002, it is nowadays a main focus in international development cooperation. Renewable energy resources are a favourable alternative for rural energy supply. In order to handle their fluctuating nature, however, hybrid systems can be applied. These systems use different energy generators in combination, by this maintaining a stable energy supply in times of shortages of one the energy resources. Main hope attributed to these systems is their good potential for economic development. This paper discusses the application of hybrid systems for rural electrification in developing countries by integrating ecological, socio-economic and economic aspects. It is concluded that hybrid systems are suitable to achieve both ecological and socio-economic objectives, since hybrid systems are an environmental sound technology with high quality electricity supply, by this offering a good potential for economic development. However, it is recommended to apply hybrid systems only in areas with economic development already taking place in order to fully exploit the possibilities of the system. Moreover, key success factors for the application of hybrid systems are discussed. It is found that from a technical point of view, appropriate maintenance structures are the main aspect to be considered, requiring the establishment of maintenance centres. It is therefore recommendable to apply hybrid systems in areas with a significant number of villages, which are to be electrified with these systems, in order to improve financial sustainability of these maintenance centres. The appropriate distribution model is seen as being important as well; it is thought that the sale of hybrid systems via credit, leasing or cash is the most likely approach. In order to do so, however, financial support and capacity building of local dealers is inalienable. Table of Contents II Table of Contents Abstract ........................................................................................................................I Table of Contents....................................................................................................... II List of Figures ........................................................................................................... IV List of Tables.............................................................................................................. V Acronyms .................................................................................................................. VI 1 1.1 1.2 2 Introduction ..................................................................................................... 1 Objective ........................................................................................................... 2 Methodology...................................................................................................... 2 Technologies for Rural Energy Supply ........................................................... 4 2.1 Decentralised Electrification .............................................................................. 4 2.1.1 Diesel Generating Sets ....................................................................................... 4 2.1.2 Renewable Energy Technologies ....................................................................... 5 2.2 2.2.1 2.2.2 2.2.3 2.2.4 2.3 3 Hybrid System Technology................................................................................ 6 Relevance .......................................................................................................... 6 Hybrid Systems in Developing Countries........................................................... 7 Other Hybrid Systems........................................................................................ 9 Technical Aspects ............................................................................................ 11 Grid-based Electrification ................................................................................ 14 Analysis of Impacts ........................................................................................ 16 3.1 Scope of the Analysis....................................................................................... 16 3.1.1 Scenario Definitions......................................................................................... 16 3.1.2 Modelling Assumptions ................................................................................... 18 3.2 3.3 3.4 3.4.1 3.4.2 3.4.3 The Concept of Indicators of Sustainability...................................................... 18 Developing an Indicator Set for Energy Technologies...................................... 19 Analysis of Sustainability ................................................................................ 21 Ecological Dimension ...................................................................................... 21 Socio-Economic Dimension............................................................................. 27 Economic Dimension....................................................................................... 33 3.5 Results and Discussion..................................................................................... 42 3.5.1 Results ............................................................................................................. 42 3.5.2 Discussion ....................................................................................................... 45 Table of Contents III 4 Project Examples ........................................................................................... 47 4.1 Hybrid Systems in Indonesia............................................................................ 47 4.1.1 Baseline ........................................................................................................... 47 4.1.2 Project Description .......................................................................................... 47 4.2 4.2.1 4.2.2 4.2.3 5 5.1 5.2 5.3 5.4 5.5 5.6 6 Hybrid Systems in Inner Mongolia................................................................... 49 Baseline ........................................................................................................... 49 Project Description .......................................................................................... 49 Aspects of System Dissemination .................................................................... 52 Key success factors......................................................................................... 53 Organisation .................................................................................................... 53 Financing ......................................................................................................... 57 Capacity Building ............................................................................................ 60 Technical Aspects ............................................................................................ 62 Assessment of Electricity Demand and Potential for Renewable Energies........ 63 Political Factors ............................................................................................... 64 Summary and Conclusions ............................................................................ 66 Annex A: Electricity Demand and System Design................................................... 68 A.1 Calculation of Electricity Demand........................................................................ 68 A.2 System Design ..................................................................................................... 70 Annex B: GEMIS Scenario Calculations ................................................................. 75 B.1 Scenario Definitions ............................................................................................. 75 B.2 Modelling Results ................................................................................................ 79 Annex C: Analysis of Impacts .................................................................................. 86 C.1 Ecology................................................................................................................ 86 C.2 Socio-Economic Issues......................................................................................... 87 C.3 Economic Issues................................................................................................... 93 Annex D: Cost Analysis .......................................................................................... 101 D.1 Investment Costs................................................................................................ 104 D.2 Electricity Generating Costs............................................................................... 105 D.3 Electricity Generating Costs from Different Sources .......................................... 110 Terms of Reference ................................................................................................. 113 List of Figures IV List of Figures Figure 2.1 Principle Circuit of Hybrid Systems ............................................................. 8 Figure 3.1 GEMIS Results: Greenhouse Gas Emissions .............................................. 22 Figure 3.2 Comparative Assessment of GHG Emissions ............................................. 23 Figure 3.3 GEMIS Results: Emissions of Air Pollutants.............................................. 23 Figure 3.4 Comparative Assessment of Air Pollutants Emissions ................................ 24 Figure 3.5 GEMIS Results: Cumulative Energy Demand of Primary Energy .............. 25 Figure 3.6 Comparative Assessment of Resource Consumption .................................. 25 Figure 3.7 Comparative Assessment of Noise Pollution .............................................. 26 Figure 3.8 Comparative Assessment of Cultural Compatibility and Acceptance .......... 28 Figure 3.9 Comparative Assessment of Supply Equity ................................................ 29 Figure 3.10 Comparative Assessment of Participation and Empowerment................... 30 Figure 3.11 Comparative Assessment of Potential for Economic Development .......... 31 Figure 3.12 Comparative Assessment of Employment Effects..................................... 32 Figure 3.13 Comparative Assessment of Impacts on Health ........................................ 33 Figure 3.14 Comparative Assessment of Investment Costs......................................... 36 Figure 3.15 Electricity Generating Costs in Comparison ............................................. 37 Figure 3.16 Comparative Assessment of Electricity Generating Costs......................... 38 Figure 3.17 Comparative Assessment of Maintenance Requirements .......................... 39 Figure 3.18 Comparative Assessment Regional Self-Supply and Import Independence 40 Figure 3.19 Comparative Assessment of Supply Security............................................ 41 Figure 3.20 Comparative Assessment of Future Potential............................................ 42 Figure 3.21 Results Ecology Assessment .................................................................... 43 Figure 3.22 Results Socio-Economic Assessment ....................................................... 44 Figure 3.23 Results Economic Assessment ................................................................. 44 Figure 5.1 Hybrid Village Systems: Distribution Steps ............................................... 60 Figure B.1 GEMIS Results: GHG Emissions .............................................................. 80 Figure B.2 GEMIS Results: Methane Emissions ......................................................... 81 Figure B.3 GEMIS Results: Air Pollutants .................................................................. 83 Figure B.4 Selected Air Pollutants .............................................................................. 84 Figure B.5 Cumulative Energy Demand (Primary Energy).......................................... 85 Figure B.6 Cumulative Energy Demand According to Resources................................ 85 Figure D.1 Specific Investment for Wind Power Plants and Diesel Gensets .............. 103 Figure D.2 Specific Investment for Hybrid Systems of Different Capacities.............. 104 Figure D.3 Illustration of Electricity Generating Costs for PV/Diesel........................ 108 Figure D.4 Illustration of Electricity Generating Costs for Wind/Diesel .................... 108 List of Tables V List of Tables Table 3.1 Scenarios and Technologies for Rural Electrification................................... 16 Table 3.2 Criteria and Indicators for the Assessment of Energy Technologies ............. 19 Table 3.3 Performance Assessment Scheme................................................................ 20 Table 3.4 Main Assumptions for the Cost Analysis ..................................................... 34 Table 3.5 Specific Investment Costs of Hybrid Systems.............................................. 35 Table 3.6 Investment Costs of Different Scenarios for Rural Electrification ................ 36 Table 3.7 Electricity Generating Costs for Different Scenarios.................................... 38 Table 4.1 Hybrid Systems in Inner Mongolia .............................................................. 49 Table A.1 Standard Household Characteristics............................................................ 68 Table A.2 Rich Household Characteristics .................................................................. 68 Table A.3 Peak and Base Loads for Different Village Sizes ........................................ 69 Table A.4 Main Modelling Assumptions..................................................................... 70 Table A.5 Share of Technologies for Electricity Generation........................................ 71 Table B.1 Amount of Greenhouse Gas Emissions ....................................................... 80 Table B.2 Air Pollutants.............................................................................................. 82 Table B.3 Cumulative Energy Demand (Primary Energy) ........................................... 84 Table C.1: Initial Investment Costs for Diesel Gensets................................................ 93 Table C.2: Electricity Generating Costs for Diesel Gensets ......................................... 95 Table C.3: Hybrid Systems at Different Diesel Prices ................................................. 96 Table D.1 Main Assumptions for the Cost Analysis .................................................. 101 Table D.2 Investment Costs for Small-Scale Wind Power Plants............................... 102 Table D.3 Investment Costs for Diesel Gensets......................................................... 102 Table D.4 Range of Investment Costs for Hybrid Systems ........................................ 105 Table D.5 Electricity Generating Costs of PV/Diesel Systems [€/kWh]..................... 106 Table D.6 Electricity Generating Costs of Wind/Diesel Systems [€/kWh] ................. 106 Table D.7 Electricity Generating Costs PV/Wind...................................................... 109 Table D.8 Investment and Operating Costs of Different Household Systems, Inner Mongolia....................................................................................................... 111 Table D.9 Electricity Generating Costs of Hybrid Systems in Inner Mongolia .......... 111 Table D.10 5 kW Hybrid Systems at Different Diesel Prices ..................................... 112 Acronyms VI Acronyms AC CED CSD DC EMS GEF GHG GTZ KfW OECD PV Schueco SMA SHS WHO Alternating Current Cumulative Energy Demand Commission on Sustainable Development Direct Current Energy Management System Global Environmental Facility Greenhouse Gas Deutsche Gesellschaft für Technische Zusammenarbeit Kreditanstalt für Wiederaufbau Organisation for Economic Co-operation and Development Photovoltaic Schueco International KG, produces i.e. different solar energy systems SMA Regelsysteme GmbH, produces i.e. inverters Solar Home System World Health Organisation 1 Introduction 1 1 Introduction Recent research on the development of the world’s energy state and the future development scenarios show alarming developments: 1. Around 2 billion people world-wide do not have access to modern energy services. This lack of access to electricity mainly applies to rural areas in developing countries, and progress being made over the last 25 years has applied mainly to urban areas (The World Bank, 1996a). 2. Without states taking heavy financial initiatives, the situation in 2030 will remain more or less unchanged with 1.4 billion people or 18 % of the world’s population without electricity supply (IEA, 2002). 3. Global consumption of primary energy resources, however, is likely to increase, with the increase being mainly based on fossil fuels. Developing countries, especially in Asia, will account for more than 60 % of this increase (IEA, 2002). The effect of increasing global CO2-emissions will be the consequence. In response to the lack of electricity supply in developing countries, their improved access to modern energy services has been regarded as essential for sustainable development during the Earth Summit on Sustainable Development in Johannesburg, 2002. This is mainly due to the goals that are associated with the development of energy infrastructure, major ones being economic and social goals. The outstanding key role in economic development, which had been attributed to energy services in the past, could not live up to experiences. Today, energy services are indeed seen as a major driving force to economic development, but additional measures are required as well. Higher availability of jobs, productivity increases or improved economic opportunities, however, are the effect that can be expected from better energy services, i.e. by catalysing the creation of small enterprises or livelihood activities in evening hours (WEHAB Working Group, 2002). Social benefits related to improved energy services include poverty alleviation by changing energy use patterns in favour of non-traditional fuels; the combating population growth by shifting relative benefits and costs of fertility towards lower rates of birth; and the creation of new opportunities for women by reducing the time for the collection of wood for cooking and heating (WEHAB Working Group, 2002), which is a major occupation of women in developing countries; time that could be used for education or employment instead. The challenge, thus, is to improve access to modern energy services, without on the other hand increasing reliance on fossil fuels. Recent approaches meet this challenge with a focus on decentralised systems for the electrification of rural areas. Main hope is here attributed to the application of renewable energies as wind, solar and hydro power, which are especially suited for decentralised electricity generation. Renewable energies use environmentally sound technologies: their consumption does not result in the depletion of resources; the compatibility to climate is better than for currently used options; and their application strengthens the security of energy supply by using local resources. A major problem related to the application of renewable energies in decentralised systems, however, is the instable energy provision due to the fluctuating nature of the resources. A pos- 1 Introduction 2 sibility to solve this problem is to backup the renewable energy generator with another power generator in a so-called hybrid system. This approach, although being known for quite some years already, is just now stepwise gaining importance. A number of projects applying hybrid systems for electricity generation have already been carried out, several are currently under implementation. However, the question whether and to which extent these systems satisfy the expectations on rural electrification projects with regard to sustainable development, has not been investigated yet and shall be matter of this paper. 1.1 Objective The objective of this paper is to analyse and assess the sustainability of the application of hybrid systems for rural electrification in developing countries. Due to the absence of respective surveys, this analysis is performed in comparative terms on the basis of an indicator set developed here. The sustainability of hybrid systems is assessed relative to the other potential decentralised electrification scenarios: diesel generator-based mini-grids, Solar Home Systems and biogas plants for electricity generation. Moreover, the extension of the conventional grid is considered as well. Another objective here is to find key success factors for the application of hybrid systems. These key success factors are related to aspects of financing, organisation, capacity building and others, which are of importance for any decentralised rural electrification project and especially for hybrid systems. The objective in investigating key success factors is to maintain the sustainability of a project for rural electrification with hybrid systems, accepting that sustainability is an ongoing dynamic process, which needs to be ensured by setting the right framework. 1.2 Methodology To pursue the above objectives, a literature research was performed first. The findings of this research were then discussed with project developers at the fair Intersolar in Freiburg/Germany on June, 28th, 2003, as well as with experts from Kreditanstalt für Wiederaufbau (KfW) on July, 7th, 2003, and Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) on August, 14th, 2003. In this paper, the different systems for energy provision being important for the comparative assessment of sustainability are presented first. Special attention is paid to hybrid systems, which have already been applied in developing countries, while the potential of other such possibilities is briefly discussed as well. For the assessment of sustainability in Chapter 3, an indicator system on the three dimensions of sustainability – ecology, socio-economic and economic issues - is developed. The different options for rural electrification are then investigated and compared with regard to these indicators. Chapter 4 then describes experiences with projects in Indonesia and Inner Mongolia, where hybrid systems were applied, while chapter 5 then outlines the key success factors for the application of hybrid systems. Finally, chapter 6 gives a summary and an outlook to the perspective of hybrid systems in developing countries. Several factors have been limiting to this work. Firstly, site visits could not be held and, therefore, the information here is limited to the findings of the literature review and the interviews. 1 Introduction 3 Moreover, the analysis of hybrid systems in developing countries in general can come only to rather vague results. What proves to be right in one country can be completely wrong for another country. Therefore, the findings of this analysis are always to be seen as strongly generalised and their applicability must be proven anew in each case. 2 Technologies for Rural Energy Supply 4 2 Technologies for Rural Energy Supply This chapter gives an overview on potential solutions for rural energy supply; the options of importance for this work are discussed more in detail. The objective is to provide a technical background for the evaluation of these options in the following chapters. Generally, power supply in developing countries for rural areas takes place in three different ways (Kleinkauf, W.; Raptis, F., 1996/1997): 1. locally, by supplying single consumers and load groups; 2. decentrally, by erecting or extending stand-alone regional mini-grids; 3. centrally, by expansion of interconnected grids. The approaches of local and decentralised electrification are obviously closely connected and can be met by similar technologies. Those of importance for this paper are described more detailed firstly in the following. In a next step, the different hybrid systems, which are in operation in developing countries nowadays, will be presented, including technical aspects to be considered and main applications. Moreover, potential other hybrid solutions will be discussed against the background of applying them in developing countries. Finally, this chapter will also briefly discuss the centralised approach of the extension of the conventional grid to rural areas. 2.1 Decentralised Electrification In highly fragmented areas or at certain distances from the grid, the decentralised approaches of regional mini-grid systems or local supply of single consumers can become competitive due to lower investments and maintenance costs compared to large scale electrification by expanding interconnected grids. Different technological options are in practice, most commonly diesel generating sets and renewable energies. 2.1.1 Diesel Generating Sets Small diesel-power generating sets (diesel gensets) have been the traditional way to address the problem of the lack of electricity. They provide a simple solution for rural electrification and can be designed for different capacities, being adapted to the needs of the consumers. In cases security of supply is not of major importance, single diesel gensets can be applied for electrification, accepting that no electricity can be supplied in times the genset is out of commission, i.e. due to repair or maintenance. This problem can be met by using a group of diesel gensets, with the other gensets providing backup (ESMAP, 2000). With diesel gensets, the electric current is produced within the village itself. The voltage of the generator is often adjusted to be higher than the required 220 Volt for the household because of high losses within the local distribution lines (Baur, J., 2000). Diesel gensets have problems with short durability, which is due to the fact that they work very inefficiently when running just at fractions of their rated capacity. Typically, the effi- 2 Technologies for Rural Energy Supply 5 ciency of operation is between 25-35% (Turcotte, D.; Sheriff, F.; Pneumaticos, S., 2001). Moreover, frequent start-up and shut-down procedures decrease their lifetime as well. Diesel gensets are typically just operated for around 4 hours in the evenings, and very often old motors from cars are used for the purpose of electrification. One of the basic problems for the application of diesel generating systems in developing countries, however, is more a problem related to infrastructure. Many, especially rural, areas are far away or isolated (i.e. islands) from higher developed regions so that the regular supply with diesel fuel becomes a logistical problem and an important financial burden even in countries, where fuel is heavily subsidised. Moreover, the transportation of diesel fuel can result in severe environmental damage, as experienced for example at the Galapagos Islands. In 2001, the tanker Jessica ran aground close to San Cristobal, spilling out 145,000 gallons of industrial fuel and diesel and putting the sensitive ecosystems of the islands to high risks. 2.1.2 Renewable Energy Technologies The use of renewable energy technologies is a very promising approach towards meeting environmental, social as well as economic goals associated with rural electrification. On a local level, two technologies are of high importance: Solar Home Systems (SHS) for supply of single consumers, and biogas for local mini-grids or single consumers.1 Both are presented in the following. Solar Home Systems Solar Home Systems (SHS) typically include a 20- to 100-Wp photovoltaic array and a leadacid battery with charge controller supplying energy for individual household appliances (Cabraal, A.; Cosgrove-Davies, M. Schaeffer, L., 1996). A common 50 Wp can supply lighting and a TV/radio for several hours per day (Preiser, K., 2001); the capacity can technically be expanded easily and, thus, be adapted to individual needs. The photovoltaic modules are usually installed on rooftops, they convert the insolation into electric current, which is used for loading the battery. The battery supplies electricity to the consumer during evening hours and in case of insolation shortages due to unfavourable weather conditions. Moreover, the battery offers the possibility to meet peak load demand for short periods of time. The electricity current is provided in direct current (DC). The application of inverters to provide alternating current (AC) at a voltage of 220 Volt is possible, but increases overall system costs. The systems work at voltages of 12 or 24 Volt, which requires high cross-sectional wiring in order to avoid high losses (Baur, J., 2000). Biogas Biogas systems utilise micro-organisms for the conversion of biomass (i.e. excrements from animal husbandry) for the production of biogas under anaerobic conditions2. The originating gas consists of 55 to 70% from Methane (CH4), which can be used in gas burners or motors 1 More potential renewable technologies include stand-alone wind turbines, wind farms, hydropower and larger-scale photovoltaics. 2 Anaerobic conditions: in absence of oxygen. 2 Technologies for Rural Energy Supply 6 for the production of electric current3 (Kaltschmitt, M., 2000) or for gas cookers/stoves, biogas lamps, radiant heaters, incubators and refrigerators working on biogas (GTZ, 1999a). Main component of a biogas plant is the digestion tank (fermenter), where the organic substrate is decomposed in the three steps hydrolysis, acidification and methane formation. Biogas systems are widely used in India and China for the supply of single consumers or local mini-grids. 2.2 Hybrid System Technology Hybrid systems are another approach towards decentralised electrification, basically by combining the technologies presented above. They can be designed as stand-alone mini-grids or in smaller scale as household systems. This section wants to discuss available technology options, the system components, general technical aspects and potential applications. 2.2.1 Relevance One of the main problems of solar as well as wind energy is the fluctuation of energy supply, resulting in intermittent delivery of power and causing problems if supply continuity is required. This can be avoided by the use of hybrid systems. A hybrid system can be defined as “a combination of different, but complementary energy supply systems at the same place, i.e. solar cells and wind power plants” (Weber, R., 1995). A system using complementary energy supply technologies has the advantage of being able to supply energy even at times when one part of the hybrid system is unavailable. So far, three different types of hybrid systems have been applied in developing countries, including Photovoltaic Generator and Diesel Generating Set (Diesel Genset), Wind Generator and Diesel Genset, Photovoltaic and Wind Generators. Although other renewable energy resources than solar and wind can in principle be used in hybrid systems as well, this has so far been limited to pilot projects in industrialised countries. In developing countries these other technology options have not yet gained importance. The presentation of these other potential options is left for section 2.2.3. Hybrid systems can technically be designed for almost any purpose at any capacity. Main applications for rural electrification in developing countries include independent electric power supply for 3 To generate 1 kWh of electricity, 1 m3 biogas is necessary (GTZ, 1999a). 2 Technologies for Rural Energy Supply 7 - Villages, Residential Buildings, Hospitals, Schools, - Farmhouses, - Missions, - Hotels, - Radio Relay Transmitters, - Irrigation systems, - Desalination Systems.4 2.2.2 Hybrid Systems in Developing Countries A common hybrid system for the application in developing countries generally consists of the following main components: 1. A primary source of energy, i.e. a renewable energy resource; 2. A secondary source of energy for supply in case of shortages, i.e. a diesel genset; 3. A storage system to guarantee a stable output during short times of shortages;5 4. A charge controller; 5. Installation material (safety boxes, cables, plugs, etc.); 6. The appliances (lighting, TV/radio, etc.). Usually, a DC/AC inverter needs to be installed additionally. All these components and the problems related to their application are further described in section 2.2.4.1. Hybrid systems are applied in areas where permanent and reliable availability of electricity supply is an important issue. Maintaining high availability with renewable energies alone usually requires big renewable energy generators, which can be avoided with hybrid systems. At favourable weather conditions, the renewable part of the system satisfies the energy demand, using the energy surplus to load the battery. The batteries act as “buffers”, maintaining a stable energy supply during short periods of time (Blanco, J., 2003), i.e. in cases of low sunlight or low wind. Moreover, the battery serves to meet peak demands, which might not be satisfied by the renewable system alone. A charge controller regulates the state of load of the battery, controlling the battery not to be overloaded. The complementary resource produces the required energy at times of imminent deep discharge of the battery, at the same time loading the battery. Figure 2.1 shows a principle overview of how to combine PV, wind and diesel generators in a hybrid system (Roth, W., 2003). 4 Personal Comment given by Mr. Georg Weingarten, Energiebau Solarstromsysteme GmbH, on June 28th, 2003, at Intersolar-Fair, Freiburg, Germany. 5 Storage systems in hybrid systems in developing countries are usually battery aggregates maintaining a stable output over a time frame of one or more days. Rotating masses can be used for shorter time frames (seconds), combustion aggregates need to be used for medium- or long-term storage. A future option might be the hydrogen fuel cell. 2 Technologies for Rural Energy Supply 8 Solar Generator Charge Control G Wind Generator Charge Control Battery Inverter Mini-Grid / Appliances G Diesel Generator Charge Control Figure 2.1 Principle Circuit of Hybrid Systems 2.2.2.1 PV/Diesel Combining Photovoltaic arrays and a diesel genset provides a rather simple solution and is feasible for regions with good solar resources. As can be seen in Figure 2.1, PV/Diesel hybrid systems require a DC/AC-inverter if appliances need alternating current, since PV modules provide direct current. Compared to the common solution for rural off-grid electrification using diesel gensets alone, the hybrid solution using photovoltaic offers great potential in saving fuel. Experiences show annual fuel savings of more than 80% compared to stand-alone mini-grids on diesel genset basis,6 depending on the regional conditions and the design of the system. A project at Montague Island even reached an 87% decrease in fuel consumption (Corkish, R.; Lowe, R.; et al, 2000). The CO2 emissions decrease correspondingly. Naturally, the observed fuel saving varies over the year. The solar generator can provide about 100% of the electricity during summertime, while in winter this figure is less. Typically, in climatic regions like Germany a PV/Diesel hybrid system is designed to provide around 50% of the electricity from photovoltaic during winter, the rest being supplied with the diesel genset.7 2.2.2.2 Wind/Diesel Wind/Diesel combinations are, in principal, built up in the same way as are PV/Diesel systems. From a perspective of financial competitiveness, they can be applied in regions where average wind speed is around 3.5 m/s already (Sauer, D.; Puls, H.; Bopp, G., 2003). If wind 6 Personal Comment given by Mr. Georg Weingarten, Energiebau Solarstromsysteme GmbH, on June 28th, 2003, at Intersolar-Fair, Freiburg, Germany. 7 Personal Comment given by Mr. Georg Weingarten, Energiebau Solarstromsysteme GmbH, on June 28th, 2003, at Intersolar-Fair, Freiburg, Germany. 2 Technologies for Rural Energy Supply 9 speed is sufficient, the wind turbine is in charge of the provision of energy. During short periods of time with low winds, the battery maintains a stable system, being replaced by the diesel generating set when low winds occur over longer periods of time. 2.2.2.3 PV/Wind and PV/Wind/Diesel In some regions the exploitation of both wind and solar resources can become favourable, i.e. at coastal or mountain areas with high degree of solar radiation. Of utmost importance is here that wind and solar energy supply complement each other so that energy provision is possible over the whole year. While for the other hybrid systems applying diesel gensets, the objective in designing the system is to maximise the exploitation of the renewable energy resource, the situation is different for PV/Wind systems. Here, accurate assessment of the resources is essential for the decision on the appropriate system design. A PV/Wind hybrid system is able to provide energy all time of the day, if weather conditions are favourable. However, breakdowns in energy supply are possible, which is not suitable for some non-household applications, i.e. hospital electrification. Thus, a PV/Wind hybrid system might ideally be supported by an additional diesel generating set for times of extremely unfavourable weather conditions. This kind of hybrid system has been implemented e.g. for a hikers’ inn in the Black Forest of Germany (Kaltschmitt, M.; Wiese, A., 2003). The PV/Wind/Diesel hybrid system has proven successful in Germany, being highly reliable and resulting in a further reduction of diesel compared to other hybrid systems. This is obviously due to the fact that PV/Wind/Diesel hybrid systems involve a higher share of renewable energy resources. For the application in developing countries, however, it must be doubted whether this effect of further reduction of diesel use can trade off the higher investment and operation costs. 2.2.3 Other Hybrid Systems The hybrid systems implemented in developing countries so far do not reflect the whole range of potential solutions. Generally, combining any renewable resource with others is conceivable, depending on the availability of resources. In regions, where two different resources complement each other, combinations in hybrid systems are worth discussing. 2.2.3.1 Biogas Hybrid Systems PV/Wind/Biogas ASE GmbH as the performing organisation has created an autonomous hybrid power supply systems for the purification plant of Körkwitz, situated close to the Baltic Sea in Northeastern Germany, using the renewable energy resources photovoltaic, wind and biogas for energy provision. The objective was to provide 80% of the necessary energy, being able to feed up to 30% of surplus energy under good performing conditions into the public grid. In the first stage, the system was implemented using just wind energy and photovoltaic arrays, however preparing the energy management for further expansion using biogas in a decentralised cogeneration plant. The main components of the system include a 250 kWp solar generator and a 300 kW wind turbine with 3 inverted rectifiers connected in parallel (Neuhäusser, G., 1996). 2 Technologies for Rural Energy Supply 10 Information on the performance of the installed system and about the further expansion with biogas could not be obtained within the framework of this work. This is due to the fact that the participating companies have been declared insolvent since implementation and the new operator of the systems could not be identified. However, the adaptation of this hybrid system for rural electrification in developing countries seems unlikely especially from a financial perspective. Combining three different types of renewable energy systems certainly involves investment costs too high for this purpose. Wind/Biogas The concept of a Wind/Biogas system is to some degree similar to Wind/Diesel hybrid systems. Instead of the diesel genset, here engine generator sets, small gas turbines, or some kinds of fuel cells can be used to generate electricity in addition to the wind turbine. The engine is fuelled by biogas, which is produced in an anaerobic digester. If the production of biogas is at times not sufficient, conventional gases as propane can be used instead. Modelling simulations proved that the availability of wind energy is upgraded by applying biogas systems additionally (Surkow, R.; 1999). A key role can be assigned to the size of the systems’ gas storage tank and its operating management. Depending on the management strategy and the scenario used for the type of consumers, additional secondary energy needed from conventional fuels (propane or diesel) accounts for 7-11% of the total amount of electricity. During the research for this work it was found out that these kind of systems are currently tested in developing countries in South Asia (ITDG, 2003), more detailed information could, however, not be obtained. A reasonable statement on the applicability therefore cannot be given here. Generally it is thought that biogas plants instead of diesel gensets as backup for wind or PV systems offer an environmental benign approach towards rural electrification, so that the potential should be more closely investigated. 2.2.3.2 Hydropower Hybrid Systems Wind/Large Hydropower On a seasonal basis, the two resources wind and hydropower tend to complement each other to some extent (Iowa, 2002a). Especially in winter, when river flows are low, wind has the potential to take over electricity supply. However, during late summer, both resources might become low, and the combination of both is then disadvantageous. Moreover, while hydro generators on rivers are usually at lower levels, wind resources are better at high elevations. For constant electricity generation, another energy resource would therefore be necessary. Since the combination of wind and hydropower offers just limited advantages, it is unlikely that these resources are combined in a project in developing countries, since this opportunity does not seem economically attractive. However, for some locations the situation might be different, so that the feasibility of Wind/Large Hydropower systems needs to be assessed for each case individually. Wind/Micro-Hydro and PV/Micro-Hydro While hybrid systems with large-scale hydropower generators seem unattractive, microhydropower is more feasible. Micro-hydroelectric generators are turbines that are able to op- 2 Technologies for Rural Energy Supply 11 erate under low elevation head or low volumetric flow rate conditions, being suitable for small rivers (Iowa, 2002b). Where rivers have inconsistent flow characteristics (dry in summer, frozen in winter), a hybrid system applying wind or PV support can be attractive. A careful assessment of water resources is therefore essential. 2.2.4 Technical Aspects This section gives an overview on different technical aspects related to the application of hybrid systems in developing countries, including general technical aspects and problems of the system’s components as well as technical management aspects. 2.2.4.1 General Aspects General problems occurring with the elements of hybrid systems are not only specific for hybrid systems, but also common for the use of the single elements. Problems and other general technical aspects, especially those specific to the adaptation in developing countries, are briefly summarised below. Lack of infrastructure for renewable energies One of the key disadvantages of renewable energies is the fact that they apply new and not yet widespread technologies, being mostly produced in the industrialised countries. This, and the accordingly missing infrastructure for maintenance of renewable energy technologies, makes their adaptation in developing countries a rather difficult task. A holistic approach to create this kind of infrastructure and to make the use of renewable energy technologies in developing countries sustainable is imperative for energy planners and development aid organisations. The diesel generating set The non-continuous use of diesel generating sets always results in a reduction of lifetime due to the frequent start-up and shut-down procedures, as was further outlined in section 2.1.1. In comparison to the application of diesel gensets alone, the application in hybrid systems is advantageous in this respect, since here start-up and shut-down procedures are less frequent. In comparison to other technical devices, motor generating sets have a wide range of operating hours, with figures from 1,000 – 80,000 hours for generators with capacities less than 30 kW (Kininger, F., 2002), strongly depending on the way of operation. Moreover, diesel generating sets are rather sensitive to climatic and geographic conditions. The decrease in efficiency is 1% for every 100 m above sea level, and another 1% for every 5.5 °C above a temperature of 20 °C (Wuppertal Institute, 2002). To improve the situation of diesel dependence, generators using vegetable oil for operation offer a potential solution. Vegetable oil can be made available by peanut plants, rapeseed or sunflowers, to mention but a few. These plants are often locally available and CO2 neutral. Although the production of vegetable oil requires an additional initial investment, this can be traded off with later cost reduction due to fuel savings. Instead of conventional diesel gensets, a gasification system might be applied as well. Here, producer gas is made from biomass in a fluidised bed gasifier and used to fuel internal combustion engines, gas turbines or fuel cells. This approach, however, is still matter of research and currently more applicable for industrial purposes (Iowa, 2002c). 2 Technologies for Rural Energy Supply 12 The Storage System The storage device of hybrid systems, in most cases lead-acid batteries, is a very sensitive and crucial part of the system. The optimal performance of this component highly influences not only the system’s performance, resulting in the need for suitable operation and management system; it also influences the overall performance costs of the system. The more optimal the performance of the battery bank, the longer the battery’s lifetime, resulting in lower overall costs. The performance of a battery bank is controlled with the help of a charge controller, which guarantees that the battery is neither over-charged nor discharged too deeply. The use of storage systems in hybrid power plants has a twofold effect: on the one hand, the storage of power is meant to bypass short times of power shortages. On the other hand, the battery offers support in times of peak demands, which cannot be met by the renewable energy source alone. The following major aspects need to be considered when designing a battery bank for hybrid systems: Capacity Design: When designing a battery bank installation, it is important to note that a battery’s capacity decreases over lifetime. The end of life of a battery is reached when capacity has declined to 80% of the nominal value, where the nominal value is given by the manufacturer. Thus, a battery installation should be designed based on the 80% of the nominal battery capacity (IEA, 1999a). Effect of temperature: The nominal capacity is usually given at a battery temperature of 20°C. Low temperatures slow down the chemical reactions inside the battery, thus significantly reducing the utilisable capacity. High temperatures result in an increase of corrosion velocity of the battery’s electrodes, thus reducing the battery’s lifetime significantly. Therefore, both high and low temperatures should be avoided as far as possible (IEA, 1999a). Deep discharge to less than 50% of the capacity, overcharge and a low electrolyte level should be avoided. In order to guarantee this, the application of a charge controller is essential. Furthermore, daily control both of battery acid level and voltage are fundamental, too.8 - - The Charge Controller The charge controller in renewable energy systems has two fundamental functions (IEA, 1998): 1. Regulation of the current from the renewable energy generator in order to protect the battery from being overcharged. 2. Most controllers additionally regulate the current to the load in order to protect the battery from discharge. The charge controller, though being one of the least costly components in renewable energy systems, is of high importance for the system’s reliability and highly influences the system’s maintenance costs (IEA, 1998). This is due to the fact that an accurately working charge controller increases performance and lifetime of the battery bank. 8 Personal Comment given by Mr. Georg Weingarten, Energiebau Solarstromsysteme GmbH, on June 28th, 2003, at Intersolar-Fair, Freiburg, Germany. 2 Technologies for Rural Energy Supply 13 For hybrid systems, one needs to distinguish two different scenarios: firstly, in hybrid systems relying on renewable energy technologies for power supply alone (i.e. PV/Wind hybrid systems), the control of charge and discharge basically works as it does in systems with just one renewable energy resource. There, the main objective of applying charge control is to maximise the battery’s lifetime. The situation, however, is different for hybrid systems using diesel gensets as a backup. Since the genset is switched on in times the renewable energy resource cannot meet the demand, the objective of system control, in addition to the former, is also to minimise costs for diesel fuel and maintenance (IEA, 1998). For the aspect of charge control, there are four major differences for diesel genset supported hybrid systems compared to “simple” systems with renewable energy technologies alone (IEA, 1998): 1. Battery banks in hybrid systems are generally relatively smaller and cycled more than, i.e., in pure photovoltaic systems. This increases the importance of regular equalisation and makes the cycle life the main factor determining the battery lifetime. A typical cycle life of hybrid systems’ battery banks consists of 2,000 – 3,000 cycles. 9 2. The fact that power is available on demand in diesel genset supported hybrid systems eliminates many of the vagaries associated with the fluctuating nature of renewable energy resources, making the charge control simpler. 3. Since hybrid systems are typically designed for higher loads than pure renewable systems, charge controllers are relatively less costly for the overall system. This gives potential for more costly controllers with higher functionality, without increasing the overall costs significantly. 4. Especially if the diesel genset is oversized, charge currents can be rather high. Concerning the diesel genset itself, the charge controller is giving the dispatch strategy, deciding when to turn it on, the loading at which to operate, and when to switch the genset off. This dispatch strategy is commonly quite simple: it can be determined by a low voltage point of the battery and a voltage point at which the battery is fully charged. During this time, the diesel genset runs at full loading, using the power which is not required by the load to charge the battery bank (IEA, 1998). Other dispatch strategies are to turn on the genset only when the load is reasonably large and to run it at a loading to supply just enough power in order to keep the batteries from being discharged; or to start the genset when the net load, meaning the load current minus the current available from the renewable energy generators, exceeds a certain threshold; sometimes it is even left to the user to switch on the genset (IEA, 1998). Main problems related to batteries and the charge controller in hybrid systems include temperature control, which is often difficult; many charge controllers cannot be properly adjusted; and not only that battery specifications are not always available, batteries are also usually the first component suffering from abuse (Turcotte, D.; Sheriff, F.; Pneumaticos, S., 2001). 9 Personal Comment given by Mr. Georg Weingarten, Energiebau Solarstromsysteme GmbH, on June 28th, 2003, at Intersolar-Fair, Freiburg, Germany. 2 Technologies for Rural Energy Supply 14 Inverters In cases where the power supplied by the renewable energy generator is given in DC, a DC/AC-inverter needs to be installed additionally. This is due to the fact that most appliances needing AC current are less costly than those requiring DC current. There are different inverter models available, which are not to be discussed within this work. All of these models, however, need to meet the following requirements (Kaltschmitt, M., 2001/2002): optimal adjustment to the renewable energy generator proper energetic inversion to DC current compliance with the principles of netparallel operation Inverters for hybrid systems are nowadays still considered as problematic and are in need for further development (Turcotte, D.; Sheriff, F.; Pneumaticos, S., 2001). Common problems related to their application in hybrid systems include faults during transition and difficulties in starting the generators. Moreover, available models often loose their parameters when being reset, and some faults additionally require manual reset (Turcotte, D.; Sheriff, F.; Pneumaticos, S., 2001). Modern inverter technologies available on the market not only provide the normal functions of an inverter, but additionally integrate the charge control. These appliances allow with their integrated system management an automatic control of the energy sources, the charging state of the battery and the power demand of the loads. 2.2.4.2 Energy Management Systems Energy Management Systems (EMS) are a modern possibility to improve supply security of hybrid or other systems applying renewable energy resources. It serves the function of the charge controller in a more flexible way, while at the same time serving additional functions. An EMS anticipates expected loads and prioritises them, co-ordinates the application of the different generators and optimises the exploitation of the renewable energy resource, and decreases the maintenance requirements by optimising the operation of the batteries (Benz, J., 2003). 2.3 Grid-based Electrification Finally, the centralised approach of extending the conventional grid to rural areas is the last option to be described here. Grid-based electricity is delivered to consumers at three different levels (Baur, J., 2000): 1. The electric current produced in conventional central power plants is transported via high-voltage transmission lines at a voltage of 60 – 200 kilovolt over long distances; 2. On a regional level, the electric current is distributed to the villages via mean-voltage grid, normally at a voltage of 10 - 22 kilovolt. 3. Inside the village, the electric current is transformed to the voltage level of 110 – 220/230 volt of the households. 2 Technologies for Rural Energy Supply 15 Compared to European standards, the conventional grid in developing countries lacks redundancy. This leads to lower costs on the one hand, but to less reliability on the other hand as well. Grid-based electrification is often highly favoured by rural population despite the problems with reliable electricity supply. However, the extension of the conventional grid is often not feasible from an economic point of view. Factors to be considered include10 distance of the village from the grid, number of households to be connected to the grid within the village, and household density in the villages, meaning the distances between the different houses. Moreover, the fact that many developing countries are heavily dependent on fossil fuels makes grid-based rural electrification unattractive not only from an economic, but also from an environmental perspective. 10 For further reading see: (Cabraal, A.; Cosgrove-Davies, M.; Schaeffer, L., 1996) and (Baur, J., 2000). 3 Analysis of Impacts 16 3 Analysis of Impacts Although several projects with hybrid systems for rural electrification have been carried out already, surveys investigating these systems are so far very limited. In fact, no socioeconomic survey discussing the adaptation of hybrid systems in developing countries has been conducted to date. This problem led to the idea of discussing the application of hybrid systems in developing countries not in absolute terms, but rather to compare their sustainability relative to other likely scenarios of rural electrification, which will be defined in the following section. This chapter, thus, aims to analyse the impacts of rural electrification in developing countries with hybrid systems relative to the different technology options presented above. In doing so, it is tried to find out to which degree hybrid system likely provide a sustainable option for rural electrification. The assessment of hybrid systems compared to the different other scenarios is accomplished with a set of indicators, which is developed in 3.2 and 3.3, making possible a comparison on the three dimensions of sustainability: ecological, socio-economic and economic issues. 3.1 Scope of the Analysis For the assessment, the fictitious case of electrification of a remote village in a rural area in a developing country is discussed. It is assumed that this village is electrified with different scenarios of rural electrification, and their impacts on the three dimensions of sustainability are analysed relative to each other. Table 3.1 gives and overview on the chosen scenarios. Table 3.1 Scenarios and Technologies for Rural Electrification No. Scenario Technologies PV-Diesel 1 Decentralised Rural Electrification with Hybrid Systems Wind-Diesel PV-Wind 2 3 4 Decentralised Rural Electrification with Diesel Gensets Decentralised Rural Electrification with Renewable Energies Centralised Rural Electrification by Grid Extension Diesel Gensets SHS Biogas Country dependent 3.1.1 Scenario Definitions This section outlines the underlying assumptions for the different scenarios for rural electrification, as they will be used for the assessment in the following. Scenario 1: Hybrid Systems The analysis of the different hybrid systems is here restricted to those which have been applied already in developing countries, namely the combinations PV/Diesel, Wind/Diesel and PV/Wind. The reason to leave out potential other technologies, as they were presented in 3 Analysis of Impacts 17 chapter 2.2.3, is that this kind of assessment would be based on too many assumptions and therefore be too speculative. The hybrid systems discussed here are designed for 24-hours electrification of a remote rural village. Where appropriate, the relevant combinations of hybrid systems are discussed as a whole; if necessary, they are discussed each for themselves. For the assessment of hybrid systems, it is here often referred to experiences of two projects on rural electrification with hybrid systems, which more detailed information could be obtained for. These projects took place in Inner Mongolia and Indonesia, and will be presented as examples in detail in chapter 4. Scenario 2: Diesel Gensets The comparison of hybrid systems with diesel gensets is based on the assumption that the considered rural village is for this scenario supplied by a diesel-based mini-grid, operated by a private operator and being implemented privately, not under the guidance of development cooperation organisations. Scenario 3: Renewable Energies For electrification of rural villages with renewable energies, two typical options are investigated here in comparison to hybrid systems: SHS and biogas systems. SHS are accounted here because they are applied widely nowadays. Since SHS are not used for productive purposes, but usually for household electrification only, this is accounted for here. It is assumed that the households of the considered village are electrified each with a SHS, accepting that the comparison with a hybrid village system is to some extent not accurate. However, it is thought that the comparison with SHS will be supportive to identify the circumstances under which the application of hybrid systems is reasonable with regard to sustainability. Biogas systems are investigated as village systems for electrification of the considered remote village, meaning that a generator is applied for producing electricity. Scenario 4: Grid Extension The extension of the conventional grid to remote rural areas is in most cases unlikely due to usually large distances of rural villages to the grid and the corresponding considerable investment necessary for the extension. However, for the assessment of hybrid systems it is seen as important to include grid extension as well in order to accurately determine the quality of hybrid system electrification. The different scenarios are all discussed as real application scenarios, which means that ideal conditions are not assumed. However, it is supposed that natural and other conditions for the realisation of the considered technical alternatives are given. It is obvious that in practical cases, only a more limited number of the technical options will be available. The scenario “Rural area without electrification” is not included in the analysis, since it is seen as inappropriate for being discussed here. This is due to two reasons: on the one hand, the electrification of non-electrified areas has been regarded as essential to economic and social development during the Earth Summit on Sustainable Development in Johannesburg, 2002; on the other hand, the comparison of non-electrified areas with the electrification by different technologies seems to be inadequate in technical terms anyway. It is rather a debate on principles but a question of analytical discussion. 3 Analysis of Impacts 18 Parts of the ecological and economic analysis in the following could not be performed in general terms and required an accurate modelling of the considered remote village and the installed hybrid systems. The main assumptions are presented in the following, the details of the calculations can be found in Annex A. 3.1.2 Modelling Assumptions For the assessment of parts of the ecological and economic dimension, Trapani/Italy was chosen as an example with moderately suited weather conditions.11 Although this location is not situated in a developing country, the comparison with weather data from several other locations revealed that this location makes a generalised statement possible by offering average conditions. For the design of the hybrid systems to electrify a village in Trapani, the annual peak demand of the village was determined according to different possible village sizes. The annual consumption results from a calculated specific consumption per household and an additional 40% excess consumption for productive purposes. The hybrid systems are then designed accordingly to meet this demand with the ratio 4:1 in the cases of PV/Diesel and Wind/Diesel systems, and 1:2 in the case of PV/Wind systems. The assessment of ecological issues is performed for a village with 170 households with a calculated annual peak electricity consumption of 48,126 kWh/a. This electricity demand is then met with the different scenarios for rural electrification in order to comparatively assess hybrid systems. The calculation of investment and electricity generating costs for the assessment of economic sustainability is then performed for different village sizes for the same location. 3.2 The Concept of Indicators of Sustainability Measuring the degree of sustainability obviously is a difficult task, leaving much space for discussion and interpretation. A system trying to describe and to quantify the degree of sustainability is the concept of indicators for sustainable development. Indicators are used to give a comprehensive view on sustainability, summarising complex information and, thus, creating a transparent and simplified system to provide information on the degree of sustainability both to decision-makers and the interested public. Most commonly, indicator sets have been developed and used to provide information on the state of sustainability of production processes or societies as a whole. Especially, the latter concept of indicators for societies as a whole has gained importance by understanding the global dimension of sustainability. A number of indicator sets have been developed, of which some of the most known on an international level have been set up by the Commission on Sustainable Development (CSD) and the Organisation for Economic Co-operation and Development (OECD). For the task of evaluating the sustainability of different energy technology concepts, no approved indicator system has been developed yet. The need for such an indicator system, how- 11 Global radiation: 1,664 kWh/m2/a; Source: Meteosat. 3 Analysis of Impacts 19 ever, is apparent and has been highlighted in a number of studies already. 12 On the one hand, it allows a “relative” comparison of different technologies, evaluating their current state of sustainability relative to each other, and also offering a comprehensive view on the their weak points from a perspective of sustainability. On the other hand, the results being obtained by such an indicator set can provide a data base for the evaluation of the sustainability of a society as a whole. 3.3 Developing an Indicator Set for Energy Technologies Available indicator sets for measuring the sustainability of energy technologies have been found to be inappropriate within the framework of this work since they are commonly adapted to the conditions of industrialised rather than to those in developing countries and they include too many indicators. They do, however, provide the basis for the indicator set being developed within this work. In a first step, the three dimensions of sustainability – ecological, socio-economic and economic issues – needed to be broken down to a set of criteria describing these issues. In a next step, a set of indicators measuring these criteria was developed, with the indicators weighted relative to their importance for the respective dimension according to the author’s opinion. This led to the following set of indicators: Table 3.2 Criteria and Indicators for the Assessment of Energy Technologies Dimension Criteria Climate Protection Ecology Resource Protection Noise Reduction Indicator Greenhouse Gas Emissions per kWh Emissions of Air Pollutants per kWh Consumption of Unlasting Resources Noise Pollution Cultural Compatibility and Acceptance SocioEconomic Issues Overall SocioEconomic Matters Degree of Supply Equity Potential for Participation and Empowerment Potential for Economic Development Individual SocioEconomic Interests Low Costs and Tariffs Economic Issues Maintenance Economic Independence Future Potential Employment Effects Impacts on Health Investment Costs per W Electricity Generating Costs per kWh Maintenance Requirements Degree of Import Dependence and Regional Self-Supply Supply Security Degree of know-how Improvement Weighting 0.3 0.3 0.3 0.1 0.1 0.1 0.1 0.4 0.2 0.1 0.2 0.3 0.25 0.1 0.1 0.05 12 Compare for example: (Aßmann, D., 2003) or (Nill, M.; Marheineke, T.; Krewitt, W.; Friedrich, R.; Voß, A., 2000). 3 Analysis of Impacts 20 The discussion of the relevance of the different indicators to the three dimensions of sustainability is left to the sections below, where each indicator is presented and analysed for different energy technology options. This set of indicators tries to give a holistic picture, aiming to analyse the three dimensions of sustainability as comprehensive as possible. The constricted number of indicators allows to give significant statements on the chosen criteria by being investigated intensively. The weighting of the indicators is explained as follows: For the ecological dimension, emphasis is given to climate and resource protection due to their high importance for environmental sustainability. For the socio-economic dimension, the indicators for economic development and employment effects are emphasised in the weighting due to the fact that economic development is one of the major objectives of rural electrification. The extent to which technologies meet this objective should be weighted accordingly. For the economic dimension, the criteria of low costs and tariffs as well as maintenance are seen as most important criteria because of their high influence on the success of electrification projects. Among these criteria, the indicator of electricity generating costs is seen as being of highest importance because these costs are to be covered by the customers directly; investment costs, meanwhile, can be covered by other means, for example donor organisations. Maintenance, moreover, is of key importance for the reliable performance of the electricity supply system and, thus, weighted high as well. - In order to come to a conclusion on the performance of hybrid systems on the three dimensions of sustainability, the indicators are then summarised for each dimension individually according to their respective weight for the dimension. The discussion of sustainability in this chapter does not account for benefits or problems related to electrification in general. As an example, gender issues are not taken into account although this issue might be important in individual cases, and the assessment of these kinds of general benefits of rural electrification has been matter of a lot of research work during the last years.13 However, a detailed determination of differences can only be discussed on concrete case studies, while this work needs to stay on a more generalised level. The comparative assessment of hybrid systems with the other scenarios of rural electrification with regard to the different indicators is done with the following assessment scheme: Table 3.3 Performance Assessment Scheme 2 Comparatively very good performance 1 0 -1 Comparatively poor performance -2 Comparatively very poor performance Average performComparatively good ance or no statement performance possible 13 As examples: (Barkat, A. et al., 2002) and (Barnes, D.; DomDom, A., 2002). 3 Analysis of Impacts 21 It must be emphasised at this point that this assessment scheme only gives information on the relative sustainability of the different scenarios compared to each other. Conclusions on an absolute degree of sustainability cannot be drawn from this. 3.4 Analysis of Sustainability This section analyses hybrid systems on the three dimensions of sustainability with the help of the indicators set up above, and compares them relative to the other options for rural electrification. For a better reading, this section presents only the assessment for hybrid systems in detail. For the relative comparison with the other scenarios, only the results are presented here. Annex C, then, gives chapter for a justification of the results. 3.4.1 Ecological Dimension 3.4.1.1 Climate Protection The degree of climate sustainability is here determined with two different indicators, Greenhouse Gas Emissions per kWh, and Emissions of Air Pollutants per kWh. Greenhouse gas (GHG) emissions are here measured in CO2-Equivalents per kWh. CO2Equivalents aggregate the different greenhouse gas emissions as CO2, CH4 or N2O14 due to their contribution to the greenhouse effect over a time frame of 100 years. All of these gases are emitted as products of combustion processes. The emission of air pollutants is here measured in SO2-Equivalents per kWh. SO2-Equivalents aggregate different air pollutants like SO2, NOx, dust or CO15 due to their acidification potential. Air pollutants are emitted in combustion processes as well, are closely linked to the occurrence of acid rain and have severe impacts on human health. All of these emissions occur not only during operation of energy supply systems, but during their whole life cycle including i.e. production, transport, operation, recycling. They can be assessed with the help of GEMIS (Global Emission Model for Integrated Systems), a free download software provided by the German Öko-Institut.16 The results of this analysis, however, shall be shown as a relative comparison rather than as in absolute figures, since it is not a detailed life cycle assessment. For the modelling in GEMIS, this electricity demand was met with the different technology scenarios. For the extension of the conventional grid, three country examples (Brazil, China, and South Africa) are chosen as representatives. The details of the modelling assumptions and a detailed discussion of the results can be found in Annex B, the main results are presented here. 14 15 CO2 = carbon dioxide; CH4 = methane; N2O = nitrous oxide (laughing gas). SO2 = sulphur oxide; NOx = nitrogen oxide; CO = carbon monoxide. 16 Available at: http://www.oeko.de/service/gemis/. 3 Analysis of Impacts 22 3.4.1.1.1 Greenhouse Gas Emissions per kWh Scenario Comparison Figure 3.1 shows the modelling results of GHG emissions attributable to the different scenarios for meeting the electricity demand of the chosen village. The scenario of grid extension is described with the chosen countries Brazil, South Africa and China. 60.000 Greenhouse Gases [kg CO2-Equivalents] 50.000 40.000 30.000 20.000 10.000 0 PV/ Wind/ PV/ Diesel SHS Biogas Brazil South China Diesel Diesel Wind Af rica Figure 3.1 GEMIS Results: Greenhouse Gas Emissions The comparison of GHG emissions per kWh shows that especially PV/Wind hybrid systems are highly preferential. PV/Wind systems result in lower greenhouse gas emissions than all other scenarios except SHS, which similar greenhouse gas emissions can be attributed to. The GHG emissions resulting from diesel-based hybrid systems are higher due to the application of the diesel genset. In comparison to purely renewable energy systems, their performance is therefore worse. Compared to conventional energy systems, however, diesel-based hybrid systems are advantageous. Figure 3.2 summarises the results of the analysis of GHG emissions on the basis of the comparative assessment scheme. It shows that hybrid systems can be assessed as being supportive for the objective of decreasing GHG emissions compared to conventional energy systems. Purely renewable hybrid systems as PV/Wind are here performing even better than dieselbased systems. 3 Analysis of Impacts 23 2 1 0 PV/ Diesel -1 -2 Wind/ Diesel PV/ Wind Diesel SHS Biogas Grid Extension Figure 3.2 Comparative Assessment of GHG Emissions 3.4.1.1.2 Emissions of Air Pollutants per kWh Scenario Comparison The comparison of emissions of air pollutants again shows a preference for the PV/Wind system. The other hybrid systems suffer in their performance mainly from the emission of NOx in the combustion process of the diesel generator. 800 Air Pollutants [kg SO2-Equivalents] 700 600 500 400 300 200 100 0 PV/ Wind/ PV/ Diesel SHS Biogas Brazil South China Diesel Diesel Wind Africa Figure 3.3 GEMIS Results: Emissions of Air Pollutants While SHS almost do not result in any emission of air pollutants due to the absence of a combustion process, the amount of air pollutants is considerable in the case of biogas. These emissions result mainly from sulphur bound in the substrate. Diesel-based mini-grids result in the highest amount of air pollutants due to NOx emissions in the combustion process. They are therefore strongly disadvantageous in this respect. The comparison with the conventional grid clearly shows a high dependence on the respective energy sources used in such grids. While Brazil applies mainly hydroelectric power and therefore hardly has significant emissions of air pollutants, China and South Africa rely mainly on coal with the associated high SO2-emissions from sulphur bound in the coal. Thus, the application of diesel-based hybrid systems is associated with more emissions of air pollutants compared to the grid of Brazil, while they emit less air pollutants compared to the grids of China and South Africa. PV/Wind systems are advantageous in any case. 3 Analysis of Impacts 24 For the comparative assessment, PV/Wind systems and SHS are evaluated to perform comparatively best. A comparatively good performance can be attributed to PV/Diesel, Wind/Diesel and biogas systems. The conventional grid is concluded to perform worst with regard to the emission of air pollutants, because most developing countries apply a significant share of fossil resources for electricity generation. 2 1 0 PV/ Diesel -1 -2 Wind/ Diesel PV/ Wind Diesel SHS Biogas Grid Extension Figure 3.4 Comparative Assessment of Air Pollutants Emissions 3.4.1.2 Resource Protection The degree of resource protection is here measured with the help of the indicator “Consumption of unlasting Resources”. For the assessment, GEMIS is used as well. GEMIS investigates the cumulative energy demand (CED) in kWh, which is a measure for the whole effort on energy resources (primary energy) caused by the provision of products or services.17 It is therefore a measure to describe the extent to which renewable and non-renewable energy resources are consumed in order to provide electricity, both during operation and for the construction of the power plant. The reason to investigate the CED rather than just the consumption of non-renewable resources is that the depletion of all resources is crucial for the environmental performance of energy systems; the availability of unlasting renewable energy resources as for example firewood is to be ensured as well. Scenario Comparison The comparison of CED with GEMIS shows expected results: fossil fuelled scenarios involve a higher amount of non-renewable energy for the production of energy. This shows the assessment with GEMIS in Figure 3.5. 17 Source: GEMIS. 3 Analysis of Impacts 25 250.000 200.000 CED [kWh] 150.000 100.000 50.000 0 PV/ Wind/ PV/ Diesel SHS Biogas Brazil South China Diesel Diesel Wind Africa Non-renew able Renew able Others Figure 3.5 GEMIS Results: Cumulative Energy Demand of Primary Energy Thus, here again PV/Wind systems are to be distinguished from diesel-based hybrid systems. PV/Wind systems involve a similar CED as do biogas systems and slightly more than SHS, while diesel-based systems here come out worse. While in comparison to diesel gensets, all hybrid systems perform better with regard to CED, the situation is different concerning the conventional grid. Since the CED as well strongly depends from the energy mix of the respective countries, it is here decided to give preference just to PV/Wind systems and rank diesel-based hybrid systems similar to the conventional grid. Figure 3.6 summarises the results of the assessment of this indicator on the basis of the assessment scheme. 2 1 0 PV/ Diesel -1 -2 Wind/ Diesel PV/ Wind Diesel SHS Biogas Grid Extension Figure 3.6 Comparative Assessment of Resource Consumption 3.4.1.3 Noise Reduction Noise reduction is here measured with the help of the indicator „Noise Pollution”. Noise is a ubiquitous environmental problem, being more than just disturbing. A stringent interpretation of the term “health” as given by the World Health Organisation (WHO) allows to call noise a health problem (WHO, 1948). The effects of noise on health reach from aural detriment or deterioration to extra-aural health problems or the perturbation of well-being (Helfer, M., 1998/1999). 3 Analysis of Impacts 26 Although the absolute figure of noise pollution measured in decibel is of importance to measure the effect on human health, it is here abandoned to do so. This is due to the fact that on the one hand reliable data could not be obtained; on the other hand mitigation measures on severe noise pollution are available and applied in developing countries as well.18 Thus, this section is based on own assessment of the author, leaving out noise being generated during construction phase, as this applies to all scenarios. Assessment of Hybrid Systems PV modules do not create noise during operation. For the case of a PV/Diesel system, thus, the diesel genset is the only part generating noise during operation and through start-up and shut-down procedures. The noise originated by the diesel genset, however, can well be cushioned by building a capsule, i.e. a powerhouse, which is taken into consideration for the assessment here. Wind turbines create an additional buzzing noise by their rotating wings. This effect can be recognised as being disturbing. Moreover, the power distribution lines of the mini-grid further contribute with a buzzing noise as well. Scenario Comparison The comparison of the impacts of the different technologies shows a disadvantage of windbased hybrid systems, being due to the noise generated by the wind turbines. 2 1 0 PV/ Diesel -1 -2 Wind/ Diesel PV/ Wind Diesel SHS Biogas Grid Extension Figure 3.7 Comparative Assessment of Noise Pollution For PV/Diesel hybrid systems, the assessment here is less negative. Still, the application of the diesel genset is disadvantageous in comparison to SHS. For the comparison with diesel gensets, hybrid systems are all seen as advantageous, because cushioning measures are usually not applied for diesel gensets in developing countries. The comparatively good performance of the extension of the conventional grid on this indicator results from the fact that electricity generation does not take place in the village itself, by this not being disturbing to its inhabitants. 18 Personal Comment given by Georg Kraft, German Bank for Reconstruction (KfW), on July 7th, 2003 in Frankfurt/Main, Germany. 3 Analysis of Impacts 27 3.4.2 Socio-Economic Dimension 3.4.2.1 Overall Socio-Economic Matters The discussion of overall social matters, reflecting overall interests and needs for sustainable social development, is based on a number of different indicators: Cultural Compatibility and Acceptance, Degree of Supply Equity, Degree of Participation and Empowerment, and Potential for Economic Development. 3.4.2.1.1 Cultural Compatibility and Acceptance Cultural Compatibility and Acceptance can be seen as key factors for project developers in developing countries. The history of development aid projects has many examples of projects, which failed due to a lack of cultural compatibility and the corresponding lack of acceptance. This indicator, thus, tries to investigate whether major cultural obstacles exist and whether this or other factors can lead to problems with regard to acceptance. It is obvious that an assessment of cultural compatibility and acceptance in global terms can just be rather vague. Especially cultural compatibility varies strongly not only between countries, but even within different regions. However, it is tried here to assess the cultural compatibility of hybrid systems by extracting experiences obtained within projects and by referring to studies addressing this issue. For this purpose, detailed information only on two projects in Inner Mongolia and Indonesia could be reviewed, because other detailed project reports could not be obtained. Assessment of Hybrid Systems The final reports of projects applying hybrid systems for rural electrification in Inner Mongolia (GTZ, 2003) and Indonesia (Preiser, K. et al., 2000) do not indicate that cultural reservations must be anticipated. Neither is there any evidence that rural electrification through solar or wind energy would reveal any potential cultural obstacles.19 However, although cultural compatibility is likely not to be problematic, problems with the acceptance of the application of hybrid system can always arise from poor system performance.20 Commonly, rural population is familiar with good-quality energy services through information given by relatives or friends who live in grid-electrified urban areas. A system promising electrification on a 24-hours basis, but not working reliably, can soon lead to dissatisfaction. Moreover, it can be expected that in areas where renewable energies have not been applied yet, hybrid systems will be met with scepticism and caution by rural population. 19 Personal Comment given by Jörg Baur, GTZ, in Eschborn/Germany on August 14th, 2003. 20 In Subang/Indonesia, for example, it was observed that consumers were dissatisfied due to technical failures or temporary breakdowns of a PV/Diesel hybrid systems. Thus, a connection to the grid was stated to be preferential by the consumers (Preiser, K., et al., 2000). 3 Analysis of Impacts 28 Scenario Comparison The comparison as being presented in Annex C.2 is based on the assumption that all systems are working well. Moreover, it is assumed that the use of renewable energy technologies is a rather unknown approach for most people in rural areas. The assessment of cultural compatibility shows that conventional technologies as grid extension and diesel gensets are likely to result in less cultural obstacles or problems of acceptance since these technologies are wellknown to rural population. 2 1 0 -1 -2 Hybrid Systems Diesel Genset SHS Biogas Grid Extension Biogas, however, faces severe cultural obstacles due to religious or social Figure 3.8 Comparative Assessment of Cultural taboos associated with dealing with Compatibility and Acceptance excrements. 3.4.2.1.2 Degree of Supply Equity Supply equity basically refers to two different aspects, and both need to be taken into account here: Access to electricity services can be hampered by existing structures of political power; Low total costs make electricity affordable to people of almost any income class. Surveys and project descriptions dealing with electrification in developing countries have been analysed, but just very limited information could be obtained. This section is, thus, based not only on literature, but also on own estimations by the author as well as on conversations with project co-ordinators of the GTZ.21 In the assessment, priority is given to the matter of equal access to electricity. Low total costs are used as an additional criterion for the comparative assessment. Assessment of Hybrid Systems By being a decentralised system, hybrid systems offer the possibility to supply energy equally to everybody within the village, widely independent from national political matters. The Indonesian project proofs that population of a hybrid-powered village does not feel discriminated with energy distribution compared to other customers (Preiser, K., et al., 2000). However, supply equity is not a matter of course in decentralised systems and should not be overestimated. The way of implementation and existing structures of political power in the village itself can be obstacles for supply equity as well. From a financial perspective, hybrid systems are relatively expensive regarding both investment and operation costs.22 This restricts the application of hybrid systems for the electrification of rural villages to areas with some economic and financial potential. 21 22 With Jörg Baur and Roman Ritter, in Eschborn/Germany on August, 14th, 2003. Without taking external costs into account. 3 Analysis of Impacts 29 Scenario Comparison The analysis of supply equity shows a preference to decentralised systems in general and especially to those applying renewable energies, which is not very surprising since the decentralised nature and the avoiding of fossil resources are major advantages of renewable energies. The provision of fossil resources as well as the conventional grid are often subject to political changes and interference, and therefore by their nature less able to guarantee longterm equal access to electricity. 2 1 0 -1 -2 Hybrid Systems Diesel Genset SHS Biogas Grid Extension Among the renewable energies, preference is given to household units. Since hybrid systems are discussed here for the application on community level, SHS come off better concerning supply equity. Biogas plants come off better than hybrid systems due to the lower total costs associated with their application. Figure 3.9 Comparative Assessment of Supply Equity 3.4.2.1.3 Potential for Participation and Empowerment This section aims to discuss whether hybrid systems are likely to contribute to capacity building on matters of energy. For a future sustainable energy system it is essential not only to provide energy in a clean and inexpensive way, but also to make customers aware of the fact that energy is limited and saving of energy therefore important. Another aspect to be considered is empowerment: increased understanding and participation of the interested public in a development context provides the opportunity of increasing empowerment. Assessment of Hybrid Systems The experiences made in the projects in Indonesia and in Inner Mongolia do not create a consistent picture of the ability of hybrid systems to improve knowledge on energy saving measures. Both projects did apply certain consumption restrictions to the consumers, since especially in Indonesia the capacity installed was too low to meet the demand. Both project reports, however, come to the conclusion that people are willing and able to learn about the system, and that people were also willing to adapt to the restrictions that were set. However, hybrid systems are likely to improve people’s understanding in matters of energy provision, as do decentralised electricity generation in general. Not only that the installed capacity is limited and does not allow unlimited consumption of electricity. Electricity is also produced within the village itself, which improves understanding and empowerment, and by which people can learn about issues of electricity production. Scenario Comparison The comparison shows a great potential for hybrid systems on capacity building for energy issues. The fact that hybrid systems are applied at a certain limited capacity, but provide electricity the whole day, is a good mixture for capacity building and empowerment. 3 Analysis of Impacts 30 People need to understand the limited nature of energy in order to properly exploit the installed capacity of hybrid systems and in order to give every user in the community the same possibility to use electricity. 2 1 0 -1 Hybrid Systems Diesel Genset SHS Biogas Grid Extension Biogas plants, however, have greater -2 potential compared to the hybrid systems investigated here, because they require a high degree of user involve- Figure 3.10 Comparative Assessment of Participament. For hybrid systems applying tion and Empowerment biogas plants as backup, the assessment would be different. 3.4.2.1.4 Potential for Economic Development The indicator “Potential for Economic Development” certainly is of major importance for the assessment of the sustainability of energy technologies. This is due to the fact that energy services are commonly seen as essential for economic development: lighting, for example, allows shop owners or handicraft enterprises to extend their commercial activities to the evenings; electrification allows handicraft enterprises to apply more power tools and to increase their productivity; and people in general have more time for enhanced commercial activities during the day if they have lighting for doing their household chores in the evenings. Experiences made in Bangladesh, for example, show that electrification results in a higher number of people being employed, even among household without access to electricity (Barkat, A., et al., 2002); moreover, a significant share of annual income could be attributed to electricity in Bangladesh (Barkat, A., et al., 2002). However, electrification should be seen as essential for economic development, but not as only necessary measure. Complementary measures need to be taken in order to ensure economic development, but are matter of the implementation process and cannot be considered for a comparative assessment. Assessment of Hybrid Systems As already mentioned in section 3.4.2.1.3, the projects in Indonesia and Inner Mongolia did apply certain restrictions on the use of electricity. Both projects experienced that the installed capacity of the systems soon was unable to meet the demand since people employed more and more electric appliances, which was not expected especially in Indonesia. These examples, and experiences made particularly in connection with SHS, proof the necessity of careful demand forecasts as will be discussed in chapter 5.5, because once electricity is available, the demand is likely to increase. For hybrid systems, which can be installed at and technically easily extended to comparatively high capacities, the conclusion can be drawn that they offer a good potential for economic development. If an adequate capacity is installed, they can supply electricity on a 24 hours basis. Under quality aspects of electricity provision, they are normally meeting the needs, in Indonesia some customers even evaluated the quality higher than that of the conventional public grid (Preiser, K., et al., 2000). As a result, the stability and flexibility of the system, the good quality of the produced electricity as well as the possibility to install high capacities make hybrid systems very favourable. 3 Analysis of Impacts 31 Scenario Comparison Hybrid systems show a good advantage on economic development in comparison to other decentralised rural electrification options, because these other systems are problematic with regard to issues as reliability, continuity of electricity supply or commonly installed capacities. 2 1 0 -1 -2 Hybrid Systems Diesel Genset SHS Biogas Grid Extension Just the conventional grid by offering Figure 3.11 Comparative Assessment of Potential practically no limitations to commer- for Economic Development cial activities on rural village level has higher potential for economic development. 3.4.2.2 Individual Social Interests The criterion individual social interests will be discussed with the two indicators Employment Effects, and Impacts on Health. 3.4.2.2.1 Employment Effects In order to create a sustainable energy system in developing countries, the effects of different technology options on employment are important. Socio-economic surveys on rural electrification in general reveal that employment effects are likely to occur and can directly be attributed to electrification.23 Employment effects can result from enhanced economic activities as a result of lighting on the one hand, but are also likely to occur due to manufacturing and maintenance processes related to the application of the energy technology in the village. Only fragmentary information could be obtained on employment effects attributable to the application of different energy technologies in developing countries in general, no studies at all were found investigating employment effects of hybrid systems explicitly. For this issue it was therefore tried to draw conclusions from surveys investigating the effects on employment of renewable energies in Germany. Assessment of Hybrid Systems Compared to conventional power plant technologies, renewable energy technologies as wind energy are relatively more labour intensive (Scheelhasse, J.; Haker, K., 1999). Case studies in Africa expect that the decentralised nature of manufacturing of technologies as solar energy is likely to result in wide-spread employment opportunities (Painuly, J.; Fenhann, J., 2002). It can generally be expected that employment opportunities in production, sales, service and maintenance of renewable energy systems will occur as was already experienced with SHS (Nieuwenhout, F.D.J., et al., 2000). The expansion of renewable energy technologies in Germany has shown that the provision of energy services gains importance. Demand-side-management to optimise appliances and con- 23 (Barkat, A. et al., 2002) reveals that access to electricity results in a higher number of people employed even among non-electrified households in the village. 3 Analysis of Impacts 32 sumption is likely to have significant employment effects (Scheelhasse, J.; Haker, K., 1999). To which extent this observation might apply to developing countries as well, cannot be quantified here. Scenario Comparison The comparison of hybrid systems 2 with other electrification scenarios shows a good potential for hybrid sys1 tems. This is mainly due to the fact 0 that renewable energies are relatively Hybrid Diesel SHS Biogas Grid -1 labour intensive on the one hand, Systems Genset Extension which makes them favourable com-2 pared to conventional options as diesel gensets. On the other hand they have good potential for economic develop- Figure 3.12 Comparative Assessment of Employment, by this creating employment ment Effects opportunities, which makes them favourable compared to options as SHS. Biogas systems, however, are seen as preferential compared to hybrid systems with regard to the fact that many system components of biogas plants can be produced inside the respective countries, by this creating more employment opportunities than in the case of hybrid systems. For the extension of the conventional grid, their higher potential on economic development and therefore employment opportunities than for hybrid systems is attenuated by lower potential for employment attributable to production or maintenance of the energy system. 3.4.2.2.2 Impacts on Health The relevance of this indicator derives from the experience that people in areas, which are not electrified, burn biomass for cooking. Due to this usually incomplete combustion process, corrosive gases are generated with negative impacts on human health. Other sources of soot and fumes are candles and kerosene lamps. Another aspect concerning human health refers to experiences with rural electrification, which reveal that rural health clinics could improve their medical services due to electrification. X-ray and sonography equipment can be used for better diagnosis of illnesses, thus directly affecting human health (GTZ, 2003). Moreover, refrigerators can be used to store vaccines. This, too, is taken into consideration here. Assessment of Hybrid Systems Hybrid systems emit corrosive gases during operation of the diesel genset. Critical corrosive gases emitted by diesel gensets are NOx, fume and particles. There are no emissions during operation resulting from the use of the renewable energy technologies. The example of Inner Mongolia shows that hybrid systems indeed provide the possibility to improve the situation for rural health clinics reliably on a 24 hours basis. The electrification of rural health clinics is a main application for hybrid systems of smaller capacities. 3 Analysis of Impacts 33 Scenario Comparison Due to the fact that hybrid systems can 2 well provide electricity to rural health clinics, and, moreover, hardly result in 1 exhaust fumes, they are seen as advan0 tageous compared to diesel gensets Hybrid Diesel SHS Biogas Grid and SHS. While biogas is seen as -1 Systems Genset Extension preferable due to further effects on -2 overall cleanliness, the extension of the conventional grid brings out similar health effects as do hybrid systems. Figure 3.13 Comparative Assessment of Impacts on Health 3.4.3 Economic Dimension 3.4.3.1 Low Costs and Tariffs The question of low costs and tariffs mainly depends on three different aspects: Investment costs per W, Electricity generating costs per kWh, Investment costs must be seen as a major hurdle for the implementation of electrification projects. If first investment is too high and requires substantial financial expenditure, potential customers are likely to decide for a cheaper option, not accounting for the fact that electricity generating costs in the end might be lower. Low costs and tariffs in general are key factors for the successful realisation and sustainable operation of electrification projects. Willingness-to-pay on the one hand, but also affordability of electricity services on the other hand are essential matters of investigation in the planning process of these projects. Low electricity generating costs per kWh allow customers to apply more technical devices, not only for lighting purposes, but also for commercial activities. For the assessment of costs and tariffs, a cost analysis for hybrid systems was performed based on cost data obtained by project developers and system providers and for the location of Trapani/Italy. The following basic assumptions were made: 3 Analysis of Impacts 34 Table 3.4 Main Assumptions for the Cost Analysis Type of Costs Costs/Details Specific Investment PV Modules: 400 €/kWp Specific Investment Wind Power Plants (incl. Tower): For Plants ≤ 10kW: Costs = 4309 × exp − 0,1068 × Source Schueco24   P  25  [€/kW] kW  P   [€/kW] kW  For Plants ≥ 10 kW: Costs = 2016,7 × exp − 0,007 × Diesel Genset: Costs = 345,63 × exp − 0,0394 ×   Own calculation based on available cost data (see Annex D) Investment   P   [€/kW] kW  Schueco 26 Battery bank: 333 €/kWh for a 12V, 500Ah battery, the batteries are designed for a storage capacity of 2 days Inverter and Charge Controller “Sunny Island”, 4.5kW: 5000 € Planning, Assembly and Commissioning: 15% of total investment Transport: 1000 € Local grid, Internal Wiring: 6000 € Cabinets, Cables, Support: 2000 € Operating Costs Manpower, Maintenance and Repair: Annually 4% of total investment Interest Rate: 6% Miscellaneous Lifetime system components: PV modules 20 years, Wind generator 12 years, Diesel genset 10 years, Battery 5 years, Inverter and Charge Controller 10 years Cost data SMA KfW27 Schueco28 Own estimations GTZ 29 Own assumption For PV and Wind: (Sauer, D.; Puls, H.; Bopp, G., 2003); others: own estimation The cost analysis was performed for different village sizes of 30 to 300 households and, accordingly, different system capacities. The electricity generating costs were calculated with the annuity method for diesel fuel prices of 0.1 to 1 € per litre. The details of the calculation can be found in Annex D. Annex D.3 additionally gives an overview on cost estimations made by other organisations in order to make the picture as comprehensive as possible. 24 Personal Comment Mr. Koerner during a telephone interview on August, 18th, 2003. 25 P = Installed capacity. 26 Personal Comment Mr. Koerner during a telephone interview on August, 18th, 2003. 27 Personal Recommendation Mr. Geis, former KfW staff member, during a telephone interview on August, 22nd, 2003. 28 Personal Comment Mr. Koerner during a telephone interview on August, 18th, 2003. 29 Personal Recommendation Jörg Baur, GTZ, in Eschborn/Germany on August 14th, 2003. 3 Analysis of Impacts 35 For the comparison with the other electrification scenarios, cost data was collected from various other institutions. By this it is tried to find out at which level of the different cost ranges hybrid systems are positioned. 3.4.3.1.1 Investment Costs per W Assessment of Hybrid Systems Assessing the initial investment necessary for hybrid systems is a difficult task since it depends strongly on the chosen system configuration, the quality of the components and the specific characteristics of the location. Therefore, the here obtained investment costs for hybrid systems cannot be generalised for all cases, but should rather be seen as indicative. In the investment costs analysis, the following results were obtained for the specific investment costs per W for villages with 30 to 300 households. Table 3.5 Specific Investment Costs of Hybrid Systems System PV/Diesel Systems Wind/Diesel Systems PV/Wind Systems at 2 days battery capacity PV/Wind Systems at 1 day battery capacity Share in Electricity Generation 4:1 4:1 1:2 1:2 Range of Investment Costs [€/W] 8.23 – 9.20 8.05 – 10.44 9.67 – 12.00 6.86 – 9.18 For PV/Wind systems, the influence of the battery capacity on investment costs was investigated by varying the storage capacity. The results in Table 3.5 indicate that the size of the battery highly influences the specific investment costs. This implies that PV/Wind systems are likely to be cost-competitive with the other hybrid systems only where weather conditions are favourable enough to guarantee electricity supply with smaller battery banks. Since these costs are based on data from German manufacturers, they need to be taken with caution. Locally produced batteries, charge controllers, inverters or other devices may significantly reduce investment costs; moreover, more suitable locations with regard to weather conditions strongly influence the system design and can therefore decrease investment costs. This is proven by a number of examples collected from other organisations, which are presented in more detail in Annex D.3. These investment costs vary between 3,30 to 4,8 €/W for PV/Diesel village systems, 3,03 to 4,5 €/W for Wind/Diesel village systems and 2,03 to 3,21 €/W for PV/Wind household systems. Scenario Comparison Table 3.6 gives an overview on typical investment costs for the other scenarios of rural electrification. 3 Analysis of Impacts 36 Table 3.6 Investment Costs of Different Scenarios for Rural Electrification System Diesel Genset SHS Biogas Grid Extension Range of Investment Costs 0.3 – 2.5 €/W 7 – 26 US$/Wp 2.5 – 4 €/W Depending on the location. Source (Kininger, F., 2002) (Cabraal, A.; Cosgrove-Davies, M.; Schaeffer, L., 1996) (ATB, 2003) The comparison of this data with those for hybrid systems calculated here reveals the following aspects: Diesel gensets are likely to be least costly among the decentralised solutions, and are therefore evaluated as comparatively very good here. The comparison of hybrid systems with biogas systems shows that biogas is likely to be less costly as well. The investment cost calculations for hybrid systems from other sources, however, show that for other locations and circumstances, the investment for hybrid systems might become similar. Compared to the use of PV alone as SHS, hybrid systems require less specific investment due to the fact that the renewable part of the systems is not designed to meet the full electricity demand, by this reducing investment costs strongly since specific investment for PV modules does not decrease with higher installed capacities. Grid extension, meanwhile, requires high financial input for remote rural areas. The quantity depends on the distance of the village to the grid, the number of households to be connected, and the density of households in the village (Cabraal, A.; CosgroveDavies, M.; Schaeffer, L., 1996; and: Baur, J., 2000). According to the World Bank, the construction of power distribution lines account for 80 to 90% of the overall investment, and can be up to 20,000 US$ per kilometre (ESMAP, 2000b). For the case of a remote village, investment costs for grid extension can therefore be evaluated as higher than for hybrid systems. 2 1 0 -1 -2 Hybrid Systems Diesel Genset SHS Biogas Grid Extension - - This leads to a comparative assessment as shown in Figure 3.14. The comparison shows that among the decentralised solutions for rural village supply – hybrid systems, diesel gensets and biogas systems - hybrid power plants require the highest specific investment and are therefore disadvantageous. Figure 3.14 Comparative Assessment of Investment Costs 3 Analysis of Impacts 37 3.4.3.1.2 Electricity Generating Costs per kWh Assessment of Hybrid Systems The cost analysis of hybrid systems was performed for different village sizes as well as different fuel prices in order to determine their influence on electricity generating costs. The results can be found in Figure 3.15. 1,80 PV/Wind, Battery 2 Days PV/Wind, Battery 1 Day Wind/Diesel: 0,1 €/l Diesel Wind/Diesel: 1 €/l Diesel PV/Diesel: 0,1 €/l Diesel PV/Diesel: 1 €/l Diesel 30 40 50 60 70 80 90 100 120 140 160 175 225 275 Electricity Generating Costs [€/kWh] 1,70 1,60 1,50 1,40 1,30 1,20 1,10 1,00 0,90 Number of Households Figure 3.15 Electricity Generating Costs in Comparison The analysis of electricity generating costs lead to the following main observations: The electricity generating costs of all systems decrease with higher capacities, which is mainly due to the decline in investment costs for wind and diesel generators. The decrease in electricity generating costs for PV/Diesel systems is lower than for the other systems due to the fact that investment for PV modules does not decrease with higher capacities. Therefore, higher loads/larger villages give preference to Wind/Diesel systems if wind potential is sufficient. The effect of decreasing diesel fuel prices is only moderate. In fact, the electricity generating costs are only 0.06 €/kWh lower for all village sizes at a fuel price of 0.1 €/l compared to 1 €/l, both for PV/Diesel and Wind/Diesel systems. The electricity generating costs of PV/Wind systems as well strongly depend on the battery size and the weather conditions. Higher annual global radiation, i.e., does not only result in higher electricity output of the PV modules, but also in the possibility to design the battery bank smaller. - - Again, the absolute numbers for electricity generating costs must be taken with caution. They might vary strongly according to actual site conditions, and the chosen system configuration strongly influences the electricity generating costs, so that the data here shall just be seen as indicative. This is proven by comparing the data calculated here with those of other institutions, which can be found in Annex D.3. Especially in the case of household systems, the costs can be significantly lower, which is mainly due to the fact that factors as the construc- 3 Analysis of Impacts 38 tion of a local mini-grid or maintenance and repair must not be accounted, since this is left to the buyer of the systems. For PV/Diesel hybrid systems, the Fraunhofer-Institute states that electricity generating costs are likely not to become lower than 1.03 Euro/kWh for village systems with annual consumption of less than 15,000 kWh at an interest rate of 6% (Sauer, D., et al., 1999). Scenario Comparison The comparison with other potential systems for rural electrification, which can be found in Annex C.3, shows a clear disadvantage of hybrid village systems among the decentralised solutions. Still, this observation must not be taken for granted and can differ strongly from case to case. The main results are presented in Table 3.7. Table 3.7 Electricity Generating Costs for Different Scenarios System Diesel Genset SHS Biogas Systems Grid Extension Specific Electricity Generating Costs 0.20 – 0.60 US$/kWh 1 US$/kWh 0.15 – 0.20 €/kWh Country dependent Source (ESMAP, 2000a) (BMZ, 1999) (Wuppertal Institute, 2002) The comparison shows that biogas systems are the least costly option among the decentralised systems from a point of view of electricity generating costs. Diesel gensets strongly depend on the diesel fuel price, and since diesel fuel is often heavily subsidised in develop1 ing countries, they are evaluated as 0 comparatively good here. SHS proHybrid Diesel SHS Biogas Grid duce electricity at lower costs than -1 Systems Genset Extension hybrid village systems due to lower -2 operational costs. However, the comparison with hybrid village systems Figure 3.16 Comparative Assessment of Electricity here is anyway critical. If compared to Generating Costs hybrid household system, the situation can be completely different. 2 The comparison with the conventional grid shows a disadvantage of hybrid systems as well. Once the conventional grid is extended to a rural village, the resulting electricity generating costs are likely to be lower, because grid extension offers the least costly option for electricity generation if a medium voltage line passes the respective village nearby. 3.4.3.2 Maintenance Requirements The indicator “Maintenance Requirements” discusses requirements on maintenance structures. For decentralised electrification, the scattered nature of these systems is generally problematic with regard to maintenance. 3 Analysis of Impacts 39 Assessment of Hybrid Systems Maintenance requirements for hybrid systems must be evaluated as being comparatively high. Project developers state this issue to be of major importance and very crucial from a technical point of view30: whole maintenance centres need to be erected close to the villages, adequate supply of spare parts is essential, etc. This shows that maintenance structures are very complex in the case of hybrid systems. More details can be found in section 5.1. Special attention needs to be paid to the maintenance of the key components, batteries and charge controllers, in hybrid systems. Experiences show that regular annual inspection and maintenance can reduce average fault rates of three failures per year to one failure every two years (Turcotte, D.; Sheriff, F.; Pneumaticos, S., 2001). To make customers aware of the need for maintenance of these small components is one of the key issues to be addressed in the implementation process of hybrid electrification projects. Scenario Comparison The comparison of maintenance requirements with other scenarios shows that hybrid systems due to their complexity require higher attention on maintenance issues than do other systems for rural electrification. Technicians need to be educated, maintenance centres need to be erected, and problems with charge controller and batteries make these systems comparatively problematic with regard to maintenance. Just biogas systems are here seen to be even more problematic, because biogas systems require regular attendance and maintenance. If this is not ensured, than system breakdowns of several days can be the result. Generally, the assessment as presented in Figure 3.17 reflects that maintenance is problematic for rural electrification in general. None of the systems is therefore assessed as comparatively very good with regard to maintenance here. 3.4.3.3 Economic Independence 2 1 0 -1 -2 Hybrid Systems Diesel Genset SHS Biogas Grid Extension Figure 3.17 Comparative Assessment of Maintenance Requirements The criterion of economic independence is measured with the two indicators Degree of Import Dependence and Regional Self-Supply, and Supply Security. Economic dependence on industrialised countries is one of the major problems of developing countries. With focus on matters of energy, the question to be discussed here is whether a technology is able to decrease dependency of developing countries on the one hand, and whether the creation of economic surplus remains within the country on the other hand. By investigating the degree of supply security, two important aspects of electrification are investigated in detail: on the one hand supply security refers to likeliness of system breakdowns, which is an important economic factor since commercial activities require reliable 30 Personal Comment given by Jörg Baur, GTZ, in Eschborn/Germany, on August, 14th, 2003. 3 Analysis of Impacts 40 electricity output. On the other hand the importance of supply security refers to the question whether a technology has the ability to supply electricity the whole day. 3.4.3.3.1 Degree of Import Dependence and Regional Self-Supply Assessment of Hybrid Systems With regard to import dependence and regional self-supply, two different aspects need to be discussed. On the one hand, the need for diesel fuel makes regions applying this technology dependent on fuel imports, except diesel is produced in the country itself. On the other hand, the question whether the other components of a hybrid system can be produced in the respective countries is of major importance for sustainability in terms of maintenance as well as further dissemination of this technology. The latter question has been discussed for many years already. The fear is that dependency on oil imports from industrialised countries might be replaced by a dependency on imports of modern technologies for the use of non-depleting resources as solar energy. It was argued that necessary production facilities and experts are likely not to be available in developing countries for many years. 31 Experiences lately, however, show that developing countries very well had the ability to produce at least parts of hybrid systems, i.e. charge controllers, batteries, wiring, etc. (IEA, 1999b). The example of Inner Mongolia, where renewable energies have been strongly promoted, shows that a market for renewable energies can emerge as well (GTZ, 2003). On the other hand experiences also show that quality of important system parts as batteries is likely to be low (Preiser, K., et al., 2000). Improvements in this respect and the development of markets for renewable technologies can be expected only over longer periods of time and often need external support. Scenario Comparison In comparison to the other scenarios, 2 two major groups can be distinguished: electrification scenarios de1 pendent on fossil resources are less 0 preferential from the point of view of Hybrid Diesel SHS Biogas Grid -1 Systems regional self-supply and import indeGenset Extension pendence. Pure renewable energies, -2 however, can be preferred to hybrid systems. Systems like biogas plants are neither dependent on new tech- Figure 3.18 Comparative Assessment Regional Selfnologies nor reliant on fossil re- Supply and Import Independence sources, and therefore are significantly preferential to hybrid systems. 31 See for example: (Hemmers, R., 1990). 3 Analysis of Impacts 41 3.4.3.3.2 Supply Security Assessment of Hybrid Systems Renewable energy generators as PV arrays and wind generators have a lifetime of up to 20 years and are nowadays very reliable. The experiences with hybrid systems in Inner Mongolia and Indonesia therefore did not show major breakdowns due to system component failures. Naturally, system breakdowns can occur by incidents, which cannot be influenced by project developers. As an example, a PV/Diesel hybrid system in Indonesia was not working due to lightning strike (Preiser, K., et al., 2000). Firstly, careful projection of demand development is essential in order to enable supply security. The experience of Indonesia shows as well that if projections are not carried out closely, the system is likely not to cover demand increase at a certain stage anymore, leading to breakdowns and therefore decreasing supply security severely (Preiser, K., et al., 2000). Anyhow, if systems breakdowns due to failures of one of the electricity generation components occur, a hybrid system is still able to supply a limited amount of energy with the other components. This and the fact that hybrid systems can be applied for 24-hours electrification shows that hybrid systems generally have a relatively high degree of supply security. Scenario Comparison Compared with other methods, hybrid systems offer a high degree of supply security. This observation is mainly 1 due to the fact that hybrid systems do 0 not rely on one generator alone, but Hybrid Diesel SHS Biogas Grid are backed up by another one. More-1 Systems Genset Extension over, hybrid systems apply renewable -2 energy technologies as photovoltaic and wind, both nowadays being maFigure 3.19 Comparative Assessment of Supply Se- ture technologies. By this, the likelicurity hood of complete system breakdowns is comparatively low. The assessment here therefore reflects supply security as a main strength of hybrid systems. 2 3.4.3.4 Future Potential The criterion of future potential is discussed with the indicator “Degree of know-how Improvement”. The relevance of future potential and know-how improvement is to be seen within the context of technology transfer, capacity building and sustainable energy development. With the help of demonstration projects and well-functioning rural electrification projects, modern and sustainable approaches for rural electrification can be promoted. For this reason, this section tries to identify the potential of the respective technologies by evaluating their degree of modernity and their ability to improve the people’s knowledge on energy issues. Moreover, tribute is given to the fact that fossil resources are limited and that for future development a decrease of dependence on such resources is desirable. Assessment of Hybrid Systems 3 Analysis of Impacts 42 Hybrid systems apply modern and new technologies for rural electrification, which are based on approaches being followed in the industrialised countries as well and involve lower dependence on fossil resources. A high degree of potential for know-how improvement and capacity building can therefore be attributed to such technologies. Scenario Comparison For SHS and Biogas, the future potential can be seen as equally high, since these are modern and new technologies not demanding fossil resources either. 2 1 0 Hybrid Diesel SHS Biogas Grid -1 Systems Genset Extension Diesel gensets and extension of the -2 conventional grids on the other hand are options, which certainly offer less potential for know-how improve- Figure 3.20 Comparative Assessment of Future Poments. tential Thus, the comparison of the future potential clearly results in a preference for the solutions based on renewable energy resources. 3.5 Results and Discussion The result of the assessment of the indicators is now aggregated according to the weight, which was attributed to the individual indicators in Table 3.2 on page 19. With this, it is tried to come to a conclusion on the degree, to which hybrid systems are likely to be a sustainable option for rural electrification, as was the objective in the beginning. The three dimensions ecological, socio-economic and economic sustainability are still discussed individually. 3.5.1 Results 3.5.1.1 Ecological Dimension The analysis of the ecological dimension shows good potential for hybrid systems. Especially compared to conventional electrification solutions, hybrid systems indeed have the potential to reduce emissions of greenhouse gases and air pollutants. Moreover, the relatively low energy consumption for the production of hybrid systems as well contributes to a good overall result on environmental sustainability compared to diesel gensets and grid extension. 3 Analysis of Impacts 43 2 1 0 This observation is not very surprising with regard to diesel gensets, since hybrid systems are especially meant to replace them in rural electrification. The comparison of hybrid systems with the extension of the conventional grid does not provide a -2 PV/ Diesel Wind/ PV/ Wind Diesel SHS Biogas Grid consistent picture at first Diesel Extension glance. The question whether hybrid systems are more environmentally Figure 3.21 Results Ecology Assessment benign than the conventional grid strongly depends on the energy mix of the respective countries. Nevertheless, the commonly high dependence of developing countries on fossil fuels allows assessing the environmental performance of hybrid systems as better. -1 The comparison of hybrid systems with purely renewable energy technologies as SHS and biogas, however, reveals a worse performance of hybrid systems, especially of those applying diesel gensets for backup. Due to the fact that purely renewable systems do not consume fossil resources during operation, the aggregated impacts on environment investigated here are worse for diesel-based hybrid systems. Therefore, if the choice is to be made between hybrid systems and other renewable energies as SHS and biogas, PV/Wind systems are the only systems being able to compete under ecological aspects and to provide an equal environmentally sound solution.32 The assessment of environmental sustainability was here restricted to matters of air and noise pollution. For the real application of hybrid systems, other environmentally important aspects would be of importance as well and would need to be examined as well. These aspects include mainly battery recycling, which needs to be assured in order to make the systems environmentally benign. Moreover, aspects of diesel storage need to be taken into account, since leakages in diesel tanks and the associated ground pollution are a major problem especially in dieselbased mini-grids, and can become problematic for diesel-based hybrid systems as well. 32 Note: In practical terms, the choice between SHS and hybrid systems will not need to be made, because they serve different purposes (basic household electrification in the case of SHS, village electrification also for productive purposes in the case of hybrid systems). The comparison here is therefore fictitious. 3 Analysis of Impacts 44 3.5.1.2 Socio-Economic Dimension The assessment of the socio2 economic effects of hybrid systems reveals a good preference 1 for hybrid systems compared to other decentralised solutions, 0 which is mainly due to the high potential of hybrid systems for -1 economic development and for the creation of employment op-2 portunities. These indicators have Hybrid Diesel SHS Biogas Grid Systems Gensets Extension been weighted comparatively high in the assessment scheme since the furtherance of economic development is one of the main Figure 3.22 Results Socio-Economic Assessment hopes connected to rural electrification. Hybrid systems by providing high quality and reliable electrification and with the quality of electric current being comparable to the conventional grid are likely to be the best among the here investigated methods for decentralised electrification. The slight comparative disadvantage of hybrid systems to grid-based electrification mainly results from the high preference rural population is likely to give to grid extension and from the high potential for economic development attributed to grid-based electrification here. Regarding other matters of social sustainability as supply equity and capacity building/empowerment, however, the decentralised option hybrid system is certainly favourable. 3.5.1.3 Economic Dimension From an economic perspective, hybrid systems have problems in 2 competing with other decentralised systems for rural electrification. 1 Hybrid systems have advantages with regard to supply security 0 compared to other decentralised options. But high investment costs, -1 high electricity generating costs and the problem of high require-2 ments on maintenance are main Hybrid Diesel SHS Biogas Grid problems associated with the apSystems Genset Extension plication of hybrid systems. These problems are, indeed, severe and Figure 3.23 Results Economic Assessment are in the relative assessment here not reflected accurately in absolute terms; they do, however, result in the demand for high involvement of donor organisations. The analysis here reveals that hybrid systems can be ranked similarly to SHS, which have been facing many problems with regard to financial issues as investment and maintenance. If one, therefore, assesses SHS as problematic from this point of view, then this applies to hybrid systems as well. 3 Analysis of Impacts 45 The comparison also revealed that hybrid systems are disadvantageous from an economic perspective to grid extension. This assessment is, however, to be taken with caution. Hybrid systems are applicable for remote rural areas, and the extension of the conventional grid to these areas will in practical cases not be an option for their electrification due to the high investment involved. From an economic perspective, decentralised systems for electrification are advantageous compared to grid extension with regard to the regional creation of value and to independence and supply security. This, as well, applies to hybrid systems. 3.5.2 Discussion The analysis of impacts of hybrid systems reveals that the initially raised question, to which degree hybrid systems are likely to provide a sustainable option for rural electrification, cannot simply be answered with yes or no. It was shown that hybrid systems indeed can be a method for sustainable rural electrification with regard to ecological and socio-economic issues. However, the assessment of these impacts was done in relatively general terms and is therefore strongly related to the underlying assumptions and their subjective evaluation. For the real application of hybrid systems, the question of ecological and socio-economic impacts will always need to be investigated individually. Nevertheless, the analysis shows that especially the question of financial competitiveness with other decentralised options for rural electrification is a major problem, and the question whether positive impacts of hybrid systems on ecological and socio-economic issues trade-off this problem, is crucial. What, then, is the answer on the initially raised question whether hybrid systems are a sustainable solution for rural electrification? What, in other terms, is the niche for hybrid systems, and under which circumstances should they be implemented? For the answer to these questions, two different possibilities are distinguished. 1. Firstly, for the electrification of individuals, both on a household scale as well as in the here investigated village mini-grids, the question whether or not to apply hybrid systems depends on the respective local circumstances. The discussion of advantages and disadvantages here has revealed that probably the most important advantage compared to other systems is that hybrid systems offer a good potential for economic development. In a way, this main advantage also provides the ground on which to decide whether or not to apply hybrid systems. From a personal point of view, it is thought here that hybrid systems on village level should just be applied in areas where this potential, meaning the demand for electrification for productive purposes, is at all given. It is rather inappropriate to apply hybrid systems in rural areas, which do not have the demand for reliable and continuous electricity supply and, thus, cannot fully exploit the system. In Inner Mongolia it was experienced that the diesel genset was in some cases not operated in order to decrease expenditure on diesel fuel, and the resulting intermittent supply of energy was accepted (GTZ, 2003). But if this is the case, the question is whether the application of hybrid systems, being relatively expensive and sophisticated at the same time, does make sense at all. Hybrid systems certainly have the potential of furtherance of economic development, but at least a basis of economic de- 3 Analysis of Impacts 46 velopment already taking place should be given in order to apply and fully exploit hybrid systems. Hybrid systems, therefore, are seen as less suitable for poverty alleviation for the poorest as are other systems. Hybrid systems are here assessed to be more suitable for supporting development of areas, which are already developing by other means and where other conditions are favourable to allow a positive prognosis of further development. If one considers economic development as a stepwise process, then the application of hybrid systems might be ideally seen as the second step of development. For supporting the first step, smaller and less sophisticated solutions as biogas, SHS or stand-alone wind turbines seem to offer a better suited method. The extension of such small-scale renewable solutions to hybrid systems by applying additional diesel or other generators might then be a possibility to support the next step of development by providing 24-hours electrification. 2. Secondly, small-scale hybrid systems are well applicable to the electrification of single consumers as rural health clinics, telecommunication devices, hotels, desalination systems, etc. For this purpose, the advantage of high quality electrification exactly adapted to the consumer demand applies and makes hybrid systems very favourable and certainly trades off the relatively high investment costs. However, this assessment is not to be taken for granted for any situation. It is based on a subjective and generalised assessment of the impacts of hybrid systems and therefore not universally applicable. For a respective project with the objective of sustainable rural electrification, the sustainability of hybrid systems and other options will need to be investigated prior to the implementation process every time again individually, taking account of the specific conditions and circumstances. The indicator set developed here and presented in section 3.3 might provide a framework for such an assessment. 4 Project Examples 47 4 Project Examples This section presents the experiences made in two projects on rural electrification with hybrid systems in Indonesia and Inner Mongolia. They are based on literature review. 4.1 Hybrid Systems in Indonesia 4.1.1 Baseline Indonesia consists of around 17.500 islands with approximately 23 million households not being connected to the conventional grid. In order to overcome this situation, the Indonesian government has created the so-called 50 MW PV-programme in 1997, which aims to electrify one million households with PV within 10 years. Systems of choice are not only SHS, but also a number of PV-based hybrid systems. Indonesia has long standing experiences with PV, first pilot projects installed 85 SHS and 15 PV street lighting already in 1989 in Sukatani. By this, a market for SHS has developed over recent years. 4.1.2 Project Description Within the project described in (Preiser, K., et al., 2000), a test and certification laboratory for PV is to be erected in Jakarta. For this purpose, the operational experiences with PV systems were reviewed, with special focus on SHS, but also with regard to PV hybrid systems. Therefore, two existing plants were visited by the project planners, the results on hybrid systems are summarised here. 4.1.2.1 PV/Wind/Diesel Hybrid System at Nusa Penida Island Two plants, both consisting of a PV generator, a wind power plant and a diesel genset, are connected in parallel to supply electricity to a village of approximately 50 inhabitants. The following information were obtained at the on-site visit: Lightning stroke has damaged the plant, and since then there is no 24-hours electricity supply. The inhabitants of the village reported the breakdown of the system two months before the on-site visit, but no reaction resulted from that. The project team felt that just protection elements were damaged, so that this could easily be repaired by a technician. Since breakdown of the system, the village used just the diesel genset for electrification, which is switched on during evening hours and works smoothly. Despite the problems, people were satisfied with the hybrid systems, which according to their opinion provided ideal electricity supply for their remote village. PV/Diesel Hybrid System close to Subang - 4.1.2.2 This system was erected in 1997 and is designed to provide electricity to three settlements with altogether 350 families. Inhabitants are usually farmers, drivers, or work in nearby urban areas. The village has an elementary school and some shopping facilities for food, hygiene and fuel. 4 Project Examples 48 The hybrid system consists of a 7 kWp PV Generator, a 40 kW Diesel Genset, a Battery Bank of 1,200 Ah and a 20 kW bi-directional Inverter. The system was designed for a electricity consumption of 150 kWh/d. The system applies two different load limitations, being secured by fuses. Consumers could be connected to either 100W or 200W, for which they had to pay a connection fee of 20,000 or 30,000 Indonesian Rupees, respectively. 33 It was assumed that due to the low income of inhabitants, the installed capacity was likely to be sufficient to satisfy consumers’ needs. The operation of the system, however, proved that this assumption was wrong. Soon after connection, people began to apply more electrical devices than they were supposed to. Since the fuses did not function, this was not a problem. But when other consumers began to follow this behaviour, the system could soon not meet the demand anymore. Already in the year 2000, the consumption rose to 238 kWh/d, exceeding the assumed level by 88 kWh/d. The organisation committee, which was created in the village before and which was in charge of the hybrid system, tried to cope with increased level of demand by extending the operational hours of the diesel genset and by temporarily disconnecting parts of the village from the system. The first led to increased electricity generating costs, while the latter led to massive frustration among consumers, because those devices, which need to be connected to the grid permanently, could not be used anymore. The whole situation led to strikes and civil commotion. The organisation committee changed several times, and only the local technician remained in position. The saved money of six million Rupees disappeared during these changes. In a new arrangement, village inhabitants are not supplied with electricity for 24 hours anymore. During night-time, all settlements obtain electricity service, while during daytime, only one of the three settlements can use electricity. Test of system components proved that the system was still in good shape; all system components except the battery bank were showing good overall test result. The battery bank was after the three years of operation down to a capacity of 60% and therefore close to replacement, which is due to the system’s constant operation with high loads. Some adapters and cables of the PV-modules were also abraded and needed to be replaced. People were obviously dissatisfied with the system’s performance, because the provided amount of energy was not sufficient and the temporary disconnection was not acceptable. When asked, they proved good understanding about the characteristics of the system and felt that the allocation of electricity was fair. People had experienced the limitations of the system and did adapt to the system’s needs by i.e. ironing during daytime. On the other hand, the behaviour in using lights was similar to that in urban areas, where light is simply not switched off. This, in turn, shows that maybe not all characteristics of electricity supply and energy saving had been understood, just those, which where experienced by system failures. However, project organisation was felt to be not transparent and people would have wished to be more involved in the project during implementation. 33 Quoted Exchange Rate: 1 US $ = 2.500 Indonesian Rupees. 4 Project Examples 49 4.2 Hybrid Systems in Inner Mongolia 4.2.1 Baseline China and Inner Mongolia have been supporting the adaptation of renewable energies for rural electrification very strongly over recent years, as many project examples on SHS, wind farms or other prove. The project presented here was taking place from 1990 till the end of 1999, and was reviewed in 2000 (GTZ, 2003). 4.2.2 Project Description This project was implemented to locally produce and use wind and solar energy systems to solve problems with the availability of energy in rural areas. Main focus was the transfer of technical knowledge. Through the executing company Hua De New Technology Company (HDNTC), different hybrid systems were installed for village electrification, repeater stations and as household systems. Table 4.1 gives an overview. Table 4.1 Hybrid Systems in Inner Mongolia Applied Systems PV/Diesel Systems Wind/Diesel Systems Wind/Diesel Systems Different Hybrid Systems Place Inner Mongolia Inner Mongolia China Sea Remote Repeater Stations Battery Bank 300 W Wind-Generator PV/Wind Systems Household Systems 100 W PV-Generator Battery Bank Hybrid Village Systems Application System Configuration Wind- or PV-Generator up to 10 kW Diesel Genset, 8-24 kW Criteria for the selection of projects sites were the quality of wind and solar resources, a distance of more than 50 km from the conventional grid, the actual and projected demand for electricity, proximity to the parent company of HDNTC, Huhhot, for the demonstration projects, and the purchasing power of the respective county. Hybrid Village Systems 4.2.2.1 System Design The hybrid systems for village electrification were designed and meant for 24-hours supply. It was assumed that the village governments/the operator were willing and able to pay for the additional diesel. However, experiences showed that this assumption was wrong. It was observed that guiding principle for the operators was to minimise costs, and therefore it was in many villages avoided to run the diesel genset to save the additional costs for fuel. Prolonged power cuts due to low availability of renewable resources were accepted, in some villages the availability 4 Project Examples 50 of electricity supply was reduced to 4 hours/day. This shows clearly that the willingness to pay for the convenience of 24-hours electrification was not given. However, it seems that it was not understood that this intermittent mode of operation increased the risk of reduced technical lifetime of the battery bank, with all consequential costs. Operation and Maintenance of the Systems There was no agreed management system on the plants with the villages, in most cases the villages decided to choose the actual operator of their previously used diesel genset to operate the hybrid system. The chosen operators were then trained by HDNTC with a Mobile Training Bus and an additional on-the-job-training during and after installation. The operator or the village government are responsible for maintenance of the systems and all expenditures on it. However, HDNTC can be contacted via telephone and gives advises in cases of technical problems. More appropriate after-sales service is difficult, since many villages are situated at far distances from the company. In cases of major breakdowns and need for spare parts from Germany, downtimes of one or two months may occur. Costs and Tariffs The village centres applied one fixed tariff, which is in the range of 1.8 – 2.4 Renminbi/kWh34 and was set by the village government after a test phase of one or two months, according to the affordability by the users and the objective of operational cost recovery. This approach is pragmatic and very user-oriented, but problematic due to the fixed tariff. Here, no differentiation is made according to the amount of power consumed or to the point of time of consumption. To account this, progressive tariffs depending on the consumption or seasonal adjustment of tariffs to the operation costs would be helpful instead in order to reduce peak load demands. With the installation of the hybrid systems, the households were connected to an electricity meter to pay the consumption-based tariff. In the beginning, it was mostly the operator being responsible for the collection of the electricity fees. Later, however, financial and operational management were separated in many villages for better control of revenues. The main problem was that a transparent and comparable bookkeeping was not introduced, leaving the total management performance much to individual perceptions and attitudes of the operator. Due to high investment costs for the systems, the tariffs were found not to cover the full costs of the systems, but only the costs of operation. Subsidies between 60 to 80% of the initial investment were necessary, the village governments and the households contributed with connection fees in the range of 350-1,000 Renminbi per household. The tariff system was, however, found to be sufficiently transparent and known by everybody concerned. The electricity fee was experienced to be paid regularly by the consumers, which was strongly accounted to the high acceptance of the system. Development of Electricity Demand The development of electricity consumption showed the expected effects. Electricity is mainly used for lighting, radios and TV. Households use typical appliances as irons, too, and 34 Quoted Exchange Rate (5/2000): 4 Renminbi = 1 DM = 0,51 €. 4 Project Examples 51 working equipment as drilling machines. Sometimes, electric water pumps are used for irrigation purposes. Hospitals use X-ray equipment or sonographs, local banks installed electrical warning systems, and boarding schools apply washing machines. Problems with the installed capacity were experienced in villages with a rather high number of inhabitants as Wuliji (600 inhabitants). The installed 10 kW Wind/Diesel system reached its capacity limit within two years. This problem was met in Wuliji by extension of the system, which was technically easily feasible. Moreover, the demand was tried to be controlled by an increase of tariffs, which obviously stroke poor families more. In other regions, this capacity problem was partly also met by extension of the system, by optimisation of supply or through control of demand by adapting regulations on consumption behaviour. The experiences showed that most people were willing to adapt to these regulation. In smaller villages as Yingen (200 inhabitants), the same capacity as above still met the electricity demand at the time of project review. 4.2.2.2 Hybrid Household Systems System Purchase and Costs Compared to other household systems, PV/Wind hybrid household systems in Inner Mongolia require high initial investment and can therefore only be afforded by higher income households. However, cost data and service time experienced indicate that PV/Wind systems are the most cost-effective option for decentralised household electricity supply from a point of view of electricity generating costs. An overview on cost details can be found in Annex D.3 Electricity Generating Costs from Different Sources. For the sale of the systems, dealers were engaged as mediators for HDNTC, because families in Inner Mongolia are usually herdsmen and come rarely to urban areas. Most household systems were paid by instalments, which makes the sale a risk for HDNTC being the creditor. However, experiences in Inner Mongolia were good in this regard. Operation and Maintenance As in the case of village systems, the users were trained with the Mobile Training Bus of HDNTC. This training needed to be very comprehensive, because a contract on maintenance was not concluded between HDNTC and the system owners. Experiences here where, however, disappointing. Families caused almost a quarter of system breakdowns due to lack of knowledge of the system and neglecting attitudes towards maintenance. Because of this, some families stayed without electricity after system breakdowns between two and five months. Development of Electricity Demand Due to the relatively high installed capacity of the hybrid systems, many electrical appliances can be used by the customers. Nevertheless, constant problem occurring was the balance of energy demand in the households: in some cases people wanted to use more appliances than the systems were designed for. Households were, on the other hand, found to be very conscious on matters of energy saving by using energy saving bulbs in the beginning. But once these bulbs were broken, they were rarely replaced due to the high purchase costs. 4 Project Examples 52 Miscellaneous Aspects As is usually the case with SHS, direct economic benefits could also not be attributed to the application of PV/Wind household systems. The installed capacity is simply to low for income generating activities, and service provision to other families is not possible due to far distances between scattered households in Inner Mongolia. The acceptance of the system was, however, found to be high, especially compared to diesel gensets and their high costs for operation. The users apparently tolerated downtimes for repairs without being negatively influenced on their opinion on the systems. Compared to SHS, however, the users were less satisfied. SHS have a higher degree of acceptance, mainly due to the fact that the wind generator in the PV/Wind system has shown to be a bit temperamental. 4.2.3 Aspects of System Dissemination The dissemination of hybrid systems by market mechanisms alone is the ultimate goal for the sustainability of the project presented here. China and Inner Mongolia provide relatively good conditions in this respect, because a market for renewable energy devices already exists. However, for the village systems, the project review states scepticism due to high initial investment costs and considered subsidies to remain essential for their dissemination. For PV/Wind household systems, however, further dissemination without subsidisation and just by market mechanisms alone are stated to be feasible in the project review. Of course, the circumstances with regard to i.e. financing schemes need to be supportive. The experiences show that the village supply systems are a persuasive demonstration for a decentralised RE supply system not only for village inhabitants, but also for scattered households who feel motivated to buy a household system. The owners of household systems manage them by themselves and expand them according to their need and purchasing power. 5 Key success factors 53 5 Key success factors Sustainability describes a dynamic process, and therefore it is not enough to ensure whether hybrid systems are likely to be a sustainable option for rural electrification. Sustainability needs also to be ensured by implementing the system in a way that guarantees a sustainable self-contained operation after project implementation. To achieve this, the key success factors in approaching a sustainable electrification project with hybrid systems shall be discussed in this section. For this, important aspects of organisation, financing, ownership, operation and maintenance, demand assessment and management, and capacity building will be discussed on the basis of a literature review. 5.1 Organisation Decision on the distribution model The World Bank distinguishes two major distribution or sales models to be applied in developing countries (ESMAP, 2001): on the one hand there is the equipment-sale approach, on the other hand there is the sale of electricity service approach. These models are presented in the following. Direct Equipment Sales: The approach of direct equipment sales commonly refers to sale of complete systems rather than components, as is in the case of SHS. The systems can be purchased either on cash or credit basis. Predominating option is cash sales, and this is likely to remain so in the future due to the fact that credit is rarely available in rural areas and is just provided to consumers with secure occupations. Moreover, equipment dealers usually lack financial background to offer credit to local consumers. With the approach of selling equipment directly to individuals, the responsibility for maintenance and repair is transferred to the purchaser. Another option for equipment sales is leasing, which has been successfully implemented in some countries (i.e. Dominican Republic), but which has not yet gained major importance due to the same reason of insufficient working capital on the side of the dealers as in case of credit based purchase (ESMAP, 2001); thus, for the adaptation of leasing, the provision of working capital is to be ensured. Leasing is an option of lower risk for the dealers since it is considerably less complicated to retrieve the equipment in case the consumers neglect their duty to pay the monthly leasing rates. For hybrid systems the approach of direct equipment sales is adequate if an appropriate credit or leasing system is set up. Neither will individual poor households be able to purchase hybrid home system on cash basis, nor can poor communities commonly afford hybrid systems for electrification of villages. Investment costs are simply too high for hybrid systems, and direct equipment sale has proven to be difficult already in the case of SHS, although it involves less investment than hybrid systems for an individual consumer. The approach of direct equipment sales therefore demands to make funds available to dealers in order to give them the possibility to provide credit to rural population or to create a leasing model. Ideally, funding of the dealers shall be provided by local banks, which can be sup- 5 Key success factors 54 ported by international organisations as the World Bank. As an option or in addition, credits can also be made available to consumers by such banks. Sale of Electricity Service: This approach is called “Dispersed Area Concession Model” by the World Bank and gives an electricity service company exclusive right to provide electricity service to a certain area by concession. In an ideal model, both local and foreign companies are bidding for the right to provide the electricity service exclusively. Criterion for decision is either - the least grant necessary for a predetermined number of connections, or the maximum number of concessions possible with a given grant (Tomkins, R.). The winning company then constructs the energy provision system including distribution lines. Users are provided electricity after paying a certain connection fee and through paying a monthly cost-based tariff. In order to make electricity affordable to even the poorest among the rural population, the electricity service company may receive a subsidy per user. Problematic for the adaptation of this approach is the fact that in remote areas electricity service companies are rarely existent. In fact, the isolation of these rural areas makes them highly unattractive for substantial private participation at any level of subsidy (Tomkins, R., 2003). The alternative is then to build capacity among small local companies through business advisory services and business development. This approach, however, although being probably even more financially sustainable, is not only comparatively time-consuming, but also demands high involvement by donor organisations. General problem in the approach to provide electricity services through private companies or businessman, however, is the fact that in many countries electricity service provision is restricted to only national utility, therefore requiring new political regulations (ESMAP, 2001). The question for hybrid systems is which of these models to favour. Basic problem of all projects applying renewable energies is the fact that knowledge and therefore necessary infrastructure is rarely existent in rural areas. The Global Environmental Facility (GEF) recommends to task managers of single electrification projects to experiment with both approaches individually in order to then decide for the most appropriate one (GEF, 2000). The decision will therefore always be an individual one, depending on the actual local situation. Recent approaches, however, focus rather on supporting private providers of electricity supply and to support them with subsidies in order to ease access to electricity for poor population. It is assumed that this approach is likely to open up and strengthen markets for decentralised electrification and therefore result in an increase of equipment sales (ESMAP, 2001). Identification of Responsibility For the electrification of a rural village, the operational structure for the mini-grids to be established, i.e. questions of ownership and responsibility, are very important for the mini-grid in several respects: Firstly, responsibility for the power plant is important with regard to theft and vandalism. Common experiences in developing countries especially with SHS show that if 5 Key success factors 55 the question of responsibility is not solved, then theft and vandalism can become severe problems and compromise the whole success of the electrification project. Secondly, a clear knowledge on responsibility is essential for operation and maintenance of the system. Clear assignment of responsibility helps a lot to avoid problems in this regard. Thirdly, clear responsibility for the financial management of a plant is necessary in order to ensure the payment of bills from the customers. - The World Bank distinguishes two different scenarios (ESMAP, 2000a): Either the hybrid power plant and the corresponding mini-grid are installed by a private entrepreneur. Then all responsibility is left to him, and he will by his own interest prevent the plant from theft and vandalism, take care of operation and maintenance, and ensure the payment of bills. The other possibility is some form of village ownership, meaning a co-operative or a user group. This approach is very common in developing countries and has a strong advantage by committing the village’s population to the project. It should, however, be avoided to press from outside village inhabitants to form such organisations, because it is strongly matter of their trust among each other and of their ability to work together whether such an approach will be successful. Moreover, one has to take into account that this organisational solution brings with it higher risks for the local community. Therefore, the organisational structure must be set up very carefully, especially with regard to leadership in order to avoid failures and severe problems. The decision on the appropriate organisational model is difficult, and a general recommendation, which one to prefer in the case of hybrid systems, cannot be given here. The appropriate solutions will vary strongly between countries and even among different villages in the same region, depending on the specific local conditions. In general, the second approach of creating co-operatives or user groups, is rather difficult in the case of hybrid systems, since training requirements are high and complex and need high involvement especially with regard to maintenance. Implementing sustainable maintenance structures Experiences not only with hybrid systems, but also with other renewable energy technologies as SHS, prove the importance of sustainable maintenance structures. Not even costly and well-designed systems with high quality components can reliably provide electricity without regular and proper maintenance. Applying renewable energies for rural electrification is a new and innovative approach, and knowledge about maintenance is usually very limited. Without appropriate maintenance structures, even slight problems with the system can become major issues and lead to complete breakdown of electricity supply. Moreover, especially the crucial parts of a hybrid system, battery bank and charge controller, require regular maintenance. Failure rates of these components can be reduced from three every year to one every two years if just inspection and maintenance are carried out carefully (Turcotte, D.; Sheriff, F.; Pneumaticos, S., 2001). Important issues to be addressed with regard to sustainable maintenance structures include the following: Identification and Training of Technicians for System Operation and Maintenance: The identification of technicians within the rural community is a crucial and important task in setting up a maintenance structure. If private entrepreneurs are chosen for the 5 Key success factors 56 provision of electricity, then the choice of the technicians is of course to be left to them. Otherwise, if outside organisations take over responsibility for guiding the implementation process, the World Bank recommends not to decide for one or two system operators in the very beginning of the project implementation process, but to involve as many interested people as possible (ESMAP, 2000b). By this, a pool of potential later technical experts can be created, and people with highest capability as well as respect among other village inhabitants can be chosen in the end. Moreover, in case the chosen operator is at times not available in the future due to i.e. illness, then others can take over seamlessly. When deciding for a system operator, the main objective is not to have high staff turnover on this position. For this, the approach of assigning the responsibility for the system to elder persons has proved to be recommendable. Not only has the potentially higher degree of respect and acceptance of elder people within rural communities played a role here. Also the engagement of young people as system operators, having been educated at school recently, just having graduated and looking for work, has shown to be problematic. Young people tend to be more open to changes and are more likely to move away to urban areas after a while (ESMAP, 2000a). Training of system operators is a long-term process and cannot be performed with in a couple of days. People need to be involved in the whole implementation process for a deeper understanding of the power plant, and the implementing organisation needs to monitor success after project implementation, too (ESMAP, 2000a). Establishment of Regional Maintenance Centres: System operators should optimally have contact persons with higher technical expertise (ESMAP, 2000a). These people then can be asked in case technical problems occur, which cannot be solved by the operator individually. Maintenance centres can serve this function of guidance and technical knowledge backup. For hybrid systems, the question of maintenance centres is difficult. Hybrid systems are commonly implemented for electrification of remote areas, as for example in a project at Galapagos Islands. This remoteness can become a problem for hybrid systems, since maintenance centres in nearby urban areas are not available and therefore need to be erected. Ideally, these centres should be financially self-sufficient and not need financial assistance. This, however, can only be achieved if these centres serve a substantial number of villages, which are ideally situated in the vicinity of the centre. A rule of thumb from the application of SHS in the Dominican Republic is that systems should not be further away than 50 km from a service centre (Cabraal, A.; Cosgrove-Davies, M.; Schaeffer, L., 1996). For the application of hybrid systems it therefore seems to be essential to choose areas with a considerable number of potential communities, which have the necessary potential for economic development and are in need of such a system. 5 Key success factors 57 5.2 Financing Willingness- and Ability-to-pay for the electricity service of rural population Investigating the consumer’s willingness-to-pay is one of the key issues to be determined prior to any electrification project. It is to be found out how much the potential consumers are willing to invest to get access to and to pay for the provision of electricity services in order to determine the investment and operation costs, which are likely to be covered by consumers themselves. Investigating the consumer’s willingness-to-pay is commonly done on the basis of questionnaires.35 However, pure investigation of consumer’s willingness-to-pay has been found to be shortsighted. It is obvious that rural population is likely to be interested in electrification and, thus, willing to pay for it. But whether people can actually afford electrification is a different question of equal importance and cannot be answered by simple investigation of willingness-topay. Affordability of electrical appliances and electricity services is difficult to determine and closely linked to energy demand assessment, as is described in section 5.5. Common approaches usually investigate the current expenditure of rural households on kerosene, candles, disposable batteries for radios and rechargeable car-batteries and the costs for their recharging. As a rule of thumb, the World Bank estimates that about 15 percent of the disposable income is usually spent on all such energy services (ESMAP, 2001). Investigating both willingness- and ability-to-pay is of major importance especially in the case of hybrid systems, which involve rather high investment and electricity generating costs. Prior to the decision, which option for rural electrification is to be chosen, it needs to be found out whether the demand for 24-hours electrification as can be provided by hybrid systems is given and whether the economic potential, which these systems certainly offer, warrants the higher financial burden for the consumer. In areas where steady income is not guaranteed, the effects of this fact on affordability are to be taken into account. Correct pricing of electricity – setting up a sustainable tariff structure Correct pricing of electricity is probably the most important success factor to be described here. Costs for hybrid systems can be broken down to the following aspects (ESMAP, 2000a): capital costs for the implementation of the mini-grid project fuel costs for the diesel genset, if applied costs for operation, maintenance and overhauling costs for equipment replacement Finding the most appropriate way for covering these costs is a difficult matter. Based on the objective to provide electricity to even the poorest among the poor, not only the implementation or connection costs, but also the operational costs often used to be covered to a large extent by subsidies. This approach, however, failed. Operational costs should be covered by consumers themselves from the beginning. Otherwise it was experienced that consumers op- 35 Examples can be found at the World Bank (ESMAP, 2000a: Annex 5.4). 5 Key success factors 58 posed to later tariff increases to fully cover operational costs themselves, which often led to financial difficulties and even to failures of electrification projects. Moreover, the emphasis on poverty alleviation by subsidising can restrict sustainable market expansion, discourage investment, and hamper business development as was experienced in China (Wallace, W.L., et al., 1998). It is therefore widely agreed nowadays that grants and subsidies should only be given on implementation costs, and a contribution to connection costs for households can be justified as well. The latter subsidy on connection costs is proposed just to be partial by the World Bank (Tomkins, R., 2003), which makes it an additional test of user’s demand and preferences concerning electrification. Setting up a sustainable tariff structure cannot be done by following a single and proven formula for success. Different approaches exist, and each of them can be applied successfully depending on the specific circumstances. An overview about potential solutions as described by the World Bank in (ESMAP, 2000a) is presented in the following. Common for all tariff structures, however, is one rule, which needs to be applied to any decentralised rural electrification project, as World Bank (ESMAP, 2000a) and KfW36 both strongly recommend: those who do not pay their monthly bills should be consequently disconnected from electricity supply, in order not to undermine the other users’ paying morality. Energy-based tariffs: The approach of applying energy-based tariffs is probably the most equitable one. This tariff allows appropriate charging according to the real individual consumption by applying an energy meter, thus awarding energy-saving consumer behaviour through lower energy bills. If time-of-day meters are applied, the use of power during offpeak times is encouraged additionally. However, energy meters require considerable additional investment and are therefore not suitable in small-sized mini-grids with small numbers of consumers. Moreover, less welleducated consumers might have difficulties in understanding the meter and how to read it, resulting in unexpected high bills. Finally, conventional energy meters do not limit consumption, and therefore it might come out that wealthier households consume that much that minigrids with limited capacity are overloaded. In order to avoid problems associated with meter reading, billing and money collecting, a new approach applies prepayment meters and is usually called “Fee-for-service”. This approach uses magnetic cards or tokens, which can be bought by the consumers and with which the consumer purchases the possibility to consume a certain amount of electricity. For electrification projects applying renewable energies, this method is of special interest because it attenuates a disadvantage of these technologies compared to diesel gensets-based electrification: if consumers temporarily do not have money to afford electricity, with diesel gensets the purchase of diesel fuel can be reduced or stopped. Renewable energy devices, however, need to be paid off, whether money is available at that time or not. With fee-for-service, a more constant flow of operational income can be expected. However, fee-for-service is as well very costly with regard to equipment and support service. In summary, the option of energy-based tariffs is applied in cases where there is a reasonable number of potential consumers and where ability and willingness to pay allow the application of this rather sophisticated tariff system. 36 Personal Comment given by Mr. Dubois, KfW staff member, on July, 7th, 2003. 5 Key success factors 59 Power-based tariffs: This tariff-scheme is not based on metering of actual electricity consumption, but on the maximum amount of power likely to be consumed. In the most simple variation, an oral or written agreement with the consumer limits his consumption to a predetermined level according to his appliances, which he is not allowed to exceed and for which he monthly pays a constant amount of money. This approach obviously depends much on the honesty of the consumers and is disadvantageous in this respect since it does not apply control mechanisms. To avoid this problem, power consumption can be limited electrically by regulating the current into the home. Moreover, overloading of the system can be avoided and every user gets the same possibility of access to electricity services. However, reliability and accuracy of electrical load limiters is often poor, as was experienced for example in Indonesia (Preiser, K., et al., 2000). In comparison to energy-based tariffs the power-based tariff is easier to understand for consumers and requires less effort for payment collection. Moreover, reliable load limiters are mostly less expensive than reliable energy meters. However, this approach generally restricts availability of electricity to consumers and, furthermore, leaves more potential to fraud by bypassing the limiter. Generally, it can be stated that the first approach of energy-based tariffs is well applicable in mini-grids of a substantial size with a considerable number of consumers, while the second approach of power-based tariffs is likely to be better applicable in mini-grids with a concise number of consumers and well-established social structures. In practice, electrification projects will most likely apply a mixture of both tariffs. Energy-based tariffs using energy meters are applied for well-income consumers and businesses as restaurants, while power-based tariffs can be applied to other users.37 Figure 5.1 gives an overview about the key issues addressed so far being important with regard to distribution, organisation and financing.38 37 38 Personal Comment Jörg Baur, Roman Ritter, GTZ, in Eschborn/Germany on August 14th, 2003. Source: Own illustration. 5 Key success factors 60 Rural Electrification with Hybrid Village Systems Sales Model Distribution Model Cash Credit Leasing Existing Utility Service Model Communitybased Provider Open-Market Provider System Owner Buyer Buyer Dealer Energy Service Company (ESCo) Operator Private Entrepreneur Village Co-operative ESCo Maintenance Operator Local Technician ESCo Energy-based Tariff Power-based Tariff Tariff Energy Meters Agreement Fee-for-Service Load Limiters Applicable for Large Mini-grids Small Mini-grids Evaluation Unlikely due to low profits, thus subsidies necessary. Most likely approach, demands high donor involvement Public power utility is usually not interested much in decentralised rural electrification due to high costs. For other private providers, the potential profit is too low for involvement, thus needing subsidies. Figure 5.1 Hybrid Village Systems: Distribution Steps 5.3 Capacity Building Capacity Building is a major aspect for the success of any project implemented in developing countries. Aspects as the education of technicians are part of capacity building, but have already been outlined above. Other important aspects on capacity building are to be discussed in the following. Education on Demand-side management Hybrid systems are installed at certain capacities and are therefore limited. In order to exploit the full potential a hybrid system offers, education on demand-side management is advisable. 5 Key success factors 61 Demand-side management in the first place refers to consumption habits. Common for the use of electricity in developing countries is the occurrence of a relatively high peak demand during evening hours, when for example lights are switched on everywhere in the village. If other appliances are used at the same time, the installed capacity of a hybrid system may soon be insufficient to meet the demand. It is therefore important to make consumers aware of the limitations of the system, and to guide them in using it correctly by performing activities, which do not necessarily have to take place in the evening, during daytime, i.e. ironing. This is especially important in order not to raise unreasonable expectations. If consumers are not aware of it, the limitation of their electricity supply system can lead to consumer’s dissatisfaction and frustration. Demand-side management also refers to the use of energy-saving appliances such as energy saving bulbs. This reduces electricity consumption considerably, and therefore helps to better exploit the potential of a hybrid system. Education of Consumers on Obligations and Behaviour Another aspect in educating consumers deals with the obligations related to the connection to an electricity supply system. These include especially financial obligations: the understanding of the need to pay for receiving electricity is not to be taken for granted. This has to be explained to consumers in order to make the project a financial success. Additionally, a policy encouraging the payment of bills by disconnecting non-paying consumers from electricity supply needs to be established. This policy is best to be established in a written manner, and can be included in an agreement, which is to be signed by the consumers. This agreement describes explicitly all obligations for the potential consumers, an example can be found at the World Bank (ESMAP, 2000a). Other issues to be addressed in consumer education include theft of power and safety. Consumers must be aware that theft of power, i.e. through bypassing energy meters or current limiters, will not be tolerated. The issue of safety should be addressed because for many areas electricity is a new commodity, and electrical lines and appliances should be handled with caution (ESMAP, 2000a). Education on Business Planning If the potential of hybrid systems is to be fully exploited, then rural population should not be left alone with the system. Hybrid systems strongly need accompanying with regard to economic development by teaching about important aspects of business founding, as setting up business plans, etc. A successful project for rural electrification with hybrid systems should prepare the ground for economic development, which cannot be obtained by electrification alone. Awareness Rising as a Means of Market Development The issue of awareness rising refers to making public hybrid systems as an option for rural electrification. Especially in the case of household systems, but also for larger systems in case of village electrification, this question is of major importance. If markets for hybrid systems are to be developed, then awareness rising is essential. Two major possibilities are worth mentioning. Firstly, project examples are an important aspect for the dissemination of knowledge on hybrid systems. Population in rural areas in developing countries are commonly sceptic towards unknown approaches in the first place, and prefer to be convinced by being informed about the possibilities and the functioning of hybrid systems visually. The example of Inner Mongo- 5 Key success factors 62 lia, where project examples in rural administrative villages contributed to the dissemination of especially household systems, proves this (GTZ, 2003). However, project examples should not be seen as the end of dissemination activities, they are rather a tool. For the purpose of developing markets, pilot projects indeed can contribute to the sale of the technology. But real market development can just take place through replication (Richards, E., et al., 1999). Secondly, multiplier organisations can play an important role. By informing and training the staff of multiplier organisations as local non-governmental organisations (NGOs), the regional administration or others, the dissemination of hybrid systems can be promoted, too. The trained staff can then multiply the obtained information by teaching the interested public about the possibilities of hybrid systems. Local institutions or NGOs can play an even greater role than just capacity building. Other aspects, which can be addressed by these organisations, include (ESMAP, 2001): o assessment of electricity demand prior to the project o provision of credit guarantees or cash sales for group lending o independent operation of the hybrid system o financing Generally, it can be stated that for awareness rising in developing countries the word-ofmouth propaganda is the most effective way. If someone owns a hybrid household system and feels satisfied with it, he will tell this to his friends and neighbours and make them aware of the possibility to use hybrid systems for electrification. The same phenomenon applies to hybrid systems for village electrification: if the neighbour village owns one and feels satisfied, the other villages are likely to get interested as well. This fact increases the importance of pilot projects for awareness rising. 5.4 Technical Aspects Main technical aspects of hybrid systems have already been discussed in chapter 2.2.4. Key success factors from a technical point of view are the following: The design of hybrid systems should always seek to maximise utilisation of local resources in order to keep the use diesel fuel low. However, oversizing of the renewable energy generator is not an option, since it increases system costs especially in the case of photovoltaic-based systems remarkably (Turcotte, D.; Sheriff, F.; Pneumaticos, S., 2001). Key requirement from a technical point of view is simplicity and reliability (Turcotte, D.; Sheriff, F.; Pneumaticos, S., 2001). For hybrid systems, this issue is a major challenge, since these systems are rather sophisticated. Most technical problems observed with hybrid system are not result of failures of single components itself, but are due to rather frequent failures of components’ integration. Experts see the point of reliability as a major hurdle for the adaptation of hybrid systems in developing countries, especially with regard to maintenance requirements.39 - 39 Personal Comment given by Jörg Baur, GTZ, in Eschborn/Germany, on August 14th, 2003. 5 Key success factors 63 For information on key technical issues to be considered when erecting mini-grids in developing countries in general, it is here referred to the Mini-Grid Design Manual published by the World Bank, which describes major technical aspects in detail (ESMAP, 2000a). 5.5 Assessment of Electricity Demand and Potential for Renewable Energies In order to guarantee optimal sizing of hybrid systems and the application of the most suitable hybrid combinations, two different aspects are of major importance: Demand Assessment and Projections The assessments of current demand for electricity as well as projections of future growth in demand are essential. As the project examples in chapter 4 prove, the optimal system performance is closely linked to an accurate demand assessment. The relevance results from the fact that over sizing of the hybrid system inherently increases the overall system costs, while underestimation of load demand is likely to entail frustration on poor system performance due to excessive consumption. However, making adequate load projections is frequently a very difficult task. The approach of simply asking households for their potential electricity demand is not sufficient, as the World Bank describes (ESMAP, 2000a). The knowledge of so far non-electrified households on their real demand for electricity is very limited, and the corresponding financial burden in terms of the monthly bills for electricity supply cannot be overviewed by them. For this reason, the World Bank proposes to assess electricity demand by surveying adjoining, already-electrified regions with similar characteristics (ESMAP, 2000a). By doing so, not only the actual demand for electricity, but also the history of load growth can be determined and taken into consideration. However, for appropriate comparison certain restrictions apply for the surveyed area: The surveyed area should have a similar type of electricity service, meaning 24-hour power supply in the case of hybrid systems. Demand in the surveyed region is not kept down by applying consumption restrictions due to limited installed capacity. Similar tariffs are applied in the surveyed regions as are planned for the new project. The assessment of not only actual demand for electricity, but also of potential future growth is of major importance for hybrid systems. As described in chapter 3.4.2.1.4, the potential of hybrid systems to economic development is comparatively high. Therefore, the electricity demand is likely to increase substantially, and may soon lead to dissatisfaction of consumers if future growth is not accurately forecasted in advance. For a hybrid system, two different situations need to be distinguished (ESMAP, 2000a): If the system is to be installed in a region, which is likely not to be connected to conventional grid during the lifetime of the system, then the growth in demand during the whole lifetime has to be accounted. If the system is to be installed in a region, which expects grid-based electrification in medium-term perspective, which is lower than the system’s lifetime, then this period has to be accounted for growth projections. - 5 Key success factors 64 An important role in assessing energy demand plays the population itself: involvement of rural population, i.e. a rural electrification committee, can do much to obtain information on demand and future growth (Barnes, D.; Foley, G., 1998). Investigation of the Potential for Hybrid Systems for Electrification In order to assess the potential for hybrid systems for electrification of a certain area, the potential of wind power and/or the extent of insolation need to be investigated prior to project implementation. This is essential for choosing the appropriate system design and to quantify the share of the renewable energy resource for electricity generation. Especially in the case of PV/Wind hybrid systems, which require converse occurrence of insolation and wind power in order to produce electricity on a 24-hours basis, accurate assessment of these resources is important. 5.6 Political Factors The political framework is a major issue for decentralised electrification as well. The World Bank states that no project on electrification has ever succeeded without the backing of political will (ESMAP, 2001), and therefore it is tried here to state the main political framework conditions for decentralised hybrid system projects. Three key issues can be identified (ESMAP, 2001): Defining the Role of the Government The central and local governments need to be involved from the very beginning and to demonstrate commitment to decentralised electrification, ideally through policy statements and direct support of respective initiatives. Sector reforms may be necessary, and supporting institutions might need to be established. Establishing electricity laws, legalisation of rural energy markets In many countries legislation does not allow for private operators to provide electricity services, since this is traditionally the exclusive right of national or regional utility. This then needs to be changed in a way that allows private operators to supply electricity to regions without electricity. Elimination of Tax and Duty Barriers The introduction of renewable energy technologies in many countries faces obstacles from unfair import duties, value-added taxes or other taxes, which need to be eliminated in order to make the option of renewable energy, and with it hybrid systems, competitive. Moreover, subsidies on diesel fuel or kerosene need to be lowered or fully eliminated in order to decrease competitive disadvantages of renewable energy technologies. A general problem in developing countries concerning the role of government results from unrealistic promises during election campaigns. Project developers report from the example of Morocco that the promise to extend the conventional grid to non-electrified areas had the ef- 5 Key success factors 65 fect that decentralised solutions were not accepted among rural population.40 People rather remain without electrification for some more years than to be electrified with other systems, because they fear then to be ignored when the grid connection becomes possible. Decentralised electrification is often seen as a second class electrification, and grid connection is preferred strongly. For the project developers it is therefore important when addressing the governments to intensively inform them about the benefits of rural electrification with decentralised systems, i.e. with hybrid systems, and general characteristics of electrification. Main issues to be addressed include environmental concerns for fossil fuel powered sources, growing demand for electricity in developing countries, and ongoing advances in technology (Turcotte, D.; Sheriff, F.; Pneumaticos, S., 2001). 40 Personal Comment given by Dirk-Uwe Sauer, Fraunhofer ISE – Club für ländliche Elektrifizierung, at Intersolar Fair in Freiburg/Germany, on June, 28th, 2003. 6 Summary and Conclusions 66 6 Summary and Conclusions Rural electrification is commonly seen as essential part for the development of rural areas in developing countries, and is integral part especially for furtherance of economic progress. However, rural electrification is a problematic issue. The extension of the conventional grid is often economically not feasible for remote rural areas, and can as well be undesirable from a point of view of environmental sustainability. Common practice to meet the problem of rural electrification in developing countries is the use of diesel gensets. This approach, however, is as well unfavourable not only from an environmental, but also from a socio-economic and economic perspective, since diesel gensets usually cannot evolve the full potential of electrification for rural development. Modern approaches, therefore, address the challenge of rural electrification with decentralised energy supply systems applying renewable energies. Renewable energies are an environmental benign solution for rural electrification, and have several additional benefits related to their use; renewable energies, i.e., use locally available resources and offer a high potential with regard to local independence compared to grid extension and diesel gensets, since they are less dependent on external interference. Despite these numerous advantages, however, the application of renewable energies for rural electrification has not yet been the success story it was expected to be. In many cases renewable energies have failed to meet the expectations of rural population, on the one hand by unrealistically high expectations on side of the population, on the other hand due to problems with reliability of the systems. The main problem for the application of renewable energies in rural electricity supply, however, was and is the intermittent supply of power due to the fluctuating nature of the resources, which has lead to customer dissatisfaction in many cases. This problem is recently met with the application of hybrid systems. Objective of this work, therefore, was to generally assess the sustainability of hybrid systems for rural electrification with regard to environmental, socio-economic and economic issues, and to identify key success factors to improve the sustainability of a hybrid rural electrification project. The assessment was performed in comparative terms relative to other solutions for rural electricity supply by using an indicator set developed within this work. The assessment revealed that from a point of view of environmental and socio-economic sustainability, hybrid systems are likely to be more beneficial than are other technologies, and that expectations associated to decentralised rural electrification are likely to be met. Main strengths of hybrid systems from an environmental perspective include low emissions of greenhouse gases and air pollutants compared to conventional methods for rural electrification; from a socio-economic perspective, main advantages include reliable and continuous energy supply and, thus, a good potential for economic development. Problematic, however, are questions of financing and maintenance. As is the case always for the application of renewable energies as PV and wind in developing countries, these issues are major hurdles and require attention during the planning of hybrid system projects and high donor involvement through subsidies and the development of maintenance structures. The assessment of sustainability of hybrid systems, thus, did not result in a clear yes concerning their application. It was argued that in order to fully exploit the potential, which hybrid 6 Summary and Conclusions 67 systems certainly can offer especially with regard to economic development, a certain economic development should already be taking place in the area to be electrified. Moreover, certain framework conditions need to be established, since economic benefits not just depend on the availability of energy, but also on other conditions favouring economic development. This paper has also identified key factors to successfully apply hybrid systems in developing countries. Main issues to be addressed include organisational issues with decision on appropriate distribution models and the implementation of sustainable maintenance schemes; issues of financing as the investigation of willingness- and ability-to-pay for electricity service, or the implementation of an appropriate tariff system; capacity building as an essential condition to create the appropriate framework for economic development and for correct use of the hybrid systems; the assessment of electricity demand now and projected to the future, and the potential to meet the demand with renewable energies for an appropriate system design; and political framework conditions and several technical aspects. Hybrid systems are here assessed to be a promising approach for decentralised rural electrification. Although the assessment here was performed in rather global terms and although therefore in individual cases the assessment might be a different one, the results allow the statement that hybrid systems can be a sustainable option. For an analysis of respective projects, the indicator set developed here might provide a framework for the assessment whether environmental and socio-economic surpluses attributable to hybrid systems justify the high investment and the necessary effort in setting up maintenance structures. Hybrid systems, however, should and cannot be seen as the ultimate solution for rural electrification in developing countries. Despite their advantages, which make them comparable to the conventional grid especially with regard to the quality of electricity supply, meanwhile being more environmentally benign, hybrid systems require a holistic approach towards electrification. They might therefore be applied within the context of whole electrification programmes for remote rural areas as an integral part of a set of different methods, and they might then ideally be chosen for those villages in the region, for which the preconditions and circumstances allow to expect the full evolvement of the system’s potential. Annex A: Electricity Demand and System Design 68 Annex A: Electricity Demand and System Design A.1 Calculation of Electricity Demand For the calculation, two different types of households with different consumption behaviour are distinguished: standard households and rich households. It is assumed here that (fictitious) 10% of all households in the village are rich, while 90% are standard households. Additional electricity consumption results from commercial (shops, handicraft businesses, etc.) and public consumption (public lighting, schools, health care, etc.). This is accounted by adding 40% excess consumption on the consumption of the individual households.41 The figures adopted here are mainly based on data from (Baur, J., 2000). It is assumed that energy saving lighting is applied within the electrification project. Table A.1 Standard Household Characteristics Equipment Energy Saving Lamp TV (b/w) Radio Total Number Capacity [W] 4 1 1 10 20 10 70 Daily Hours of Operation [h/d] 3 6 2 Daily Electricity Consumption [kWh/d] 0.12 0.12 0.02 0.26 Annual Electricity Consumption [kWh/a] 43.8 43.8 7.3 94.9 Table A.2 Rich Household Characteristics Equipment Number Capacity [W] Daily Hours of Operation [h/d] 3 6 2 8 Daily Electricity Consumption [kWh/d] 0.18 0.60 0.02 2.40 3.20 Annual Electricity Consumption [kWh/a] 65.70 219.00 7.30 876.00 1168.00 Energy Saving Lamp TV (Colour) Radio Refrigerator Total 6 1 1 1 10 100 10 300 470 In a next step, the peak load for different village sizes are calculated, with village sizes from 30 to 300 households. Moreover, the base load of the villages is calculated. The base load is of major importance for the design of the diesel genset in a hybrid system, since the diesel 41 Personal Recommendation Mr. Erich Geis, former KfW staff member, during a telephone interview on August, 22nd, 2003. Annex A: Electricity Demand and System Design 69 genset should normally be designed to satisfy the base demand.42 To simplify matters, the load caused by the adaptation of refrigerators is defined as the base load. Table A.3 shows the results for different village sizes. Table A.3 Peak and Base Loads for Different Village Sizes Number of Households Daily [kWh/d] 23.3 27.1 31.0 34.9 38.8 42.7 46.5 50.4 54.3 58.2 62.0 65.9 69.8 73.7 77.6 85.3 93.1 100.8 108.6 116.3 124.1 131.9 135.7 155.1 174.5 193.9 Peak Load Annual [kWh/a] 8492.8 9908.3 11323.8 12739.2 14154.7 15570.2 16985.6 18401.1 19816.6 21232.1 22647.5 24063.0 25478.5 26893.9 28309.4 31140.3 33971.3 36802.2 39633.2 42464.1 45295.0 48126.0 49541.5 56618.8 63696.2 70773.5 Base Load (Refrigerators) Daily [kWh/d] 7.2 8.4 9.6 10.8 12.0 13.2 14.4 15.6 16.8 18.0 19.2 20.4 21.6 22.8 24.0 26.4 28.8 31.2 33.6 36.0 38.4 40.8 42.0 48.0 54.0 60.0 Annual [kWh/a] 2628 3066 3504 3942 4380 4818 5256 5694 6132 6570 7008 7446 7884 8322 8760 9636 10512 11388 12264 13140 14016 14892 15330 17520 19710 21900 Standard Rich Total 27.0 31.5 36.0 40.5 45.0 49.5 54.0 58.5 63.0 67.5 72.0 76.5 81.0 85.5 90.0 99.0 108.0 117.0 126.0 135.0 144.0 153.0 157.5 180.0 202.5 225.0 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5 10.0 11.0 12.0 13.0 14.0 15.0 16.0 17.0 17.5 20.0 22.5 25.0 30.0 35.0 40.0 45.0 50.0 55.0 60.0 65.0 70.0 75.0 80.0 85.0 90.0 95.0 100.0 110.0 120.0 130.0 140.0 150.0 160.0 170.0 175.0 200.0 225.0 250.0 42 Personal Comment Mr. Strauß, Institut für Solare Energieversorgungstechnik (ISET), during a telephone interview on August 20th, 2003. Annex A: Electricity Demand and System Design 70 Number of Households Daily Peak Load Annual [kWh/a] 77850.9 84928.2 Base Load (Refrigerators) Daily [kWh/d] 66.0 72.0 Annual [kWh/a] 24090.0 26280.0 Standard Rich Total [kWh/d] 213.3 232.7 247.5 270.0 27.5 30.0 275.0 300.0 A.2 System Design The design of hybrid systems here is based on personal comments by project developers and literature review (Haselhuhn, R.; Berger, F.; Hemmerle, C., 2002). It is obvious that the design of the systems here is therefore rather rough and that real application of hybrid systems would require accurate system design with the help of optimisation models as for example TALCO (Technical and Least Cost Optimisation, (FHG ISE, 2003)) or HOMER (Evaluation of design options, (Homer, 2003)). However, for a comparative assessment, it seems sufficient. For the system design, the following basic assumptions are made: Table A.4 Main Modelling Assumptions PV Modules Annual Global Radiation: 1,664 kWh/m /a Radiation on a surface with 10° incline In June: 7.2 kWh/m2/d In December: 2.2 kWh/m2/d Temperature Correction In Summer: 0.85 In Winter: 0.9 Norm Radiation = 1,000 W/m2 Diesel Genset Annual operating time in Mini-Grid: 2,190 h/a Efficiency: 0.3 Designed to meet the base load Wind Generator Annual Full Load Hours: 2,000 h/a Miscellaneous Energy losses due to inverter and battery: 24% (Haselhuhn, R.; Berger, F.; Hemmerle, C., 2002) Own assumption, good site Equals 6 h/d Own assumption, typically between 0.25 – 0.35 (Turcotte, D.; Sheriff, F.; Pneumaticos, S., 2001) Personal Recommendation Mr. Strauss, ISET44 Personal Recommendation given by Claudia Hemmerle, 43 Deutsche Gesellschaft für Sonnenenergie Average Site in Trapani, Italy; Source Meteosat 2 Remarks/Source 43 During a telephone interview on August 21st, 2003. 44 During a telephone interview on August 20th, 2003. Annex A: Electricity Demand and System Design 71 For the different hybrid systems, the following share on electricity generation was attributed to the different generators: Table A.5 Share of Technologies for Electricity Generation PV/Diesel Hybrid Systems Share: 80 % PV, 20% Diesel Genset Remarks/Source Common design for cost optimisation PV generator is designed to meet 50% of the electricity Personal Recommendation Mr. Georg Weingarten, 45 demand in winter Energiebau GmbH Wind/Diesel Hybrid Systems Share: 80 % Wind, 20% Diesel Genset PV/Wind Hybrid Systems Share: 2/3 Wind, 1/3 PV Own assumption Common design for cost optimisation Based on these assumptions, the calculations lead to the following system designs for the different village sizes. 45 Given at Intersolar Fair in Freiburg/Germany on June 28th, 2003. Annex A: Electricity Demand and System Design 72 Total Number of Households 30 35 40 45 50 55 60 65 70 75 80 85 Diesel Capacity [kW] 1.8 2.1 2.4 2.7 3.0 3.3 3.6 3.9 4.2 4.5 4.8 5.1 System Design PV/Diesel 80% PV [kWh/a] 6794.3 7926.6 9059.0 10191.4 11323.8 12456.1 13588.5 14720.9 15853.3 16985.6 18118.0 19250.4 PV Capacity [kW] 7.7 9.0 10.3 11.6 12.9 14.2 15.5 16.8 18.0 19.3 20.6 21.9 System Design Wind/Diesel 80% Wind [kWh/a] 6794.3 7926.6 9059.0 10191.4 11323.8 12456.1 13588.5 14720.9 15853.3 16985.6 18118.0 19250.4 Wind Capacity at 2000 h/a [kW] 4.5 5.2 6.0 6.7 7.4 8.2 8.9 9.7 10.4 11.2 11.9 12.7 33,3%PV [kWh/a] 2830.9 3302.8 3774.6 4246.4 4718.2 5190.1 5661.9 6133.7 6605.5 7077.4 7549.2 8021.0 System Design PV/Wind PV Capacity [kW] 2.6 3.0 3.5 3.9 4.3 4.8 5.2 5.6 6.1 6.5 7.0 7.4 66,6% Wind [kWh/a] 5661.9 6605.5 7549.2 8492.8 9436.5 10380.1 11323.8 12267.4 13211.1 14154.7 15098.3 16042.0 Wind Capacity at 2000 h/a [kW] 3.7 4.3 5.0 5.6 6.2 6.8 7.4 8.1 8.7 9.3 9.9 10.6 Annex A: Electricity Demand and System Design 73 Total Number of Households 90 95 100 110 120 130 140 150 160 170 175 200 Diesel Capacity [kW] 5.4 5.7 6.0 6.6 7.2 7.8 8.4 9.0 9.6 10.2 10.5 12.0 System Design PV/Diesel 80% PV [kWh/a] 20382.8 21515.1 22647.5 24912.3 27177.0 29441.8 31706.5 33971.3 36236.0 38500.8 39633.2 45295.0 PV Capacity [kW] 23.2 24.5 25.8 28.3 30.9 33.5 36.1 38.7 41.2 43.8 45.1 51.5 System Design Wind/Diesel 80% Wind [kWh/a] 20382.8 21515.1 22647.5 24912.3 27177.0 29441.8 31706.5 33971.3 36236.0 38500.8 39633.2 45295.0 Wind Capacity at 2000 h/a [kW] 13.4 14.2 14.9 16.4 17.9 19.4 20.9 22.3 23.8 25.3 26.1 29.8 33,3%PV [kWh/a] 8492.8 8964.6 9436.5 10380.1 11323.8 12267.4 13211.1 14154.7 15098.3 16042.0 16513.8 18872.9 System Design PV/Wind PV Capacity [kW] 7.8 8.3 8.7 9.6 10.4 11.3 12.2 13.0 13.9 14.8 15.2 17.4 66,6% Wind [kWh/a] 16985.6 17929.3 18872.9 20760.2 22647.5 24534.8 26422.1 28309.4 30196.7 32084.0 33027.6 37745.9 Wind Capacity at 2000 h/a [kW] 11.2 11.8 12.4 13.7 14.9 16.1 17.4 18.6 19.9 21.1 21.7 24.8 Annex A: Electricity Demand and System Design 74 Total Number of Households 225 250 275 300 Diesel Capacity [kW] 13.5 15.0 16.5 18.0 System Design PV/Diesel 80% PV [kWh/a] 50956.9 56618.8 62280.7 67942.6 PV Capacity [kW] 58.0 64.4 70.9 77.3 System Design Wind/Diesel 80% Wind [kWh/a] 50956.9 56618.8 62280.7 67942.6 Wind Capacity at 2000 h/a [kW] 33.5 37.2 41.0 44.7 33,3%PV [kWh/a] 21232.1 23591.2 25950.3 28309.4 System Design PV/Wind PV Capacity [kW] 19.6 21.7 23.9 26.1 66,6% Wind [kWh/a] 42464.1 47182.3 51900.6 56618.8 Wind Capacity at 2000 h/a [kW] 27.9 31.0 34.1 37.2 Annex B: GEMIS Scenario Calculations 75 Annex B: GEMIS Scenario Calculations B.1 Scenario Definitions For the comparison of the different electrification scenarios, the main requirement for adequate comparison is that in all scenarios the same amount of electricity is provided. Here, a village with 170 households is chosen, with peak electricity consumption of 48,126 kWh/a, which is to be produced by the different scenarios. SHS, however, are seen as an exception here. SHS are just used for household electrification, and since real application is to be investigated, this is accounted for here. It is assumed that every household is supplied with a 50 Wp SHS-module each, generating 80 kWh/a at the given global irradiation, efficiency and energy density. For the assessment of the impacts of conventional grid-based electrification on ecology, three commonly used developing/transition countries are chosen: Brazil for its high share of hydro power plants on electricity supply; China for its high share coal power plants on electricity supply; and South Africa as an African representative and with comparatively high share of nuclear power. The different electricity supply systems are chosen from the database of GEMIS. An overview on system designs and main assumptions is given in the following. Scenario 1: Hybrid systems PV Module PV/Diesel monocrystalline PVmodule, system with aluminium-frame incl. Elevation after DIN small-scale dieselmotor for decentral electricity production, no emission control (base case) 20 9,625.2 10.2 30 1,460 10 Own assumption Source: GEMIS; for the diesel generator, no emission control is applied as worst case scenario Wind Generator Diesel Remarks/Source Description Electricity Production [%] Electricity Production [kWh/a] Installed Capacity [kW] Efficiency [%] Annual Operating Hours [h/a] Lifetime [a] 80 38,500.8 43.8 10 1,664 20 Annex B: GEMIS Scenario Calculations PV Module PV/Wind monocrystalline PVsmall-scale single module, system mit wind turbine, for good aluminium-frame incl. sites Elevation after DIN 33.3 16,042 14.8 10 1,664 20 66.7 32,084 21.1 100 2,000 12 Own estimation Wind Generator Diesel 76 Remarks/Source Description Source: GEMIS Electricity Production [%] Electricity Production [kWh/a] Installed Capacity [kW] Efficiency [%] Annual Operating Hours [h/a] Lifetime [a] Wind/Diesel Description small-scale dieselmoSmall-scale single tor for decentral elecwind turbine, for good tricity production, no emission control sites (base case) 80 38,500.8 25.3 100 2,000 12 20 9,625.2 10.2 30 1,460 10 Source: GEMIS; for the diesel generator, no emission control is applied as worst case scenario Electricity Production [%] Electricity Production [kWh/a] Installed Capacity [kW] Efficiency [%] Annual Operating Hours [h/a] Lifetime [a] Annex B: GEMIS Scenario Calculations 77 Remarks/Source Scenario 2: Diesel Mini-Grid Diesel Mini-Grid Description small-scale dieselmotor for decentral electricity Source: GEMIS; no emission control as is production, no emission control (base case) common in developing countries Electricity Production [kWh/a] Installed Capacity [kWp] Efficiency [%] Annual Operating Hours [h/a] Lifetime [a] 48,126 22 30 2,190 6 Own assumption Scenario 3: Renewable Energy Solar Home system Remarks/Source Biogas Plant Remarks/Source Small generator for biogas from decentral Source: GEMIS; fermentation for elecCatalytic Converter tricity generation in added; Converter developing countries, meets World Bank with three-way cataEmission and Imlytic-converter for remission Standards duction of NOx/CO/NMVOC 35,058.3 170 Buildings, each one SHS Description Complete 50 Wp Solar Home System, incl. battery & CFL bulbs, with 100% firm power due to battery storage Source: GEMIS Electricity Production [kWh/a] Installed Capacity [kWp] Efficiency [%] Annual Operating Hours [h/a] Lifetime [a] 13,600 8.5 10 1,600 20 10 27.74 4,813 10 Own estimation Source: GEMIS Own estimation Annex B: GEMIS Scenario Calculations 78 Hydroelectric Power Plant Scenario 4: Grid-Extension Coal Power Plant Brazil In Brazil: bagasse. Large hard coal power Generic nuclear power Here dealt with as biomass: mediumplant with steam tur- plant (pressurisedbine for developing water reactor, PWR) sized power plant with Large scale river countries, no SO2- or in developing counintegrated biomass power plant Brazil tries; includes asNOx- removal, but gasification of wood; electric filter; no cool- sumed nuclear waste simple-cycle steaming tower. of 5 g/MWh-el. injected gas turbine = STIG 8.3 4.4 82.7 4.6 Nuclear Power Plant Others Description Electricity Production [%] Electricity Production [kWh/a] Installed Capacity [MW] Efficiency [%] Annual Operating Hours [h/a] Lifetime [a] China 3,994.5 300 38 5,000 30 2,117.5 1,250 33 6,000 20 39,800.2 50 100 6,000 50 2,213.8 10 38.98 3,506 15 Description Nuclear power plant Coal-fired steamhydro-electric power (pressurised lightturbine power plant in plant - dam + reservoir water reactor LWR) in China. in China China. 80.2 1.2 18.5 0.1 Electricity Production [%] Electricity Production [kWh/a] Installed Capacity [MW] Efficiency [%] Annual Operating Hours [h/a] Lifetime [a] 38,597.1 577.5 8,903.1 here neglected 600 38 6,000 30 950 33 6,000 20 250 100 4,000 50 Annex B: GEMIS Scenario Calculations Coal Power Plant South Africa Nuclear power plant Large hard coal power Koeberg close to Cape plant with steam turTown, South Africa. bine in South Africa, PWR with 2x 920 no SO2- or NOx- reMW-netto; includes moval; cooling tower assumed nuclear waste with wet recooling. of 5 g/MWh-el. Nuclear Power Plant Hydroelectric Power Plant Others 79 Description Electricity Production [%] Electricity Production [kWh/a] Installed Capacity [MW] Efficiency [%] Annual Operating Hours [h/a] Lifetime [a] 93.5 5.5 1.1 0.1 44,997.8 2,646.9 529.4 here neglected 500 38 5,000 25 920 33 7,200 25 360 100 3,561 50 B.2 Modelling Results The following section gives an overview and interpretation on the results of the GEMIS calculation for a village of 170 household, supplied with energy due to the different scenarios. With GEMIS, the amount of greenhouse gas emissions, air pollutants and the cumulative energy demand (CED) were calculated. Greenhouse Gas Emissions The following table shows the amount of greenhouse gas emissions attributable to the different electrification scenarios. CO2-Equivalents aggregate the different greenhouse gas emissions due to their contribution to the greenhouse effect. Annex B: GEMIS Scenario Calculations 80 Table B.1 Amount of Greenhouse Gas Emissions Option [kg] PV/ Diesel Wind/ Diesel PV/ Wind Diesel SHS Biogas Brazil South Africa China CO2Equivalents [kg] 18,568.16 12,340.27 3,887.38 56,503.63 2,710.80 4,071.56 29,969.36 46,707.43 40,677.63 CO2 [kg] 17,637.73 11,945.93 3,593.53 54,815.31 2,533.00 3,422.43 17,165.27 42,201.37 34,879.95 CH4 [kg] 27.43 13.02 8.75 54.04 6.51 10.52 553.57 166.23 234.69 N2O [kg] 0.50 0.32 0.10 1.50 0.09 1.38 0.24 2.31 1.35 Perfluormethane Perfluorethane [kg] [kg] 2.11E-02 5.98E-06 8.80E-03 4.35E-06 6.40E-07 1.46E-06 3.53E-06 1.38E-06 6.16E-06 2.65E-03 7.52E-07 1.11E-03 5.47E-07 8.05E-08 1.83E-07 4.44E-07 1.73E-07 7.74E-07 These figures are illustrated by the following graphs. 60.000 Greenhouse Gases [kg CO2-Equivalents] 50.000 40.000 30.000 20.000 10.000 0 PV/ Wind/ PV/ Diesel SHS Biogas Brazil South China Diesel Diesel Wind Af rica Figure B.1 GEMIS Results: GHG Emissions The comparison of the different scenarios clearly shows that hybrid systems result in relatively few GHG emissions. The comparison with diesel genset shows the expected result: the application of hybrid systems result in less GHG emissions due to the fact that the diesel generator accounts for just 80% of the electricity production. The comparison with renewable energy technologies shows a likewise expected result: diesel based hybrid systems result in more GHG emissions than do SHS and biogas plants due to the application of the diesel generator. PV/Wind hybrid systems do not apply fossil resources during operation, so that their GHG emissions are equal to those attributable to SHS and biogas. The comparison of hybrid systems with grid-based electrification shows expected results for South Africa and China, which can be explained with the high share of coal in electricity production. For Brazil, which applies 82.7% of hydropower for electricity generation, the result Annex B: GEMIS Scenario Calculations 81 seems surprising in the first instance; the Brazilian grid results in similar GHG emissions as do PV/Diesel systems. This has two main reasons: Firstly, the diesel generator applied in the model here does not apply emission reduction measures as catalytic converters. Secondly, the application of hydroelectric power plants results in a high degree of CH4 emissions as shows figure B.2. 600 Methance Emissions [kg] 500 400 300 200 100 0 PV/ Wind/ PV/ Diesel SHS Biogas Brazil South China Diesel Diesel Wind Africa Figure B.2 GEMIS Results: Methane Emissions CH4 emissions, although from their total amount fewer than CO2 emissions, have a comparatively high greenhouse potential and therefore significantly contribute to the aggregated CO2Equivalents. Air Pollutants The following tables show the amount of air pollutants attributable to the different electrification scenarios. SO2-Equivalents aggregate the different air pollutants due to their acidification potential. Annex B: GEMIS Scenario Calculations 82 Table B.2 Air Pollutants Option PV/ Diesel Wind/ Diesel PV/ Wind Diesel SHS Biogas Brazil South Africa China 9.04 772.97 4.30 222.45 52.79 395.62 390.61 4.86 215.37 2.06 168.22 32.22 246.85 297.12 5.83 799.03 3.20 77.78 27.06 186.61 134.15 0.10 1.22 0.01 0.07 1.66 18.08 0.08 0.02 0.12 0.00 0.01 0.17 1.85 0.01 2.36 197.40 0.51 13.86 4.53 116.56 14.88 12.00 155.14 3.67 47.76 6.69 25.01 21.74 0.29 16.66 0.33 1.91 0.50 0.71 1.22 -6.26E-07 -1.15E-09 -4.13E-08 1.44E-09 4.38E-08 -1.92E-08 6.87E-11 SO2Equivalent [kg] 172.06 156.73 SO2 [kg] 53.48 43.71 NOx [kg] 169.54 161.95 HCl [kg] 0.47 0.25 HF [kg] 0.08 0.03 Dust [kg] 44.04 40.03 CO [kg] 51.13 35.41 NMVOC [kg] 3.88 3.40 H2 S [kg] -1.48E-06 -1.24E-08 Option PV/ Diesel NH3 [kg] As [kg] Cd [kg] Cr [kg] Hg [kg] Ni [kg] Pb [kg] PCDD/F [kg] 1.75E-09 6.94E-10 1.19E-09 4.64E-10 2.77E-10 1.46E-10 1.49E-10 2.42E-10 1.17E-12 8.02E-05 1.04E-04 3.97E-05 2.24E-04 1.17E-04 3.76E-04 1.28E-03 Wind/ Diesel 3.43E-05 1.53E-05 8.76E-06 6.97E-05 1.89E-05 6.16E-05 4.52E-04 PV/ Wind Diesel SHS Biogas Brazil 5.56E-05 5.35E-05 2.23E-05 1.39E-04 6.12E-05 1.97E-04 8.31E-04 2.46E-05 1.04E-05 5.89E-06 4.67E-05 1.27E-05 4.18E-05 3.03E-04 4.73E-06 5.49E-06 3.35E-06 2.74E-05 6.91E-06 2.18E-05 1.79E-04 8.21E-06 3.30E-06 1.86E-06 1.47E-05 4.05E-06 1.33E-05 9.55E-05 1.89E-05 4.11E-06 2.07E-06 1.56E-05 4.87E-06 1.69E-05 9.89E-05 South Africa 8.32E-06 5.10E-06 3.00E-06 2.42E-05 6.33E-06 2.04E-05 1.57E-04 China 5.65E-08 2.62E-08 1.51E-08 1.18E-07 3.24E-08 1.04E-07 7.66E-07 These figures are illustrated with the following graphs. Annex B: GEMIS Scenario Calculations 83 800 Air Pollutants [kg SO2-Equivalents] 700 600 500 400 300 200 100 0 PV/ Wind/ PV/ Diesel SHS Biogas Brazil South China Diesel Diesel Wind Af rica The comparison of the different scenarios shows that hybrid systems are likely to result in few emissions of air pollutants. Compared to diesel gensets, again the expected result is obtained. Due to fewer operational time of the diesel generator in hybrid systems, the amount of air pollutants is significantly Figure B.3 GEMIS Results: Air Pollutants lower than for diesel mini-grids. The comparison with SHS shows that diesel-based hybrid systems result in higher emissions of air pollutants. For PV/Wind systems, the total amount is similar. The comparison with biogas systems, however, reveals similar or less air pollutants from hybrid systems. The high amount of air pollutants in the biogas system here results mainly from SO2 from sulphur in the fuel. In comparison with grid-based electrification, the amount of air pollutants in a country like Brazil, applying a high share of hydroelectric power, is lower. However, the higher the share of coal in electricity production and the worse the flue gas cleaning in these countries, the better the comparative performance of hybrid system, especially PV/Wind systems. For a better overview on the amount of the main air pollutants SO2, NOx, dust and CO, the following figure is meant to provide an overview. It illustrates that main pollutants in diesel systems are NOx, while the conventional grid emits mainly SO2 from coal combustion. Annex B: GEMIS Scenario Calculations 800 Selected Air Pollutants [kg] 700 600 500 400 300 200 100 0 PV/ Wind/ Diesel Diesel PV/ Wind Diesel SHS Biogas Brazil South Africa China SO2 NOx Dust CO 84 Figure B.4 Selected Air Pollutants Cumulative Energy Demand (CED) The Cumulative Energy Demand (CED) in kWh is a measure for the whole effort on energy resources (primary energy) for the provision of products or services.46 It is therefore a measure to describe the extent to which renewable and non-renewable energy resources are consumed in order to provide electricity, both during operation and for the construction of the power plant. The following table shows the results of the GEMIS calculations. Table B.3 Cumulative Energy Demand (Primary Energy) Option Total CED [kWh] 103,742.3 82,645.3 59,369.0 210,861.2 14,012.6 68,799.7 64,945.2 129,681.0 118,053.4 Non-Renewable Resources [kWh] 62,454.2 43,747.1 10,040.3 209,705.4 350.0 12,600.9 19,353.6 129,085.1 109,078.1 Renewable Resources [kWh] 39,273.0 38,717.6 48,370.2 1,032.8 13,602.3 56,159.4 45,537.6 537.6 8,975.0 Others [kWh] 2.015.1 180.6 958.4 123.0 60.3 39.4 54.0 58.3 0.3 PV/Diesel Wind/Diesel PV/Wind Diesel SHS Biogas Brazil South Africa China These figures are illustrated with the following graphs. 46 Source: GEMIS Annex B: GEMIS Scenario Calculations 85 The investigation of 250.000 total cumulative energy demand 200.000 shows that the ap150.000 plication of hybrid systems is advanta100.000 geous compared to 50.000 the diesel mini-grid and to the conven0 tional grid in counPV/ Wind/ PV/ Diesel SHS Biogas Brazil South China tries with a high Diesel Diesel Wind Africa share of coal in electricity generaFigure B.5 Cumulative Energy Demand (Primary Energy) tion. In comparison to Biogas and the conventional grid of Brazil with a high share of hydropower, hybrid systems applying diesel generators are disadvantageous. As is proved by figure B.6 as well, the consumption of non-renewable resources, being most important for this assessment here, is higher in these hybrid systems due to the use of the diesel generator. Just PV/Wind systems are able to compete with biogas and the grid of Brazil. In comparison to SHS, hybrid systems are all disadvantageous. For the case of PV/Wind hybrid systems, this disadvantage might well be due to the fact that larger systems of higher installed capacity are applied to provide more energy than with SHS. This idea is supported by figure B.6 as well, which shows not only a higher degree of renewable energy consumption by PV/Wind systems than with SHS, but also a significantly higher degree of non-renewable energy consumption. This is to the higher energy demand for higher installed capacity in PV/Wind hybrid systems. 250.000 CED [kWh] 200.000 150.000 100.000 50.000 0 PV/ Wind/ PV/ Diesel SHS Biogas Brazil South China Diesel Diesel Wind Africa Non-renew able Renew able Others CED [kWh] Figure B.6 Cumulative Energy Demand According to Resources Annex C: Analysis of Impacts 86 Annex C: Analysis of Impacts C.1 Ecology Indicator: Noise Pollution Scenario 2: Diesel Gensets Diesel genset-based mini-grids are commonly operating the generator during evening hours, usually for the duration of several hours. Since the load is not constant during these hours, the generator produces noise not only through operation, but also due to start-up and shut-down procedures, which frequently occur. Just as for hybrid systems, power distribution lines of the mini-grid further contribute to noise generation. Cushioning the noise of a diesel genset alone can as well be done by building a powerhouse, but in reality this is not often the case and, thus, cannot be taken in consideration for the assessment here. Moreover, larger gensets producing more noise, with longer operation time than in diesel-based hybrid systems, are necessary in order to provide the same amount of electricity as with hybrid systems. Due to this reason the impact of diesel gensets on noise pollution is evaluated to be comparatively very poor. Scenario 3: Renewable Energy Technologies The PV modules of SHS do not generate noise during operation and do not apply power distribution lines, which could create noise. The impact on noise pollution is therefore estimated to be negligible, resulting in a comparatively very good evaluation. Biogas plants for electrification create noise through the operation of the biogas-generator, which as well can be cushioned. For power distribution lines the same considerations apply as above. Therefore, the impact on noise pollution created by biogas-systems is estimated to be low, by this resulting in a comparatively good assessment. Scenario 4: Extension of the Conventional Grid The generation of electricity in centralised power plants does not result in noise in the remote villages. However, power distribution lines cause significant noise pollution by generating a constantly buzzing noise. Due to the fact that power transport to remote villages takes place over large distances with high and medium voltage lines, the noise is distributed over these large distances as well, affecting more villages than the discussed single remote one. This clearly shows that this effect is not negligible. However, for the single remote village discussed here the impact on noise pollution is estimated to be low due to the fact that electricity generation does not take place in the village itself, resulting in a comparatively good assessment. Annex C: Analysis of Impacts 87 C.2 Socio-Economic Issues Indicator: Cultural Compatibility and Acceptance Scenario 2: Diesel Gensets Diesel gensets are one of the most common and well-known ways to address the problem of electrification of remote areas. Thus, people are likely to have a high degree of confidence towards this technology. However, it is also reported that people are often dissatisfied with the unreliable and intermittent energy provision with diesel gensets (Prokahausli Sangsad Ltd., 2000), and are, thus, open to solutions for this. Furthermore, in regions where renewable energies like photovoltaic and wind have already been applied, a preference towards these technologies can sometimes even be observed. This is not only due to the high operational costs for diesel gensets, but also to the hard and tiring work connected to filling the tank of a generator, especially in winter (GTZ, 2003). As a result, diesel gensets are still likely to face hardly any cultural obstacles or problems with acceptance than hybrid systems due to their high degree of publicity, resulting in a comparatively very good performance. Scenario 3: Renewable Energy Technologies For SHS, no major obstacles resulting from cultural incompatibilities have been reported yet. However, SHS suffer from the same problem of acceptance due to intermittent supply as do diesel gensets, but probably to a higher degree since SHS is a new technology being unknown to population. The fact that energy provision is very limited and does not satisfy all needs and expectations, can give to rural population, who is well aware of possibilities of grid-based electrification, the feeling of being electrified in second class manner. Experiences show that only the advertisement of SHS as pre-electrification before being connected to the grid brings the necessary acceptance among rural population (Sauer, H., 2000). This effect is likely to be stronger than in hybrid systems, which, if functioning well, can supply electricity for 24 hours, so that hybrid systems are likely to face less cultural obstacles than do SHS. In an overall result, SHS are assessed to perform comparatively poor with regard to cultural compatibility and acceptance. Biogas systems have been found to be the system probably facing most cultural obstacles. The GTZ reports obstacles arising from religious and/or social taboos (GTZ, 1999a). Religious taboos are experienced to arise for example from the fact that cleanliness, which is valued very high in some religions, is not seen as guaranteed in dealing with human and animal excrements. Furthermore, the use of the produced gas for the preparation of food and the use of the slurry as fertiliser is sometimes hindered on cultural grounds. Especially the work connected to running a biogas system can be prohibited as well. All in all, biogas systems are estimated to be in many cases significantly less compatible to cultural issues than hybrid systems, therefore performing comparatively very poor. Scenario 4: Extension of the Conventional Grid The extension of the conventional grid is usually the option being preferred the most by rural population. Most people in rural areas are familiar of the possibilities and benefits of gridbased electrification, because they have relatives or friends in cities. Since word-of-mouth Annex C: Analysis of Impacts 88 propaganda is a common cultural habit in developing countries, the extension of the conventional grid to remote villages is considered as “real electrification” and will most likely be welcomed by rural population. Project developers even describe experiences where rural population refused to be electrified with renewable energy technologies because of their fear that the conventional grid is then likely not to be extended to their region. It is, thus, preferred to remain for a couple of years without electrification in order to preserve the chances for grid extension.47 For this reason, the degree of cultural compatibility and acceptance of grid extension is assessed to be comparatively very good. Indicator: Degree of Supply Equity Scenario 2: Diesel Gensets Diesel-based mini-grids often do already exist in developing countries, and electrification with diesel gensets has then usually not been implemented in an elaborated way. Meanwhile, the application of hybrid systems (and any other technology) has the potential to do so and to take account of matters of supply equity. From a financial perspective, diesel gensets are relatively expensive with regard to total costs; nevertheless, hybrid systems are even more expensive, so that it is decided here to assess hybrid systems and diesel gensets as equally with regard to supply equity. Scenario 3: Renewable Energy Technologies SHS offer a solution for electrification being largely independent from existing power structures. Once constructed, SHS are independent from fuel and are not likely to become matter of political power demonstrations since they belong to the consumers themselves. In this respect, SHS are significantly advantageous compared to hybrid systems and other decentralised electrification measures: because SHS provide electricity to individual households, they can be considered as completely independent from power structures even within rural communities. The fact, however, that investment costs for SHS are comparatively high, attenuates this effect. The World Bank states that investment costs are in the order of magnitude of a year’s income for low- and middle-income rural families (Cabraal, A.; Cosgrove-Davies, M.; Schaeffer, L., 1996). However, since costs for hybrid systems are high as well, SHS can be assessed to be more beneficial towards supply equity. Biogas systems generally seem to offer a good possibility for independent and fair power supply, being independent from fossil resources. However, the GTZ notes the possibility of a further accentuation of existing differences in income and property holdings (GTZ, 1999b). Comparatively high investments make this technology more affordable to well-situated families, and poor farmers are likely to be coerced to deliver their manure to the landlord or more prosperous farmers, either free of charge or at least cheaply. For a biogas plant on community level, however, this effect does not apply. Nevertheless, the same problem might apply as for hybrid systems that matters of political power or 47 Personal Comment given by Dirk-Uwe Sauer, Fraunhofer ISE – Club for Rural Electrification, at Intersolar fair, June 28th, 2003 Annex C: Analysis of Impacts 89 mismanagement of the electrification committee can result in unequal supply. Still, due to lower costs for biogas systems, biogas plants are seen as preferential with regard to supply equity compared to hybrid systems. Scenario 4: Extension of the Conventional Grid It is a well-known fact that the conventional grid can become a matter of political power on a national level. Many developing countries have experienced demonstrations of political power on the issue of energy, which make decentralised rural electrification highly advantageous with regard to supply equity. The question whether or not to extend the conventional grid to certain rural areas is often a matter of political influence and preference as well. From a financial perspective, a general statement cannot be given. Since grid extension to remote rural areas requires enormous investment, it is decided here to assess hybrid systems as preferential to grid extension with regard to supply equity, resulting in a comparatively poor performance of grid extension in this respect. Indicator: Potential for Participation and Empowerment Scenario 2: Diesel Gensets Diesel gensets, which cannot be run all day, by this offer potential for understanding of the limited nature of energy. However, the potential for capacity building and increasing empowerment is higher for hybrid systems due to the fact that consumers in hybrid systems need to adapt to certain regulations, and the responsibility for this is left to the individual consumer. This is not the case with diesel gensets, where electricity is simply not available during the day, but only during some hours in the evening. Scenario 3: Renewable Energy Technologies Experiences with PV systems in general and SHS in particular show that the link between energy consumption and insolation is usually understood (Nieuwenhout, F.D.J., et al., 2000), and that people adapt energy consumption to seasonal patterns with regard to insolation (Hammamami, N.; Ounalli, A.; Njaimi, M., et al., 1999). This effect, which is obviously due to natural limitations and fluctuations of renewable energy resources, applies to hybrid systems as well, but to a lesser degree since back-up with a diesel genset weakens the effect. SHS, however, to some degree have the same problem as diesel gensets: if insolation (or diesel in the case of diesel gensets) is there, electricity is available, if not, then no electricity can be used. This does not result in the same effect on capacity building or social empowerment than with hybrid systems, where people are to understand the limited nature of energy in order to make electricity available to everybody to the same extent. Therefore, the effect on capacity building of SHS is here evaluated to be lower. Biogas systems involve a lot of work to be done by the consumer himself. The consumer should not only be directly involved in the planning processes, but also needs to directly participate in the production of energy and the fertiliser. This shows the great potential this technology offers towards capacity building and empowerment, and therefore the effect on capacity building is here evaluated to be higher than for hybrid systems, resulting in a comparatively very good assessment. Annex C: Analysis of Impacts 90 Scenario 4: Extension of the Conventional Grid The extension of the conventional grid is not likely to improve understanding about the limited availability of electricity. Energy is not generated on site to improve people’s understanding, and energy supply is open to any kind of use with limitation just through pricing. The effect is therefore evaluated to be significantly lower than for hybrid systems, resulting in the assessment of a comparatively very poor potential for participation and empowerment. Indicator: Potential for Economic Development Scenario 2: Diesel Gensets From a technical point of view, diesel gensets are comparable to grid connection, offering a high degree of flexibility for the villages with effectively no technical constraints to be made on the use of appliances (ESMAP, 2000b). An important constraint on the potential for economic development is the fact that diesel gensets are less suitable to be operated the whole day, since operation costs are high. Due to the latter fact, the potential for economic development with diesel gensets is estimated to be lower than with hybrid systems. Scenario 3: Renewable Energy Technologies The potential for economic development of SHS has been matter of intensive research, but there was just little evidence found for the potential of SHS to generate income (Nieuwenhout, F.D.J., et al, 2000). The following aspects are mentioned (Campen, B.; Guidi, D.; Best, G., 2000): lighting provides the possibility of extended commercial activities in the evening; SHS were found to be a tourist attraction in Nepal, which was mentioned as potential for income generation. However, SHS services are limited. The commonly installed capacities are not sufficient to be used for productive purposes by installing electrical machines, and the costs for expanding capacity are considerably high (Cabraal, A.; Cosgrove-Davies, M.; Schaeffer, L., 1996). Experiences show that rural population reverts to existing diesel gensets in the village for productive purposes or to the use of petroleum for further lighting (Preiser, K., et al., 2000). The potential of SHS for economic development is therefore rated to be considerably lower than for hybrid systems, resulting in a comparatively very poor potential of SHS for economic development. The potential for economic development of biogas systems depends on the size of the system and is therefore a matter of the pre-investment planning process. An extension of an existing system can be done by erecting new tanks and biogas generators if enough substrate is available and financial feasibility is given. When discussing the economic development potential, one should not ignore the fact of improved yields attributable to biogas systems. As a result of the use of the by-product, a biofertiliser, average increases of yields between 6 to 10%, in some cases up to 20%, have been reported (GTZ, 1999b). Annex C: Analysis of Impacts 91 However, the potential for economic development through biogas systems seems lower than with hybrid systems, since it is limited by the availability of the substrate, while hybrid systems depend on the unlimited resources wind and/or sun. Scenario 4: Extension of the Conventional Grid For villages, which are likely to experience a substantial load-growth after electrification, the extension of the conventional grid normally offers a maximum degree of flexibility to accommodate increasing demand without supply constraints. The main restriction given is quite often the ability of the customers to pay for the energy service. However, it should not be overseen that for grid connection a minimum threshold level of electricity demand as well as certain load densities are essential in order to achieve economies of scale (Cabraal, A.; Cosgrove-Davies, M.; Schaeffer, L., 1996). Anyhow, the potential for economic development given by the conventional grid can be considered to be higher than for hybrid systems. Indicator: Employment Effects Scenario 2: Diesel Gensets The use of diesel gensets for electrification is likely to result in lower employment effects as in the case of hybrid systems. As for all energy technologies, the effect of enhanced economic activities is likely to occur, especially of those activities taking place in evenings since this is the time when diesel-based mini-grids likely operate. Direct effects on employment related to operation and maintenance of diesel gensets can be evaluated to be low. These activities are mostly carried out by family members of the operator and are often neglected (GTZ, 2003). Generally, the application of diesel gensets is not very labour intensive, and related maintenance work is carried out – if at all - by the operator or family members. For this reason, the impact of diesel gensets on overall employment is valued to be lower than with hybrid systems. Scenario 3: Renewable Energy Technologies As with diesel gensets, employment effects by enhanced commercial activities during the evenings are likely to occur through SHS. Production, sales, service and maintenance of PV systems, as outlined above, are likely to result in further employment effects as well. This effect, however, is reduced by the fact that the application of SHS is likely to have negative influence on the possibility of kerosene dealers, who are the major competitor of SHS for lighting, to sell their goods (Nieuwenhout, F.D.J., et al., 2000). Since SHS systems just provide potential for lighting, but not for electrification of machines for handicraft businesses, it is expected here that SHS are likely to result in lower employment effects than hybrid systems. Biogas systems provide potential for employment both in a long-term and short-term perspective. Since building material for biogas plants is less sophisticated than for example for photovoltaic modules, already the construction phase is likely to encourage local manufacturing of building materials and accessories. In China it was experienced that every district applying biogas erected its own enterprises for the production of the individual parts of the biogas plant (GTZ, 1999b). Annex C: Analysis of Impacts 92 When applying biogas systems on a community level, further employment effects for operation and maintenance of the plants can be expected, since skilled craftsmen are needed as permanent staff for the plant (GTZ, 1999b). Due to the fact that biogas systems are less sophisticated and that experiences proof immediate effects on employment due to their application, the likelihood to create job opportunities is here estimated to be higher than for hybrid systems. Scenario 4: Extension of the Conventional Grid The extension of the conventional grid is certainly the possibility offering the highest potential to create all such employment opportunities, which can be attributed to electrification. Commercial activities using electricity can take place at any time of the day, handicraft enterprises get the opportunity to use as many appliances as they need and can finance, and since household chores can be dealt with in the evenings due to lighting, families have more time during the day to follow commercial activities as farming or animal husbandry. However, direct employment effects are likely not to occur. The extension of the conventional grid hardly gives rise to job opportunities related to production, sales or maintenance of energy generating technologies. In comparison to hybrid systems, the fact that grid-based electrification offers higher potential for commercial activities than hybrid systems is lowered by the lack of job opportunities related to the energy provision itself. This leads to the estimation that no preference is made towards one of these scenarios, and both are evaluated to have a comparatively good effect on employment opportunities. Indicator: Impacts on Health Scenario 2: Diesel Gensets For the use of diesel gensets the same argument concerning corrosive gases applies as outlined for the hybrid systems. For the electrification of health clinics, diesel gensets generally can be applied as well, but do not produce electricity in the same reliable and constant manner as do hybrid systems. Thus, the impact on improved human health is lower than with hybrid systems. Scenario 3: Renewable Energy Technologies During operation of SHS, no corrosive gases are emitted. This positive effect can be reduced if kerosene lamps and candles are applied additionally in case lighting is not sufficient. Electrification of rural health clinics with SHS is unlikely. SHS are usually not designed to support appliances like refrigerators or even X-ray equipment. For this reason the positive impact on human health is here considered to be lower than with hybrid systems. Besides the potential general impacts of electrification on human health, biogas systems have a special positive side effect by improving sanitary conditions for the plant owners or even the villages. The fermentation process inside the tank significantly reduces the initial pathogenic capacity of the animal and human excrements, and biogas slurry does not attract important causes for contagious diseases as flies and other insects (GTZ, 1999b). The positive effect on human health is thus higher than with hybrid systems. Annex C: Analysis of Impacts 93 Scenario 4: Extension of the Conventional Grid The extension of the conventional grid to remote areas does not result in emissions from the electricity generating process in the village itself. Moreover, the conventional grid is undoubtedly able to support electricity demand from rural health clinics. This positive assessment, however, is worsened in countries where for example the share of coal for electricity generation is high. Since flue gas cleaning in these power plants is usually not elaborated well, high amounts of i.e. CO2, CO or SO2 are emitted. This does not take place close to the remote villages and therefore does not result in immediate health problems. But after-effects as acid rain have severe impacts on human health. Thus, it is decided here not to give a preference to grid extension or hybrid systems with regard to the impacts on human health and both are considered to have a comparatively good potential to improve human health situation. C.3 Economic Issues Indicator: Investment Costs per kW Scenario 2: Diesel Gensets Diesel gensets commonly require low initial investment, the main problems of diesel gensets are rather the high operation costs and the overall low lifetime. However, some data could be collected and is presented in Table C.1. Table C.1: Initial Investment Costs for Diesel Gensets System Investment costs Capacity [kW] Location/Source Remarks 0.33 US$/W 50 Bulitai (Inner Mongolia) (GTZ, 2003) Bangladesh (Prokahausli Sangsad Ltd., 2000) Second hand generators of private service providers 0.20 US$/W 5 – 20 Diesel 2.29 €/W 5 (Wuppertal Institute, 2002) 1.10 – 1.57 US$/W 0.3 – 2.5 €/W 0.45 – 0.5 Inner Mongolia (Byrne, J.; Shen, B.; Wallace, W., 1998) any (Kininger, F., 2002) Annex C: Analysis of Impacts 94 The cost analysis here revealed specific investment costs for diesel gensets of P   345,63 × exp − 0,0394 ×  [€/kW], meaning for example 0.28 €/W in the case of a 5 kW kW   genset or 0.16 €/W for a 20 kW diesel genset.48 Compared to the figures for hybrid systems, the initial investment for diesel gensets is therefore significantly lower, which is not surprising with regard to the fact that PV/Diesel and Wind/Diesel systems apply diesel gensets as well. For PV/Wind systems, the initial investment is as well significantly higher than for diesel gensets. Scenario 3: Renewable Energy Technologies The initial investment costs for SHS vary significantly from country to country, but are generally comparatively high: depending on the size of the module and the frame conditions of the respective countries, the World Bank estimated in 1996 that prices for SHS are typically in the range of 7 – 26 US$/Wp (Cabraal, A.; Cosgrove-Davies, M.; Schaeffer, L., 1996). A recent Dutch study concluded that prices are typically in the range of 10 – 22 US$/Wp (Nieuwenhout, F.D.J., et al., 2000). The same study furthermore concluded that the prevailing view that costs for PV hardware are likely to decrease, could not be supported. Observed price reductions are stated to be related to decreases in taxes and duties rather than to a decrease of hardware costs. For the evaluation, it can be stated that SHS can require significantly higher investments per Watt than hybrid systems, resulting in the assessment of comparatively very poor performance with regard to investment costs. Biogas plants usually require high investment as well, and costs vary strongly between different plant types and sizes. Total costs of biogas plants, including all installations but not including land, are estimated to be 50 – 75 US$ per m3 capacity in (GTZ, 1999b), with the main share of the costs needed for the digester. Additional costs result from the application of the biogas generator. An appraisal in (ATB, 2003) gives 2.5 – 4 €/W as a reference point for specific investment costs, with 250 – 400 €/ m3 for the digester. Due to their simplicity, biogas plants, however, can be constructed with a high share of user’s involvement. A reduction of up to 15% for labour wages can be achieved (GTZ, 1999b). Therefore, investment cost for biogas plants can be evaluated to be lower than for hybrid systems, resulting in a comparatively good assessment of investment costs. Scenario 4: Extension of the Conventional Grid As in all of the above cases, costs for extension of the conventional grid vary widely not only among, but also within countries. Problems associated with grid extension in rural areas are lower load densities in rural areas, lower capacity utilisation rates, and often higher energy losses (Cabraal, A.; Cosgrove-Davies, M.; Schaeffer, L., 1996). According to the World Bank, the construction of power distribution lines account for 80 to 90% of the overall investment, and can be up to 20,000 US$ per kilometre (ESMAP, 2000b). Therefore, the extension of the conventional grid is just economically feasible, if 48 P = Installed Capacity in kW Annex C: Analysis of Impacts 95 - the village is situated close to the next medium-voltage line of the conventional grid, a considerable number of households is to be connected to the grid, and the distance between single households in the village is low (household density) (Cabraal, A.; Cosgrove-Davies, M.; Schaeffer, L., 1996; and: Baur, J., 2000). From a perspective of the local consumer, the connection cost to the grid is of major importance. Main determinant for the resulting connection cost is the average number of consumers per kilometre of line (ESMAP, 2000b), and a review of the World Bank in 1990 showed that these costs typically range from US$ 230-US$ 1,800 per connection, with a median cost of about US$ 520 per connection. For the case of a remote village, hybrid systems can be evaluated to be less costly than grid extension. Indicator: Electricity Generating Costs Scenario 2: Diesel Gensets The costs for electricity generation with mini-grids based on diesel gensets vary depending mainly on the following factors (ESMAP, 2000b): size of the generator, number of consumers, consumption per individual consumer, and the efficiency of operation. The operational costs for diesel gensets are usually considerably high. The World Bank estimates that costs for electricity generation with such systems typically range from US $0,20 to US$ 0,60 per kWh (ESMAP, 2001), which is still lower than for hybrid systems. For the case of Inner Mongolia, the experiences with diesel genset are presented in Table C.2. Table C.2: Electricity Generating Costs for Diesel Gensets Diesel Genset (non-continuous service) 0.56 US$/kWh 0.76-0.80 US$/kWh 1.16-1.27 US$/kWh49 Diesel Genset (continuous service) (GTZ, 2003) (Byrne, J.; Shen, B.; Wallace, W., 1998) Source A direct comparison of hybrid systems with diesel gensets, however, should be performed on the basis of the same capacity installed and with the same electricity output. This was done by Wuppertal Institute in (Wuppertal Institute, 2002), and is shown in Table C.3. 49 Levelized costs based on field analysis of battery’s lifetime. Annex C: Analysis of Impacts 96 Table C.3: Hybrid Systems at Different Diesel Prices Capacity: 5 kW Electricity Output: 2190 kWh/a Diesel Genset PV/Diesel, ratio 4:1 Wind/Diesel, ratio 4:1 Investment costs in € 11,450 23,825 22,740 Electricity Generating Costs at Diesel Price of 0.75 € 1.45 €/kWh 1.51 €/kWh 1.70 €/kWh Electricity Generating Costs at Diesel Price of 1.5 € 1.84 €/kWh 1.59 €/kWh Comparing these figures for hybrid systems and diesel gensets, a general statement cannot be given for PV/Diesel and Wind/Diesel hybrid systems. The comparison in Table C.3 shows the high dependency on the fuel price. In countries where fuel is subsidised, diesel-based hybrid systems are likely not to be competitive; if no subsidies are provided by the respective countries, these hybrid systems can compete, especially if 24-hours electrification is required. However, in the evaluation preference is given to diesel gensets due the data of the World Bank. Scenario 3: Renewable Energy Technologies In case smaller loads are required, photovoltaic systems are likely to become the least cost option (Nieuwenhout, F.D.J., et al., 2000). However, costs do not decrease with more households applying SHS, making the construction of mini-grids more attractive for villages with several households demanding electrification. For a common 50 Wp SHS, delivering around 0.25 kWh of electricity on a sunny day, the electricity generating costs are approximately 1 US$/kWh (BMZ, 1999). Experiences in Inner Mongolia reveal costs of 0.67 –0.73 US$/kWh (Byrne, J.; Shen, B.; Wallace, W., 1998). In any case, these costs are high and make the application of SHS difficult for electrification of the poorest. Whether additional costs occur is matter of further use of appliances: since SHS have limited capacity and extension is comparatively expensive, auxiliary energy sources as diesel gensets might be applied and generate additional costs (Nieuwenhout, F.D.J., et al., 2000). Nevertheless, the cost analysis of electricity generating costs reveals that SHS is likely to result in lower costs than hybrid village systems. However, in the case of hybrid household systems, this situation might be considerably different as the above example of Inner Mongolia proves. Here, PV/Wind household systems were experienced to be as low as 0.37 US$/kWh (Byrne, J.; Shen, B.; Wallace, W., 1998). For the application of biogas systems, data based on experiences could not be obtained. Generally, the aspect of costs for electricity generation cannot be seen independent from the fact that the production of bio-fertiliser and a correspondent observed increase of yields generates income (GTZ, 1999b), thus lowering overall system costs. Experiences of GTZ show that biogas programmes are usually less costly than similar strategies accounting both for energy and the production or use of fertilisers and being based on fossil resources (GTZ, 1999a). An appraisal of the Wuppertal Institute results in electricity generating costs of 0.15 – 0.20 Annex C: Analysis of Impacts 97 Euro/kWh for biogas plants (Wuppertal Institute, 2002). This, again, has not to be taken for granted since costs for biogas plants vary strongly. As a conclusion it is decided here to value the performance of biogas systems with regard to electricity prices significantly better than for hybrid systems. Scenario 4: Extension of the Conventional Grid A general statement on electricity generating costs from the conventional grid cannot be given since costs vary strongly between different countries and grid characteristics. According to the World Bank, grid extension offers the least costly option for electricity generation in cases where a medium voltage line serving a number of centres with larger loads passes the respective community nearby (ESMAP, 2000a). If this is the case, then costs and tariffs can be relatively low, and they can even further decline with increasing consumption. A common occurrence is that a doubling of consumption per household over a time frame of ten years leads in many places to a decline of costs per kWh of about 40% (ESMAP, 2000b). Still, electricity generating costs are here valued to be significantly lower for grid extension than for hybrid systems. Indicator: Maintenance Requirements Scenario 2: Diesel Gensets The application of diesel gensets in remotely located mini-grids has been facing long-standing maintenance problems. Even though the technology itself has been known for years, operators often lack knowledge about these systems, as the example of Bangladesh proofs (Barkat, A., et al., 2002). In case of system breakdowns, spare parts are difficult to purchase due to the remoteness of the villages (ESMAP, 2001). Experiences also show severe problems with poor quality contaminated fuel, which is available on rural markets (Prokahausli Sangsad Ltd., 2000). Nevertheless, from a perspective of maintenance the application of hybrid systems seems to be less favourable than diesel gensets. Although the back-up diesel generator in hybrid systems is likely to be strained less than in the case of a diesel genset-based mini-grid, the additional requirement for the maintenance of the renewable energy generator and the other components as batteries and charge controllers give preference to the diesel genset. Scenario 3: Renewable Energy Technologies SHS can partly be maintained by users themselves, especially simple maintenance functions as cleaning of the PV arrays can be carried out individually. However, not every PV user owns the required auxiliary means as for example a ladder for cleaning the PV array, resulting in considerable effort for cleaning (Nieuwenhout, F.D.J., et al., 2000). Moreover, as the World Bank describes, just few households can carry out this maintenance by themselves over a long period of time (Cabraal, A.; Cosgrove-Davies, M.; Schaeffer, L., 1996). Technicians are needed, but a single technician can serve maintenance needs for a large number of customers (Cabraal, A.; Cosgrove-Davies, M.; Schaeffer, L., 1996). Service centres are needed as well, a rule of thumb from the Dominican Republic states that systems should not be installed more than 50 km away from the next service centre (Cabraal, A.; Cosgrove-Davies, M.; Schaeffer, L., 1996). A problematic experience with the education of technicians was observed in Indonesia in applying SHS: technicians who were educated within the context of the project left the villages Annex C: Analysis of Impacts 98 and searched for better paid jobs in cities (Preiser, K., et al., 2000). This lead to a lack of maintenance and undermined the whole effort for setting up a maintenance structure. Although the problem of batteries and charge controllers applies to SHS as well, the relatively higher complexity of hybrid systems compared to SHS makes the application of SHS advantageous from the point of view of maintenance. Biogas systems require regular attendance and maintenance, which can be a problem especially in tropic countries where climate dictates agricultural activities. Regular charging with substrate is essential, but in case it is forgotten, the result of decreasing gas production is observed with significant time lag. If once the production of biogas is reduced, a return to normal levels takes up to 10 days (GTZ, 1999a). Moreover, the cause of problems related to the micro-organisms inside the tank cannot be identified by users themselves, but requires help from experts even in developed countries.50 For this reason, experts from GTZ have experienced maintenance as a major issue with biogas plants,51 and therefore hybrid systems are evaluated to be less problematic from a point of view of maintenance, resulting in comparatively very poor performance of biogas plants with regard to maintenance. Scenario 4: Extension of the Conventional Grid System breakdowns and shortages in power supply are likely to occur due to often unreliable conventional grids in developing countries. Maintenance usually cannot be carried out by the customers themselves or local technicians. It is therefore likely that due to the remoteness of the here considered villages, maintenance will be carried out slowly, resulting in longer periods of shortages. Maintenance of the conventional grid is to be carried out by a central public or private utility, which usually have a pool of experts or technicians for this purpose. Because in the case of decentralised electrification with hybrid systems, local technicians need to be trained and maintenance centres need to be erected, the comparative assessment results in a preference for grid extension. Therefore, the conventional grid is assessed to perform comparatively good with regard to maintenance. Indicator: Degree of Import Dependence and Regional Self-Supply Scenario 2: Diesel Gensets Diesel gensets can usually be only produced in larger countries as China, India, etc. Thus, very often it is just old motors from cars, which are taken for electrification, especially in African countries. Diesel gensets are also heavily dependent on the import of fuel. This dependency is of course much higher than for hybrid systems, where fuel consumption is reduced to roughly 20% of the figures for diesel-based mini-grids. Assuming that markets for renewable energy technologies are likely to develop, but taking into account the current non-existence, the result is then a slight preference for hybrid systems, making the performance of diesel gensets comparatively poor with regard to this indicator. 50 51 Personal Comment given by Jörg Baur, GTZ, in Eschborn/Germany on August 14th, 2003. Personal Comment given by Jörg Baur, GTZ, in Eschborn/Germany on August 14th, 2003. Annex C: Analysis of Impacts 99 Scenario 3: Renewable Energy Technologies SHS offer to a large extent the possibility of independence from the import of fossil resources as oil or coal. For the application of SHS in developing countries, the World Bank in 1996 stated high transaction costs in purchase and servicing for SHS due to limited market structures (Cabraal, A.; Cosgrove-Davies, M.; Schaeffer, L., 1996). However, since it was experienced and is assumed here that markets for PV are likely to develop, this is not taken in consideration. Therefore preference is given to SHS with regard to import dependency since hybrid systems applying diesel gensets normally still rely on diesel imports, resulting in a comparatively good performance of SHS with regard to this indicator. For the case of PV/Wind systems, the result of this assessment is the same due to the fact that markets both for PV and for wind generators need to be developed before local production becomes reasonable. Biogas systems provide a comparatively high potential for independence in electricity generation. Firstly, ingredients for the operation of the plants are locally available. Furthermore, the experience shows that due to the uncomplex nature of the systems, local production of needed materials and components and respective markets can rather easily be developed. The additional effect of the production of bio-fertiliser can even lower the need for import of mineral fertilisers. This effect was evaluated to be in the range of 30-35% by Indian experts (GTZ, 1999a). The degree of import independence and regional self-supply is therefore rated to be significantly higher with biogas systems compared to hybrid systems, resulting in a comparatively very good assessment of biogas plants with regard to this indicator. Scenario 4: Extension of the Conventional Grid On a country level, the degree of import dependency is difficult to assess for developing countries in general. Countries as Brazil, generating a high share of its electricity with hydropower, obviously are less dependent on energy import than the major part of the developing countries, which are dependent on fuel imports to a large extent. The degree of import independence is here evaluated to be lower than for hybrid systems. This is due to the fact that the degree of regional self-supply is higher for decentralised electrification solutions than with the conventional grid. Thus, the comparative assessment reveals a poor performance of grid extension with regard to this indicator. Indicator: Supply Security Scenario 2: Diesel Gensets Electricity provision with diesel-based mini-grids is limited, the gensets usually operate 4-12 hours in the evenings (Cabraal, A.; Cosgrove-Davies, M.; Schaeffer, L., 1996), the lifetime of a conventional diesel genset is about 4 years and can become as low as 1.5 years (Prokahausli Sangsad Ltd., 2000). Although diesel gensets offer a proven and reliable technology for rural electrification, the degree of supply security is here estimated to be lower than with hybrid due to the following aspects: as already described, diesel gensets provide limited energy supply Annex C: Analysis of Impacts 100 - in case of breakdowns, no alternative energy source is available in case of shortages of fuel, no electricity can be generated at all For the comparative assessment here, diesel gensets are valued as average with regard to supply security. Scenario 3: Renewable Energy Technologies Security supply with SHS is certainly to be estimated as lower than with hybrid systems. The reason for this is on the one hand non-continuous energy provision, limiting electricity provision to just several hours during the day, and with system breakdowns without electricity supply during longer periods of unfavourable weather conditions. On the other hand, in cases of system breakdowns no back-up with other energy sources can stabilise electricity generation if no diesel genset is available. Information concerning reliability of SHS is very limited and does not give a consistent picture. While some projects report all SHS systems as being operative, others report 100% failures. However, a recent survey estimates that roughly three-quarters of the SHS systems operate relatively well (Nieuwenhout, F.D.J., et al., 2000). The same study also reveals that larger SHS systems are working more reliable since deep discharge of batteries occurs less frequently in larger systems (Nieuwenhout, F.D.J., et al., 2000). For the comparative assessment here, SHS are seen as average with regard to supply security. For biogas plants no information on the reliability of the systems could be obtained. It can generally be stated that biogas plants nowadays are a mature technology (Biogas, 1999a). However, the problem of biogas plants, as was mentioned in the context of maintenance requirements already, lies in the fact that once the system is down, the reactivation can take several days and needs the involvement of experts in case problems with the tank occur. It is therefore assessed that biogas systems offer a lower degree of security on energy supply, being average in the comparative assessment here. Scenario 4: Extension of the Conventional Grid From the extension of the conventional grid one can usually expect a reliable full-time coverage of electricity demand. However, in many regions in developing countries the quality of grid supply is rather low, with breakdowns in generating equipment or distribution systems and leading to intermittent availability of electricity (ESMAP, 2000b). Moreover, reductions and fluctuations in voltage can become so severe that the use of appliances is connected with the risk of damages for the customer (ESMAP, 2000b). On the other hand, it has to be considered that markets and maintenance structures for renewable energy have not yet emerged in most developing countries, implying that in case of breakdowns, maintenance or repair is likely to take a long time. This certainly reduces the otherwise significant advantage of hybrid systems compared to grid extension concerning supply security and results in an evaluation of just better performance, being average in the comparative assessment here. Annex D: Cost Analysis 101 Annex D: Cost Analysis For the cost analysis, the following basic assumptions were made. Table D.1 Main Assumptions for the Cost Analysis Type of Costs PV Modules 400 €/kWp Wind Power Plants (incl. Tower) For Plants ≤ 10kW: Costs = 4309 × exp − 0,1068 × Costs/Details Source Schüco52   P  53  in [€/kW] kW  P   in [€/kW] kW  For Plants ≥ 10 kW: Costs = 2016,7 × exp − 0,007 × Diesel Genset: Costs = 345,63 × exp − 0,0394 ×   Own calculation based on available cost data Investment   P   in [€/kW] kW  Schüco 54 Battery bank: 333 €/kWh for a 12V, 500Ah battery, the batteries are designed for a storage capacity of 2 days Inverter and Charge Controller “Sunny Island”, 4.5kW: 5.000 € Planning, Assembly and Commissioning: 15% of total investment Transport: 1,000 € Local grid, Internal Wiring: 6,000 € Cabinet, Cables, Support: 2,000 € Operating Costs Manpower, Maintenance and Repair: Annually 4% of total investment Cost data SMA KfW55 Schueco56 Own estimation GTZ57 Own assumption For PV and Wind: (Sauer, D.; Puls, H.; Bopp, G., 2003); others: own assumption Interest Rate: 6% Miscellaneous Lifetime system components: PV modules 20 years, Wind generator 12 years, Diesel Genset 10 years, Battery 5 years, Inverter and Charge Controller 10 years 52 Personal Comment given by Mr. Körner during a telephone interview on August 18th, 2003. 53 P = Installed capacity in kW. 54 Personal Comment given by Mr. Körner during a telephone interview on August 18th, 2003. 55 Personal Recommendation given by Mr. Geis, former KfW staff member, during a telephonme interview on August, 22nd, 2003. 56 Personal Comment given by Mr. Körner during a telephone interview on August 18th, 2003. 57 Personal Comment given by Jörg Baur, GTZ, on August 14th, 2003, in Eschborn/Germany. Annex D: Cost Analysis 102 The investment costs for wind power plants and diesel gensets are based on the costs for different plants from various manufacturers. The details are shown in the following tables. Table D.2 Investment Costs for Small-Scale Wind Power Plants Name Capacity Total Investment Specific Investment Costs [€] Costs [€/kW] [kW] 0.6 0.8 1.0 1.5 2.0 3.0 6.0 3,294.40 3,802.48 3,970.68 4,471.80 6,762.80 6,599.24 10,509.60 5,490.67 5,069.97 3,970.68 2,981.20 3,381.40 2,199.75 1,751.60 Including 19 m tower Inventus Windpower GmbH Including 11 m tower (Heyde, 2003) Remarks Source INCLIN 600 AC 752 turbo MAJA 1000 INCLIN 1500 neo GRT 2000 INCLIN 3000 neo INCLIN 6000 neo Inventus 6 GRT 8000 AIRMAXX-10 Novatec ML10Eco Vergnet GEV10/20 Fuhrländer FL30 Vergnet GEV15/60 Lagerwej LW18 6.0 8.0 10.0 10.0 20.0 30.0 60.0 80.0 17,725.00 9,324.08 19,998.40 17,420.80 29,980.00 60,680.44 78,600.00 89,373.40 2,954.17 1,165.51 1,999.84 1,742.08 1,499.00 2,022.68 1,310.00 1,117.17 (Heyde, 2003) Including 11 m tower Bundesverband 58 Windenergie Including 18m tower Including 27m tower Including 30m tower Including 40m tower Bundesverband 59 Windenergie Table D.3 Investment Costs for Diesel Gensets Diesel Generator Mitsubishi MGE-1800 ROU Mitsubishi MGE-2900 ROU Capacity [kW] 1.8 2.9 Total Investment Costs [€] 629.90 862.39 Specific Investment Costs [€/kW] 349.94 297.38 Source (Diesel, 2003)60 58 Personal Comment given by Mr. Twele during a telephone interview on September, 1st, 2003. 59 Personal Comment given by Mr. Twele during a telephone interview on September, 1st, 2003. Annex D: Cost Analysis 103 Diesel Generator Yamaha EF4000DE Yamaha YG4000D Yamaha EF5200DE Yamaha EF6600DE Yamaha EF12000DE Capacity [kW] 4 4 5.2 6.6 12 Total Investment Costs [€] 1,242.67 1,116.51 1,431.91 1,657.20 2,693.51 Specific Investment Costs [€/kW] 310.67 279.13 275.37 251.09 224.46 Source (Diesel, 2003)61 The decline in specific investment cost per kW is reflected in the following graphs. Specific Investm ent for Plants <=10kW Specific Investment [€kW] 6.000 5.000 4.000 3.000 2.000 1.000 0 0 5 10 15 Installed Capacity [kW] Specific Investm ent for Plants =>10kW Specific Investment [€/kW] 2.500 2.000 1.500 1.000 500 0 0 50 100 Installed Capacity [kW] P   Costs = 4309 × exp − 0,1068 ×  in [€/kW] kW   Specific Investm ent for Diesel Gensets Specific Investment [€/kW] 400,00 300,00 200,00 100,00 0,00 0 5 10 15 P   Costs = 2016,7 × exp − 0,007 ×  in [€/kW] kW   Installed Capacity [kW] P  Costs = 345,63 × exp − 0,0394 × kW    in [€/kW]  Figure D.1 Specific Investment for Wind Power Plants and Diesel Gensets 60 61 Calculated Exchange Rate: 1 US$ = 0.90114 € (September 8th, 2003). Calculated Exchange Rate: 1 US$ = 0,90114 € (September 8th, 2003). Annex D: Cost Analysis 104 While the regression is rather fair in the case of diesel gensets with a regression coefficient of R2 = 0.8422, this is not the case for wind power plants. Here, it was distinguished between plants of smaller capacity ≤ 10 kW and plants of higher capacity ≥ 10 kW in order to improve the accuracy of regression. Regression coefficients of R2 = 0.6659 in the case of smaller plants and R2 = 0.7163 for bigger plants were obtained, still being relatively poor. With this data, the analysis of investment and electricity generating costs was performed. D.1 Investment Costs The analysis investment costs revealed the following results. PV/Diesel 9.400 9.200 9.000 8.800 8.600 8.400 8.200 8.000 0 50 100 150 11.000 10.000 9.000 8.000 7.000 6.000 0 20 40 60 80 Wind/Diesel Investment Costs [€/kW] Investment Costs [€/kW] Installed Capacity [kW] Installed Capacity [kW] P  P    Costs = 8880,5 × exp − 0,0009 ×  in [€/kW]  in [€/kW] Costs = 9564,1 × exp − 0,0034 × kW  kW    PV/Wind at 1 Day Battery 10.000 9.000 8.000 7.000 6.000 0 20 40 60 80 Installed Capacity [kW] PV/Wind at 2 Days Battery 14.000 12.000 10.000 8.000 6.000 0 20 40 60 80 Installed Capacity [kW] Investment Costs [€/kW] P  P    Costs = 8241,7 × exp − 0,0037 ×  in [€/kW] Costs = 11061 × exp − 0,0027 ×  in [€/kW] kW  kW    Figure D.2 Specific Investment for Hybrid Systems of Different Capacities For the different village sizes as presented in Annex A, this leads to the following range of investment costs. Investment Costs [€/kW] Annex D: Cost Analysis 105 Table D.4 Range of Investment Costs for Hybrid Systems System PV/Diesel Systems Wind/Diesel Systems PV/Wind Systems at 2 days battery capacity PV/Wind Systems at 1 day battery capacity Investment Costs at 30 Households [€/W] 9.20 10.44 12.00 9.18 Investment Costs at 300 Households [€/W] 8.23 8.05 9.67 6.86 D.2 Electricity Generating Costs The electricity generating costs per kWh were calculated with the help of the annuity method. With the help of the underlying assumptions as presented on page 101, the following formula was used to calculate the annuity of the investment costs of single components: a = C0 × (1 + i )n − 1 i × (1 + i ) n With a i = Annuity = Interest Rate = 6% C0 = Capital Value n = Component Lifetime The total annuity of investment is then the sum of the single annuities. By adding the annuities of operation costs for manpower, maintenance, repair and diesel fuel, the total annual costs can be calculated. Division of the annual costs by the annual electricity production leads to the specific electricity generating costs per kWh. For the different systems and varying diesel fuel prices, the following results were obtained: Annex D: Cost Analysis 106 Table D.5 Electricity Generating Costs of PV/Diesel Systems [€/kWh] Number of Households 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 110 120 130 140 150 160 170 175 200 225 250 275 300 Diesel Fuel Price [€/l] 0.1 1.51 1.50 1.49 1.48 1.48 1.47 1.47 1.46 1.46 1.45 1.45 1.45 1.45 1.45 1.44 1.44 1.44 1.43 1.43 1.43 1.43 1.43 1.43 1.42 1.42 1.42 1.42 1.42 0.2 1.52 1.51 1.50 1.49 1.49 1.48 1.48 1.47 1.47 1.46 1.46 1.46 1.46 1.45 1.45 1.45 1.45 1.44 1.44 1.44 1.44 1.43 1.43 1.43 1.43 1.43 1.43 1.43 0.3 1.53 1.52 1.51 1.49 1.49 1.48 1.48 1.47 1.47 1.47 1.47 1.46 1.46 1.46 1.46 1.45 1.45 1.45 1.45 1.44 1.44 1.44 1.44 1.44 1.44 1.44 1.43 1.43 0.4 1.53 1.52 1.51 1.50 1.50 1.49 1.49 1.48 1.48 1.47 1.47 1.47 1.47 1.47 1.46 1.46 1.46 1.45 1.45 1.45 1.45 1.45 1.45 1.44 1.44 1.44 1.44 1.44 0.5 1.54 1.53 1.52 1.51 1.51 1.50 1.50 1.49 1.49 1.48 1.48 1.48 1.48 1.47 1.47 1.47 1.47 1.46 1.46 1.46 1.46 1.46 1.45 1.45 1.45 1.45 1.45 1.45 0.6 1.55 1.54 1.53 1.51 1.51 1.50 1.50 1.49 1.49 1.49 1.49 1.48 1.48 1.48 1.48 1.47 1.47 1.47 1.47 1.47 1.46 1.46 1.46 1.46 1.46 1.46 1.45 1.45 0.7 1.55 1.54 1.53 1.52 1.52 1.51 1.51 1.50 1.50 1.50 1.49 1.49 1.49 1.49 1.48 1.48 1.48 1.47 1.47 1.47 1.47 1.47 1.47 1.47 1.46 1.46 1.46 1.46 0.8 1.56 1.55 1.54 1.53 1.53 1.52 1.52 1.51 1.51 1.50 1.50 1.50 1.50 1.49 1.49 1.49 1.48 1.48 1.48 1.48 1.48 1.48 1.47 1.47 1.47 1.47 1.47 1.47 0.9 1.57 1.56 1.55 1.53 1.53 1.53 1.52 1.52 1.51 1.51 1.51 1.50 1.50 1.50 1.50 1.49 1.49 1.49 1.49 1.49 1.49 1.48 1.48 1.48 1.48 1.48 1.47 1.47 1 1.58 1.56 1.55 1.54 1.54 1.53 1.53 1.52 1.52 1.52 1.52 1.51 1.51 1.51 1.51 1.50 1.50 1.50 1.50 1.49 1.49 1.49 1.49 1.49 1.48 1.48 1.48 1.48 Table D.6 Electricity Generating Costs of Wind/Diesel Systems [€/kWh] Number of Households 30 35 40 Diesel Fuel Price [€/l] 0.1 1.67 1.64 1.59 0.2 1.68 1.65 1.60 0.3 1.69 1.66 1.61 0.4 1.69 1.66 1.61 0.5 1.70 1.67 1.62 0.6 1.71 1.68 1.63 0.7 1.71 1.68 1.63 0.8 1.72 1.69 1.64 0.9 1.73 1.70 1.65 1 1.73 1.70 1.65 Annex D: Cost Analysis 107 Number of Households 45 50 55 60 65 70 75 80 85 90 95 100 110 120 130 140 150 160 170 175 200 225 250 275 300 Diesel Fuel Price [€/l] 0.1 1.56 1.55 1.51 1.50 1.47 1.50 1.49 1.48 1.48 1.47 1.47 1.47 1.46 1.45 1.45 1.44 1.44 1.44 1.43 1.43 1.42 1.41 1.41 1.40 1.40 0.2 1.57 1.55 1.52 1.51 1.48 1.51 1.50 1.49 1.49 1.49 1.48 1.48 1.47 1.46 1.46 1.45 1.45 1.45 1.44 1.44 1.43 1.42 1.42 1.41 1.40 0.3 1.58 1.56 1.53 1.51 1.48 1.52 1.51 1.50 1.49 1.49 1.49 1.48 1.48 1.47 1.47 1.46 1.46 1.45 1.45 1.44 1.43 1.43 1.42 1.41 1.41 0.4 1.59 1.57 1.53 1.52 1.49 1.52 1.51 1.51 1.50 1.50 1.49 1.49 1.48 1.48 1.47 1.46 1.46 1.46 1.45 1.45 1.44 1.44 1.43 1.42 1.42 0.5 1.59 1.57 1.54 1.53 1.50 1.53 1.52 1.51 1.51 1.51 1.50 1.50 1.49 1.48 1.48 1.47 1.47 1.47 1.46 1.46 1.45 1.44 1.44 1.43 1.42 0.6 1.60 1.58 1.55 1.53 1.50 1.54 1.53 1.52 1.51 1.51 1.51 1.50 1.50 1.49 1.49 1.48 1.48 1.47 1.47 1.46 1.46 1.45 1.44 1.43 1.43 0.7 1.61 1.59 1.56 1.54 1.51 1.54 1.53 1.53 1.52 1.51 1.51 1.51 1.50 1.50 1.49 1.48 1.48 1.48 1.47 1.47 1.46 1.46 1.45 1.44 1.44 0.8 1.61 1.59 1.56 1.55 1.52 1.55 1.54 1.54 1.53 1.53 1.52 1.52 1.51 1.50 1.50 1.49 1.49 1.49 1.48 1.48 1.47 1.46 1.46 1.45 1.44 0.9 1.62 1.60 1.57 1.55 1.52 1.56 1.55 1.54 1.53 1.53 1.53 1.52 1.52 1.51 1.51 1.50 1.50 1.49 1.49 1.48 1.48 1.47 1.46 1.45 1.45 1 1.63 1.61 1.58 1.56 1.53 1.56 1.55 1.55 1.54 1.54 1.53 1.53 1.52 1.52 1.51 1.50 1.50 1.50 1.49 1.49 1.48 1.48 1.47 1.46 1.46 These figures can be illustrated with the graphs on the following page. Annex D: Cost Analysis 1,60 Electricity Costs [€/kWh] 1,55 1,50 1,55-1,60 1,45 1,40 1,35 1,30 30 45 60 110 140 170 225 Num ber of Households 75 90 0,1 300 1 Diesel Price [€/l] 1,50-1,55 1,45-1,50 1,40-1,45 108 Figure D.3 Illustration of Electricity Generating Costs for PV/Diesel 1,80 Electricity Costs [€/kWh] 1,70 1,60 1,70-1,80 1,50 1,40 1,30 1,20 30 45 60 110 140 170 225 Num ber of Households 75 90 0,1 300 1 Diesel Costs [€/l] 1,60-1,70 1,50-1,60 1,40-1,50 Figure D.4 Illustration of Electricity Generating Costs for Wind/Diesel The cost analysis of hybrid systems here reveals that electricity generating costs are decreasing with higher loads and lower diesel fuel prices. This effect is stronger in the case of Wind/Diesel systems, where costs decline over the whole area of investigation due to the decrease in specific investment costs for wind power plants with higher capacities. The buckling in the curve progression is a result of the different equations used for small and big wind generators. PV/Diesel systems, meanwhile, seem to reach a threshold value at all diesel fuel prices, which they are likely not to fall below. This is due to the fact that the decline in investment costs of diesel gensets at certain installed capacities does not trade off the high investment for the PV modules anymore. This observation is supported by the investigations of the Fraunhofer Institute in (Sauer, D., et al., 1999), where it is calculated that electricity generating costs are Annex D: Cost Analysis 109 likely not to become lower than 1.03 Euro/kWh for systems with lower annual consumption of 15,000 kWh and at an interest rate of 6%. For PV/Wind systems, the following results were obtained with regard to electricity generating costs per kWh: Table D.7 Electricity Generating Costs PV/Wind Number of Households 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 110 120 130 140 150 160 170 175 200 225 250 275 300 PV/Wind Systems with Battery Capacity for 2 Days 1.76 1.73 1.69 1.66 1.64 1.63 1.62 1.59 1.58 1.57 1.56 1.58 1.58 1.58 1.57 1.56 1.56 1.56 1.55 1.55 1.54 1.54 1.54 1.54 1.53 1.53 1.52 1.52 1 Day 1.22 1.18 1.15 1.12 1.10 1.09 1.07 1.05 1.04 1.03 1.01 1.04 1.03 1.03 1.03 1.02 1.02 1.01 1.01 1.01 1.00 1.00 1.00 0.99 0.99 0.98 0.98 0.98 Annex D: Cost Analysis 110 The analysis of PV/Wind systems shows the high dependency of electricity generating costs from the size of the battery bank. For the chosen location of Trapani/Italy with annual global radiation of 1,664 kWh/m2/a and under the assumption of 2,000 full load hours for wind generators, the circumstances are just moderately suited for fully renewable coverage of electricity demand. D.3 Electricity Generating Costs from Different Sources Institut für Solare Energieversorgungstechnik (ISET) in (Kininger, F., 2002) PV/Diesel hybrid system for Sevilla/Spain with costs on planning, transport and construction for Kassel/Germany. These costs increase for remote regions. 1. Assumptions o Electricity Consumption: o Capacity PV Modules: o Capacity Diesel Genset: o Battery Bank: o Inverter: o Energy Management System applied o Global radiation in Sevilla/Spain: o Diesel Costs: o Interest rate: o Labour Costs: 2. Result 50 kWh/d 9.9 kWp 6.6 kW 96.0 kWh 6.6 kWh 1,752 kWh/m2/a 1.00 Euro/l 5.0 % 37.5 Euro/h Electricity generating costs of 0.76 Euro kWh. Fraunhofer Institut für Solare Energiesysteme ISE in (Sauer, D., et al., 1999) PV/Diesel hybrid system for Mexico City. 1. Assumptions o Electricity Consumption: o Solar Coverage Rate: o Diesel Fuel Price: o Interest Rate: o Labour Costs: 2. Result o Electricity generating costs of 1.34 Euro/kWh. 11,000 kWh/a 77% 0.30 Euro/l 6% 350 Euro/d Annex D: Cost Analysis 111 National Renewable Energy Laboratory(NREL)/University of Delaware in (Byrne, J.; Shen, B.; Wallace, W., 1998) PV/Wind Household hybrid systems for Inner Mongolia. 1. Assumptions o Global radiation: o Wind Energy Density: o Capacity Wind: o Capacity PV: o Diesel Fuel Price: o Interest Rate: 2. Result 1,150 kWh/m2/a 150 W/m2 300 W 100 W 0.82 US$/l 12% Levelised costs based on field analysis of battery’s lifetime. Costs are related to the size of the system, with large hybrid systems being less expensive. Electricity Generating Costs: 0.43 US$/kWh – 0.72 US$/kWh. Gesellschaft für technische Zusammenarbeit GTZ, China, in (GTZ, 2003) Application of PV/Diesel and Wind/Diesel hybrid systems for village electrification, PV/Wind hybrid systems (300 W Wind, 100 W PV) for household electrification. Results Table D.8 Investment and Operating Costs of Different Household Systems, Inner Mongolia System specification PV-Battery-Inverter System (100 W) Wind-Battery-Inverter System (300 W) Wind-PV-Battery-Inverter System (300 + 100 W) Investment costs [RMB] 6,837 6,087 11,720 Operating costs/year [RMB/a] 100 119 119 Table D.9 Electricity Generating Costs of Hybrid Systems in Inner Mongolia PV/Diesel Village System 1.85 US$/kWh Wind/Diesel Village System 0.75 US$/kWh PV/Wind Household System 0.37 US$/kWh Annex D: Cost Analysis 112 Wuppertal Institute in (Wuppertal Institute, 2002) Table D.10 5 kW Hybrid Systems at Different Diesel Prices Capacity: 5 kW Electricity Output: 2,190 kWh/a Diesel Genset PV/Diesel, ratio 80:20 Wind/Diesel, ratio 80:20 Investment costs in € 11,450 23,825 22,740 Electricity Generating Costs at Diesel Price of 0.75 € 1.45 €/kWh 1.51 €/kWh 1.70 €/kWh Electricity Generating Costs at Diesel Price of 1.5 € 1.84 €/kWh 1.59 €/kWh Terms of Reference 113 Terms of Reference Aßmann, D., 2003: Akteure, Strukturen und Technologien für ein zukunftsfähiges Energiesystem; Peter Lang Verlag; Frankfurt/Germany; 2003. 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