A remote town currently relies on a diesel generation plant to supply its electricity needs. The power station consists of 2 x 500 kVA generators which are normally operated and 1 x 250 kVA generator on standby for emergencies. The community is interested in developing a renewable energy project to reduce its dependence on diesel fuel and lower its electricity costs. After conducting a detailed site assessment, an engineering consultant recommends an off-grid solar PV system combined with a battery energy storage system (BESS). The proposed system specifications are: ? 1 MW solar PV system with a capital cost of $1.2 million ? 2 MWh BESS (LFP type) with a capital cost of $1.5 million Assuming that all solar PV generation is consumed, calculate the net present value (NPV) of the proposed system over a 20-year project life. Use a discount rate of 5% and assume an annual inflation rate of 2%.

Compare the proposed renewable energy system with the following scenarios:

Scenario 1: Do Nothing. Assuming that there are no capital payments remaining on the existing diesel generator and fuel, maintenance, and replacement are the only regular costs, calculate the annualized cost per unit of electricity used.

Scenario 2: Grid Extension. Assuming that the nearest distribution line is 5 km away and the route to the community consists of a 2 km stretch of land that is environmentally problematic, calculate the cost of extending the grid to the community.

Calculate the annualized cost per unit of electricity used in the renewable energy solution as well as the two scenarios for comparison.

use the following assumptions

Diesel generation parameters Capacity L/hr (1/4 load) L/hr (1/2 load) L/hr (3/4 load) L/hr (full load) 120kW / 150kVA 10.8 18.8 27.0 36.0 200kW/250kVA 18.0 31.2 45.0 60.0 280kW / 350kVA 25.2 43.7 63.0 84.0 400kW / 500kVA 36.0 62.4 90.0 120.0 Replacement after 20,000 hours of operation. Maintenance costs are $0.005/kWh of power generated e.g. if 400 kW generator runs for 10 hours it would produce 4000kWh and maintenance for that period would cost $20. Take servicing interval as 800 hrs of operation. Cost of line extension (poles and wires) $120/m (overhead) + 10% p.a. for O&M $300 /m (underground) + no O&M Average solar PV production - 4.4 kWh/kW per day. Cost of grid electricity $0.30 per kWh + $0.50/day Batteries Can be charged at a rate equal to 50% of kWh capacity and discharged at 100% rated capacity i.e. a 1 kWh battery should not be charged at above 0.5 kW or discharged at greater than 1 kW.