This document discusses the challenges of solar/diesel mini-grid projects. It notes that mini-grids are a feasible solution for remote communities due to high costs of diesel fuel and extending the grid. However, there are technical, financial, logistical, and other challenges to overcome including: integrating intermittent solar power with diesel generators; completing retrofits on legacy systems; securing project financing; addressing remote logistics and communities; and gaining acceptance. Case studies from Canadian projects provide lessons learned in implementing mini-grids.
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Reduction in variable cost;
Oil Price at 6 yr low but ……?
Of Total price <50% is retail;
Significant diesel savings over LOM;
8-12 PPA financially viable due to
high cost of Diesel;
Demand for power is growing as
mines ‘dig deeper’;
Reduction in CO2 emissions;
Reduction of O&M costs
• Unstable grid;
• Logistical challenges for Fuel supply;
• Theft & Contamination of fuel;
• Political instability;
• Grid extension prohibitively high;
• >7km access makes Mini-grids feasible;
• Mini-grids will jump the grid like mobile did.!
• Monopolistic conditions causing
price uncertainty;
• Government subsidies aimed at
Gridco;
Why PV/Diesel Mini-grids….?
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Technical Challenges
Design
PV Penetration & Control
Why is this important?
• Solar PV is an intermittent resource;
• Failure could result in electrical system collapse and outages;
• Large thermal power plants are generally made of multiple medium speed generators;
• Medium speed generators may not respond quick enough to the match intermittency;
• High speed generators sized to mirror solar PV capacity due to their fast response.
Degree of Penetration
• <20% - PV regarded as negative load no controller neccessary
• Prolonged PV may cause several DG to switch off affecting system inertia & frequency
fluctuations;
• Requires PV Inverter intelligence;
• >20% - DG Production must match consumption;
• Maintain minimum DG load under large influx of PV energy;
• Load loss – must throttle back PV inverters
• Mechanical Injection - operating at 30% of its rated power consumes 20% more fuel per kilowatt hour
produced compared with a diesel generator under full load.
• This leads to greater engine wear and an increased maintenance requirement due to deposits in the waste
gas system and in the pistons;
• N+1 rule for 110% of estimated load;
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Technical Challenges
Legacy Retrofit
Diesel Generators
• Low Load or Variable Speed engines;
• Minimum Loading will determine RE penetration;
• Option 1: solar design is modified to suit the generators) or
• Option 2: the generators are modified to suit the solar design.
Example impact of diesel engine size on solar penetration (100kW load)
Ref: Solar/Diesel/Grid Handbook
Minimum Load Factor
Spinning Reserve
• Several HS DG running at load level to ramp up faster;
• Spinning reserve can be reduced if PV oversized compared to Inverter;
• Storage will reduce Diesel sizing, load shifting;
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Technical Challenges
• Dropping a large load on a generator in a short timeframe can result in engine stall;
• Management of over-production (curtailment);
• Storage is key;
Illustrative Overview of Hybrid PV/Diesel Load and Generation Profile
Legacy Retrofit
Energy Management Plan
• Inadequate Load curve (15min) and future growth needs + margin;
• Powerhouse…?;
• Existing Diesel assets usually EOL;
• Outdated Diesel control systems;
• Contaminated fuel (Diesel & HFO);
• Adequate reference sites for controller technology;
• Accurate evaluation of DER and controller integration;
Other
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Financial Challenges
Project Finance
PV / Diesel Hybrids
• Projects too small for Investors;
• How to secure PPA Risk (LOM, Curtailment, Sovereign, Liquidity, Foreign Exchange);
• Venture Risk with Infrastructure returns…?;
• Parental company guarantee not always available;
• Propriety engineering drives up cost….(MG test centre)
Rural Mini-grids
• No clear standards for technical bankability;
• No confirmed revenue stream; (PAYG, Political Risks and grid expansion;
• No Scalable business model;
• Current projects only exist through large Government subsidies;
• Early development funding:
• Grants;
• Crowdfunding (Sun Exchange. TRINE, Ecoligo);
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Financial Challenges
Solutions
• Establishing common features for PPAs;
• Develop industrywide standards.;
• Reduced due diligence costs;
• > $300m threshold;
• Default de-risk;
• MG backed assets to access secondary markets
• Streamline due-diligence process;
• Green Bonds;
• Streamline Operations;
• Need policy change to re-divert subsidies;
• Leverage existing data to match consumption for POC;
• Leverage anchor (commercial) client to subsidise residential tariffs;
Standerdised Contracts
Aggregation
Securitisation
Other
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Other Challenges
Logistical
• Remoteness;
• Local logistics partners;
• Country specific Sub-contractor HSE requirements do not match contacting party;
• Special transport requirements (air suspension trucks);
• Very specific packing requirements;
• Permitting for abnormal loads vary considerably (no superlinks !) resulting in additional trips;
• Clearly defined laydown area (goods arrive site not ready!)
• Goods held at port incurring demurrage costs;
• Lack of heavy lifting equipment;
• Identified spares storage for O&M;
• Environmental issues like water onsite for dust & road control;
• Bribery & Theft;
• Inadequate lead time;
• Country specific investment incentives direct subsidise import duties; (up to project developer to provide)
• Custom risks must be well defined;
Environmental
• Risk of diesel spills in-situ and in transit, causing contamination of soil and ground water
• Greenhouse gas emissions from diesel combustion and fuel transportation
Community Involvement
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Case Study – Fort Severn
----What did we do?
Proposed a phased-in solar
capacity development plan
Phase I - Installed a grid
connected 24kWdc/20kWac solar
rooftop system.
Gained confidence of community
and utility that renewables would
not have a negative impact.
Phase II – To implement a pilot
Mini-grid including 300kW solar,
10kW wind and 200kW battery to
study the impact on the grid with
diesel as primary.
Phase III – To implement a full
Mini-grid including 600kW solar,
500kW wind and 750kW battery
allowing for diesel-off operation.
----What did we learned?
Logistics in remote locations
is unpredictable.
Shipping BOS materials
was another challenge
Important to triple check and
cross check bills of material.
Necessity of working with
the situations as they arrive
and adapting to a change
on the fly.
----How did it start?
Most remote community in
Ontario.
Highest cost of electricity
generation due to transport
cost of diesel fuel.
Planned community
growth.
Prior – failed – experience
with wind energy.
