Integrating energy resource assessment to project finance modeling : the key to fast turn-around in analyzing renewable energy potential and its economic viability

September 10th, 2010 Posted in energy technology expert

Integrating energy resource assessment to project finance modeling : the key to fast turn-around in analyzing renewable energy potential and its economic viability

I am now in Jakarta, Indonesia as international technical consultant of a wind-diesel hybrid power generation project of an international development agency.  My consultancy is pioneering work that is applicable especially to poor and developing economies that has very little access to integrated consulting services that are appropriate to developing economies in Asia, Africa, Middle East and Latin America.

Doing a renewable energy (RE) resource assessment of an intermittent source such as solar PV and wind and sometimes biomass, biogas, landfill methane gas, municipal solid waste (MSW) is indeed a backbreaking exercise even for an experienced consultant.

This difficulty is now a thing of the past because your Energy Technology Selection Expert (Marcial) has automated and computerized in an easy-to-use and accurate spreadsheet the evaluation of wind energy potential (which could be applied also to solar PV) that is found in wind speed data from space satellite doppler data measurements.

In a minute or two, a wind site using a wind turbine model (power curve) could be evaluated in terms of its kW output, leading to annual generation potential.  Thus a wind site with many turbine models could be optimized in less than 30 minutes.

This involves doing 365 x 24 hours simulation of wind speed at proposed wind farm sites, and with the wind turbine performance (power curve showing power output vs wind speed), estimate daily and annual generation leading to calculation of annual capacity factor for both the wind and the diesel (daily demand less wind generation) units.

These 2 capacity factors then goes to wind-diesel hybrid analysis that ensures 15% penetration of peak demand in the nearby grid with the balance carried by the diesel units (split to 10% peaking and 90% baseload).

The number of wind turbine units of given capacity is then varied, together with the peakload and baseload units so that capacity factors of 50% peakload and 75% baseload units are maintained and the annual kWh gross generation outputs are calculated.

Once configured, the wind and diesel project finance models are then run at the given total capacities and capacity factors to arrive at the all-in project cost and first year tariff that will provide 16% p.a. IRR (30% equity, 70% debt at 10% p.a. interest).

I did these calculations for around 20 wind sites and over 10 various wind turbine manufacturers/models to arrive at the optimum wind turbine model for the given site (one with lowest wind tariff).

The next step was to analyze the fuel mix of the grid, its GHG CO2 emission profile and intensity, and see how the proposed wind-diesel hybrid will reduce such CO2 emission.

Its CO2 emission reduction impact on the local grid (with its own average GHG intensity factor) and the national grid (country GHG intensity factor) is then determined to assess the efficacy of the hybrid project.

This integrated wind energy resource simulation and project finance model has automated my analysis of a proposed wind site to determine that economic viability of its proposed wind site, and analyze its impact on GHG emission and climate change.

I believe that my experience in the Philippine Department of Energy (energy audits, policies), Petron Bataan Refinery (refinery modeling and oil pricing), Petronas (oil company financial modeling), PCIERD-DOST (energy and technology policy formulation), First Gen (600 mw Masinloc coal, 600 mw Calaca coal, 868 mw Makban-Tiwi geothermal, etc), DOE-WB (Rio Tuba diesel-biomass hybrid for the 1st QTP project, ERC has approved my tariff recommendation), PNOC-EC (100 mw Isabela lignite-coal fired CFB, 500 mw Greenfield natural gas-fired CCGT), Aboitiz (1200 mw Ilijan CCGT IPPA), NREB (feed-in tariff calculations for biomass, mini-hydro, solar PV, wind, OTEC) and Benguet Mining (140 mw Surigao del Sur bituminous coal-fired CFB) will greatly help me in my future consultancy endeavors which I would like to share to my deserving friends and clients  from Asia, Africa, Middle East, Latin America and the Pacific Islands.



Leave a Reply

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>