## Solar PV-Diesel Hybrid Project finance Model with Resource Assessment – now available

**Solar PV-Diesel Hybrid Project finance Model with Resource Assessment – now available**

Analyzing the economics of a solar PV-diesel hybrid power plant

(as well as other RE-diesel hybrid systems such as wind-diesel, biomass-diesel,

mini-hydro-diesel) has now become simple with the new solar PV-diesel project

finance model that makes use of the PVSYST V5.4 solar energy model. Avoid the

time consuming hassle by purchasing this latest product offering from your

energy technology selection expert.

1) Solar energy resource assessment

Renewable Energy (RE) assessment is first conducted on a given location

(latitude, longitude, elevation) using an RE assessment tool such as PVSYST

V5.4 solar energy simulation model which provides monthly horizontal global

irradiation (kWh/m2/month) and using a particular solar panel model and

inverter, estimates the solar energy injected to the grid:

solar PV(month) = specific production(kWh/peak kW) x panel

output(peak kW)

By summing up the 12 months of kWh output, the annual kWh

generation is determined and the annual capacity factor of the solar PV model

is calculated:

ave CF of solar PV = sum[solar energy(month)] / (solar PV rated kW

x 24 x 365)

2) Monthly energy demand profile

The annual energy demand (kWh/year) is then converted to monthly

energy demand (kWh/month) by considering the seasonality of the demand.

3) Balance monthly diesel generation

By subtracting the monthly output of the solar PV from the monthly

demand, the balance monthly diesel generation is calculated:

diesel output(month) = demand(month) – solar PV output(month)

By summing up the 12 months kWh output, the annual kWh generation

is determined and the annual capacity factor of the diesel genset is

calculated:

ave CF of diesel = sum[diesel output(month)] / (diesel rated kW x

24 x 365)

4) Running the solar PV model

This model calculates the all-in capital cost of solar PV farm

(installed equipment, transmission line & substation, taxes & licenses,

project development, working capital, financing costs during construction),

fuel & lubes costs, operating & maintenance costs (variable, fixed,

regulatory), depreciation (20 year economic life), interest expense, income

before tax (IBT), income tax (10% of IBT with 7 year income tax holiday), and

income after tax (IAT). Then add-back depreciation and subtract principal

repayment to arrive at net cash flow (NCF).

It then assumes 30% equity (at 16% p.a. IRR) and 70% debt (at 10%

p.a. loan interest) to determine the weighted average cost of capital (WACC).

By comparing the all-in project cost with the discounted net cash

flow, the model calculates the project IRR, project NPV and project payback

period.

By comparing equity portion of the all-in project cost with the

discounted net cash flow, the model calculates the equity IRR, equity NPV and

equity payback period.

By applying the annual capacity factor to estimate annual gross

generation and net generation (gross – substation loss & own use – transmission

loss), we arrive at the first year tariff needed to meet the equity IRR of the

project (minimum returns of the investors).

5) Running the diesel genset model

The model calculates the all-in capital cost of the diesel gensets

(peaking and base load units needed to backup the intermittent wind energy

output), fuels (diesel & fuel oil) & lubes costs, operating &

maintenance costs (variable, fixed, regulatory), depreciation (20 year economic

life), interest expense, income before tax (IBT), income tax (10% of IBT with 7

year income tax holiday), and income after tax (IAT). Then add-back

depreciation and subtract principal repayment to arrive at net cash flow (NCF).

It then assumes 30% equity (at 16% p.a. IRR) and 70% debt (at 10%

p.a. loan interest) to determine the weighted average cost of capital (WACC).

By comparing the all-in project cost with the discounted net cash

flow, the model calculates the project IRR, project NPV and project payback

period.

By comparing equity portion of the all-in project cost with the

discounted net cash flow, the model calculates the equity IRR, equity NPV and

equity payback period.

By applying the annual capacity factor to estimate annual gross

generation and net generation (gross – substation loss & own use – transmission

loss), we arrive at the first year tariff needed to meet the equity IRR of the

project (minimum returns of the investors).

6) Optimizing the solar pV-diesel hybrid configuration for grid

stability

The peaking units and diesel units must ideally be in the 1:3

rated capacity ratio to ensure that the high-speed peaking units could follow

the intermittency of the wind farm output, e.g. 2 MW peaking and 6 MW base load

units for a total of 8 MW of diesel genset capacity.

Ideally, the peaking units must be loaded around 50% while the

baseload units should be loaded not more than 75%. This means that if the

engine size of the peaking and baseload units have been set, the modeler will adjust

the number of peaking and baseload units so that it will meet the above load

factors.

7) Solar PV penetration limits and peaking/baseload parameters

The solar PV farm must only displace 15% of the kW and the balance

85% to be carried by the combined peaking and base load diesel gensets.

Likewise, the peaking units will carry 10-20% of the kWh while the base load

units will carry 80-90% of the kWh demand, which when sized and configured

correctly will result in a 50% annual capacity factor for the peaking units and

75% annual capacity factor for the base load units (gensets).

8) Determining the first year tariff of the solar PV-diesel hybrid

power plant

The generation of the solar PV and diesel gensets (peaking and

baseload units) are blended to arrive at the weighted average tariff to be

charged to the customer buying power from the hybrid power plant.

Alternatively, the income and expense as well as balance sheet

items for each solar PV and diesel models are aggregated to arrive at the hybrid

model. And instead of obtaining the first year tariff, the revenue will consist

of the following:

TOTAL TARIFF = CAPACITY TARIFF + O&M TARIFF + FUEL TARIFF

Order now and save valuable time for your solar PV-diesel hybrid

project finance model. Similar models for biomass-diesel hybrid, wind-diesel

hybrid and mini-hydro-diesel hybrid are available or could be customized for

your particular project.

Email me now:

### 2 Responses to “Solar PV-Diesel Hybrid Project finance Model with Resource Assessment – now available”

### Leave a Reply

Theodora KurtenbachSays:March 22nd, 2012 at 8:09 am

Thanks for the post Jason. It’s a good read. I own an ix-2 for my home lab. It’s great for what I need it for which is testing out vSphere Configs and learning. I wonder what the benefits would be of replacing the default ix-2 drives with a couple 2 TB WD Caviar Black Drives.

LeslieSays:July 26th, 2013 at 4:11 pm

I have read so many articles or reviews regarding the blogger lovers

however this piece of writing is truly a nice article, keep it up.