Economic evaluation of a remote microgrid system for an Omani island

Abstract

An effective solution for power generation in an isolated area is to establish microgrids using locally available clean energy sources. The establishment of a microgrid can enhance the integration of renewable power, resiliency, reliability, and efficiency. This paper evaluates the technical viability of developing a microgrid system that includes a mix of renewable and conventional energy along with suitable energy storage facilities for application in an Omani island. Models of different renewable energy systems are presented to evaluate their energy production. Economic indices, such as the net present cost (NPC) and levelized cost of energy (LCOE) are utilized to analyze the economic performance of the proposed microgrid system. Five different microgrid scenarios are designed, and their economic, operational, and environmental performance are evaluated and compared. Two system architectures, namely, microgrid utilizing a mix of renewable energy sources and renewable-conventional energy mix microgrid, are proposed. The HOMER Pro Microgrid software is utilized in this study to size, simulate, and optimize the microgrids. The NPC and the LCOE for a renewable-only mix (wind-PV-BS) microgrid are 108.3 million US dollars (USD) and 0.189 USD/kWh, while for a renewable-conventional energy mix (wind-diesel-PV-BS) microgrid with energy storage they are 63.6 million USD and 0.108 USD/kWh, respectively. A wind-diesel-PV-BS microgrid achieves a lower NPC and LCOE than the diesel-only, wind-diesel-BS, or PV-diesel-BS microgrid systems. A thermal load controller is introduced to the microgrid models to verify the impact of excess electricity and to better utilize the microgrid capacity. The outcomes of the sensitivity analysis indicate that a microgrid using a renewable-only mix will become cost competitive if the increasing trend in the price of diesel and the decreasing trend in the cost of renewable technologies persist.