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Muhammad Ismail ENG470: Engineering Honours Thesis 2017 Determining a Cost-Effective Technique for Electrification of Remote Houses Using Different Renewable and Gas-based Sources School of Engineering and Information Technology ENG 470: Engineering Honours Thesis 2017 Majoring in Renewable Energy Engineering and Instrumentation and Control Engineering Author: Muhammad IsminHilmy Ismail Academic Supervisor: Farhad Shahnia Unit Coordinator: Dr Gareth Lee and Prof Parisa Arabzadeh Bahri
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Determining a Cost-Effective Technique for Electrification of … · 2016). Houses that are connected to the South-West Interconnected System (SWIS) would see expansion in their power

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Page 1: Determining a Cost-Effective Technique for Electrification of … · 2016). Houses that are connected to the South-West Interconnected System (SWIS) would see expansion in their power

Muhammad Ismail ENG470: Engineering Honours Thesis 2017

Determining a Cost-Effective

Technique for Electrification of

Remote Houses Using Different

Renewable and Gas-based Sources

School of Engineering and Information Technology

ENG 470: Engineering Honours Thesis 2017

Majoring in Renewable Energy Engineering and

Instrumentation and Control Engineering

Author: Muhammad IsminHilmy Ismail

Academic Supervisor: Farhad Shahnia

Unit Coordinator: Dr Gareth Lee and Prof Parisa Arabzadeh Bahri

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Muhammad Ismail ENG470: Engineering Honours Thesis 2017

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ACKNOWLEDGEMENT

I would like to express my appreciation to those who provided me with the possibility

to complete this report. A gratitude I give to my supervisor, Dr Farhad Shahnia, whose

contributing motivating ideas and encouragement, helps me to complete my thesis project

especially in writing this report.

Special thanks to the staff member of Murdoch University for assisting me and firmly guide me

in completing this project. Without their help and organization, this thesis would not be

finished.

Last but not least, I would like to show gratitude to my family and my friends for continuously

supporting me to complete this thesis.

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ABSTRACT

This project is concerned with determining the cost-effective technique for

electrification of remote houses using different renewable energy and gas-based sources.

Cases with inclusion and exclusion of some of the power sources are given with the idea of

which cases defined as the most profitable and worthwhile. The power sources included in this

thesis project are the electricity grid, the PV panel, the battery storage and the gas generator.

Therefore, the cost visibility of each of these cases are also different and it is an important

view as it decides the outcomes of the project. The cases given were modelled in the HOMER

pro software. Initially, feasibility studies and literature review were carried out in order to

acquire knowledge of the power sources used in the project as well as familiarizing with the

HOMER tools. In familiarizing with the tools, the components used in HOMER tools were

examined and studied as it sometimes creates problems such as limited library data. This

method helped develops a strong basic information about the project and gives a broad view

of the project. The HOMER software is used to experience the simulation, the optimization and

the sensitivity analysis of the cases given. By using the HOMER tools, the total net present cost

can be obtained. Through the data obtained, analysis of the project also can be presented.

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Table of Contents ACKNOWLEDGEMENT .................................................................................................................... i

ABSTRACT ...................................................................................................................................... ii

LIST OF FIGURES ............................................................................................................................iv

LIST OF TABLES .............................................................................................................................. v

LIST OF ABBREVIATIONS ................................................................................................................ v

LIST OF SYMBOLS .......................................................................................................................... v

1. INTRODUCTION ..................................................................................................................... 1

1.1. PROBLEM STATEMENT ....................................................................................................... 1

1.2 PROJECT OBJECTIVES ........................................................................................................... 3

1.3 PROJECT DESCRIPTION ........................................................................................................ 5

1.3.1 Area of Study ................................................................................................................ 5

1.3.2 Cases Overview ............................................................................................................ 6

2. LITERATURE REVIEW ................................................................................................................. 7

2.1 ELECTRICITY GRID ................................................................................................................ 7

2.1.1 Overview and Structure ............................................................................................... 7

2.1.2 Market .......................................................................................................................... 9

2.2 PHOTOVOLTAIC (PV) ........................................................................................................... 9

2.2.1 Overview and Structure ............................................................................................... 9

2.2.3 Market ........................................................................................................................ 12

2.3 BATTERY STORAGE ............................................................................................................ 13

2.3.1 Overview and Structure ............................................................................................. 13

2.3.2 Market ........................................................................................................................ 15

2.4 GAS GENERATOR ............................................................................................................... 16

2.4.1 Overview and Structure ............................................................................................. 16

2.4.2 Market ........................................................................................................................ 18

3. PROJECT CASES ........................................................................................................................ 19

3.1 CASES ................................................................................................................................. 19

3.1.1 Case 1: Electricity Supplied from Electricity Grid ................................................ 19

3.1.2 Case 2: Electricity Supplied from Electricity Grid and PV .................................... 19

3.1.3 Case 3: Electricity Supplied from Electricity Grid, PV and Battery Bank ............. 20

3.1.4 Case 4: Electricity Supplied from Electricity Grid, PV, Battery Bank and Gas

Generator ............................................................................................................................ 20

3.1.5 Case 5: Electricity Supplied from Gas Generator ................................................ 21

3.2 COST VISIBILITY ........................................................................................................... 21

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4. METHODOLOGY ...................................................................................................................... 23

4.1 EQUIPMENT MODELED IN HOMER ................................................................................... 23

4.1.1 Load Profile of Study Area ................................................................................... 23

4.1.2 Resource of Study Area ....................................................................................... 24

4.1.3 Grid ...................................................................................................................... 25

4.1.4 Photovoltaic (PV) ................................................................................................. 25

4.1.5 Solar Inverter ....................................................................................................... 26

4.1.6 Battery Bank ........................................................................................................ 27

4.1.7 Hybrid Inverter .................................................................................................... 27

4.1.8 Gas Generator ..................................................................................................... 28

4.2 DESIGNATED SYSTEM MODEL IN HOMER ................................................................... 29

4.3 HOMER: SIMULATION ................................................................................................. 32

4.4 HOMER OPTIMIZATION ..................................................................................................... 32

4.5 HOMER SENSITIVITY ANALYSIS.......................................................................................... 33

5. RESULT AND ANALYSIS ............................................................................................................ 34

5.1 COST VISIBILITY OF MODELLED CASES FOR 25 YEARS ...................................................... 34

5.2 COST VISIBILITY OF MODELLED CASES FOR 1 YEAR .......................................................... 36

6. CONCLUSION ........................................................................................................................... 38

7. FUTURE RECOMMENDATION .................................................................................................. 39

8. REFERENCE .............................................................................................................................. 40

LIST OF FIGURES Figure 1: Retail price index of electricity in Australia capital cities each year since 1990

(Commission 2017) ........................................................................................................................ 1

Figure 2: Annual electricity bill trend for a representative consumer across Australia

(Commision 2016) ......................................................................................................................... 2

Figure 3: Aerial view of Serpentine. .............................................................................................. 5

Figure 4: Layout of an electrical grid. (Daware 2014/2016b) ....................................................... 7

Figure 5: The process of the photovoltaic effect. ......................................................................... 9

Figure 6: The construction of a solar array ................................................................................. 10

Figure 7: Typical grid-connected PV solar system ....................................................................... 11

Figure 8: The cross-sectional area inside of a battery ................................................................ 13

Figure 9: Electricity flow scenarios for a home with solar and battery storage system ............. 15

Figure 10: The electromagnetic induction by a moving magnet. ............................................... 17

Figure 11: A standby generator ................................................................................................... 17

Figure 12: The Monthly load profile in the study area................................................................ 23

Figure 13: Monthly Global Horizontal Irradiance data of the study area ................................... 24

Figure 14: Monthly average temperature data of the study area .............................................. 25

Figure 15: Winaico 260W Polycrystalline Solar Panel ................................................................. 26

Figure 16: SMA Sunny Boy SB5.0 ................................................................................................ 26

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Figure 17: LG CHEM RESU6.5 ...................................................................................................... 27

Figure 18: Solax X3 Hybrid........................................................................................................... 28

Figure 19: Cummins 30kW RX30 Standby Power Generator ...................................................... 28

Figure 20: Schematic Diagram of Case 1 ..................................................................................... 29

Figure 21: Schematic Diagram of Case 2 ..................................................................................... 30

Figure 22: Schematic Diagram of Case 3 ..................................................................................... 30

Figure 23: Schematic Diagram of Case 4 ..................................................................................... 31

Figure 24: Schematic Diagram of Case 5 ..................................................................................... 31

Figure 25: the Electrical cost of modelled cases for 25 years ..................................................... 35

Figure 26: Annual electrical cost of modelled cases ................................................................... 36

LIST OF TABLES Table 1: The results for common network connected systems in Perth (Synergy 2017a) ......... 12

Table 2: The Total Net Present Cost for the designed cases for 25 years ................................... 34

Table 3: The Total Net Present Cost of modelled cases for a year ............................................. 36

LIST OF ABBREVIATIONS AC Alternating Current

ACCA Australian Competition and Consumer

AEMC Australian Energy Market Commission

CBD Central Business District

DC Direct Current

Emf Electromotive Force

GHI Global Horizontal Irradiance

HOMER Hybrid Optimization Model for Multiple Energy Resources

NASA National Aeronautics and Space Administration

NREL National Renewable Energy Laboratory

SWIS South-West Interconnected System

TNPC Total Net Present Cost

WA Western Australia

LIST OF SYMBOLS Ω Ohms

$ Dollar

W Watt

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1. INTRODUCTION

1.1. PROBLEM STATEMENT

Nowadays, peoples pay a relative amount of money for their power consumption as the prices

for both electricity and gas for both business and households in Australia have increased in

recent years and the trends express that it will resume rising. The electricity prices in Australia

have been risen significantly in the last decade by more than 60 percents (Iggulden 2017).

Reports by the Australian Competition and Consumer (ACCA) states that between 1990-91 and

2007-08, the electricity prices were logically stable as shown in Figure 1. However, there has

been a rapid increase in the retail price of electricity over the past 10 years. After adjustment

for inflation, the prices growth of 63 percents can be observed throughout the trends.

Henceforward, this indicates that for the next decade, the prices could be expected to

escalate.

Figure 1: Retail price index of electricity in Australia capital cities each year since 1990 (Commission 2017)

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In addition, for the next two years, households in Western Australia should be prepared by the

rise of electricity prices by 7 percents which is almost three times the national average (Mundy

2016). Houses that are connected to the South-West Interconnected System (SWIS) would see

expansion in their power bills that can be seen in Figure 2 from $1,412 in 2017 to $1,617 in

2018 (Commision 2016). The SWIS is the main electricity grid in Western Australia (WA) that

provides power to houses in South-West region. The area covered is from Albany in the South

to Kalgoorlie in the East and up to Kalbarri in the North. Based on the report from the

Australian Energy Market Commission (AEMC), the escalation of over $200 of the total annual

residential electricity bill in WA is due to higher wholesale energy price and also by the green

energy policies of the state and the federal government.

Figure 2: Annual electricity bill trend for a representative consumer across Australia (Commision 2016)

Therefore, in reducing the amount of electricity to be paid, the renewable sources should be

implemented in residential. The excess electricity produced can be sold back to the retailer

and in exchange, this method can help in minimizing the power bill.

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1.2 PROJECT OBJECTIVES

There are four objectives of this thesis project, which are:

(i) To investigate the cost-effectiveness of different renewable and gas-based resources

for electrification of remote houses.

This project is mainly to decide which models are worthwhile and profitable. All five

models will be simulated using the HOMER Pro microgrid analysis software (version 3.10.2).

The models modelled involved the insertion and exclusion of selected power sources, which

are from the electricity grid and from the solar panel. Gas generator and the battery bank also

another example of the power sources that will be included in this project as well. The results

of each case would be the primary aim as it decides which one satisfy the objectives.

(ii) To gain expertise in using HOMER Pro microgrid analysis tool throughout the thesis

project.

U. S National Renewable Energy Laboratory (NREL) developed the Hybrid Optimization

Model for Energy Resources (HOMER) Pro software. HOMER Pro software is an application

that enables the user to run a simulation for an entire year of grid-connected and off-grid

systems for remote, stand-alone and distributed generation application (Singh, Baredar, and

Gupta 2015). Numerous components and resources can be selected depending on how it is

modelled. Moreover, this software does both optimization and sensitivity analysis as well. The

system in HOMER carries out the energy balance calculation judging by a particular number

and size of components. After HOMER has performed its calculations, a sorted list of

optimization result based on the Total Net Present Cost (TNPC) is displayed at the bottom half

of the screen (Kumar et al. 2016).

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HOMER also could examine the system types in one run and categorize the system based

on the optimization algorithm that was intended specifically to work in HOMER. The

optimization algorithm identifies the least-cost options for microgrid or other sources. Then,

sensitivity analysis also can be executed by letting the user compare thousands of probabilities

in a single run (Kumar et al. 2016). For instance, the user can obtain the wind speed and fuel

costs as well as understand how the optimal system will adapt with these dissimilarities.

(iii) To identify the total net present cost (TNPC) in reducing the installation costs.

Another condition to be tested in the HOMER software are when the installation costs for the

battery bank, photovoltaic (PV) and gas generator is removed from the expenses. This also

includes the purchase of the power sources itself as well. This method is applied on two cases.

By reducing the installation cost, the initial bills to pay can be minimized expectantly. The

consequences of this exclusion will be briefly explained after the result has been obtained and

reviewed.

(i) To obtain and present a cost summary for each case for comparison.

Based on the simulation carried out in the HOMER Pro software, the monthly energy

consumption costs for each case were compared. Hence, the slightest bill paid is the most

cost-effective. Additionally, the cost of all expenses including capital cost, replacement cost,

and operation and maintenance cost for all five cases are being compared as well. This also

includes the cost of buying and selling the electricity and cost of using the gas.

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1.3 PROJECT DESCRIPTION

1.3.1 Area of Study

The selected area is a remote area as it is defined in the project’s topic. The case study

is conducted on a house in a remote area in Serpentine, Western Australia whose latitude is

32˚24.3˚ South and latitude is 115˚58.2˚ East. The aerial view of the location of the case study

is shown in Figure 3.

Figure 3: Aerial view of Serpentine.

Then, this location is picked due to its location that is over 50 km from the Central

Business District (CBD). Next, the SWIS is responsible for bringing electricity into the Southern-

West region, therefore, the electricity retailer that covers the area is Synergy. The price of

electricity depends on the tariff offered by Synergy which is $0.241 per kWh (Synergy 2017b).

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1.3.2 Cases Overview

This thesis project is to decide a cost-effective method for electrification of remote

houses using different renewable and gas-based sources. There are five cases to be developed

and modelled using the HOMER Pro microgrid software. In each case, the energy sources

would be added or removed depending on the selection by the user. The content for each case

is shown below:

Case 1: Electricity supplied from the Electricity Grid.

Case 2: Electricity supplied from the Electricity Grid and Photovoltaic.

Case 3: Electricity supplied from the Electricity Grid, Photovoltaic and

Battery Storage.

Case 4: Electricity supplied from the Electricity Grid, Photovoltaic, Battery

storage and Gas Generator.

Case 5: Electricity supplied from the Gas Generator.

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2. LITERATURE REVIEW

2.1 ELECTRICITY GRID

2.1.1 Overview and Structure

The electricity grid consists of complex transmission and distribution network that

transports electricity from the power stations to the consuming sector such as residential,

commercial and business. The South-West Interconnected System (SWIS) is the grid in WA that

is responsible for supplying electricity to households in South-West region.

There are three stages of a power grid which are power generating system,

transmission system and distribution system as shown in Figure 4 (Daware 2014/2016b). The

power generating system comprises generating station and generating step-up transformer

which is in red colour. Then, the blue colour defines the transmission system and the green

colour expresses as the distribution system. Figure 4 below shows the layout of an electrical

power grid.

Figure 4: Layout of an electrical grid. (Daware 2014/2016b)

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The first part of the electricity grid is the power generating system. It involves the

power stations which are usually located near the facilities such as coal pilot plant,

hydroelectric dams and nuclear power plants. These pilot plants are usually sited far away

from populated areas. The stations generate electricity and once generated, it has to be sent

to the end users. The voltage of the electricity generated by the generating station extending

from 11 kV up to 25 kV. Because of technical boundaries, it cannot be greater than 25kV

(Daware 2014/2016b).

Furthermore, for the transmission system, in order to convey the electricity efficiently

through the transmission network to the poles, a step-up transformer in the power generating

system is the first substation transformer is used to increase the voltage of its electricity. By

stepping up the voltage of the electricity, the power losses in the transmission network is

being minimized and the current shrunk correspondingly. The transmission voltages are

typically at 220 kV or up to 765kV. In the meantime, the transmission system also offers

electricity to transmission customer such as generator owner, load serving entity or

purchasing-selling entity at 138kV or 230kV (OpenEI 2012).

Next, the last stages of a power grid system are the distribution system. The voltage of

the electricity from the transmission systems is being dropped by using a step-down

transformer to a considerably lesser voltage at 22 kV to 66 kV. The distribution substations

received the power from the step-down transformer or the electricity is directly delivers to

very large industrial consumers. The distribution substations which are commonly known as

poles and wire systems deliver electricity to the consumer such as houses or buildings.

Overhead power cables and underground power lines are the types of distribution network

(Daware 2014/2016b).

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2.1.2 Market

Then, there are plentiful retailer companies in Western Australia whose sell electricity

such as Synergy, Infinite Energy and Carbon Energy. Then as for the consumers, they can pick

to stay on a standard retail contract with their retailer or to be provided on a market contract.

Consumers can look for the best electricity deal for them by comparing the offers offered by

the retailers. The daily supply charge also known as service fee is applied to the customers for

gaining access to electricity and the electricity spent are billed to the customers as a usage

charge in cents per kilowatt-hour (c/kWh) (Supply 2017). Then, the pricing structure charged at

the customers for their electrical consumption by the retailers is called tariff. By picking the

right tariff, it can help reduce what the customers pay for their usage. There is three type of

tariffs which are the simple rate, time of use and controlled load (Australia 2017).

2.2 PHOTOVOLTAIC (PV)

2.2.1 Overview and Structure

Photovoltaic (PV) directly convert solar energy into electricity built on of the

photovoltaic effect. Photons from the light are shining onto the solar cell absorbed by the solar

cell and electrons are released when specific materials are exposed to light. This occurrence is

called the photoelectric effect. The principle of photoelectric effect works on the photovoltaic

effect to create direct current (DC) electricity (Daware 2014/2016c).

Figure 5: The process of the photovoltaic effect.

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Moreover, the solar cell or photovoltaic cell are made based on the principle of the

photovoltaic effect. The process of photovoltaic effect is shown in Figure 5 above

(Mysolarprojects 2011). After the sunlight or photons is shining onto the solar cell, the

junction absorbed the photons. Hence, pushing the electrons in the silicon out. The more

photons are absorbed by the solar cell, sufficient energy is generated to push the electrons

past the junction and subsequently produce electrical charges. The solar cell convert light

beaming from the sun into DC electricity. According to the demand of electricity, multiple

combinations of solar panels connected electrically together to create a solar array in

supplying more power. For example, a 6kW solar system is a multiplication of 23 panels with

each solar panel rating at 260 Watt. Figure 6 below shows the formation of a solar array (Team

2012). The solar cells are connected together electrically and attached to a supporting frame

to form a solar panel. Several solar panels are wired together to form a solar array. The solar

panels are available in different power output about 20 to 300 Watts and sizes as well

(Mysolarprojects 2011).

Figure 6: The construction of a solar array

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The most standard types of materials to make a solar cell are crystalline-silicon,

amorphous-silicon and thin-film photovoltaics. The crystalline-silicon PVs contributes great

efficiency but much more expensive than other materials. Moreover, an inverter must be

connected with the solar panel as it converts the current from direct current (DC) electricity

generated by the solar panels to alternating current (AC) electricity which is essentially used in

every electrical appliance in each house or buildings (Daware 2014/2016c).

In addition, there are three different categories of PV systems which are commonly

practised. Firstly, the PV direct solar system defines as the PV only supplying the load when the

sun is beaming and there is no presence of battery bank. Then, the commonly used system at

places where power from the grid is not accessible is known as off-grid PV solar system. Lastly,

a grid-connected system which is the home is powered by the electricity from the power grid

and the PV solar system (Daware 2014/2016c). This system will be the part of this project as it

is shown in the project cases. Figure 7 below shows the typical grid-connected PV solar system

(Daware 2014/2016c).

Figure 7: Typical grid-connected PV solar system

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2.2.3 Market

After that, usually, a solar system would generate more energy than the load demand

in a household. The energy generated by the PV solar system depends on the system size of

the PV.

shows the results for common network connected systems in Perth which shows that

for a 1kW of a PV system size, a quantity 4.4 kWh of energy would be produced and for a PV

system size of 30kW, energy generated is 132kWh. This shows that a significant amount of

energy generated even with a small addition of the PV system size (Synergy 2017a)

Table 1: The results for common network connected systems in Perth (Synergy 2017a)

PV system size Energy generated

1kW 4.4 kWh

5kW 22 kWh

10kW 44kWh

15kW 66kWh

20kW 88kWh

25kW 110kWh

30kW 132kWh

The surplus energy produced by the solar system no matter the system size can be

sold back to the power grid. Thus, a solar feed-in tariff is an income for the clean energy that

paid by the electricity retailer as a credit for the excess electricity transported back to the grid.

The solar feed-in tariff’s rate that is a charged with the retailer is set in cents per kilowatt-hour

(c/kWh) (Energy 2017c). Synergy who covers the Perth and the south-west region of the state

as the electricity provider for Western Australian gain a solar feed-in tariff of 7.135 cents.

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2.3 BATTERY STORAGE

2.3.1 Overview and Structure

A battery is an independent pack that can transform chemical energy into electricity by

implanting specific chemicals in contact with each other in a particular method. A cell is a basic

power unit placed inside a battery and it contains three main bits which are two electrodes as

electrical terminals and a chemical electrolyte sited in between them. The electrodes are

divided into two electrical terminals, identifiable with a positive terminal and a negative

terminal. The negative terminal or the zinc case which is called the anode made up from the

outer case and the bottom of the battery and also connected to the positive terminal that is

inside of the battery which is the carbon rod (Woodford 2006/2016). Figure 8 shows the cross-

sectional area inside a battery (Up 2017).

Figure 8: The cross-sectional area inside of a battery

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Then, the electrons, which are tiny parts of atoms, move from one part of chemical to

another under the accurate condition and when it flows, an electrical current can be produced.

When both sides of a battery are connected together by a wire with any kind of load, for

instance, a lightbulb, ions are created from the materials in both of the electrodes and

contribute to chemical reactions with the electrolyte. And at the same time, electrons move

from one terminal to another through the circuit and will light up the lightbulb. This procedure

will go on until the electrolyte fully transformed and at that point, the ions stop flowing

through the electrolyte and the electrons finish moving through the wire. As a result, the

battery is depleted (Woodford 2006/2016).

Battery storage system usually works with PV solar system due to its ability to stock

extra energy generated by the PV. During the day, the PV solar array produces extra electricity

and the excess electricity flows to the house and the battery bank. Once the battery bank has

fully charged, the inverter will stop the PV system from recharging it and the power

consumption of the house is being supplied by the PV panels. Then, in the evening, when the

solar panels generate inadequate electricity, the load demand is higher than the electricity

production by the PV panels. Therefore, the electricity flows to the home from both the solar

panels and the battery bank respectively. During the night, when the PV system is not

developing any electricity, the battery bank and the power grid will give its energy to powers

the electrical appliances used in the house. The inverter transformed the electricity to usable

AC electricity and is delivered to the household appliances that use electricity at the time by

the switchboard. In addition, if the load demand is lower than the electricity supplied by the

battery bank, no power from the electricity grid needed. But if the battery bank starts to be

low in power, the inverter enables the power from electricity grid to be pass in powering the

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load demand needed by the house (Australia 2015). Figure 9 shows the battery storage system

in a house (Farrell 2017).

Figure 9: Electricity flow scenarios for a home with solar and battery storage system

2.3.2 Market

Batteries available in all different ranges of sizes, voltages and also capacities but there

are only two crucial types of batteries which are primary and secondary. The ones that are

disposable and cannot be rejuvenated are primary batteries while the secondary batteries are

rechargeable. When the secondary batteries undergo recharging process, the batteries and the

chemical reactions inside it which are the electrons flow in reverse direction using the power

source that is used to fill up the energy. The electrochemical processes happen in a different

direction and the cathode and anode are returned to its former state and can continue to give

full power when needed (System 2016).

Battery storage system is predictably to raise in the coming years although it is still a

new concept around the world. Consequently, a lot of energy retailers and independent

companies are investing in battery bank solutions such as Tesla, AGL and Enphase (Mozo

2018/2017). A battery bank should be connected with PV system as the surplus power can be

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stored rather than selling the electricity to the power grid and the use of both renewable

energy sources are equally important.

2.4 GAS GENERATOR

2.4.1 Overview and Structure

A gas generator creates power by using the cooperation of a gas engine and an electric

generator. It uses the gas engine as the prime mover of an electric generator. The shaft of the

gas engine is joined to the shaft of the electric generator (alternator). Then, to generate

electricity, the gas engine will have to drive the electric generator together. When a conductor

travels in a magnetic field, an electromotive force (emf) is induced in the conductor. Thus,

electricity is generated (Daware 2014/2016a).

An electric generator or also known as the alternator is an electrical machine which

turns mechanical energy into alternating current energy as its output. It practices the

mechanical energy provided to it to force the movement of electric charges to present in the

wire of its windings through an external electric circuit. The flow of electric charges causes the

existence of an electric current as the output of the generator (Supply 2016).

The generator uses the law of electromagnetic induction which had been discovered

by Michael Faraday. Faraday stated that whenever an electrical conductor such as a wire that

carries electric charges moves in a magnetic field, an emf gets induced within the conductor.

This motion creates a voltage difference between the two ends of the electrical conductor or

wire and at the same time causes the electric charges to flow, hence generating current as

shown on the galvanometer in Figure 6 when the magnet is being pushed and pulled from the

coil (Supply 2016). Figure 10 shows the electromagnetic induction by a moving magnet

(Tutorial 2017).

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Figure 10: The electromagnetic induction by a moving magnet.

A home generator system consists of a generator which is positioned outside of the

house are coupled with the fuel line as the power source for the engine and with the external

connection box. The external connection box is then connected to the transfer switch with

emergency load centre inside the house. So, if there’s power breakdown from the generator,

the transfer switch breaks the circuit before it reached the main distribution panel. Figure 11

below shows a home generator system (Inc 2017).

Figure 11: A standby generator

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2.4.2 Market

The gas generators necessitate fuels as a power source in converting electrical power

into electrical power. The most common types of fuel are gasoline, diesel, natural gas and

propane. Each fuel types have different prices, storage requirements and availability. However,

natural gas is the most preferred fuel for residential purposes (Peterson 2015)

The gas tariff which is the same as electricity tariff has two parts of charges which are

daily supply charge and usage charge. The daily supply charge or service charge is applied due

to having contact with gas at the house even if the house does not use gas in contributing

electricity. This charge is charged in cents per day. Other than that, the usage charge or also

known as consumption charge is charged in cents per megajoule (c/MJ) (Easy 2017).

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3. PROJECT CASES

3.1 CASES

There are five cases that will be discussed in this project. In each case, the energy

sources would be included or removed depending on the given selection by the supervisor.

The content for each case is shown below:

3.1.1 Case 1: Electricity Supplied from Electricity Grid

In this case, the house model only uses the electricity from the power grid. So, the

electrical appliances used in the household are mainly provided by the power grid and the bill

obtained comes from the retailer company depends on the tariff selected which is the flat rate

tariff. In this case, the expenses for electricity is greater compared to other cases due to its

inability to sell excess electricity. Moreover, the bill contains service charge for having access

to electricity and consumption cost as the usage charge in cents per kilowatt-hour (c/kWh)

(Supply 2017).

3.1.2 Case 2: Electricity Supplied from Electricity Grid and PV

The electricity, in this case, is being created by the electricity grid and the PV solar

system to the house modelled and this system also known as a grid-connected solar system.

When there is sunshine, the PV solar system will produce electricity and at the same time

powers the electrical devices being used in the household. Then, if the load demand is lower

than the electricity production, the power can be sold back to the power grid. The tariff is

called feed-in tariff which is an income that paid by the electricity retailer as a credit for the

excess electricity delivered back to the grid. The rate that charged is set in cents per kilowatt-

hour (c/kWh) (Energy 2017c). During the night, the house only used the electricity from the

power grid as the PV system cannot produce any energy anymore. This case consumes less

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electricity from the grid than the Case 1 because it uses the energy from the PV system and

any extra power can be sold back to obtain some credit.

3.1.3 Case 3: Electricity Supplied from Electricity Grid, PV and Battery Bank

This case is quite similar to Case 2 but it has battery storage system included. The

additional electricity generated by the PV system during the day is being transported to start

the electrical devices in the household and also charging the battery bank. If the battery bank

is fully charged, the power then will be working back to the grid and counted as the feed-in

tariff. Furthermore, during the night, when the solar does not produce any energy, the battery

storage starts to give power to the load demand. If the power supplied to load by the battery

bank is enough, no power from the grid needed. However, if the battery power is less than the

load demand, the grid will give its electricity to power the house. Case 3 uses the least

consumption of electricity from the grid as it uses more electricity from the PV panels during

the day and the battery storage at night. Spare energy produced by the PV system can be

stored in the battery storage, in this case, compared to Case 2 which the electricity is being

sold back to grid thoroughly without any storage to store the extra power (Australia 2015).

3.1.4 Case 4: Electricity Supplied from Electricity Grid, PV, Battery Bank and Gas

Generator

Case 4 obtain electricity from the electricity grid, PV, battery storage and also gas

generator. The difference between Case 3 is that it has standby natural gas generator included

in the system. The gas generator is usually installed in a household for a backup power source.

Although, the gas generator can also be used for cooking and heating. In terms of a power

outage, the gas generator is more useful compared to the battery bank because the gas

generator can provide adequate wattage to the home rather than a battery bank which cannot

give full wattage of power at once. The type of fuel use for the gas generator in this project is

natural gas. The gas tariff is charged in cents per megajoule (c/MJ) (Easy 2017). The gas

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the generator is switched on for five hours on every weekend. Case 5 uses extra cash because

it contains electricity and gas bills combined. However, the feed-in tariff is also applied due to

having PV system in which the excess electricity can be used to recharge the battery bank and

as well as sell back to the grid.

3.1.5 Case 5: Electricity Supplied from Gas Generator

This case can be considered as off-grid systems because the house does not use any

electricity from the power grid at all. The gas generator is used to generate electricity to

powers all of the electrical appliances in the house. In this case, the tariff that needed to be

paid is only the gas tariff which will be charged in cents per megajoule (c/MJ) (Easy 2017). The

fuel used for this standby gas generator is natural gas and the generator operating mode is

‘forced on’ every single time of the day due to it is only the power sources modelled in this

case. In Case 5, the bill for using electricity is mainly coming from the consumption of gas.

Therefore, Case 5 might consume a lot of money compared to other cases.

3.2 COST VISIBILITY

This project purpose is to determine the cost-effective procedure using different renewable

and gas-based resources for electrification of remote houses. Therefore, the cost visibility is

the main concerns in completing this project as it defines which cases are worthwhile and

profitable. In each case, the capital cost for PV system, battery storage system and gas

generator system are included. After that, the bills of power consumption for each component

are also incorporated in computing the real cost paid. Based on this cost visibility, this enables

me to obtain the total bill paid in using the electricity for every case. Even though the solar

inverter and hybrid inverter are included in the designed model in Case 3 and Case 4

respectively which can be seen in 4.2, the costs for both inverter are not comprised in the

simulation. In other words, the capital cost, replacement cost and operation and maintenance

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cost for both inverters is not included in the cost visibility. The inverters do not have any voices

on deciding which cases is the ideal one.

Case 1 (Grid)

Contains bill of the electricity grid

Grid power price ($/kWh)

Case 2 (Grid and PV)

Contains bills of the electricity grid and PV

Capital cost of PV ($) + Grid power price ($/kWh) - Grid sell back price ($/kWh)

Case 3 (Grid, PV and Battery Storage)

Contains bills of the electricity grid, PV and Battery Storage

Capital cost of PV and battery storage ($) + Grid power price ($/kWh) - Grid sell

back price ($/kWh)

Case 4 (Grid, PV, Battery Storage and Gas Generator)

Contains bills of the electricity grid, PV, Battery Storage and Gas Generator

Capital cost of PV, Battery Storage and Gas Generator ($) + Grid power price

($/kWh) - Grid sell back price ($/kWh) + Fuel Usage ($/m3)

Case 5 (Gas Generator)

Bills of the gas generator.

The capital cost of Gas Generator + Fuel Usage ($/m3)

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4. METHODOLOGY

All of the cases are modelled in the HOMER pro software.

4.1 EQUIPMENT MODELED IN HOMER

4.1.1 Load Profile of Study Area

An average Australian house uses 18 kWh per day and 6,570 kWh per year (Electricians

2017). Therefore, I used 18 kWh as the scaled annual average (kWh/d) for a residential

household. The electric loads for each case would be the same. The monthly load profile is

shown in Figure 12. The energy load demand in the morning is low, however, at night, the load

demand is approximately high as compared to in the morning and from 12:00 pm until 5:00

pm (Singh, Baredar, and Gupta 2015).

Figure 12: The Monthly load profile in the study area

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4.1.2 Resource of Study Area

The solar Global Horizontal Irradiance (GHI) data for the designated area of study is

attained from the National Aeronautics and Space Administration (NASA) Surface Meteorology

and Solar Energy website. The solar GHI is essential in modelling the cases because the data is

used by PV panel in simulating all of the cases plus the data is accurately defined by the

location of the area of study. Figure 13 shows the solar GHI of the selected area of study. The

annual average of the solar GHI is 5.51 (kWh/𝑚3/day).

Figure 13: Monthly Global Horizontal Irradiance data of the study area

The temperature data of the selected area is also obtained from the NASA Surface

Meteorology and Solar Energy website. The presence of PV panels requires the data of the

temperature of the study area. The average temperature data for the study area is 17.85 (˚C).

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Figure 14: Monthly average temperature data of the study area

4.1.3 Grid

In this project, the electricity grid is used in every case but not in Case 5. The power

rates that would be chosen for this project is the simple rates. Consumer pays the same

price for any usage of electricity at any time. The grid power price ($/kWh) is 0.241 while

the grid sell back price ($/kWh) is 0.741.

4.1.4 Photovoltaic (PV)

The PV panel that is used in the project is Winaico 260W Polycrystalline. In this project,

a 6kW of PV capacity is used which means that 23 number of panels will be combined together

in order to get a 6 kW capacity of PV system. The capital cost is $ 7,000 and the replacement

cost is $5,800 for this PV panel. For the maintenance and operation cost, the price would be $

30 per year as the maintenance including the connections, cables, panels, rooftop mounting

and DC isolator switches (Brakels 2017). The PV panel is shown in Figure 15 (Australia 2016).

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Figure 15: Winaico 260W Polycrystalline Solar Panel

4.1.5 Solar Inverter

The solar inverter is a vital device that works together with the PV panels. The purpose

of a solar inverter is to convert the DC electricity that comes from the PV panel into AC

electricity so that it can use in supplying the load demand. This string inverter is a single phase.

The SMA Sunny Boy with a capacity of 5 kW is used for the solar inverter and the capital cost

for it is $ 3,900. The maintenance cost and the maintenance and operation cost is $ 2,000 and

$ 20 per year respectively. Figure 16 shows the solar inverter by SMA Sunny Boy

(webosolar.com 2017).

Figure 16: SMA Sunny Boy SB5.0

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4.1.6 Battery Bank

The battery bank is installed because of its ability to store the surplus electricity produced by

the PV panels. It discharges power when PV do not create power anymore. LG Chem RESU6.5

is the battery storage that will be used in this project with a capacity of 6.5 kW. The capital

price is $ 8,000 and the replacement price is $ 6,600. This battery storage does not need

maintenance hence the cost of maintenance is zero. The battery is as shown in Figure 17

(Brakels 2016).

Figure 17: LG CHEM RESU6.5

4.1.7 Hybrid Inverter

The hybrid inverter is inserted in Case 4 due to having both PV panels and battery bank

respectively. It can change the DC electricity created by the PV panels into AC electricity and

also can convert the DC charge of the battery into AC charge as well in order to powers the

households. The Solax X3 Hybrid is a 3 phase hybrid inverter that will be introduced in this

project as shown in Figure 18 below (Electric 2017) . The capacity for the Solax X3 Hybrid is

5kW and the capital cost for it is $ 9,500. The replacement cost is $ 5,500 and it does not need

maintenance. It is chosen because it is compatible with LG Chem battery.

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Figure 18: Solax X3 Hybrid

4.1.8 Gas Generator

The standby gas generator is used in Case 4 and Case 5. It uses natural gas as it fuels

source. This 3 phase Cummins gas generator has an initial capital cost of $ 12,000 and the

replacement cost is $ 10,000. It requires 3 cents per hour of operation and maintenance. The

fuel price is 4.7 ($/𝑚3) (Energy 2017a). This standby gas generator contains a capacity of

30kW. Figure 19 show the Cummins 30kW RX30 Standby Power Generator (Generator 2017).

Figure 19: Cummins 30kW RX30 Standby Power Generator

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4.2 DESIGNATED SYSTEM MODEL IN HOMER

All of the cases are simulated in the HOMER pro software in which way they are

designated. This software is used in determining the cost-effective technique for electrification

of remote houses by using different renewable and gas-based sources. The power sources

involve power grid, PV panel, battery bank and gas generator. The following shows the

schematic diagram of all of the five cases modelled in the HOMER pro software. The figures

contain the components that are in the cases and it also displayed with the AC and DC buses as

well.

CASE 1

Figure 20 shows the schematic diagram of Case 1. It shows that the electricity grid power

the study area by using AC electricity to withstand the electric load of 18kWh.

Figure 20: Schematic Diagram of Case 1

Case 2

In this case, the sources to generate energy are from the power grid and the PV array. As shown in

Figure 21, the grid gives AC electricity straight away to supply the households. After

that, the PV array provides DC electricity; consequently, the solar inverter is needed in

converting the electricity from DC to AC in order to powers the home.

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Figure 21: Schematic Diagram of Case 2

Case 3

Case 3 is where the battery bank is installed with the previous system. The AC bus is

occupied only with the electricity grid. Though, the DC bus is filled with the PV array and

the battery bank as shown in Figure 22. The hybrid inverter is used in this case in

transforming the electricity of AC to DC and vice versa. The purpose of using the hybrid

inverter rather than a solar inverter and battery inverter by itself so that it can convert the

DC electricity into AC electricity from the PV array to supply the energy to the house and it

converts AC electricity to DC electricity so that it can charge the battery bank as one unit

only. The battery bank also can discharge itself with the assist of the inverter. Given these

points, the hybrid inverter has the ability of the combination of the solar and battery

inverter.

Figure 22: Schematic Diagram of Case 3

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Case 4

The differences between Case 3 and Case 4 is, in Case 4, the gas generator is inserted.

Now, the AC bus is filled with the gas generator and the power grid. The DC bus remains

the same as in Case 3. To summarize, this case uses most electricity sources which are the

grid, the gas generator, the PV array and the battery storage. This is shown in Figure 23.

The gas generator operated only on weekends in the simulation.

Figure 23: Schematic Diagram of Case 4

Case 5

In Case 5, the households received powers only from the gas generator. This can be seen in

Figure 24. The gas generator has to withstand the load demand of 18kWh per day by itself.

Therefore, the gas generator is scheduled to operate at all time.

Figure 24: Schematic Diagram of Case 5

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4.3 HOMER: SIMULATION

In the simulation process, HOMER will undergo an energy balance calculation which will

be based on the system configuration containing numbers of components depends on the

cases as shown in the section above. In this project, the considered components are electricity

grid, PV array, battery storage and gas generator. Then after the simulation, it decides the

ideal system configuration. The simulation of the designed model on the study area based on

the approximation of the capital cost, replacement cost, operation and maintenance cost, and

fuel rate (Kumar et al. 2016). There are also grid power price and grid sell-back price.

4.4 HOMER OPTIMIZATION

After done simulating the designed model based on cases, the ideal solution is

attained. The optimization results containing a list of the ideal solution in an organized form

considering Total Net Present Cost (TNPC). HOMER software sorted the NPC from the highest

to the lowest. Then again, the designed model based on TNPC is altered subject to the

sensitivity variable that has been selected by the user (Kumar et al. 2016).

The total net present cost (TNPC) of a system is the present value of all the cost the

system experience over its lifetime, minus the present value of all of the revenues that the

system earns over its lifetime. The cost comprises capital cost, replacement costs, operation

and maintenance cost. This also included the cost of buying and selling power from and to the

grid respectively. The recovered value and grid sales revenue are the revenues components

(ENERGY 2017b).

The TNPC is the main output of the HOMER software as it decides which case is the

best in term of cost and reliability in the optimization results. From the results, HOMER

calculates the total annualized cost and the levelised cost of energy (ENERGY 2017b).

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4.5 HOMER SENSITIVITY ANALYSIS

The sensitivity analysis of the HOMER software compromises the ideal result for every system

modelled. In this procedure, it will repeat the iterations for all sensitivity variable included in

this project. A list of an ideal solution of the designed model is shown with sorted form the

lowest TNPC to the highest. Therefore, the system with the lowest TNPC is the ideal case.

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5. RESULT AND ANALYSIS

The data obtained from the optimization result from the HOMER software after

running the simulation are analysed. The TNPC of each case is recorded. Therefore, in this

project, the cost visibility of all cases are being examined in achieving the project objectives.

5.1 COST VISIBILITY OF MODELLED CASES FOR 25 YEARS

The cost visibility of modelled cases is simulated for 25 years and the data is recorded.

In this data, the capital cost, the replacement cost and operation and maintenance cost are

included. The buying and selling grid power are also included in the data. In

, as shown below, it shows the electrical cost of modelled cases for 25 years including

the capital cost.

Table 2: The Total Net Present Cost for the designed cases for 25 years

Type of Cases Total Net Present Cost ($)

Case 1 24,942

Case 2 -57,630

Case 3 -45,910.00

Case 4 160.91

Case 5 3,630,000.00

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Figure 25: the Electrical cost of modelled cases for 25 years

Based on Figure 25, it can be observed that in Case 1, the cost is $ 24,942 which is a

moderate value considering the household only using the power from the grid. On the other

hand, in Case 2 and Case 3, the electrical cost is minus $ 57,630 and minus $ 45,910

respectively. It shows the minus sign due to the presence of PV array. The surplus energy

generated by the PV panels are being sold back to the power grid in reducing the electricity

bill. In specific, the bill for Case 2 and Case 3 contained a lot of credit in such a way the value of

the households need to pay is negative. However, Case 4 rose considerably more than Case 1,

Case 2 and Case 3 which is $ 160.91. This is due to the high fee of capital cost, replacement

cost, operation and maintenance cost of the generator. Moreover, the natural gas fee is also

mainly influenced the bill for Case 4. Lastly, the TNPC for Case 5 grows sharply for the value of

3.63 million. This case generates the highest value because it uses an only gas generator in

supplying the load demand of 18kWh per day.

24,942 -57,630 -45,910.00 160.91

3,630,000.00

-500,000

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

1 2 3 4 5

Tota

l Net

Pre

sen

t C

ost

($

)

Type of Cases

Cost visibility of modelled cases for 25 years including the capital cost

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5.2 COST VISIBILITY OF MODELLED CASES FOR 1 YEAR

All of the designed cases are simulated for a year in the HOMER software and the

capital cost are excluded from the simulation. In contrast, the power grid buying and selling

fees are the only bills contained in this study. Table 3 shows the cost visibility of the designed

cases for a year with eliminating the capital cost.

Table 3: The Total Net Present Cost of modelled cases for a year

Type of Cases Total Net Present Cost ($)

Case 1 1,583

Case 2 -4,133

Case 3 -5,079.00

Case 4 15,572.00

Case 5 221,011.00

Figure 26: Annual electrical cost of modelled cases

1,583 -4,133 -5,079.0015,572.00

221,011.00

-50,000

0

50,000

100,000

150,000

200,000

250,000

1 2 3 4 5

Tota

l Net

Pre

sen

t C

ost

($

)

Type of Cases

Cost visibility of modelled cases over a year excluding the capital cost

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Based on Figure 26, Case 1 shows a steady value of $ 1,583 of the electric bill. This is

because it uses the power from the grid only. While in Case 2, the cost for using the electricity

is minus $ 4,133 since the extra energy created by the PV array is exported back to the grid.

The negative value shows that the household uses most of the energy created by the PV rather

the grid. Case 3 shows a steady increase in numbers from Case 2 which is minus $ 5,079. Case

3 gives highest credit compare to Case 2 because of the existence of the battery bank.

Therefore, lesser power from the grid is used. Then, Case 4 shows a significant increase with

the value of $ 15,572 and Case 5 represent the top bill in this analysis with the value of $

221,011 as it operates every day for a year with the price of 4.70 ($/𝑚3) for natural gas.

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6. CONCLUSION

Based on the result and analysis that have been carried out, the most ideal case that

has been simulated in the HOMER pro software to achieve the main objective is Case 3. Case 3

proves to be the most cost-effective model due to its ability in generating the least TNPC

compare to other cases. The electricity sources installed in this case are electricity grid, PV

array and battery storage. The capability of PV in creating huge excess power so that it would

be able to recharge the battery bank as well as selling back the energy to the electricity grid.

Other than that, this thesis project mainly uses HOMER pro software by HOMER

ENERGY as the medium in modelling the cases. Throughout the thesis, this software has been

used to simulate all of the cases provided and at the same time provide the best method in

determining the cost-effectiveness for electrification of remote houses by using several

renewable and gas-based sources.

Then, by reducing the installation cost, the anticipated cases to be decided as the

worthwhile and profitable are Case 4 and Case 5 as it contains gas generator in both cases.

However, the natural gas price is expensive and the gas generator selection that uses natural

gas as its fuel with a low capacity in the HOMER software is limited. Therefore, Case 3 still

considered as the ideal cases due to the least bill consumed by the simulation carried out.

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7. FUTURE RECOMMENDATION

As can be seen, there are several recommendations that can be considered in the

future if this thesis wishes to be improved. The components that are listed in the HOMER pro

software are varied and a lot of options to choose. Nevertheless, the library for each of the

components are not up-to-date and most of the components are not available in this country.

Then, the desired components are usually not on the library list because of the limited

manufacturer and capacity range. Therefore, it is difficult to carry a feasibility study due to its

components are mostly comes from the original creator of the software which is the USA.

Other than that, in trying to determine which cases are profitable, the standby gas

generator should be installed with diesel as its fuel. This is because the price of diesel is much

cheaper compared to natural gas’s price.

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