Cost-Effectiveness Analysis of a PVGS on the Electrical Power Supply of a Small Island

Abstract

This paper presents a feasibility study of a large simulated stadium-scale photovoltaic generation system (PVGS) on a small island. Both the PVGS contribution to the energy demand on the island and its financial analysis were analysed in this study. The maximum allowable PVGS installation capacity is obtained by executing load flow analysis without violating the voltage magnitude and voltage variation ratio limits. However, the estimated power generation of PVGS is applied to know its impact on the power system according to the hourly solar irradiation and temperature. After that, the cost-benefit analysis of payback years (PBY) and net present value (NPV) method is derived considering the cash flow from utilities annual fuel and loss saving, the operation and maintenance (O&M) cost, and the capital investment cost. The power network in Kiribati (PUB DNST) is selected for study in this paper. The simulation results are very valuable and can be applied to the other small islands for reducing the usage of fossil fuel and greenhouse gas emissions.

The economic feasibility analysis of generated photovoltaic energy in the USTO campus

“…These methods are analyzed in this study. The NPV as an economic indicator compares the present value of all cash flows with the present value of all cash flows associated with an investment project according to equation ( 1) computed at the discount rate [1,6,9,14,23,24]. The positive NPV represents an indicator of a potentially feasible project.…”

“…More studies on the profitability analysis have been carried out. The main factors affecting PV deployment are the initial capital cost of the system, the feed-in tariff and the capital cost subsidy rate [14].…”

“…It is necessary to first calculate the annual cash flow (CF), which is the difference between the cash and the cash out, as indicated in the equation (3) [9,14].…”