Long-term optimal capacity expansion planning for an operating off-grid PV mini-grid in rural Africa under different demand evolution scenarios

Journal article, 2023

Using real-time load data and HOMER Pro's ‘multi-year’ optimization tool, this paper investigates the long-term cost optimal capacity expansion planning (CEP) for an overloaded photovoltaic (PV) mini-grid (MG) with storage batteries in off-grid rural Ethiopia over a 20-year planning horizon. Three distinct annual energy demand growth scenarios were considered: 0 % (fulfils the minimum load requirement), 5 %, and a 15 % from productive users only. In all scenarios, the generation mix consists of only solar energy and the maximum allowable capacity shortage (MACS) is limited to 10 %. The findings reveal that, in all scenarios, the largest capacity expansion is performed on the battery and PV systems, covering up to 73 % and 35 % of the total expansion costs, respectively. The annual unmet load fraction of the expanded MG system ranges from 5.9 % in scenario-3 to 9.4 % in scenario-1, and the cost of electricity (LCOE) ranges from $0.404/kWh in scenario-3 to $0.887/kWh in scenario-1. The results indicate that the scenario-3 expansion path is comparatively cost-effective and has the highest reliability; but it still falls short of fully satisfying the required load demand and is not financially viable. Surprisingly, increasing the reliability of the scenario-3 capacity expansion from 94 % to 100 % raises the MG's Net Present Cost by 37 %. The sensitivity analysis shows that the MACS, ambient temperature, and battery's depth of discharge significantly affect the cost and performance of the capacity expansion. The study demonstrates (a) there are significant trade-offs between minimizing MG expansion costs and maximizing reliability levels; (b) capacity expansion based solely on cost-minimization without considering key constraints and uncertainties (demand, cost, PV, and battery degradations) may not provide a practical and robust solution to severe reliability issues, (c) capacity expansion that supports demand from productive users increases the cost-effectiveness and bankability of isolated MGs.