Economic viability of captive off-grid solar photovoltaic and diesel hybrid energy systems for the Nigerian private sector. (October 2019)

• Record Type: Journal Article
• Authors: Adesanya, Adewale A.; Pearce, Joshua M.
• Is Part Of: Renewable & sustainable energy reviews. Volume 114(2019)
• Publication Date: 2019-10
• Subjects: Autoproduction -- Captive power -- Diesel generator -- Off-grid -- Solar photovoltaic -- Nigeria; Renewable energy sources -- Periodicals; Power resources -- Periodicals; Énergies renouvelables -- Périodiques; Ressources énergétiques -- Périodiques; 333.794
• DOI: 10.1016/j.rser.2019.109348
• Languages: English
• ISSNs: 1364-0321

Abstract

Abstract: It is well established that lack of both electric supply capacity and reliability weaken the Nigerian economy. Recently, the reduction in solar photovoltaic (PV) costs along with the technical potential to couple PV to hybrid battery and diesel generators provides Nigerian businesses with an opportunity to reduce operating costs while defecting from the grid. This study investigates the potential of using off-grid hybrid energy systems for private industries within and near Lagos state currently with relatively high daily electricity demands that are met with supply through captive diesel generation. The results based on simulations of six industry sector load profiles developed from surveys found solar PV and diesel hybrid energy systems are economically viable for a wide array of industries in the Nigerian private sector including real estate, education, banking, automobile, hospitality and production. Five of the six sectors had discounted payback times for the systems under a year and ROIs >100%. The results established that the levelized cost of electricity is lower for every sector analysed with inclusion of solar PV, lower still with coupling of batteries and more reliable than the current grid-provided electricity. Nigeria as a whole will also benefit from widespread adoption of solar hybrid systems, as it will assist the balance of trade by reducing refined petroleum imports. In conclusion, the results of this study make it clear that every scale of Nigerian businesses could increase profitability with the use of solar hybrid systems. Graphical abstract: Image 1 Highlights: Nigerian private sector does not need to rely on expensive diesel fuel for energy needs. Using batteries in hybrid solar photovoltaic (PV) + diesel systems reduces LCOE. Solar PV adoption is economically viable, offering ROIs >100% for five subsectors. Results show high ROI and low discount payback for all – good indicators for lenders. Security of solar PV infrastructure and increase awareness are key to investment.