A Prefeasibility Analysis of a PV Mini Grid with Ice Plant on Buvu Island in Lake Victoria

University essay from KTH/Skolan för industriell teknik och management (ITM)

Author: Jonathan Daglish; [2019]

Keywords: ;

Abstract: Improving energy access through the provision of sustainable electrification is fundamental to reducing poverty and facilitating development in many areas of rural Sub Saharan Africa. The region currently suffers from severe energy inequality, with 81% of people relying on traditional forms of biomass for direct energy provision. A major reason for this is that centralised grid infrastructure in many countries remains under maintained and grid extension to remote rural areas poses as too much of a financial burden to governments. Solar PV mini grids are gaining increasing attention from policy makers, researchers, and developers in the region as they pose as a means of leapfrogging the necessity for centralised fossil-fuel based infrastructures. Despite this, a high number of mini grid projects in SSA remain in their pilot stage. A major reasoning for this is the difficulty associated with accurately predicting the future electricity demand of currently un-electrified communities, and following on from that, it is also difficult to incentivize local economies once electricity is made available. The aim of this work was to assess the feasibility of Buvu Island on Ugandan Lake Victoria housing a PV mini grid and ice plant so as to provide power to its three un-electrified communities, and flaked ice to the local fishing industry. Structured interviews were first held with developers in the region so as to assess current weaknesses in mini grid design methodologies and following from that the literature was used to develop a suitable methodology. Data gathered in the field was used to predict the electricity demand of the island, and the HOMER optimization tool was used to size an appropriate system. The modelled system includes an AC-coupled PV array, a lead acid battery bank, a back-up generator, and a converter. Within Uganda, it is the role of the grid operator to provide capital investment for the distribution network. Accordingly, within this study, such a system has been proposed and costed, however this does not impact upon mini grid feasibility. A full financial analysis was used to as to assess the feasibility of the mini grid and ice plant project over a twenty year lifetime. A reference scenario returned promising results, with an IRR of 23.5%, DSCR of 529%, and NPV of $114,651 assuming that daily electricity demand is 695 kWh / day, and 2.5 tonnes of flaked ice are sold per day. The business model is highly dependent on the sale of ice and if average sales drop below under 1.6 tonnes per day over the project lifetime the system becomes unviable. To overcome the problems associated with unpredictability of demand and encouraged new uses of electricity, the mini grid in this work is scaled to match current demand on the island – thus mitigating such risks. Additionally, a sensitivity study is included so as to fully characterise the range of mini grid operative models that may need be considered, and indeed the likely financial outcomes.

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