Traditionally, electric power utilities use large, central station generators to generate power and employ transmission and distribution facilities to take the power to the point of utilisation because of the significant economy of scale that favoured such against DG technologies.
However, this has dropped significantly enough to make a shift in the economics of scale in some situations because of the following (Lorrin, P. and Lee W., ―Understanding Electric Utilities and De-Regulation‖ 2006) (Suresh M. C. V., Edward J. B. ―Optimal DG Placement for Benefit Maximization in Distribution Networks by Using Dragonfly Algorithm‖ 2018)
Innovation improved the efficiency of small gas turbines, combined cycle, hydro and fuel cells more than large ones.
Improvement in materials, including new high temperature metals, special lubricants, ceramics and carbon fibre permit vastly stronger and less expensive small machinery to be built.
Due to the use of computerisation and smart control systems, small and even some large units need no on-site operators.
Furthermore, in considering the economic value of installing a DG, the benefit to cost ratio of DG applications in which the cost and benefit of the DG to both the customer and utility are considered. The DG costs include the initial investment cost, operations and maintenance costs and the displacement cost while the benefits include the loss reduction revenue, power purchase savings and reduction of customer interruption costs due to the DG (Ahmadigorji M., Abbaspour A., Rajabi-Ghahnavieh A., Fotuhi-Firuzabad M. ―Optimal DG Placement in Distribution Systems Using Cost/Worth Analysis‖ 2019). This is given mathematically as
𝑀𝑎𝑥
𝐵𝐶= 𝐵
𝐷𝐺𝐶
𝐷𝐺(2.46)
40
Where
B
DG= Benefits of DG installation C
DG= Costs of DG installation
𝐵
𝐷𝐺= ∆𝐶𝐼𝐶
𝑖𝑘+ 𝐿𝑅𝑅
𝑖𝑘+ 𝑃𝑃𝑆
𝑖𝑘𝑁𝐿𝑜𝑐
𝑘=1 𝑁𝐷𝐺
𝑖=1
. 𝐴
𝑖𝑘(2.47)
Where
N
DG= Number of DGs
N
Loc= Number of DG locations i = DG installed
k = Places DG installed
CIC = Customer interruption cost LRR = Loss reduction revenue PPS = Power purchase savings
𝐿𝑅𝑅
𝑖𝑘= ∆𝐿𝑜𝑠𝑠
𝑖𝑘. 1 + 𝐼𝑅
𝑁𝐿𝑜𝑐
𝑘=1 𝑁𝐷𝐺
𝑘=1
. 𝐸𝑃 2.48
𝑃𝑃𝑆
𝑖= 𝐴𝐷𝐺
𝑖. 𝐸𝑃
𝑁𝐷𝐺
𝑖=1
(2.49)
Where
IR = Interest rate EP = Electricity price
ADG
i= Annual DG generation of DG (i)
These costs also apply to a conventional generating station where the result for both it and a DG
can be placed side by side and adequate comparison made.
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Also, economic evaluation is also done using the spot market price of electricity. Thus, the economic assessment of losses is obtained using the relation:
𝐸𝐴𝐿 =
𝑔𝑖=1Δ𝐸
𝑖∗ 𝑚𝑝
𝐼𝐶
𝐷𝐺(2.50)
Where
EAL = Economic Assessment of Losses ΔE
i= Avoided losses for g zone mp = Spot market price of electricity IC
DG= Installed DG capacity
The savings in transmitted power can be measured through the difference between the power transmitted with the use of DG and without the use of DG. This can be used to determine the reduction in the use of transmission lines.
For the set of elements in the set Z (from equation 2.39), the savings in transmitted power can be determined from the relation:
𝛥𝑃
𝑍= 𝑃
𝑍0− 𝑃
𝑍𝐷𝐺(2.51)
The savings of the entire transmission network (STP) can be determined by summing the savings of all the zones and expressing it as a percentage of the transmitted power without DG. This, when multiplied by the transmission fee, will give the amount of money saved by the reduction of transmitted power due to the installation of DG in the system.
𝑆𝑇𝑃 =
𝑔𝑖=1Δ𝑃
𝑖Δ𝑃
𝑖0𝑔 𝑖=1
∗ 𝑇 2.52
2.4.1 High Investment Costs
The traditional, conventional system of electric power generation employs the use of a large
generator to generate the power at a remote site which is then transmitted thousands of
kilometres to load centres. This requires a huge investment both in the generation and
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transmission facilities costs whereas DG systems are installed at the load centres and do not need transmission facilities.
The costs for building and running a DG cum conventional power generating station can be quantified using the relation (Prasad V. S. N. T., ―Nigeria’s Electricity Sector - Electricity and Gas Pricing Barriers‖ 2009)
𝐶
𝐷𝐺= 𝐼𝐶
𝑖𝑁𝐷𝐺
𝑖=1
+ 𝑂𝑃
𝑖+ 𝑀𝐶
𝑖𝑁𝐿𝑜𝑐
𝑘=1 𝑁𝐷𝐺
𝑖=1
. 𝐴
𝑖𝑘(2.53)
Where
IC = Investment cost OP = Operations cost MC = Maintenance cost
Furthermore, the need to acquire a large tract of land to build a conventional power plant demands a huge capital investment (reference equation 2.27). The size of land required to site a central power station facility is dependent on two factors: the type of fuel to be used and the technology employed for the power plant (U.S. Department of Energy, ―The Potential Benefits of Distributed Generation and Rate Related Issues That May Impede Their Expansion: A Study Pursuant to Section 1817 of The Energy Policy Act of 2005‖ 2007). This can be estimated from the relation –
𝐿 = (𝑋
𝑖𝑊
𝑖)
5
𝑖=1
(2.54)
Where
L = Average land use for a central power station X
i= Land area required for an ith central power station W
i= Percentage of electricity generation of the ith type
i = Number of assumed generation facility types, where i ranges from 1 to 5.
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Similarly, transmission and distribution lines take a lot of land for their right of way. Table 2.4 highlights the standard right of way for transmission and distribution lines (Eze P. I., Richard J.
U., ―Geospatial Analysis of Encroachments on the Nigeria Electricity Grid Right-of-Way in Parts of Port-Harcourt, Nigeria‖ 2018).
Table 2.4: Standard Right of Way for Transmission and Distribution Lines
S/N VOLTAGE TYPE GROUND
CLEARANCE
STANDARD RoW 1. 330kV Transmission 30 metres 50 metres 2. 132kV Transmission 30 metres 30 metres 3. 66kV Sub-transmission 20 metres 20 metres 4. 33kV Distribution 15 metres 15 metres 5. 11kV Distribution 15 metres 12 metres
The wingspan of a 330kV line is 17.3 metres (Ezeakudo C. P., Ezechukwu O. A., Ani L. U., Ocheni A., ―Voltage Stability Control Through Reactive Power Regulation in the Nigerian 330kV Grid‖ 2015) and Nigeria has 5,650kM of 330kV lines and 6,687kM of 132kV lines which connects 32 330kV and 105 132kV substations (Energypedia, ―Nigeria Energy Situation‖ 2019).
These lengths, multiplied by the wingspan and the required right of way for the lines, gives you the humongous amount of land used up for just the transmission lines. This cost of land, in addition to the land space required for the power station, is part of the initial investment cost, IC, of equation 2.53.
This, in addition to the huge equipment costs involved in building a central power station and transmission and distribution lines network could be avoided by investing in DG.
2.4.2 High Operation and Maintenance Costs
Plant operation level, cost, reliability, availability, safety and environmental compliance are
priorities that determine power plant business performance. Failure of plants to attain high levels
of availability can result in significant risks to the plant operators financially. In order to sustain
high plant availability and also meet regulatory requirements and costs, appropriate maintenance
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strategies need to be integrated with other management functions (Dr Shyong W. F., Professor Mile T., ―The Impact of Operations and Maintenance Practices on Power Plant Performance‖
2014).
Since the power plants cannot deliver energy on the days of scheduled maintenance outage, D
main, then, according to (Ahmadigorji M., Abbaspour A., Rajabi-Ghahnavieh A., Fotuhi-Firuzabad M. ―Optimal DG Placement in Distribution Systems Using Cost/Worth Analysis‖
2019)
∆𝐿𝑜𝑠𝑠
𝑖𝑘= 365 − 𝐷
𝑚𝑎𝑖𝑛365 𝐿𝑜𝑠𝑠
𝑜𝑙𝑑− 𝐿𝑜𝑠𝑠
𝑖𝑘+ 𝐷
𝑚𝑎𝑖𝑛365 𝐿𝑜𝑠𝑠
𝑜𝑙𝑑2.55
∆𝐶𝐼𝐶
𝑖𝑘= 365 − 𝐷
𝑚𝑎𝑖𝑛365 𝐶𝐼𝐶
𝑜𝑙𝑑− 𝐶𝐼𝐶
𝑖𝑘+ 𝐷
𝑚𝑎𝑖𝑛365 𝐶𝐼𝐶
𝑜𝑙𝑑2.56
In document
Large substitution boxes with efficient combinational implementations
(Page 93-96)