A Multi-period Optimization Model for the Design of an Off-Grid Micro Hydro Power Plant with Profitability and Degradation Considerations

Abstract

Micro hydroelectric power is a clean and efficient source of energy that has been used for the electrification of rural off-grid communities. However, numerous micro hydro installations have failed as caused by factors such as poor site selection and uneconomical design of materials, among others. A multi-period mixed integer linear programming model for the design of an off-grid micro hydro power plant is then developed. The proposed model is able to provide technical specifications such as the penstock dimensions, turbine choice, weir height, and site choice in order to fulfill a community’s demand while simultaneously maximizing the net present value of the investment. The model may choose among different productive end uses, with each being subject to a respective investment cost as well as a set-up time and degradation rate. Computational experiments demonstrate the different capabilities of the model to address real-life scenarios such as population growth and streamflow variability. An increase in energy consumption due to population growth leads to the requirement of a more powerful turbine. Capacity limitations likewise prevent the community to invest in productive end usage. Meanwhile, streamflow variability potentially reduces the capability of the power plant to produce electricity. In these instances, batteries had to simultaneously be used in order to augment the increase in energy requirement.

Appendix

Model Parameters

Generators

The price of the generators, as seen in Table 7, is set in order to reflect the tradeoff between increasing cost and increasing efficiency of the generators.

Table 7 Generator cost and efficiency

Productive end usage

The productive end usages that were included in the model are assumed to have a constant income per year. Each would have their own costs of investing and comes with an additional capacity that would need to be fulfilled. This is hypothetical data aimed to capture the how the model would respond to a tradeoff between revenue versus capacity increase, as well as its impact on degradation due to the increase in load. This can be seen in Table 8.

Table 8 Possible productive end usage

Degradation

The rate of baseline degradation of the plant was set at 0.5%. Power plants were assumed to degrade at around 0.5–1.5% per year, with micro hydro power plants degrading slower than PV and wind plants.

Other cost parameters

The cost of batteries were set at 200 USD/kW installed with each battery having a lifespan of 3 years. Once a battery is purchased and used, this adds to the usable capacity of the micro hydro power plant for 3 years. The shutdown cost meanwhile of each PEU is set to be half of the initial investment cost for the PEU. It must be noted that given the localized nature of materials and equipment for micro hydro power plants, it may be difficult to sell off the materials; therefore, it only incurs a shutdown cost.

The cost of a micro hydro power plant installation may range from around 20,000 to 100,000 USD depending on the capacity of the plant. Since the community demand of Sitio Pariña is set at 15 kW, the initial available cash set for the model was 40,000 USD in order to be just enough to satisfy the requirements.

Sitio Pariña currently has 98 households each with a monthly payment of PHP 130.00 per household (Ubando et al., 2018). This is because this is the amount they pay for kerosene lighting, and with the micro hydro power plant replacing their kerosene lighting, this is the most that they should be willing to pay. Yearly, this amounts to PHP 152,880.00, and when converted to USD, it roughly amounts to 3000 USD. This is one of the sources of positive cash flow of the system.