Techno-Economic Feasibility of Off-Grid Renewable Energy Electrification Schemes: A Case Study of an Informal Settlement in Namibia

Abstract

This paper examines different off-grid renewable energy-based electrification schemes for an informal settlement in Windhoek, Namibia. It presents a techno-economic comparison between the deployment of solar home systems to each residence and the supplying power from either a centralized roof-mounted or ground-mounted hybrid microgrid. The objective is to find a feasible energy system that satisfies technical and user constraints at a minimum levelized cost of energy (LCOE) and net present cost (NPC). Sensitivity analyses are performed on the ground-mounted microgrid to evaluate the impact of varying diesel fuel price, load demand, and solar photovoltaic module cost on system costs. HOMER Pro software is used for system sizing and optimization. The results show that a hybrid system comprising a solar photovoltaic, a diesel generator, and batteries offers the lowest NPC and LCOE for both electrification schemes. The LCOE for the smallest residential load of 1.7 kWh/day and the largest microgrid load of 5.5 MWh/day is USD 0.443/kWh and USD 0.380/kWh, respectively. Respective NPCs are USD 4738 and USD 90.8 million. A sensitivity analysis reveals that variation in the fuel price and load demand changes linearly with system costs and capacities. However, reducing the PV module price in an energy system that includes wind and diesel power sources does not offer significant benefits. Furthermore, deploying an energy system that relies on fossil fuels to each residence in an informal settlement is not environmentally responsible. Unintended negative environmental impacts may result from the mass and simultaneous use of diesel generators. Therefore, a microgrid is recommended for its ability to control the dispatch of diesel generation, and its scalability, reliability of supply, and property security. A roof-mounted microgrid can be considered for piloting due to its lower initial investment. The electricity tariff also needs to be subsidized to make it affordable to end-users. Equally, government and community involvement should be prioritized to achieve long-term economic sustainability of the microgrid.