Investigating the Impact of Economic Uncertainty on Optimal Sizing of Grid-Independent Hybrid Renewable Energy Systems

Abstract

One of the many barriers to decarbonization and decentralization of the energy sector in developing countries is the economic uncertainty. As such, this study scrutinizes economics of three grid-independent hybrid renewable-based systems proposed to co-generate electricity and heat for a small-scale load. Accordingly, the under-study systems are simulated and optimized with the aid of HOMER Pro software. Here, a 20-year average value of discount and inflation rates is deemed a benchmark case. The techno-economic-environmental and reliability results suggest a standalone solar/wind/electrolyzer/hydrogen-based fuel cell integrated with a hydrogen-based boiler system is the best alternative. Moreover, to ascertain the impact of economic uncertainty on optimal unit sizing of the nominated model, the fluctuations of the nominal discount rate and inflation, respectively, constitute within the range of 15–20% and 10–26%. The findings of economic uncertainty analysis imply that total net present cost (TNPC) fluctuates around the benchmark value symmetrically between $478,704 and $814,905. Levelized energy cost varies from an amount 69% less than the benchmark value up to two-fold of that. Furthermore, photovoltaic (PV) optimal size starts from a value 23% less than the benchmark case and rises up to 55% more. The corresponding figures for wind turbine (WT) are, respectively, 21% and 29%. Eventually, several practical policies are introduced to cope with economic uncertainty.