Hybrid Power Systems And Their Role In Emerging Markets

Falling PV system costs make PV diesel hybrid systems an economically attractive and environmentally friendly solution.
Published: Tue 22 Sep 2015

Hybrid power systems are becoming more cost-effective and energy efficient, and the cost of installing these power systems is decreasing due to the increased use of renewable energy sources. Thanks to their lower cost and marginal environmental impact, these renewable power hybrid systems are able to complement or even replace conventional diesel generators.

Solar-diesel hybrid systems, for instance, already represent profitable (and reliable) alternatives, particularly for large-scale industrial users in remote, yet sunny, regions.

Clear benefits of PV diesel hybrid systems

There is no question that pure diesel power generation for industrial consumers in remote regions located far from the utility grid, leads to increasing operating costs. In comparison, PV-diesel solutions offer independence from escalating diesel prices, reduced operating and maintenance costs, and can offer an efficient electricity supply.

The opportunities around off-grid generation are growing and are already being exploited, according to David Taylor-Smith, Regional Managing Director, EMEA, Aggreko who spoke to Engerati at African Energy Forum (as discussed in the live studio interview above.) He explained that the lack of grid infrastructure creates the opportunity to put in place distributed power at different levels, from household to industrial.

He added that off-grid applications are being used by Telecoms for instance. Remote mast networks create the opportunity to use combinations of solar battery hybrid and traditional high speed engine. These combinations offer some interesting economic advantages because different sources can run at different times of the day to match customer demand.

With fixed pricing and no fuel-price volatility, solar represents a meaningful value proposition for anyone using diesel as their primary energy source. Solar should be viewed as a competitively priced source of fuel and not just additional generation capacity.

Despite sinking oil prices, worldwide demand for power from PV is still on the rise. The reason for this is that PV modules are now 75% less expensive than they were six years ago.

Reports from the International Renewable Energy Agency (IRENA) indicate that, in many regions, PV electricity can now be produced at the same price as electricity from fossil fuels or lower.

PV-diesel hybrid systems therefore have the potential to replace conventional diesel generators, particularly in remote areas. For instance, a remote community in Cobija, Bolivia will soon be host to the world's largest PV-diesel hybrid power plant with a lithium-ion battery system. The 5MW of PV will be hooked up to the battery so that excess energy is stored. The German army has also seen the opportunity in solar and has opted for mobile solar containers with PV modules and battery storage systems in order to reduce the consumption of fossil fuels.

PV hybrid power systems-a growing market

The number of hybrid systems used around the world is on the rise. Various renewable technologies such as PV-wind and PV-hydropower are being combined in single plants. Here, costs can be saved and the environmental impact reduced if several renewable technologies share the same infrastructure.

The global hybrid grid market was valued at $1,05 billion in 2014 and is projected to reach $1,92 billion by 2019 at a CAGR of 12.8% from 2014 to 2019.

To take advantage of this dynamic market and overcome various technological challenges, companies are forming strategic partnerships. For instance, Northern Power Systems, a global power electronics company that designs, manufactures and sells smart power converter solutions for advanced grid support, generation and energy storage applications, announced a strategic partnership with MCM Energy Labs, part of ELVI Industrial group.

The collaboration aims to target the growing demand for hybrid energy systems in the global market.

Northern Power and MCM will deliver hybrid power systems for both grid-connected and off-grid applications.  Offerings are expected to include multiple source power generation with advanced power technology solutions, in some cases combining sustainable, low cost power with traditional generation, and in other cases bringing complete, sustainable power solutions optimized to lower cost and increase reliability.

Northern Power Systems' product line of wind turbines and power converters fully complement MCM's specialization in hybrid power control, integration and project deployment.

By joining forces, both companies believe their modular solutions integrating sustainable power can bring increased grid reliability, lower long term operating costs for energy generation, and a reduction in both fossil fuel dependency and carbon emissions.

The advanced hybrid grid solutions are expected to bring considerable value to commercial and industrial applications, as well as off-grid remote needs that often have limited choices in powering unmet and growing energy demands.

While PV hybrid power systems certainly fall under the label ‘temporary power’ , its distribution is spreading fast, thanks mainly to its ability to quickly meet urgent needs not only for event, construction, and post-disaster emergency power but also for fast-growing economies and stressed grids. This is making it a serious competitor for “permanent” power in some situations. Mr Taylor-Smith says that the emergence of new technologies and the ability for Aggreko to use their balance sheet and use those assets in multiple locations. Customers will be sharing asset costs which makes temporary power even more cost-effective. He says that that the new technologies will close the gap between temporary and permanent power costs. “I can see us nibbling into the permanent power market.” He says that this will be possible through offering even more economic benefits with no complications of financing and quick speed of delivery and flexibility in consumption needs.

Hybrid energy system challenges

Ineffective control systems and equipment optimization leading to uncompetitive levelized cost of energy are the main challenges for the development of hybrid energy systems, both grid-connected and off-grid.  

But a collaboration like Northern Power and MCM should see the development of cutting-edge solutions delivering the lowest operating cost of microgrids for effective optimization of renewable technologies and turnkey deployment for grid-connected as well as island and remote applications.

The partnership intends to address opportunities across the globe and incorporate the most effective and productive technologies both for generation (wind, solar and other) as well as storage (batteries and mechanical energy storage systems (ESS)), and control and software overlays.

Research supports growth

To support the growth of specifically diesel-PV hybrid energy systems, solar inverter manufacturer SMA has set up a test centre at the company’s headquarters in Niestetal, Germany.

Looking at systems that combine solar power, diesel generation and battery storage with energy management, one main function of the centre will be to analyse the effects on grid stability of running the multiple power sources.

Standalone hybrid systems are designed to operate independently and autonomously, with communities and industries such as mining operations in remote areas increasingly looking to use them to replace reliance on costly and polluting fossil fuels. But, completely replacing the diesel generator altogether is not often an option, with diesel commonly required for backup if nothing else.

SMA’s test centre will examine how to manage frequency and voltage in standalone systems. Load variations and voltage fluctuations, will be among the parameters tested.

Already today, there is a significant cost advantage of PV-diesel hybrid systems compared to conventional diesel generating systems. This gap is set to grow even larger in the future as battery prices decrease, the quality of technology improves and  collaboration brings about innovation.

Further reading

Microgrid News-Global Hybrid Grid Market by Application, by Consumption Pattern, and by Geography Forecasts to 2019