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PV-BESS hybrids make economic sense as they approach grid parity

Renewable Energy Project Developer and EPC and O&M provider juwi, highlights significant economic benefits in switching to solar and battery hybrid power for heavy energy users connected to the South African grid.

At the recent SA Energy Storage conference held in Johannesburg, Doreen Kanetey-Essel, sales engineer and business development consultant with juwi presented an award-winning paper on, “Grid parity analysis of a PV-BESS hybrid case study.”

Using a proprietary technical and economic model for the optimal sizing of a grid-connected PV-BESS combination for a mine in development located in the Northern Cape of South Africa, the paper presented the analysis of grid parity dynamics based on the levelized cost of electricity concept to examine the timings and conditions for a PV-BESS to reach grid parity.

Kanetey-Essel outlined how in the last few years, PV systems have developed into a highly competitive power generation option, and how BESS systems can cross the last hurdles of ensuring PV power is fully dispatchable and not totally reliant on the availability solar irradiation.

“Battery technology and manufacturing capacity have developed rapidly in recent years mainly driven by e-mobility. BESS costs have reduced to levels where PV plus battery can provide dispatchable power at competitive prices,” explained Kanetey-Essel.

“One noteworthy example is the World’s largest BESS called Horns dale Power reserve in South Australia. The 100 MW/129 MWh BESS is co-located to a windfarm and additionally provides exceptional high-speed ancillary services to stabilize the grid. The advancement of BESS technology and continued cost reductions in PV and BESS, lead to the forecast that a growing number of high energy users such as mines or grid operators will find it beneficial to opt for energy or ancillary services from PV-BESS systems.”

Kanetey-Essel cited a Cost and SWOT analysis study conducted by Zharan, on integration of RE into the mining industry, where a research finding from Navigant shows that the number of mining projects that will utilize renewable energy technologies for its operations is set to increase: “Navigant reports that by 2020, mining operations worldwide will deploy more than 1,438 megawatts in renewable energy”. This equates to an expected deployment of 500MW RE projects for the mining industry in the next two years.

The paper presents the preliminary findings from an ongoing case study being performed on a mine in development to determine the most economical, secure and environmentally sustainable solution for the energy needs of the mine.

The case study investigates how the mine can maintain security of supply at the lowest possible tariff and if possible and beneficial, how it can mitigate future electricity price risks from the grid.

Using a proprietary technical and economic model for the optimal sizing of a grid-connected PV-BESS solution for the mine situated in the Northern Cape of South Africa with an estimated life of mine of 13 years and an average load demand of 35 MW. The paper presents the results of the analysis of grid parity dynamics based on the levelized cost of electricity (LCOE) concept to examine and determine the timings and conditions under which this mine could supplement its energy needs with solar energy and battery technology without incurring higher cost or a decrease in reliability of power.

Key conclusions of the case study

In present day 2018, based on the Eskom Megaflex electricity rates in South Africa, the mine’s energy demand and at the given location, a PV power plant behind the meter provides substantial cost and CO2 savings.

“juwi’s system design and modelling shows that behind-the-meter Solar PV systems are already cost effective now compared to South African utility’s Megaflex tariff,” comments Kanetey-Essel.

“This detailed analysis of a mining project in development shows that for a 42MWp behind the meter PV plant in 2018, the estimated cost and CO2 savings over the lifetime of the project is R2.45 bn which is equivalent to 61% of the grid electricity cost and a 33% CO2 savings of 95,439tCO2e per year.”

The advancement of Battery Energy Storage System (BESS) technology and continued cost reductions for PV and BESS lead to a fast-approaching grid parity around the year 2023.

“This will unlock an even higher percentage of clean solar power,” states Kanetey-Essel.

“At the investigated mine, the PV-BESS system could grow to 82 MWp with a 33MW/76MWh that could save the mine R1.36 bn within 8 years.”

Kanetey-Essel concludes: “We can therefore offer lower cost of electricity to industrial and commercial energy users with reliable and seamlessly integrated solar, battery or even wind hybrid solutions.

“We must recognise that the study is only a preliminary assessment; a detailed and in-depth analysis is required for each and every site, tariff and revenue structure to conclude an appropriate technology mix PV BESS or other RE sources such as Wind.”

After the successful construction and commissioning of the award winning and world‘s largest fully off-grid solar-diesel-and battery storage plant of 10.6MW PV coupled with 6MW of battery storage and 19MW of diesel for the De Grussa Copper-Gold Mine in 2016, the juwi Group has since seen significant interest in Hybrid systems arising from the commercial and industrial sector and most specifically, the mining sector.

To address the growing needs of the PV-Hybrid market juwi has further strengthened its hybrid team in South Africa and Australia to provide development, EPC and O&M services for hybrid solar and wind systems integrated with battery energy storage and thermal generators (diesel, HFO, gas).

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