Techno-economic analysis of a PV generator operating in a hybrid diesel-unreliable grid system

Electrical demand continues to increase in both developing and developed countries. In Lebanon, the cost of electricity is relatively high because the utility burns expensive heavy fuel oil and gasoil in low-efficiency power plants. In addition, customers are using expensive private diesel generators to compensate for power shortages caused by the unreliable grid hence further escalating the energy bill of consumers and the GHG emissions. The aim of this paper is to examine the feasibility of implementing PV systems along the existing diesel generators in order to reduce the consumption of diesel fuel used in private generators. A techno-economic analysis is carried out to test the feasibility of such a hybrid system to power a small industrial user. The analysis takes into consideration Government plans regarding power generation expansion, restoration of full power supply in the near future, tariff increase and the commitment to increase the share of renewable energy to 12% by 2020. Simulation results show that the proposed hybrid scheme is technically feasible but economically not very attractive due to the long payback period and the low internal rate of return. The design and implementation of selected incentives that are suitable for the Lebanese case will make such systems very attractive both in the short and long terms.