Page 255 - Hybrid-Renewable Energy Systems in Microgrids

232 Hybrid-Renewable Energy Systems in Microgrids

For the application of the LPSP in designing a stand-alone hybrid solar–wind sys-
tem, two approaches exist in the literature. The first approach is based on chronologi-
cal simulations, which is computationally burdensome and requires the availability
of data spanning for a certain period. The second one uses probabilistic techniques to
incorporate the fluctuating nature of the resource and the load, eliminating the need
for time-series data [65].
Apart from LPSP, some other power reliability criteria have also been studied,
for example, Loss of Load Probability (LOLP), System Performance Level (SPL)
and Loss of Load Hours (LOLH). The LOLP method measures the probability that a
system demand will exceed the system’s power supply capacity in each period, often
expressed as the estimated number of days over a long period [65]. The SPL is defined
as the probability that the load cannot be satisfied [67]. In some studies, researchers
also explored the method for assessment based on the LOLR (loss of load risk) to
decide an optimum proportion for the solar and wind energy in a hybrid system [68].

4.1.2 System Cost analysis
Several economic criteria exist in literature such as the Net Present Cost (NPC), Lavel-
ized Cost of Energy (LCE) and life-cycle cost. The NPC is the total present value of a
time series of cash flows. That includes the initial cost of all the system components,
the cost of any component replacements and the cost of maintenance [26,69]. The
NPC also considers any salvage costs, which is the value remained in a component
of the system at the end of the project lifetime [65]. HOMER (Hybrid Optimization
Model for Electric Renewable) uses the total NPC for optimal sizing of the renewable
energy sources.
The LCE is defined as the ratio of the total annualized cost of the system to the
annual electricity delivered by the system [26,66]. It has been widely used by the
researchers to evaluate the hybrid solar/ wind system configurations [70]. LCE can be
represented by the following equation [66]:

TAC
LCE =
LCE=TACEtot E tot (12.6)
where TAC represents the total annualized cost and E tot the annual total energy gener-
ated. TAC is calculated considering the present value of costs (the value on a given date
of a future payment or series of future payments, discounted to reflect the time value of
money, for a hybrid energy system. The present value of costs can be composed of the
initial cost, the present value of maintenance cost and the present value of replacement
cost), and the capital recovery factor (CRF) of the hybrid energy system where CRF can
be expressed as [71]

( +
d 1 ) d t
CRF =
CRF=d1+dt1+dt−1 ( + d1 ) −1 (12.7)
t
where d is a discount rate, and t is the useful lifetime of the energy system.