Abstract
Electricity generation in South Africa relies on several different resources to meet the country's electricity demand. These resources range from coal accounting for about 85% of the country's electricity production, renewable energy sources accounted for about 5%, one nuclear station accounting for about 6%, 1% from natural gas and pumped hydro (1.9 GW) used to balance the grid and provide backup power during peak demand periods. Recently, the energy landscape has started to change due to the national power grid decarbonization program that the government has adopted as it accelerates the integration of renewable energy sources into the conventional power grid. However, this paradigm shift of electricity generation has been affected by the dilapidated power infrastructure and rising energy demand. This has caused a supply-demand imbalance which has resulted in the implementation of load shedding. Scheduled load shedding has become a never-ending occurrence at the national level and many industries have started to look for energy alternatives to meet their energy demand. Careful planning and modelling to achieve economies of scale and to optimize the performance and reliability of alternative energy systems are required as industries seek to reduce their grid dependency, electricity demand and consequently reduce their electricity bills. This research study proposed the use of a solar PV system and battery energy storage system (BESS) to supply the load demand of a foundry company. The proposed energy system was designed such that the foundry company can avoid peak demand penalties and to reduce the energy bill without changing its load profile. Furthermore, financial modelling was also performed to determine the capital cost, net present value (NPV), net savings, levelized cost of energy, and payback period of the solar PV system paired with BESS. Different scenarios were considered and assessed in terms of their technical and cost parameters. System Advisor Model (SAM) software was utilised to simulate and optimize both the performance and financial models of the foundry company.
The analyses showed that a solar PV system with 547 kWp capacity is the optimal energy system suitable for supplying the foundry company load demand. The modelled system predicted an annual energy generation of 937 847 kWh and about 83% performance ratio. For the first year of operation, the suggested ideal 537 kWp solar PV system will reduce the foundry's (department A) annual energy bill by around 46%. The system requires a R7.2 million investment with a 6.3-year payback period and an LCOE of 77.76 cents per kWh. Demand side strategies were also
vii
investigated and cost saving of about 13% was achieved when the strategies were implemented. There is a potential for the foundry to achieve about 5%-10% energy-cost savings from implementing energy conservation through behaviour change.
When an increased capacity (surplus energy) of a solar PV system (990 kWp) was modelled and integrated with two different battery storage systems, it was found that the lithium iron phosphate battery type is a better option. This is because of being able to perform better during the peak demand shaving application, cheaper over-time, and less prone to overheating and thermal runaway, which reduces the risk of fire and explosion. This battery technology is also more stable at high temperatures and can maintain their performance even at high discharge rates. The lithium iron phosphate battery was able to store surplus energy from the 990 kWp solar PV system output and the foundry can use it to either supply night loads (achieve cost savings during evening peak) or to create flexibility in the system through peak shaving thus reducing peak demand penalties for the foundry energy bill. Energy cost saving of about 70.35% was achieved in this case scenario.
The results from this case study show that it is important to consider demand side management opportunities of an entity before optimizing the alternative energy supply system of choice. This ensures that the supply system of choice is not oversized to meet an inefficient load. This reduces the capital cost of the oversized supply system to meet demand (too much capacity is expensive). Also, too little capacity leads to supply failures, therefore it is important to consider the load size to properly design the system to meet the demand. The results from this case study can therefore be a guide to other entities who are interested in designing their own alternative energy systems to supply their load and reduce their electricity bills, by initially reducing energy consumption through integrating demand side management (DSM) fusing demand response, energy efficiency and promoting behavioural change before considering implementing distributed energy using solar PV/battery energy storage system (BESS).