Domestic solar water heating system in Oman: Current status and future prospects

The excessive usage of fossil fuels worldwide is causing environmental problems. One solution to these problems is the exploitation of available renewable energy resources, including solar energy. This exploitation of renewable energy resources becomes essential to meet the large energy demand that resulted in depletion of fossil fuel resources, fuel price uncertainty and volatility, and growing concerns about global warming. Oman is located in a geographical region with an abundant and reliable supply of solar energy throughout the year. This paper presents a thorough financial, economic and technical analysis of using Solar Water Heaters (SWHs) in residential units. It was found that using SWHs in all governorates of Oman can save up to 1859 GWh of electrical energy annually, which is equivalent to the annual energy produced by a power station of 212 MW size. Moreover, the net annual reduction in CO₂ emission exceeds 1.227 million tons. In addition, the economic feasibility of installing SWHs in residential units is presented. The study shows that the dissemination of SWHs in Oman requires setting policies that motivate people to use them. Besides, subsidies to SWHs customers and/or investors will help making the price of these devices more affordable to the public.     

Comparing the cost of electricity sourced from a fuel cell-based renewable energy system and the national grid to electrify a rural health centre in India: A case study

The provision of electricity is a key component in the development of a country’s health care facilities. This study was performed to estimate the cost of powering a rural primary health centre, in India with a decentralised renewable energy system. The costs were also compared between a decentralised renewable energy system and providing electricity from a grid source. The critical or break-even distance that makes electricity from a decentralised renewable energy system cost effective over that from a grid source was determined. The decentralised renewable energy system considered was a hydrogen-based fuel cell for the generation of electricity with hydrogen extracted from biogas obtained from biomass. The software program HOMER was used for the simulation analysis. The cost of a decentralised renewable energy system was found to be between seven times and less than half that of conventional energy, and the break-even distance was between 43.8 km to a negative distance for varying ranges of input component costs. The results of this study indicated that the use of a decentralised renewable energy system to power a rural primary health centre is both feasible and cost effective, and may even be cheaper than using electricity from a grid source.     

Financing off-grid rural electrification: Country case Nepal

More than 61% of the total population of Nepal has no access to electricity. The majority is poor and live in rural areas. In recent years, rural electrification has had high priority in government policies, and micro hydro and solar PV have been the most commonly adopted off-grid technologies. The financial mix in the off-grid rural electrification is generally characterized by subsidy, equity and credit. In this paper, we analyze how rural electrification has been funded and the impact of subsidy policies on the renewable energy market, focusing on the projects implemented under the ‘subsidy policy 2000’. Our study is based on official data obtained from authorities in Nepal and a survey carried out among private supply and installation companies, NGOs and financial institutions. The study shows that awareness levels in adopting RE-technologies and willingness of people to access and pay for electricity have increased significantly. However, there is a huge financial gap between the cost of electrification and the affordability. Bridging this gap is a crucial issue that needs to be addressed for the smooth expansion of rural electrification in the country.     

A method for allocating renewable energy source subsidies among final energy consumers

In a new context of growing need for renewable energy sources (RES), tariff design has become a critical component of energy system regulation. A methodology for allocating the cost of RES subsidies that ensures an optimal balance between compliance with the main regulatory principles of tariff design and each state's specific policy is of cardinal importance in the current context. This paper presents and discusses a novel methodology to allocate the RES subsidy costs, which consists of distributing them among final energy consumers, in proportion to their consumption, regardless of the type of final energy consumed (liquid fuels, gas, electricity or coal).     

CDM potential of bagasse cogeneration in India

 So far, the cumulative capacity of renewable energy systems such as bagasse cogeneration in India is far below their theoretical potential despite government subsidy programmes. One of the major barriers is the high investment cost of these systems. The Clean Development Mechanism (CDM) provides industrialized countries with an incentive to invest in emission reduction projects in developing countries to achieve a reduction in CO₂ emissions at lowest cost that also promotes sustainable development in the host country. Bagasse cogeneration projects could be of interest under the CDM because they directly displace greenhouse gas emissions while contributing to sustainable rural development.     

Renewable deployment in India: Financing costs and implications for policy

India′s ambitious goals for renewable energy raise many questions regarding the nature of investment required. We conduct financial modeling of actual renewable projects in India; and derive the following insights. First, the high cost of debt is the most pressing problem: higher cost and inferior terms of debt in India may raise the cost of renewable energy by 24–32% compared to the U.S. Second, even if cost of debt goes down, loan terms – including short tenors and variable interest rates – will become significant impediments, given that they add 13–14% to the cost of renewable energy in India compared to the U.S. Finally, due to the high cost of debt, policy lessons from the U.S. and Europe; which focus on finer instruments such as duration of revenue-support, revenue-certainty, investor-risk-perception, and completion/cost-certainty; are not likely to be as effective, with potential impacts on the cost of renewable energy in the 3–11% range. In fact, we find that an interest-rate subsidy, which reduces the cost of debt, reduces the overall subsidy burden by 13–16%. This suggests that Indian policymakers need to prioritize the provision of low-cost, long-term debt and take a closer look at the successful efforts by China and Brazil.     

Small-scale bioenergy projects in rural China: Lessons to be learnt

Large amounts of small-scale bioenergy projects were carried out in China's rural areas in light of its national renewable energy policies. These projects applied pyrolysis gasification as the main technology, which turns biomass waste at low costs into biogas. This paper selects seven bioenergy projects in Shandong Province as a case and assesses these projects in terms of economy, technological performance and effectiveness. Results show that these projects have not achieved a satisfying performance after 10 years experience. Many projects have been discontinued. This failure is attributed to a complex of shortcomings in institutional structure, technical level, financial support and social factors. For a more successful future development of bioenergy in rural areas, China should reform its institutional structure, establish a renewable energy market and enhance the technological level of bioenergy projects.     

Modelling and analysis of resource scheduling in restructured power systems considering wind energy uncertainty

Concerns over rapid transformation of global climate patterns resulted in wide deployment of renewable energy sources especially wind energy. However, intermittent nature of wind energy makes resource scheduling aspect of system operator more complex. The emerging deregulation policies have added to the complexity of scheduling problem. Therefore, treating and scheduling of wind energy on deterministic basis would result in non-optimal energy dispatch and increased operation cost over scheduling horizon. This paper focuses on optimal scheduling methodology of wind energy in day ahead market (DAM) considering expected costs due to wind uncertainty in real time (RT) spot market under deregulated market structure. This paper introduces various possible costs, namely, spot market compensation cost, additional reserve cost and rescheduling cost applicable to deviation in scheduled power from DAM to spot market. The costs can be derived from front-end information of DAM, historical and statistical estimate of RT market conditions. The effectiveness of proposed methodology is examined using IEEE 30 bus system with thermal and wind energy generators. In addition, sensitivity analysis is performed to examine the effect of incentive margin on DAM scheduling. Simulation results are presented, discussed and affirmed the effectiveness of proposed scheduling methodology.     

Contribution of green labels in electricity retail markets to fostering renewable energy

In European countries, retailers are obliged to disclose the energy source and the related environmental impacts of their portfolio over the preceding year. The electricity supplied in the Dutch retail market is presented as renewable energy for 34%, but this relatively high share is for 69% based on certificates (Guarantees of Origin) which are imported from in particular Norway. The certificates are used to sell green electricity to consumers. The premium for green electricity which is actually paid by Dutch consumers is no more than a few percentages of the retail price. The low level of this premium is related to the abundant supply of certificates at low marginal costs from Norway. This also means that the premium for green electricity is too low to give an incentive for investments in new capacity. Hence, the current labelling system for renewable electricity is mainly valuable, besides being an instrument for tracking and tracing of renewable energy, as a marketing instrument for electricity retailers. The effectiveness of Guarantees of Origin as a policy instrument to foster renewable electricity sources is weak. This effectiveness can be raised by implementing restrictions on the international trade or the issuance of new certificates.     

Optimal regulation of renewable energy: A comparison of Feed-in Tariffs and Tradable Green Certificates in the Spanish electricity system

Incentives for renewable energy based on Feed-in-Tariffs have succeeded in achieving high levels of renewable installed capacity. However, these incentives have not been responsive to market conditions or price signals, imposing in some cases a great financial burden on consumers when Renewable Energy Sources reached significant levels. A way out of this problem could be a market mechanism where incentives respond to the level of investment on renewables. We explore this issue comparing a regulatory system based on Tradable Green Certificates, able to react to market changes, to a Feed-in-Tariffs incentive scheme. We model the strategic interaction between participants in the electricity pool and the Tradable Green Certificates market and focus on the optimal regulation for the retailer segment, which generates the desired demand for green certificates as a decreasing function of the certificate price. We then calibrate our theoretical model with data from the Spanish electricity system for the period 2008–2013. Simulations show that a green certificate scheme could both achieve the 2020 targets for renewable electricity and reduce regulatory costs. However, the role of regulators is still important, since setting the right target for renewable electricity affects the cost burden of the system.     

Using the binomial model for the valuation of real options in computing optimal subsidies for Chinese renewable energy investments

For the valuation and implementation of renewable energy investments, the issue of providing private investors with a financial incentive to accelerate their investment is frequently a critical component. We apply this principle to the Chinese context. This paper focuses on using the binomial model to compute the required subsidy that would incentivize investors to optimal immediate exercise of the American-style option embedded at the launching phase of the projects for Chinese renewable energy investments. In addition, this paper also aims at contrasting the binomial model with the more-laborious Monte Carlo simulation previously used to evaluate the proper subsidy. By using the same data but a different method, and reducing the number of uncertain factors to one, it is suggested these two methods have similar outcomes but the binomial method requires substantially less computation and is more self-explanatory. This paper thus provides government with an easy-to-implement alternative way to compute the required subsidy.     

全球太阳能热利用行业激励政策及对我国的启示

太阳能热利用是一种重要的可再生能源,在我国已经实现了商业化运行。如何支持已实现了商业化运行的太阳能热利用行业,是目前可再生能源政策研究的热点问题。本文研究分析了立法、财政补贴和间接市场等激励政策的适用环境,剖析了欧盟、西班牙、以色列和澳大利亚等国家和地区的现行激励政策,针对我国的产业发展现状,提出了相应的政策建议。     

A comparison of the drivers influencing adoption of on-farm anaerobic digestion in Germany and Australia

This review examines the drivers behind the adoption of on-farm anaerobic digestion in Germany where there were more than 4000 plants operating in 2009. In Australia, only one plant is operating, at a piggery in the State of Victoria. Germany’s generous feed-in-tariffs for renewable energy are typically given the credit for promoting investment in on-farm anaerobic digestion. But the particular biophysical and socio-economic character of farming in the country provided the fertile ground for these financial incentives to take root. Energy security has also been a major driver for the promotion of renewable energy in Germany since it imports over 60% of its energy needs. In contrast, Australia is a net energy exporter, exporting about two-thirds of its domestic energy. Although it has considerable potential for application in Australia, anaerobic digestion is unlikely to be widely adopted unless new incentives emerge to strongly encourage investment. Stronger Australian regulation of manures and effluent may serve as an incentive to a limited extent in the future. Yet the experience in Germany suggests that regulation on its own was not sufficient to encourage large numbers of farmers to invest in anaerobic digestion. Even with generous incentives from the German government, increasing construction costs and the rising cost of energy crops can put the financial viability of anaerobic digestion plants at risk. Unless improvements in efficiency are found and implemented, these pressures could lead to unsustainable rises in the cost of the incentive schemes that underpin the development of renewable energy technologies.     

CDM potential of solar water heating systems in India

The Clean Development Mechanism (CDM) provides industrialized countries with an incentive to invest in emission reduction projects in developing countries to achieve a reduction in CO₂ emissions at lowest cost that also promotes sustainable development in the host country. Solar water heating systems (SWHs) could be of interest under the CDM because they directly displace greenhouse gas emissions while contributing to sustainable development by reducing local pollutants. However, there are only three solar water heating projects under the CDM so far. An attempt has been made to estimate the CDM potential of SWHs in India in this study. Our estimates indicate that there is a vast theoretical potential of CO₂ mitigation by the use of SWHs in India. The annual CER potential of SWHs in India could theoretically reach 27 million tonnes. Under more realistic assumptions about diffusion of SWHs based on past experiences with the government-run programmes, annual CER volumes by 2012 could reach 4–9 million and 15–22 million by 2020. This would require that the government sets the subsidy level for SWHs at a level that allows them to become viable with the CER revenue. From a macro-economic point of view this makes sense if the sustainability benefits are deemed sufficiently high to warrant promotion of this project type.     

Application of ‘C.A.R.B. financial methodology’ analysis for alternative energy technologies into UK housing

Current energy trends in UK housing are reviewed and then assessed by introducing the ‘CARB financial analysis’ methodology. CARB is an acronym for ‘Carbon Abatement’, as it evaluates the potential carbon-dioxide reduction from different technologies; ‘Relative’, as all the technologies examined are dependant on various primary sources; and ‘Balance’, as the cost of surplus CO₂ is quantified. According to conventional financial analysis, most of the technologies examined have the potential to provide positive returns on the investments especially for those with an environmentally conscious agenda. Further reduction of up to 30% of most installed alternative energy systems cost is required to compete with an investment in, e.g., a UK pension scheme. Using the ‘CARB financial analysis’ the cost of reducing CO₂ has been quantified, and compared with the potential cost of climate change impact. Conventional installed solar technologies are not financially attractive both with a pay back period calculations and ‘CARB financial analysis’ under current market costs and governmental subsidy regimes. Heat recovery technologies could be sensible investments, both in financial and environmental terms under particular assumptions; especially if the investment budget is small. The use of cogeneration technologies provides a financial advantage in the attempt to minimise the cost of climate change impact, as pay back period of such investment could be less than 7 yr, and the cost of CO₂ saved could be two to seven times less than the global damage cost of carbon emissions.     

Subsistence electricity renewable energies and development

This article suggests that the use of some new and renewable sources of energy (NRSE) in rural electrification may lead to ‘subsistence electrification’. Grid rural electrification, it is argued, contributes to development not by substituting for existing fuels and energy sources at lower cost but by transforming the marginal costs of supply. Techniques commonly used to evaluate NRSE do not capture the developmental implications.     

Feasibility assessment of Anchor-Business-Community model for off-grid rural electrification in India

The concept of “micro-grids” as self-sustained power systems is driven largely by business models, which have to be developed by considering the perspectives of all the stakeholders. This study tests the feasibility of the Anchor-Business-Community model of off-grid electrification in a cluster of two Hamlets in Uttar Pradesh, from the perspective of a Renewable Energy Service Company. Telecom towers, Flour Mills and rural communities have been considered as the Anchor, Business and community customers respectively. Primary surveys have been carried out to assess socio-economic characteristics, renewable energy resource availability and energy demand. Cost savings has been assumed to be the primary incentive for the customers to switch to clean energy. Cash flow analysis has been done to estimate the level of profitability of the project with and without the current level of subsidy. Solar Photovoltaic systems, Biomass gasification systems and Solar-Biomass hybrid systems have been modelled using HOMER. The model for Solar PV system with subsidy was found to be the most robust out of all three models in the scenario analysis. Solar-Biomass hybrid systems and Biomass Standalone systems are found to have the potential to offer a healthy level of returns under the best case and most likely scenarios.     

Economic analysis of standalone and grid connected hybrid energy systems

A pilot region was selected and cost analysis of using renewable energy sources with a hydrogen system for that region’s energy demand is introduced, in a techno-economic perspective, in this paper. The renewable energy potential for the region was evaluated by implementing energy cost analysis. The study also evaluates the feasibility of utilizing solar and wind energy with hydrogen as a storage unit to meet the electricity requirements of the pilot region as a standalone system and in conjunction with the conventional grid based electricity.In order to simulate the operation of the system and to calculate the technical and economic parameters, micropower optimization program Homer (NREL, US) was used in this study. Homer requires some input values, such as technological options, cost of components, and resource compliance; and then the program ranges the feasible system configurations according to the net present cost (system cost) by using these inputs.The pilot region in this study, where the renewable based energy will be used, is determined to be Electrics & Electronics Faculty, Istanbul Technical University.     

Assessment of Korean customers’ willingness to pay with RPS

To increase the use of renewable energy, the Korean government will introduce the Renewable Portfolio Standard (RPS) in 2012. The RPS places responsibility for extra renewable energy costs on the consumers and allows price competition among different renewable sources. Accordingly, this study analyzes through the contingent valuation (CV) the willingness of Korean households to pay more for electricity generated by wind, photovoltaic (PV), and hydropower. Our empirical results show that, although the willingness to pay (or WTP) was highest for wind power and lowest for hydropower, the differences in WTP among the renewable sources were statistically insignificant. This suggests that Korean consumers prefer a renewable portfolio that minimizes power supply costs.The average WTP for all three energy types was KRW 1562.7 (USD 1.350) per month per household, which was approximately 3.7% of the average monthly electricity bill in 2010. This amount represents only 58.2% of what the Korean government allocated in its budget to the new and renewable energy dissemination program in 2010. Thus, our results imply that the promotion of the new and renewable energy dissemination program may be difficult only with the WTP for electricity generated from renewable sources. Specifically, the mean WTP will not support the set-aside dissemination capacity for PV after 2014.     

Retail price effects of feed-in tariff regulation

The feed-in tariff regulation is the widest spread instrument used to promote electricity generation from renewable energy sources in the EU, with the costs of resources devoted to this promotion usually being borne by final consumers. Two components of the electricity retail price are expected to be influenced by the feed-in tariff regulation: the incentive to those firms producing electricity from renewable energy sources and the wholesale price of electricity. In this study we analyze the effects that the feed-in tariff regulation has on the electricity retail price for industrial consumers. We estimate the relative intensity of the impact of the cost of support electricity generation under the feed-in tariff and the electricity wholesale price on the Spanish industrial retail price. Special attention is devoted to technology-specific considerations, as well as short and long run effects. The results show that there is not a strong link between the retail and wholesale market for Spanish industrial consumers. Moreover, the results indicate that an increase of solar generation leads to a higher increase in the industrial retail price than in the case of a proportional increase of wind generation. This suggests that, when evaluating the feed-in tariff regulation impact on the retail price, the cost of incentives effect prevails over the wholesale price effect, and this is stronger for solar than for wind generation.