IEEE Electrification Magazine - June 2017 - 33

Table 3. Results of economic analysis.

Configurations

Total Investment
(RMB Million Yuan)

Average Annual
Return (RMB
Million Yuan)

Average Annual
Rate of Return

Dynamic Recovery
Investment Period
(Years)

PV-diesel-storage mode 1

9,306

2,045.20

20.54%

4.87

PV-diesel-storage mode 2

6,906

1,431.64

18.96%

5.72

PV-diesel mode 1

8,606

2,086.94

23.99%

4.37

PV-diesel mode 2

6,206

1,460.86

23.19%

4.50

RMB: Ren Min Bi, Chinese currency.

where W i = the annual generation of PV system in the ith
year; and Z kWh = the unit cost of electricity generated by a
diesel unit.
The formula for calculating the annual generation of
PV system is shown in (6)
W i = C PV ) H ) ^1 - phi - 1 - C PV ) H ) ^1 - phi - 1 ) d storage ) ^1 - h storageh,
(6)

1.0

/_ 1.0
BUS1

N3 N2 N1

where C PV = installed capacity of PV; p = annual decay rate
of PV modules; H = annual effective utilization hours of
solar; h storage = charge and discharge efficiency of energy
storage; and d storage = storage proportion of PV.
The economy of the microgrid can be quantified through
the investment payback period, investment rate of return,
and other evaluation indicators. The shorter the payback
period, the quicker the investment can be recovered. At the
same time, the payback period can also partly describe the

risk of the project: the shorter the payback period, the lower
the project risk. The net cash flow and the investment recovery rate of these four configuration modes over a 20-year
operating life cycle are calculated and shown in Figure 5. In
the four configuration modes, the investment income balance can be reached within four-to-six years. The initial
investment recovery rates of the project are between 22%
and 27%. The investment recovery rate will decrease with an
increase of operation and maintenance investment when
operating years are longer. Within the 20-year operating life
cycle, the average annual yield is 18-24%. From the calculation and analysis of the four configuration modes, the economic evaluation results are found and are summarized in
Table 3. From Table 3, we can see that, from the perspective
of the dynamic investment recovery period, the economic
ranking (from the best to the worst) of the four configuration
modes is as follows: PV-diesel mode 1, PV-diesel mode 2,
PV-diesel-storage mode 1, and PV-diesel-storage mode 2.

A
B C
Dynamic Load
R-X Load

Diesel Generator

Diesel Generator

Energy Storage
System

PV System

Asynchronous
Motor Load

Dynamic Load

Figure 6. A system model of a MW-level isolated microgrid.
	

IEEE Electrific ation Magazine / j une 2 0 1 7

33



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