Distributed Generation in an isolated grid: Methodology of case study for Lesvos – Greece E.D. Giannoulis ⇑ , D.A. Haralambopoulos Energy Management Laboratory, Dept. of Environment, University of the Aegean, Mytilene, P.O., 81100 Lesvos, Greece article info Article history: Received 14 October 2009 Received in revised form 14 January 2011 Accepted 18 January 2011 Available online 12 February 2011 Keywords: Distributed Generation HOMER software Isolated grid CO 2 emissions Wind energy abstract The purpose of this article is to evaluate the economic effects of Distributed Generation (DG) in isolated grids and in particular Lesvos island in Greece. DG penetration is expected to rise in the following years since the island’s wind potential is still not exploited at a satisfying level. The necessity to replace the existing oil-fired power plant together with the need to cut down on greenhouse gases makes DG, and in particular wind turbines quite a promising technology. The present study with the use of specific soft- ware simulates the current electricity production for a whole year looking at its technical and economic performance. The sensitivity analysis that is carried out shows the effects of a potential increase in renewable energy sources (RES) capacity. Different sensitivity factors are investigated such as diesel price and hub height. The results show the environmental benefits of increased RES capacity and the variation of the cost of electricity production which remains high compared to other interconnected areas in Greece. Ó 2011 Elsevier Ltd. All rights reserved. 1. Introduction A large part of the Greek energy sector comprises of isolated power grids. This is the case for most of the islands in the Greek Archipelagos, which are autonomous producers and are based mainly on diesel power plants to produce electricity. Even though there is an abundance of renewable energy sources (RES) such as solar, wind and geothermal ones, their use is limited [1]. Thus, small isolated communities on islands in Greece and in other coun- tries in Europe, such as Denmark, Britain, Sweden, depend on im- ported oil for their energy needs [2]. Although most of these islands exhibit significant wind potential, the stochastic nature of which, along with the diurnal and seasonal variations in energy de- mand, limits its exploitation [3]. The entirety of Aegean Sea Islands are characterized during the last decade by a considerable annual increase of the electrical power demand exceeding the 5% in annual basis. This continuous amplifying electricity consumption is hardly fulfilled by several outmoded internal combustion engines usually at a very high oper- ational cost [4]. Solar and wind energy systems are being consid- ered as promising power generating sources due to their availability and topological advantages for local power generations in remote areas. Utilization of solar and wind energy has become increasingly significant, attractive and cost-effective, since the oil crises of early 1970s [5]. The obligation of Greece to lower greenhouse gas emissions as well as to increase the contribution of RES in order to reach 20.1% of the total energy production by 2010, leaves limited op- tions on future energy planning. Community awareness of environ- mental impact caused by large conventional power plants is growing, together with a greater interest in Distributed Generation (DG) technologies based upon RES [6]. Most of the islands provide a very suitable environment for RES due to their rich wind and so- lar potential: mean monthly wind speeds range between 6 and 15 m/s (at 40 m height) throughout the year and solar radiation at sea level is between 60 and 230 kW/m 2 [7]. Traditionally, electricity is generated in large power-stations, located near resources or at logistical optima, and delivered through a high-voltage transmission grid and locally through med- ium-voltage distribution grids. DG aims to add versatility of energy sources and reliability of supply and reduce emissions and depen- dence on fossil fuels [8]. In recent years as a supplement for con- ventional large-scale power generation system, DG technologies have got more comprehensive attention. DG represents an alterna- tive paradigm of generating electricity (and heat) at, or close to, the point of demand [9]. At the present time, oil-fired power plants, compared to wind turbines have more than two times lower capital costs and more than three times lower fixed operation and maintenance (O&M) costs. Fixed O&M costs are those costs for operation and mainte- nance per year that are not related to the amount of electricity 0306-2619/$ - see front matter Ó 2011 Elsevier Ltd. All rights reserved. doi:10.1016/j.apenergy.2011.01.046 ⇑ Corresponding author. Address: University of the Aegean, University Hill, Dept. of Environment, Mytilene, P.O., 81100 Lesvos, Greece. Tel.: +30 22510 36216; fax: +30 22510 36209. E-mail address: sgian@env.aegean.gr (E.D. Giannoulis). Applied Energy 88 (2011) 2530–2540 Contents lists available at ScienceDirect Applied Energy journal homepage: www.elsevier.com/locate/apenergy