Standalone PV-diesel system vs. PV-H 2 system: An economic analysis Arun S. Raj a , Prakash C. Ghosh b, * a Department of Mechanical Engineering, T.K.M. College of Engineering, Kollam 691005, India b Department of Energy Science and Engineering, Indian Institute of Technology Bombay, Mumbai 400076, India article info Article history: Received 27 October 2011 Received in revised form 21 January 2012 Accepted 24 March 2012 Available online 26 April 2012 Keywords: PV-DG system PV-H 2 system Long-term storage Life cycle cost abstract Hydrogen as a long-term storage medium in photovoltaic systems has been a subject of interest in recent years. Such a system uses an electrolyser e H 2 storage e fuel cell combination along with battery as short-term storage to minimize the loss of load probability. Conventionally, the same goal is achieved including a diesel generator (DG) in the photovoltaic (PV) systems. In present work, an economic comparison is carried out between DG based system and various possible configurations of H 2 based systems suitable for standalone application in the range of 5 kW. Both the systems are compared with the help of boundary curve obtained from life cycle cost analysis and excess energy available in the PV-DG system. Boundary curve enables in determining cost-effective system for a site, specified by on-site fuel cost including transportation cost and seasonal solar energy difference. It is found, a system with unitized regenerative fuel cell (URFC) and metal hydride storage offers most cost-effective solution. Further, the scope of the PV-H 2 system is enhanced if the salvage value of the fuel cell is considered. With steeply rising fossil fuel prices and developments in H 2 technology, globally more regions will be cost-effective for PV-H 2 systems. Ó 2012 Elsevier Ltd. All rights reserved. 1. Introduction The increasing concern on national and international level about the climate change and energy security is the motivating factor towards a dramatic paradigm shift from fossil fuels to renewable energy sources. The intermittent natures of the renewable energy sources are the main hurdles towards the wide implementations. Lead-acid batteries show excellent behaviour to overcome the diurnal variation and they are widely used in photovoltaic (PV) system to achieve higher energy supply reliability. However, due to high self-discharge they fail to overcome the seasonal mismatch in the renewable energy systems. To minimize the loss of load probability (LOLP) in standalone PV systems, conventionally diesel generator (DG) is used as a backup in combination with battery. In such a system peak loads can be met by the DG set together with the stored energy in the battery or the renewable energy converter. The system is sized to reduce the fuel consumption of the diesel generator by 70e90%, therefore, relying heavily on the renewable resource [1]. Nema et al. [2] has reported various cases which clearly indicate that the optimal sizing of the different components in a PV-DG hybrid system is must to minimize LOLP and costs. To achieve high power supply reliability either the energy converter or the battery is usually oversized [3]. As a consequence, a large amount of energy is wasted in the system and the average state of charge (SOC) of the battery also remains high for prolonged period during good season. The generator can be replaced by a long-term storage system which is complementary to the battery storage. Such a system consists of hydrogen storage in combination with an electrolyser for on-site hydrogen generation and fuel cells to overcome the disadvantages in a DG based hybrid system. In such a system, the surplus energy during the good season is utilised in the electrolyser to produce hydrogen for the long-term use. The deficit in the system during the bad season is overcome by using stored H 2 through the fuel cells. Since, such systems are capable of producing fuel (H 2 ) on-site; they are more attractive for remote applications where continuous fuel transportation is difficult and expensive. Various configurations of such systems for stationary applications have been studied [4,5]. Compressed air energy storage (CAES) is considered to be a cost- effective alternative for storing renewable energy [6,7] and using in diesel generator system with improved efficiency [8]. However, mostly it is used for energy storage in the power plants in the MW ranges for peak load saving and the effectiveness of such storage in small scales (few kW) is yet to be proven. Ghosh et al. [9] has compared H 2 storage with diesel generator in a PV-Wind hybrid system and the least cost for H 2 storage is * Corresponding author. Tel.: þ91 22 2576 7896; fax: þ91 22 2576 4890. E-mail address: pcghosh@iitb.ac.in (P.C. Ghosh). Contents lists available at SciVerse ScienceDirect Energy journal homepage: www.elsevier.com/locate/energy 0360-5442/$ e see front matter Ó 2012 Elsevier Ltd. All rights reserved. doi:10.1016/j.energy.2012.03.059 Energy 42 (2012) 270e280