Abstract- In this paper we analyse and evaluate a scenario of an electric power system based on a combination of wind power and a diesel generator. The computer simulation program HOMER (Hybrid Optimization Model for Electric Renewables) was used. The data considered for the simulation are extracted from the island of São Vicente in Cape Verde. The case study aims to add a wind turbine in an existing electric power system consisting of a diesel generator set, in order to determine the cost/benefit ratio and examine the effect of fuel prices and the initial investment in the wind turbine. It is concluded that this type of technology is an asset to a developing country, more specifically Cape Verde, where the system currently relies heavily on imported fossil fuels.

I. INTRODUCTION The main parameters governing the economics of wind

energy include: • investment costs, such as auxiliary costs for foundation

and grid connection, • costs of operation and maintenance, • production of wind energy / mean velocity, • lifetime of the turbine. The most important parameters are the turbine's electricity

production and investment costs. As the production of electricity depends largely on wind conditions, a good choice in the location of the turbine is crucial for achieving economic viability.

The capital costs of wind energy projects are dominated by the cost of the wind turbine itself.

Fig. 1 shows the cost structure for a typical 2 MW turbine installed in Europe [1].

Fig. 1. Cost structure for a typical turbine of 2 MW installed in Europe [1].

II. PRODUCTION OF ELECTRICITY IN CAPE VERDE The production of electricity in Cape Verde is divided in

three technology groups: • diesel production, • wind power production, • thermal production. ELECTRA (Electricity and Water Company of Cape

Verde) had 18 diesel plants at the end of 2008, and 3 wind farms, registering one less diesel group than in the previous year [2].

The installed capacity in the ELECTRA park totalled at the end of 2008 about 88258 kW, including 85386 kW of diesel groups (97%), 2100 kW of wind power (2%) and 772 kW of thermal (1%).

The producer system of Cape Verde is mainly based on an isolated grid with power plants equipped with synchronous generators using diesel as fuel.

Thus, the country needs to import fuel for electricity generation, which is required not only for the satisfaction of the conventional consumption, but also for sea water desalination plants.

As indicated in Fig. 2, the fuel consumption by ELECTRA has been increasing year after year, and this has been reflected in a certain way in the company’s management and in the economy of Cape Verde.

For the year 2007 there was a decrease in diesel consumption by 34%. This decrease was due to the dismantling of some running groups. The consumption of fuel oil 380 has increased 2% while the consumption of fuel oil 180 has increased by 55%, due to the entry into operation of new groups.

Fig. 2. Electra's fuel consumption for electricity generation [2].

Contribution to Investment Decisions on Wind Energy in Cape Verde

E. Freire1, J.P.S. Catalão1,3, J.C.O. Matias1,2, C.M.P. Cabrita1,2

1 University of Beira Interior, 2 Centre for Aerospace Science and Technologies R. Fonte do Lameiro, 6200-001 Covilhã, Portugal

3 Center for Innovation in Electrical and Energy Engineering, IST Av. Rovisco Pais, 1049-001 Lisbon, Portugal

catalao@ubi.pt; matias@ubi.pt; cabrita@ubi.pt

Fuel consumption for electricity generation

III. WIND ENERGY IN CAPE VERDE Due to its geographical location, Cape Verde has very

favourable wind resources, which can be used to produce electricity and thus obtain a reduction in fuel imports.

Aware of the complexity of the sector and the importance it has for the development of the country, having also in mind the role of renewable energy, including wind power, it becomes important to establish a wind program in major population centres in the country.

The analysis and assessment of potential windy locations brought down four different topographic sites on three islands, namely: Santiago Island:

• Ilhéu de S.Filipe, São Vicente Island:

• Selada de São Pedro, • Selada do Flamengo,

Sal Island: • Palmeira. Fig. 3 shows graphically the potential of Selada do

Flamengo on the São Vicente Island. This figure shows the intensity of annual energy

production in GWh, for a 600 kW turbine. The results are given for an above ground height of 40 m with a resolution of 20 m.

Fig. 3. Map of wind power in Selada do Flamengo [3].

IV. ECONOMIC EVALUATION OF INVESTMENTS The project evaluation criteria are measures or indicators

of profitability related to the projects of investment, to support the decision making in order to implement or not the project [4].

There are several alternative criteria, as follows: • Actual Net Value (VLA), • Profitability Internal Rate (TIR), • Recovery Period (Payback).

The criterion of the Actual Net Value (VLA) is the more coherent in the context of the selection of mutually exclusive projects:

( )∑=

−+−

=n

tt

e IidRVLA

0 1. (1)

being eR the revenues and d the charges of the execution of the project, and I the charge of the investment in the initial period.

The projects are profitable and are implementable when the respective Actual Net Value are positive at the chosen up-to-date rate (VLA>0), while all projects with VLA<0 are rejected.

The Profitability Internal Rate (TIR) is the project up-to-date rate that given a VLA equal to zero:

( )0

10

=−+−

=∑=

n

tt

e IidRr . (2)

The Recovery Period (Payback) is a project evaluation criterion that takes only into account the time period in which the project recovers the capital invested.

V. MODELS AND SIMULATION PLATFORM The software chosen for this study was the HOMER

(Hybrid Optimization Model for Electric Renewables) version 2.68, which is freely available from the NREL (National Renewable Energy Laboratory).

HOMER has the ability to model systems connected to the grid or individual serving electrical loads and loads of the thermal type, which may consist of any combination of photovoltaic systems, wind systems, micro-hydro, biomass, micro-turbines, fuel cells, batteries and hydrogen storage tanks. The three main tasks performed by HOMER are simulation, optimization, and sensitivity analysis of energy production systems.

VI. CASE STUDY The scenario adopted for this simulation study was based

on the scenario of the São Vicente Island in Cape Verde, in order to determine the contribution that wind power will have on the electrical system.

The scenario is as follows: for an existing diesel generator, it is intended to include also a wind turbine (Vesta V-52), creating a hybrid system of electricity generation. It is on this basis that we will make a simulation in order to examine the cost/benefit analysis, the effect of fuel prices and wind speed on the implementation of this project. This realistic scenario is intended to reduce a portion of the dependence of the Cape Verdean electrical system on the fossil fuels.

The configuration of the case study in HOMER is shown in Fig. 4. The components of the system to consider are the following:

• wind turbine Vesta V-52, • generator group Cat 3412 CTA, • batteries bank Trojan L16P, • converter.

Fig. 4. Configuration of the case study in HOMER. The wind resource was modelled using actual data of the

wind speed measured on the São Vicente Island (Fig. 5).

Fig. 5. Wind speed values on the São Vicente Island. To modelling the wind system was chosen a turbine

existing in the market: turbine Vesta V-52. The characteristics and power curve of this wind turbine are shown in Fig. 6.

Fig. 6. Characteristics and power curve of the wind turbine. The choice of this turbine was motivated by a search of

articles about Cape Verde, because this country has recently made new investments related to that type of turbines in order to increase the capacity of the existing wind farms.

The characteristics of the converter chosen for the connection to the grid are shown in Fig. 7. In addition, Fig.8 shows the characteristics of the battery.

Fig. 7. Converter details.

Fig. 8. Battery details. To modelling the diesel system was chosen a generator

that was implemented in the system HOMER. The generator characteristics are exposed in Fig. 9.

Fig. 9. Generator details. To realize the economic analysis were introduced in the

program the cost of each component as well as the respective operation and maintenance costs, in order to help the program in the optimization of the components of the system.

With the technical data (workload, wind speed data, system components, etc.) introduced, the program find the best possible solution in order to implement the system.

The values considered for the economic analysis were obtained from both market and bibliographic searches, with the objective of creating a case study as close as possible to reality.

Costs of both turbine and battery are presented respectively in Figs. 10 and 11.

Fig. 10. Wind turbine costs.

Fig. 11. Battery costs. According to the introduced data, and some assumptions

that were made (was assumed an annual average speed of 7 m/s, an average workload of 8kWh/d, and a price for fuel of the order of $0,34/L), the best solution presented by the simulator consists in the system composed by the converter, generator, batteries and turbine Vesta V-52 (Fig. 12).

The program informs that the initial cost of the system is $1956808, with an annual cost of operation and maintenance equal to $253779.

Fig. 12. Best configuration in the case study.

However, it will be noted that the program will only

consider the costs of the battery and the turbine, because they are the new components in the system.

In Fig. 13 one can see that about 55% of the supplied energy is due to the wind turbine, and 45 % to the diesel generator, having an excess of 12% of electricity.

Fig. 13. Simulation results. Based on the configuration provided by HOMER,

financial calculations (Fig. 14) were carried out to see if the project is implementable in economic terms, considering all data available and also considering the lifetime of the system for 20 years, assuming that the turbine works 2682 hours per year. One can conclude that the system is viable, because VLA is higher than zero and TIR is higher than the up-to-date rate. In addition, one can conclude that the return on investment will occur in 5 years and half approximately.

Fig. 14. Financial calculations.

Year Investment

VII. CONCLUSIONS This paper presents a study of technical and economic

feasibility of adding a large wind turbine to an existing electric system in Cape Verde, in order to transform it in a hybrid system. By means the program HOMER used in the simulation, the installation costs and specific cost of energy were estimated. In both technical and economic terms, one can conclude that the implementation of the turbine is viable. This type of study is important to encourage countries like Cape Verde to invest in this type of technologies, in order to reduce

not only the import of the fossil combustibles but also the gas emissions with greenhouse effect.

VIII. REFERENCES [1] S. Krohn, The economics of wind energy: A report by the EWEA, 2009. [2] ELECTRA annual report and accounts of 2008. [3] H.M.N. Duarte, Utilization of wind energy in hybrid generation systems

for small communities (in Portuguese), Brazil, 2004. [4] C. Barros, Investment decisions and project funding (in Portuguese),

Lisbon, 2000.