SLIDE 1: RETScreen Power Projects
RETScreen can be used to rapidly determine the technical and financial viability of a wide range of Power Projects, including, for example, the 120 MW geothermal power plant, located in Iceland, seen in the photo on this slide. This presentation will show how to analyse power projects with the RETScreen software.

SLIDE 2: Overview of Power Projects
Power projects supply electricity to loads. One useful way to classify power projects is by the way that they are connected to the loads. In “grid-connected” projects, dispersed loads and generators are interconnected by a network, called the grid. This network can be very large: for example, the so-called “central-grid” typically links the loads and generators of an entire nation or continent. The wind turbines in the photo on this slide, located in Pori, Finland, supply power to the European central grid, via the transmission lines seen on the right of the photo.

Sometimes the network of interconnected loads and generators is much smaller. When the central grid does not reach a village, a cluster of communities, or the loads of a mine or other industrial site, these can be served by an “isolated grid.” An isolated grid is often powered by reciprocating engines or hydroelectric power plants. For example, the waterfall seen here is located near a hydro project comprising an 18 MW and three 1 MW generators that together provide power to the communities of Fort Smith, Fort Resolution, and Hay River, in Canada’s Northwest Territories.

Sometimes it makes more sense to power a load directly, rather than through a grid. This can be the case when the load requires little power, the grid is distant and therefore a connection would be costly, or both. In the photo at bottom left, we see a diesel engine powering a 3 kW generator, used to supply electricity to a single household in a village in Kalimantan Tengah, Indonesia. Other examples of “off-grid” power applications include photovoltaic solar systems that power telecommunications installations, and thermo-electric generators that supply electricity to Supervisory Control and Data Acquisition, or SCADA, equipment at natural gas wellheads.

RETScreen can be used for central grid, isolated grid, and off-grid power projects.

SLIDE 3: Technologies
Electricity can be generated by a vast range of technologies. Some of these make direct use of renewable energy resources. For example, in this slide’s photo, solar photovoltaic arrays are seen on the roofs of the barn and house of this farm, located in Bavaria, Germany. These photovoltaic arrays convert sunlight directly into electricity, which can be supplied to the grid, as seen here, or used off-grid.

We have already encountered in this presentation three other electricity-generating technologies that directly utilise renewable energy resources. Wind turbines make use of the kinetic energy of the wind. Hydroelectric turbines convert the kinetic and potential energy of water, flowing from a higher to a lower location, to electricity. Geothermal projects drive turbines with the heat, originating in the Earth’s molten core, that is available within a few kilometres of the earth’s surface in certain locations; these same power plants can also supply heat for buildings, agriculture and industry.

There are other technologies that make direct use of renewable energy resources. The sun’s energy can generate electricity through photovoltaic modules, which are semi-conductor devices that are sensitive to light photons, or through solar thermal power projects. In the latter, the sun’s rays, which may be concentrated by lenses or mirrors, warm a collector surface that then raises the temperature of a heat-transfer fluid to the point that it can operate a heat engine, for example a Rankine cycle steam turbine or a sterling engine.

A number of emerging technologies generate electricity through movement of water in the ocean or sea. In wave power projects, the energy propagated in a wave, via the deformation of the sea-surface into crests and troughs, is captured and transformed into electricity. Many different offshore, near-shore, and on-shore devices have been proposed for this purpose. The first commercial wave power project, with a capacity of 2.25 MW, opened in 2008, in Portugal.

Tidal power and ocean current power projects both harness the flow of ocean water. Tidal projects rely on the flow, generated by the gravitational pull of the moon, and to a lesser extent, the Sun, on the ocean’s water which, in combination with the rotation of the Earth, causes water levels at a given location to periodically rise and fall. Certain configurations of ocean floor and shoreline accentuate this flow. At these locations, the power of the tide can be used to turn electricity-generating turbines. These turbines may be located in a barrage, or dam, that blocks off an estuary, allowing its level to differ from that of the ocean, thus creating head, or they may be placed in fences or used as independent installations that rely solely on the kinetic energy of the tidal flow. Although large tidal power installations using barrages have been successfully operated since the 1960s, including a 240 MW project in Rance, France, the high cost of building a barrage and possible environmental impacts on the estuary have meant that there are only a few such projects world-wide.

Tidal flows are not the only ocean currents. Other currents arise due to differences in density stemming from temperature and salinity gradients. Unlike periodic tidal flows, these currents are relatively constant year round. At certain near-shore locations, these currents can be quite fast. Recently there has been much interest in placing submerged turbines directly in these currents—using the approach proposed for “in stream” tidal flow turbines. Most of the proposed turbines are similar in design to wind turbines, but other approaches are emerging. Several prototype projects have been built or are under study.

RETScreen is useful in the analysis of all of these types of projects; the more common technologies, such as wind, hydro, and photovoltaics, are modelled in more detail.

SLIDE 4: Technologies (continued)
Although technologies making use of renewable resources are increasingly common, most electricity is still generated by heat engines burning fossil fuels.

Heat engines are devices that transform thermal energy into mechanical work or electricity by exploiting the difference in temperature between a heat source and a cold “sink,” or medium where heat can be rejected. In most cases, the heat for the source is provided by the combustion of a fossil fuel, and the sink is the outside air, or water from a river or lake. We have already seen that this is not always the case, however: geothermal and solar thermal power plants operate heat engines without burning fossil fuels.

A steam turbine is a heat engine that uses the flow and pressure of steam as it flows from a high temperature, high-pressure inlet to a low pressure, low temperature point where it dumps heat to the cold sink. The flow rotates a turbine, a radial arrangement of fan-like blades. This in turn drives an electric generator. The thermodynamic process by which this works is known as the Rankine cycle; a number of modifications to this cycle permit modern power plants to achieve efficiencies as high as 40%.

Rankine cycle steam turbines generate the majority of the world’s electricity. This reflects their principal strength: they are not reliant on any particular fuel, but rather can use any source of heat at temperatures high enough to generate good quality steam from water. This includes geothermal and solar thermal heat, but also nuclear reactors and coal combustion. In a later slide we’ll list other fuels that can be used in the boilers that generate the steam for these turbines, such as renewable biomass fuels.

A gas turbine, another type of heat engine, is much less flexible in its use of fuel, because combustion typically occurs within the turbine itself. Most gas turbine power plants combust natural gas. The flow of hot combustion gasses out of the unit turns a turbine connected to a generator; the overall efficiency can be 35 to 40%.

Gas turbine power plants can be constructed much more quickly than coal-fired or nuclear steam turbine power plants, have lower capital costs, are smaller and lighter, and can modulate their output more readily. The cost of producing electricity with gas turbines is closely tied to the cost of natural gas. Often this is high enough that gas turbines serve mainly as peak power generators, being brought online when the lower-cost output of hydro, wind, coal, and nuclear plants is insufficient to meet the load.

The exhaust gases from a gas turbine are very hot, generally well in excess of 300ºC. In a combined cycle gas turbine power plant, this exhaust is used to generate steam, which then drives a steam turbine, as shown in the diagram on this slide. The combined efficiency of the plant can be as high as 60%, and as a consequence, most new gas power plants in North America and Europe are of this design.

Whereas a gas turbine spins, in a reciprocating engine expanding combustion gases force a piston to move back and forth within a cylinder. The types of reciprocating engines commonly found in cars and trucks are also used to generate electricity. In the four-stroke Otto cycle engine, which burns high-octane fuels like gasoline, a spark ignites the fuel. The combustion of air and fuel within the cylinder drives the piston in a power stroke. Between power strokes the piston must return to its original position, forcing the exhaust out of the cylinder, move back in the direction of the power stroke, drawing an air-fuel mixture into the cylinder, and return to its original position again, compressing the mixture so as to improve efficiency. The piston is connected to a rotating shaft which turns a generator.

A Diesel cycle reciprocating engine functions similarly to an Otto cycle engine, but lower octane fuels, which ignite at lower temperatures, are employed. Rather than filling the cylinder with a mixture of air and fuel, only air is drawn in. This is highly compressed by the piston, raising its temperature above the ignition point of the fuel. When fuel is injected into the cylinder at the end of the compression stroke, it ignites, initiating the power stroke.

Otto and Diesel cycle power plants can achieve efficiencies of up to 40%. They are often used in isolated grid and off-grid applications.

These conventional heat engine technologies, while still evolving and improving, are well known and widely used. In contrast, microturbines and fuel cells are innovative emerging technologies that are not yet widespread.

Microturbines operate according to the same principal as large-scale gas turbine power plants, but are much smaller, having capacities of 1 to 200 kW, and spin more quickly. They generally interface with the grid via power electronics, permitting designs with very few moving parts. They are somewhat less efficient than reciprocating engines, especially at low power output.

Fuel cells react a stream of fuel and a stream of oxidant to generate electricity. In many types of fuel cells, the fuel is hydrogen, the oxidant is oxygen and the reaction product (comparable to the exhaust of a reciprocating engine) is water or steam; indeed, the fuel cell reaction is the opposite of electrolysis of water. A fuel cell is like a battery in which the reactants are consumed, the reaction products exit the battery, and the reactants are replenished on a continual basis.

A fuel cell contains two electrodes, a negative anode and a positive cathode, both in contact with an electrolyte. Fuel reacts at the anode and the oxidant reacts at the cathode, resulting in a voltage appearing across them; electrons flow through an external circuit, as electricity, as a consequence of this voltage, while within the fuel cell positively or negatively charged ions traverse the electrolyte from one electrode to the other. Unlike most spinning generators, which produce alternating current, fuel cells provide direct current electricity.

Thermodynamic considerations limit the maximum theoretical efficiency of a heat engine according to the relative temperatures of the heat source and sink. Fuel cells are not limited in this way, but are constrained by other thermodynamic considerations. While efficiencies of 50 to 70% are possible, they are difficult and costly to achieve in practice. Typical operating efficiencies of fuel cell power plants are comparable to those of reciprocating engines.

Because of inefficiencies, all fuel cells generate heat. The temperature of this waste heat depends on the type of fuel cell.

SLIDE 5: Power System Operation
Let’s introduce some of the important concepts and terminology associated with power plants by examining the operation of a gas turbine.

Air enters the unit and passes through a compressor. Fuel, usually natural gas, is combusted in this compressed air, increasing its temperature, pressure, and velocity. These hot, high-pressure combustion gases pass through a turbine, which both operates the compressor and drives an electric generator. The generator converts the mechanical power of the spinning turbine into electrical power.

The gas turbine, like most heat engines, also produces a stream of hot exhaust gases. The exhaust of a gas turbine is sufficiently hot that it can be used to boil water into steam in a device called a heat recovery steam generator (or HRSG). In the previous slide, we mentioned that this steam can power a steam turbine in a combined cycle power plant. But it is also possible to use this steam for industrial process or other heating requirements. The exhaust gases exiting the HRSG are not normally hot enough to generate high quality steam, but may be useful for lower-temperature heating requirements, such as domestic water or space heating.

The use of the “waste” heat from a power plant can greatly increase the overall efficiency with which fuel is used and generate an additional stream of benefits to justify the capital cost of the project. Overall efficiencies in excess of 80% can be achieved. The success of such combined heat and power or “cogeneration” projects typically depends on there being a requirement for heat near the power plant for most of the year, and the temperature of the power plant’s waste heat stream being high enough for this heating requirement. Such combined heat and power projects, and the district heating networks that are used to distribute low-temperature heat to geographically distributed loads, are further discussed in the RETScreen Combined Heat and Power Project Analysis training course module.

For fuel cells, reciprocating engines, and gas turbines, the user of the RETScreen software specifies the efficiency in terms of the heat rate. This is the amount of energy, in the form of fuel, that is consumed by the project in order to generate a unit of electricity; this is measured in the units of kJ per kWh or BTU per kWh. The difference between the energy that can be liberated from the fuel upon combustion and the energy output in electricity is assumed to be available as heat for other purposes. In a combined heat and power project, there is a load for a certain fraction of this heat, with the remainder being dissipated in the environment before any use is made of it. The fraction that can be used will depend on the temperature of the available heat versus the minimum temperature of the heat required by the load, as well as the characteristics of the equipment recuperating, conveying, and furnishing this “waste” heat to the load. In RETScreen, this fraction of available waste heat that is delivered to a load is called the “heat recovery efficiency.”

SLIDE 6: Types of Fuels
Power projects can use many different types of fuels, and RETScreen reflects this. For combustible fuels, RETScreen knows the energy content of the fuel, so that it can translate electrical output into a fuel requirement based on the heat rate or, for steam turbines, the seasonal boiler efficiency and turbine operating characteristics.

In the RETScreen “fuel type” cell, the user finds an extensive drop-down list of choices for fuel. These include, for fossil fuels, coal, diesel, gasoline, kerosene, oil, and propane. The choice of biomass fuels is even more varied, with biodiesel, biogas, bio-oil, ethanol, methanol, various woods and barks, peat, various types of straw, bagasse, switchgrass, hemp and other agricultural outputs, and many others. The waste streams found in the list cover a surprising range of possibilities, such as tires, landfill gas, food waste, wood waste, yard waste, coffee refuse, compost, leather, Christmas trees, telephone poles, poultry litter, and packaging waste. For completeness, the list also includes energy carriers like hydrogen and electricity itself, and a user-defined fuel.

The energy content of a combustible fuel can be considered to either include or exclude the heat liberated when the water vapour in the exhaust gases cools and condenses. The convention to include this latent heat of vaporization is called the Higher Heating Value, and is employed in North America. The rest of the world has adopted the Lower Heating Value convention, which excludes this latent heat of vaporization. The user tells RETScreen which convention to adopt.

When the user selects, within RETScreen, a renewable energy project technology (not including biomass), energy sources like wind, sunshine, waves, geothermal heat, tides, and flowing water take the place of combustible fuels.

SLIDE 7: Power Projects with RETScreen
RETScreen evaluates the financial viability of a power project in terms of a comparison between a proposed project and a base-case project. The proposed project usually implements a clean energy technology, and the base case generally relies on a conventional technology. RETScreen compares the incremental benefits and costs of the proposed project versus the base-case project.

There are a number of different steps in a RETScreen analysis of a power project.

First, for off-grid systems and grid-tied systems that must also furnish power to an internal load, the user describes the characteristics of the load and the base case power system. For grid-tied systems, the base case point of comparison is the electricity already available from the grid, and costs and associated emissions of a MWh of grid electricity are specified directly. Second, the user specifies the characteristics of the proposed-case power system, in terms of its performance and incremental capital, operating, and maintenance costs. Third, the user selects the operating strategy for the proposed case power system. RETScreen’s energy model uses the operating strategy in conjunction with the performance characteristics to determine the project’s energy output and incremental benefits compared to the base case system. Fourth, a summary section presents, for the user to review, the findings of RETScreen’s energy model. Fifth, an optional greenhouse gas analysis calculates the emissions reductions associated with the proposed project versus the base case project, according to a standardized methodology developed in collaboration with the United Nations Environment Programme and the World Bank’s Prototype Carbon Fund. And sixth, a financial summary indicates whether the project is financially attractive, considering cash flows, taxation, incentives, and GHG emissions reductions credits. The financial analysis can include an optional sensitivity and risk analysis that reveals how changes in inputs affect the viability of the project, in part through a “Monte Carlo” simulation that reruns the analysis 500 times with random variations in key parameters.

To facilitate this analysis, RETScreen has been designed for ease of use. To this end, it runs under Microsoft Excel, which provides a familiar interface. Behind Excel, RETScreen contains many tens of thousands of lines of code, making it powerful and flexible.

RETScreen also assists in the selection of parameters for the analysis through built-in databases. RETScreen includes a global climate database with 4,700 ground locations. Furthermore, through long-term collaboration with NASA, global climate data derived from 20 years of satellite observations is built into RETScreen. In addition to RETScreen’s climate database, there is a product database of over 7,000 clean energy devices, ranging from wind turbines to fuel cells.

A thousand page context-sensitive help manual guides the user and explains clean energy technology. A host of tools performs detailed engineering calculations directly applicable to RETScreen— for example, for estimating hydro project costs —and helps with unit conversions, steam properties, GHG equivalencies and more.

Beyond software, RETScreen offers a comprehensive distance learning course, training material in many languages, a detailed textbook revealing the algorithms behind RETScreen and providing background information on clean energy technologies, case studies, and links to energy resource maps.

SLIDE 8: Types of Analyses
Because RETScreen is so flexible, the user must configure the software for the desired analysis. This configuration involves making a few selections from drop-down lists on the RETScreen Start sheet.

The Start sheet appears when RETScreen is opened. In it, the user specifies the project name and location, the language, the currency, the unit system, the climate data, and whether the higher or lower heating value convention is used for the energy content of fuels. Clicking on “show settings” reveals cells for selecting the language, the currency, and the unit system. The user chooses between “Method 1,” a simplified single spreadsheet analysis, or “Method 2,” a more detailed approach with separate sheets for the different elements of the analysis.

A key part of the configuration is the choice of project type. A drop down list provides a wide range of options, a number of which pertain to power systems. If the option “Power” is selected, then RETScreen permits the user to compare a single technology power system to the base case. This single technology is chosen from an extensive “Technology” drop-down list in the Start sheet. The list includes steam turbine, gas turbine, combined cycle gas turbine, fuel cell, reciprocating engine, geothermal power, hydro turbine, ocean current power, photovoltaic, wind turbine, solar thermal power, wave power, tidal power, and “other,” a catch-all for unusual, hard-to-classify projects.

If “Power-multiple technologies” is chosen as the project type, then the proposed case project can consist of a base load, intermediate load, and peak load system, each employing a different technology. The type of technology used for each system is specified in the Energy Model worksheet, rather than on the Start sheet as with the single technology “Power” project type.

For projects that make use of waste heat from a power project, the user will wish to select “Combined heating and power” as the project type. If a cooling system is a significant electrical load for the power project, then the user will find the “Combined cooling and power” project type useful. These two can be combined in a “Combined cooling, heating and power” project type, which even permits waste heat from the power project to be used for absorption cooling. All these options, like the “Power—multiple technologies” project type, accommodate base, intermediate, and peak load systems utilizing different technologies. The RETScreen training course includes more information on these technologies in the Combined Heat and Power Project Analysis presentation and the Heating and Cooling Projects presentation.

Obviously, RETScreen deals with technologies apart from those generating power. These are also found in the “project type” drop-down list.

SLIDE 9: Grid Type
RETScreen’s Start sheet also contains a drop-down list for “grid type,” by means of which the user indicates whether the project will be connected to the central grid, connected to an isolated grid, or be off grid. For grid-tied power plants that must also supply an internal load, such that only the power in excess of this load can be fed onto the grid, RETScreen offers the grid type choices of Central Grid & Internal Load and Isolated Grid & Internal Load. These internal load choices are particularly useful when the tariff for electricity purchased from the grid is different from the tariff paid for electricity fed onto the grid. Furthermore, RETScreen permits the purchase tariff to change as a consequence of the proposed project, since it may reduce the grid electricity consumption to the point that preferential tariffs for large electricity purchases no longer apply.

In a central grid or isolated grid project without an internal load, it is assumed that the entire output of the power project will be supplied to the grid. In RETScreen, this is called “electricity exported to the grid.” There is no need for a detailed description of the base case equipment, which would be the vast collection of generators and transmission facilities constituting the grid; rather, the user merely specifies the “electricity export rate,” or the monetary value paid by the utility or other customer for a MWh of electricity fed onto the grid.

When an internal load is present, RETScreen adds a “Load & Network” sheet where the user specifies the average power requirements of the internal load for each month, the peak load on an annual basis, and the cost of supplying a unit of electricity to this internal load in the base case. RETScreen calculates the portion of the internal load’s annual electricity requirement that can be met by the proposed case power plant, the resulting cost savings, and how much of the proposed power plant’s output is left over for export to the grid.

For isolated grid projects with an internal load, the user may also specify a limit on the power that the isolated grid can absorb from the proposed power project. Output of the proposed power plant in excess of this threshold will cause RETScreen to display a warning.

When “off-grid” is selected as the grid type, the base case parameters and load description required by RETScreen depend on the project and technology type. In most cases, the user will specify in the Load & Network sheet the average power requirements of the off-grid load for each month, as for an internal load. Unlike with a grid-tied project, the user will also have to supply information about the base case power system equipment, such as the fuel it uses, its capacity and efficiency, and its annual operation and maintenance costs.

If, however, a single technology “Power” project is chosen for the project type, and the proposed power system technology is one of five normally associated with small off-grid power projects—that is, photovoltaics, wind turbines, reciprocating engines, hydro turbines, or “Other”—then the Load & Network sheet disappears and the energy model sheet expands. The base case power system must now be chosen from among reciprocating engine, grid electricity (i.e., grid extension to the off-grid site), gas turbine, or other. Its fuel type, capacity, efficiency, and annual operation and maintenance costs must be entered. Then the daily load is specified, either through a detailed enumeration of the requirements of the various loads that will be connected to the power system, or by a specification of the total AC and DC electricity consumption. The user may also indicate how the daily load changes from month to month, and whether loads have a positive, negative or zero correlation with the amount of solar radiation, wind or other intermittent resource powering the proposed case system.

SLIDE 10: Operating Strategy
In many power projects, an operator can chose the output level at which the equipment runs. For example, a reciprocating engine can be operated at full power or some lower power level. Within RETScreen, the user can account for this by the choice of “Operating Strategy.”

Sometimes RETScreen offers no choice of operating strategy because it is fixed by the project, technology, and grid type. For example, in a single technology “power” project involving grid-tied wind turbines, RETScreen understands that the turbine output will be determined by the wind resource and fed in its entirety onto the grid.

A grid-tied power system with an internal load, on the other hand, could be operated in two ways: at its rated capacity, which is called a “full power capacity output” operating strategy, or at the power level of the internal load, which is called a “power load following” strategy. For projects not utilising an intermittent renewable energy resource, a full power capacity output strategy leads to a constant power output throughout the year, as seen for the “base load power” system in the figure on this slide. The power load following strategy will vary throughout the year if the power load varies, as suggested by the “peak load” power system in the figure. A power load following strategy makes sense if the value of a unit of electricity consumed by the internal load greatly exceeds the value of a unit of electricity exported to the grid.

In a combined heating and power project, the “heating load following” strategy may be desirable. In this case, the power project operates at the level where its rejected heat stream perfectly satisfies the heat load. In this way, rejected heat in excess of the heat load is not wasted.

With steam turbines, it is possible to extract steam from the turbine in order to supply a heat load. RETScreen permits the user to specify whether the full power capacity and power load following operating strategies should or should not extract steam in order to make up any part of the heat load not met by the exhaust steam returning from the turbine.

SLIDE 11: Emissions and Financial Analysis
RETScreen’s Power Project Model employs the standard RETScreen Emissions analysis and Financial analysis. These simple but powerful tools are discussed in more depth in the “GHG Emissions Analysis” and “Financial and Risk Analysis” presentations in the RETScreen training course. For simplified analyses in a single spreadsheet, Method 1 is selected from the Start page. For more in-depth analyses with individual Emissions Analysis and Financial Summary Sheets, Method 2 is selected.

SLIDE 12: Project Example 1: Grid Projects
Let’s see how RETScreen can be used to determine the viability of power projects by looking at a couple of examples. The first of these will be a central grid-tied power project located in Bergen, Norway. In this project, the gases escaping from decaying waste in a landfill are captured and, rather than being flared, used to power a reciprocating engine turning a generator. The capacity of the power plant is 1.3 MW, and it has an efficiency of 37%. The local utility will pay US$ 0.03 per kWh of electricity fed onto the grid.

This project is examined in a case study found in the project database. We open the project database, select the Case Studies tab, and select the Reciprocating Engine Power project located in Norway. We can obtain a more detailed description of this project by clicking on the help button at the bottom right of the project database window. We retrieve the RETScreen analysis of the project by clicking on the green checkmark.

Once the case study has opened, we see that, as expected, RETScreen has been configured on the Start sheet for a Power project utilizing a Reciprocating Engine on the Central grid. Note, too, that the Lower Heating Value convention for the energy content of fuel has been selected; this makes sense, since this convention is commonly used in Europe, where this project is located. Although it is not required in this analysis, climate data for Bergen, Norway, has been selected from the climate database.

When we click on the Energy Model tab, we see the Energy Model Sheet. The first dozen parameters describe the proposed case power system. The engine will be able to run for an estimated 8,000 hours per year, giving an availability of 91%; it will operate on a single fuel, landfill gas, that is free and therefore has a fuel rate of $0.00 per cubic metre.

The capacity of the project is 1,300 kW, and this is estimated to cost US$ 1.3 million. We can find more information about how to estimate the cost of this project by selecting the incremental initial costs cell and then clicking on the help icon, a question mark, found on the RETScreen toolbar. A help text pops up. If we follow the link to Total Initial Costs – Power projects, we see that the cost of reciprocating engine capacity tends to be around Can$1,400 per kW. This is about 10% more expensive than the value of US$1,000 used in this case study, so we are in the right ballpark.

RETScreen shows that a 1.3 MW power plant with an annual availability of 8,000 h will export 10.4 GWh (or 10,400 MWh) to the grid each year. At a heat rate of 9,692 kJ per kWh this will require 12.6 GJ of fuel. It is not obvious whether this heat rate corresponds to the 37% efficiency already mentioned, but RETScreen has a helpful tool for this which we will take a look at a little bit later on.

The electricity export rate of US$30 per MWh reflects the US$0.03 per kWh price paid by the local utility for the output of this project.

The emission analysis calculates the net annual GHG emissions reductions. Here emissions associated with generating electricity with the proposed project are compared with emissions for the grid electricity it replaces. Norway has been selected as the country, and RETScreen shows us that for Norway, which generates much of its power with hydro-electricity, the average GHG emissions factor is only 0.004 tonnes of CO₂ equivalent per MWh of grid electricity. This includes average losses of 5%, called “T&D” losses, incurred in the long-distance transmission power lines that connect to the hydro projects and the lower voltage distribution power lines that connect smaller generators and loads around the grid. Since this landfill gas project is located on the outskirts of Bergen, Norway’s second largest city, it is closer to electrical loads than the average Norwegian power project, and is estimated to suffer only 1% T&D losses.

Based on this information, RETScreen calculates the net annual GHG emission reduction stemming from this project to be about 41,000 tonnes of CO₂ equivalent. We can use the RETScreen equivalency calculator to help get a feeling for this figure. It tells us that the 41,000 tonnes of CO₂ equivalent per year are comparable to taking about 8,200 cars and light trucks off the road, the effect of 41,000 North Americans reducing their energy use by 20%, or 85,000 barrels of crude oil not being burned.

The case study assumes that these GHG emissions reductions are worth $5.00 per tonne of CO₂ equivalent, with payments being received for 10 years and escalating at 2% per year.

In the Financial Analysis, we see that a number of financial parameters, like the inflation rate, debt interest rate, project life, and debt ratio are given. Operation and maintenance costs of a $104,000 per year are specified. The total annual costs savings are indicated; when the total annual expenditures and debt payments are subtracted from this, the result is the net annual revenues for the project. These net annual revenues are the basis for the calculations of project profitability.

As seen from the cash flow graph, this is an attractive project. RETScreen shows that although its simple payback period is 3.6 years, it has a pre-tax internal rate of return of 63% on the proponent’s 30% equity stake.

That covers the basic sheets of our case study, but it only scratches the surface of what RETScreen can do. For example, there is a third tab we can select: this opens the Tools worksheet. One of the tools we might find useful for this project is the landfill gas calculator. The quantity of waste disposed in the project landfill between 1970 and 2003 and some characteristics of the waste and the landfill site have been entered, and from this RETScreen shows us the production of gas from this landfill as a function of time. Our project starts in 1993, and we can verify that this landfill will provide sufficient gas to operate our project over its 10 year life.

If you were paying close attention, you may have noticed something strange about the GHG emissions analysis for this project: even though the hydro electricity available from the grid in Norway is associated with very low emissions, our project had very high net emissions reductions. How is this possible? This landfill gas tool provides an answer. In the base case, we assume that 10% of the landfill gas is flared, and the remainder escapes into the atmosphere. Landfill gas, composed mostly of methane, is a potent greenhouse gas, so if we capture this escaping landfill gas and burn it in our power project, we are greatly reducing the landfill’s emissions. If, however, we were required to capture and flare the landfill gas in the base case, we observe that the emissions reductions would be much smaller.

If we want to better see this, we will have to consider our emissions in more detail. Up until now, we have been looking at a simplified, Method 1 analysis. Let’s go back to the Start sheet and change to a Method 2 analysis. Now there are separate worksheets for the cost analysis, emissions analysis, financial analysis and risk analysis. Note that the additional parameters that appeared in the Method 2 analysis do not affect the Method 1 analysis in any way.

In the expanded Emissions analysis worksheet, the effect of flared and emitted landfill gas is stated explicitly. The figures in the emissions analysis are directly tied to the data entered into the landfill gas tool.

Similarly, this Method 2 analysis brings more detail and flexibility to the cost analysis and financial analysis. If we wished, we could enter a more precise breakdown of costs in the cost analysis sheet, including feasibility and development costs, contingencies, interest during construction, and periodic costs. The cost analysis sheet shows that the 12.6 GJ per hour of fuel required by our project, as indicated in the energy model sheet, corresponds to 5.4 million cubic metres of landfill gas per year. The financial analysis sheet allows us to refine our analysis through new financial parameters, such as an energy export escalation rate that is independent of the inflation rate and the fuel cost escalation rate. It also displays a more complete suite of indicators of financial viability, including the most reliable measure of project profitability, the net present value, and the debt-service coverage, which tells us if the accumulated revenues from the project are always sufficient to cover debt payments. This project has a GHG reduction cost of -$6 per tonne of CO2 equivalent, showing that the GHG emissions reductions are achieved at negative cost, that is, are the result of a financially profitable investment.

Let’s return to the energy model. You will recall that we just accepted that the specified heat rate was equal to a 37% efficiency. RETScreen can help us verify that this is the case. Open the Tools worksheet, and select the heat rate tool. We want to know the efficiency given the specified heat rate of 9,692 kJ per kWh. Using the Method 3 option of the tool, we enter the power capacity of 1,300 kW, the heat rate, and a heat recovery efficiency of 0%, and RETScreen shows that this does indeed correspond to 37.1% efficiency.

If we were constructing this case study from scratch, we could use this tool to find the heat rate that matched the 37% efficiency. We could do this by trial and error, or we could use the Excel Goal Seek tool. By selecting the efficiency cell, clicking on the Goal Seek button of the RETScreen toolbar, entering a target value of 37%, and telling goal seek to adjust the heat rate to achieve this target efficiency, we find that a heat rate of 9,730 kJ per kWh nearly perfectly corresponds to an efficiency of 37%. It is important to remember that RETScreen runs within Excel, so we can exploit Excel’s facilities, including tools like goal seek and the use of formulae within cells.

Reciprocating engines are often used on isolated grids. Let’s see how RETScreen could help us with that. From the Start sheet we select a grid type of Isolated-grid & Internal load. A Load & Network sheet appears. Here we could specify the peak load of the grid, the minimum power load that the grid sees in a year, the gross average power required for an internal load every month, a peak load, and the electricity rate, or cost of supplying a unit of electricity to this internal load in the base case.

In the Energy Model sheet, some additional parameters need to be specified. The “electricity rate—proposed case” permits us to adjust the cost of supplying grid electricity to the internal load once our power project has been built. This is useful since preferential tariffs are often given to major consumers of electricity, and the proposed power system supplants the grid supply. This tariff is applied to the remaining electricity required, which in this example stems from the 9% of the time when our power project is not available to supply the internal load.

RETScreen gives us a choice of two operating strategies: full power capacity output, or power load following. The former is clearly more profitable.

On central grids, reciprocating engines are somewhat rare, except in the case of small combined heat and power plants typically located in buildings and at factories. Most new larger scale gas power projects are combined cycle gas turbines. If we wished to look at such a project, we would return to the Start sheet and select Gas turbine-combined cycle technology for use on the central grid. You will recall that a combined cycle project uses the hot exhaust of the gas turbine to generate steam for a steam turbine. On the energy model page, we see that we now have to describe the gas turbine and steam turbine characteristics.

Such a project would typically require far more gas than this landfill could supply. On the other hand, if it were to be supplied with 95% natural gas and 5% landfill gas, RETScreen could model this through the selection of “multiple fuels-percentage.”

Further possibilities could be investigated, but it should be clear by now that RETScreen is a highly flexible tool for the analysis of grid-tied power projects.

SLIDE 13: Project Example 2: Off-grid
In this second example, we’ll consider an off-grid power project. This is a power system for a small village containing 6 households, in the Syrian Arab Republic. The village is far from the electric grid; the nearest city is Aleppo. The base case is an existing 3 kW diesel generator that provides, on average, 8.4 kWh of AC electricity daily. The peak load is 2.4 kW. This diesel genset costs $US 1,000 to purchase, but lasts only 5 years, needs $150 in maintenance every year, and consumes 13,400 L of fuel per year. At the time of the analysis, diesel fuel cost $0.15 per L, expected to escalate at 5% annually.

The proposed replacement for this diesel generator is a photovoltaic array with a battery sufficiently large to supply the load, without PV input, for 4 days. Photovoltaic modules are available for US$6,500 per kWp, and the batteries, inverter, and installation are expected to cost US$17,000. The photovoltaic modules should last 20 years, the electronics 10 years, and the batteries 8 years.

This project is examined in a case study, found in the project database under Power-Photovoltaic-Syrian Arab Republic. We open a more detailed description of the project, found in the help manual, as well as the RETScreen analysis. On the Start sheet, “Off-grid” has been selected as the grid type. RETScreen climate data for Aleppo has been selected. This data is critical for this case study, because the solar radiation data is used to calculate the electrical output of the proposed system. Opening the climate database, we see that complete data is available for every country. Within a single country like Syria, there are many different climate data locations to choose from. The climate data includes parameters, such as monthly earth temperature and heating degree-days that are not relevant to a photovoltaic project, but are useful for heating projects. The “Source” cells indicate the providence of the data; for this site, most parameters are from observations on the ground, but for other sites, data is inferred mainly or entirely from satellite observations.

Since we have selected “Off-grid” as the grid-type and “Photovoltaic” as the technology, RETScreen has configured itself for a small power system analysis, as mentioned in the “Grid Type” slide of this presentation. That is, there is no Load & Network sheet, and the energy model expects a description of the base case equipment, not just a single cost of electricity figure.

The parameters describing our diesel genset have been entered. The heat rate is very high; small, low cost generators loaded at a small fraction of their rated output, as is common in this application, operate very inefficiently. We can estimate the heat rate, in the absence of efficiency information, based on the total cost of electricity; we know that it should be the cost of buying 13,400 L of diesel at $0.15 per litre, or $2,010. The specified heat rate matches this total cost very closely.

All we know about our loads is that they together consume 8.4 kWh of AC electricity on an average day, and that the peak load is 2.4 kW. These figures have been entered under the load characteristics. The “intermittent resource-load correlation” has been set to “negative.” This makes sense: the solar resource is strong during the day, but the loads are likely to be lighting, radios, and maybe even televisions that will operate during the evening. Thus, they are negatively correlated in time with the availability of sunshine. If we had to estimate the daily electricity consumption based on individual equipment requirements, we could select Method 2 for load characteristics. Similarly, if we knew that the loads varied from month to month, we could adjust the “Percent of month used” figures.

At the top of the proposed case power system description, an inverter has been specified. At 2.4 kW, it is large enough to supply the peak load. Next is the battery description. We have indicated that we want a 48 V battery with 4 days of autonomy, that is, sufficient to supply the load for four days without power from the PV array. We estimate that the battery is 85% efficient, can be discharged to a depth of discharge of 80% without seriously curtailing its lifetime, is connected to the array via an efficient charge controller, and is generally at the ambient air temperature. RETScreen estimates that our battery should have a capacity of 1,046 Ah; a 5% larger capacity has been specified.

The next section specifies our photovoltaic array itself. We have solar resource data, but it is for solar radiation on the horizontal. We want to fix our array facing the south (that is, with an Azimuth of 0 degrees), at a slope of 45 degrees. RETScreen calculates the daily average solar radiation in the plane of the tilted array as well as the electricity delivered to the load. By adjusting the tilt angle, we can see that an array tilted at an angle equal to the latitude, 33 degrees, would generate more electricity on an annual basis. But since this system must supply the load in every month, we are more concerned with its performance in the least sunny months of December and January. Looking at the tilted daily solar radiation for these two months, we see that it is slightly higher at a tilt angle of 45 degrees.

Next the array is specified. Monocrystalline silicon technology has been chosen, and from the product database, opened with the blue hyperlink, 3.6 kW of capacity in 72 modules has been specified. The module efficiency is taken from the product database. We have chosen to operate the array at its maximum power point voltage, rather than have it fixed (or “clamped”) to the battery voltage. The losses in the maximum power point tracker are set to zero; they have already been included in the charge controller efficiency.

In the summary section, RETScreen estimates the capacity factor and the electricity delivered to the load. This is larger than the load on an annual basis, which is necessary in order for the array to meet the load in the least-sunny months.

The financial analysis section indicates total initial costs of over $43,000. If we calculate 3.6 kW of array capacity at $6,500 per kW, add $17,000 for installation and balance of plant costs, we arrive at $40,400—within 10% of the specified figure. For a detailed cost breakdown, we can select Method 2 on the start page and examine the Cost Analysis sheet. There the $1,000 initial cost of the diesel generator has been subtracted from the initial costs of the PV system, yielding the incremental initial costs. Also, the annual costs for diesel maintenance, the periodic costs for battery replacement and the periodic credit for avoided generator replacement every 5 years are factored in.

Returning to the Method 1 Financial Analysis, we observe that this is not a financially attractive project. That is not surprising: with diesel fuel priced at $0.15 per L it is hard to justify an expensive photovoltaic system on cost savings alone. But if the cost of fuel doubled to $0.30 per L—still a very low cost by international standards—the project would achieve an internal rate of return of nearly 14%.

This demonstrates RETScreen’s capabilities for dealing with small off-grid as well as large grid-connected power systems.

SLIDE 14: Questions?
This completes this presentation on Power Project analysis with RETScreen.