An otimization approach for the economic dispatch incorporating renewable energy resources into the LEC power sources portfolio

Abstract

Electricity demand in Lesotho has been constantly rising over the past years and has greatly surpassed the main domestic generation of 72 MW hydropower station in ‘Muela, which only supports a monthly average of 58% of the load and the deficit is imported from South Africa and Mozambique through fixed bilateral contracts. Although these contracts are regarded as uninterruptable as transmission paths are secured in advance, they come with heavy reliability premium costs endured by electricity utility, Lesotho Electricity Company (LEC). With the abundant renewable energy sources in Lesotho, Independent Power Producers (IPPs) could be invited to erect wind farms and solar photovoltaics (PV) plants to increase local energy security and diversify LEC power sources. Because electrical power networks must be secure, reliable, and cost-effective, the study developed a power dispatching approach that includes solar PV and wind generators to aid 'Muela meet demand and be backed by imports. According to the analysis, main grid imports are minimized by 22.3% with the introduction of 50 MW Ha-Ramarothole solar PV and by 40.2% with wind farms (24 MW Masitise and 34 MW Lets'eng) working with 'Muela. A 59.7% minimization is obtained by combining solar PV at 50 MW, wind farms at 58 MW, and 'Muela at 72 MW. Furthermore, the study used the Monte Carlo approach to simulate generation adequacy analysis in order to establish the monthly average expected demand not supplied (EDNS) and loss of load probability (LOLP). The EDNS never drops below 0 MW, while the LOLP only reaches a minimum of 52% for allscenarios evaluated, according to generation adequacy analysis of all local generators. Finally, the study assessed the influence of renewable energy absorption on LEC in terms of costs in procuring power locally and from imports using the South African Power Pool (SAPP) Markets: Day Ahead Market (DAM), Forward Physical Market (FPM) weekly and monthly. Since DAM yearly cost of energy is approximately half that of FPM weekly and monthly, it has been shown to be the most cost-effective market to procure under for renewables penetrations. Additionally, the cost of electricity anticipated to be incurred while purchasing from solar at 50 MW, ‘Muela, and DAM is around LSL 45 million less expensive than the fixed bilateral contracts. As a result, minimization of imports and their cost can be effectively accomplished with DAM because the total cost of energy (local prices plus DAM pricing) significantly reduces the potential expenses.