Alternative Energy Source/ Energy Conservation Measures

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The following table summarizes the consultant’s findings of the various sustainable energy options proposed in the study.

Alternative Energy Source/ Energy Conservation Measures Capital Cost (USD) Annual Savings (USD) Annual Savings (kWh) Simple Payback Period (Years) Net Present Value (NPV) Internal Rate of Return (IRR)

  • 750kW Solar PV $960,000 $252,560 612000 5 $1,300,000
  • Biogas Upscale (Phase 1 and 2) $115,000 $30,000 171,360 4.2 $94,452 20%
  • Solar Water Heater $100,000 $16,695 6.4 $68,236 10.3%
  • Efficient Lighting $15,000 $7,400 42,323 2
  • Improvement of staff living quarters $15,876
  • Banana cable-way transport system $80,000

The following are the inputs used by the consultants in conducting the financial analysis in the feasibility study, which were also used in the independent AFREPREN/FWD analysis:

Bio Power and Resol Inputs

RESOL FIGURE ($) BIOPOWER FIGURE ($)

  • Annual Savings (Solar PV) $ 252, 560 Annual Savings (Biogas Upscale) $ 30,000
  • Annual Maintenance Costs (Solar PV) $ 10,332 Annual Savings (Solar Water Heating) $ 16, 695
  • Annual Savings (Energy Conservation Measures) $ 7,400
  • Annual Maintenance Costs (Biogas Upscale) $ 3, 500
  • Annual Maintenance Costs (Solar Water Heating) $ 1,000
  • One-off Labour Costs (Energy Conservation Measures) $ 14,800

The parameters used in the independent AFREPREN/FWD analysis, as shown below, were extracted from the reports produced by the consultants, current market data and statistics and independent AFREPREN/FWD assumptions.

An independent AFREPREN/FWD analysis of the alternative energy solutions proposed by the feasibility study was conducted in a bid to prudently confirm the results of the consultants.

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Net Present Value (NPV), Internal Rate of Return (IRR), simple payback period and discounted payback period were the parameters used to assess the viability of the project, similar to the parameters used by the consultants. Upon completion of this analysis, it was found that the profitability of the project increases when the electricity price increases, loan interest rate reduces and where there is a mix of debt and equity financing as opposed to relying only on one of the two.

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Below is a summary of the findings of the independent AFREPREN/FWD analysis.

Time of Use Tariff

Effective 1st December 2017 the Government of Kenya through the Energy Regulatory Commission (ERC) introduced a new set of electricity tariffs to be charged to commercial consumers and industrial based on the electricity consumed at different times of the day (Peak and Off-peak hours). This initiative is aimed at reducing strain on the national grid during day-time (peak hours). Companies such as PJ Dave that fall under CI1, which are companies whose consumption is between 0 to 100 units per month and are metered by Kenya Power at 415 volts ( as seen in Appendix 8.3).

Off-peak hours are prescribed in the Regulation as shown in the table below:

Day Start (Hrs) End (Hrs)

Weekdays 00:00 06:00

  • 22:00 00:00

Saturday/holidays 00:00 08:00

  • 14:00 00:00

Sunday 00:00 00:00

During off-peak hours, consumers are charged electricity at a lower rate as compared to peak hours. Effective August 2018, below is the current schedule of tariffs for all consumers of electricity supplied by Kenya Power.

Source: Stima.regulus, (2018)

These time-of-use tariffs are an initiative by the Government to boost electricity consumption by industries and reduce electricity costs incurred by large industries, given that the off-peak tariffs are 50% cheaper than peak tariffs. Previous attempts by the Government to effectively implement this program resulted in the publicly-owned electricity distribution company, Kenya Power and Lighting Company, earning lower margins as industries maximized production during off-peak hours. Hopefully, with better planning and implementation, both the large industries and the government will benefit from the restructured tariff.

According to data from Kenya Power, 850 of 3,700 large industries in its records had benefited from the off-peak tariffs by January 2018. As a result, there was an additional 21.8 GWh consumed during off-peak hours in December 2017, according to Kenya Power.

Industries such as PJ Dave could also benefit from this new tariff to enable them reduce electricity costs while sustaining, or even enhancing, their production. As such, an independent AFREPREN/FWD analysis of the potential savings that PJ Dave would gain were it to take advantage of the off-peak tariffs was carried out.

The electricity consumption of power-intake points at the PJ Dave Farm was measured during the feasibility study and summarized in the table below:

Logging at the four power intake points

  • Logging Point
  • Measured Power Measured
  • Energy Transformer (kVA)
  • Comments Min (kW) Max (kW) kWh

Main intake (24hr) 194.4 527.2 8,643 1000 (Max. Auth.831) The bulk of the loads in farm all operating normally during 24-hour period.

Riverside borehole (4min) 28.89 29.11 4.83 100 1 borehole pump on. Second borehole decommissioned.

Mzee Borehole (26 min.) 7.2 7.5 3.4 200 Power was fairly constant (26min.logging) and it is expected to remain so throughout its operation.

Mombasa Camp (Log2) (5/4/2017) 20.01 74.03 798.3 630 Grid supply available in the second 24-hour logging period.

Source: AFREPREN/FWD (2018)

Power logging of the main intake revealed that the farm consumes approximately 8,643kWh on a normal day. An independent AFREPREN/FWD analysis found that the potential daily energy savings to be enjoyed by PJ Dave as a result of taking advantage of the time-of-use tariff is approximately Kshs 9,886 (USD 96). This translates to annual savings of Kshs 3,558,960 (USD 34,550).

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Alternative Energy Source/ Energy Conservation Measures. (2022, Apr 29). Retrieved from https://studymoose.com/alternative-energy-source-energy-conservation-measures-essay

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