Anda di halaman 1dari 25

AWWCE

Project proposal for solar water pumping

Project Proposal:

SOLAR WATER PUMPING

Afar Water Works Construction Enterprise (AWWCE)

Prepared by:
Walelign Girma, Consultant on Renewable Energies, M.Sc

Anteneh Getachew, Practicing Water Resource Engineer, B.Sc


spreading

February 2009, Addis Ababa, Ethiopia

Walelign Girma: Consultant on Renewable Energies Email:walelign_gir1777@yahoo.com 0


P.O.Box: 24219, Code 1000 Tel: (251) 910-573157
Addis Ababa
AWWCE
Project proposal for solar water pumping

Table of Content
1. Background................................................................................................................................2

2. Justification................................................................................................................................3
2.1. Economics of solar water pumping...................................................................................3
2.2. Which energy investment - generator or solar?...............................................................4
3. Beneficiaries:............................................................................................................................10
4. Objectives:................................................................................................................................12
5. Expected results:......................................................................................................................12
6. Activities:..................................................................................................................................13
7. Project schedule:......................................................................................................................14
8. Project budget:.........................................................................................................................15
9. Project financing:.....................................................................................................................16
10. Organization and administration:........................................................................................17
Reference:.....................................................................................................................................17

Table 1: Scenario for different solar pumping designs based on capacity of the system to
meet different population demand...............................................................................................5
Table 2: Financial analysis comparing solar and diesel energy.................................................7
Table 3: Advantage and disadvantage of solar energy and generator......................................8
Table 4:.Estimate of foreign currency saved from solar pumping system 2 Kw replacing
generator,2.5 Kw..........................................................................................................................11

Walelign Girma: Consultant on Renewable Energies Email:walelign_gir1777@yahoo.com 1


P.O.Box: 24219, Code 1000 Tel: (251) 910-573157
Addis Ababa
AWWCE
Project proposal for solar water pumping

1. Background

Afar National Regional State is a region where national grid electric supply
system is rarely existed while generators are most commonly used form of
energy for water supply system. However, the region lying in a Great Rift
Valley of Ethiopia is endowed with plentiful resource of solar energy. It is in
the first highest solar radiation category of regions in Ethiopia, as the
Ethiopian Tourism Organization slogan implies, “Ethiopia a nation of 13
months of sunshine”. Based on data from Ethiopia Rural Energy
Development and Promotion Center (ERDPC), the area of most Ethiopian Rift
valley area has an average solar radiation falling 6.0 – 6.5 Kwh/m 2/day.This
solar energy is a remarkable and sustainable form of renewable energy in
the region which could well meet the demand of solar water pumping
requirements for water supply and livestock watering projects.

Water as an essential element for living, most people in the rural setting of
Afar National Regional State is lacking access to sufficient water supply and
also has to walk a long distance to fetch the water from river or if there is
well, they use a traditional way of water lifting and spend a lot of time.
Hence renewable energy - like solar energy - is very crucial for off-grid
sustainable and reliable electric energy supply for solar water pumping in the
region.

Walelign Girma: Consultant on Renewable Energies Email:walelign_gir1777@yahoo.com 2


P.O.Box: 24219, Code 1000 Tel: (251) 910-573157
Addis Ababa
AWWCE
Project proposal for solar water pumping

2. Justification

Energy is the most important and key component of economic and social
well being of a country or a region. Secured supplies of water for the
pastoral sector necessitate secure supplies of energy for water lifting. In a
related context a major obstacle to develop water supply and sanitation
project in the region has been the lack of an energy source to move water.
Water, where available, is typically collected through laborious time
consuming manual methods for general family use. Also the commonly used
pumps driven by fuel-burning generators have proven to be often defective
and unsustainable and unreliable in terms of operation and maintenance for
the longest operational life. Moreover, diesel generators used commonly for
water pumping have limitation on their volatile fuel price coupled with
unreliability. A generator also requires regular follow up and maintenance
which increases running cost. However, unlike generators, solar energy
modules are maintenance free with an average of 25 years defect free
guarantee. It only requires cleaning the surface from dust and dirt materials.
Hence, in a promising solar energy potential spot like Afar region, solar
pumping energy will be a better optional reliable renewable energy for water
supply and sanitation projects.

2.1. Economics of solar water pumping

Water pumping and solar power are natural partners that create economic
solutions for any remote community’s water delivery application like Afar
region. Solar powered pumps and systems are changing the way water is
delivered to livestock and people when utility service is expensive, unreliable
or non-existent. The economy and reliability of solar electric power make it
an excellent choice for remote water pumping. Remotely scattered

Walelign Girma: Consultant on Renewable Energies Email:walelign_gir1777@yahoo.com 3


P.O.Box: 24219, Code 1000 Tel: (251) 910-573157
Addis Ababa
AWWCE
Project proposal for solar water pumping

pastoralists in Afar region can be enthusiastic and potential solar pump users
if they could get the chance to use the solar pumping energy system. The
main water sources - Awash River - is spread over many kilometers of
rangeland where electricity is non- existed and refueling and maintenance
costs of generators are substantial. Hence, for water source so far away and
scattered from powerline (grid electric supply), solar energy is a favorable
economic choice. A solar pump minimizes future costs and uncertainties and
its fuel is free. Moving parts are reduced to as few as one. A few spare parts
can assure many years of reliable water supply at near-zero operating costs.

2.2. Which energy investment - generator or solar?

Generators are commonly used to provide power beyond the grid line
electricity. There are several economic studies concerning the economics of
solar versus generators as a power choice. These studies consider all costs
involved: modules, mounting structure, pumps, miscellaneous components,
installation, operation, maintenance, yearly inspection, component
replacement and salvage value. With this it possible to determine a life
cycles cost and a present value. One such comparison was done by the
Bureau of Land Management at Battle Mountain, Nevada (the desert part of
US) specifically comparing solar water pumping systems. For a system of 1.0
lit/s with a 92 meter design head, the solar system cost only 64 % for over
20 years of what the generator system costs about 10 years. This remote
solar site is also used only 14 % of labor hours as compared to what
generator needs. Photovoltaic pumping systems in remote locations would
often be cost effective compared to generators, even with 3-4 times the
initial capital cost. Low generators, which are initially inexpensive, require
consistent maintenance and have a smaller design life. Small to medium

Walelign Girma: Consultant on Renewable Energies Email:walelign_gir1777@yahoo.com 4


P.O.Box: 24219, Code 1000 Tel: (251) 910-573157
Addis Ababa
AWWCE
Project proposal for solar water pumping

sized solar pumping systems often initially cost less than a durable slow
speed engine driven generator. Larger pump systems initially cost more than
generator systems, but tend to be far more economical in the end.

Table 1: Scenario for different solar pumping designs based on capacity of the system to
meet different population demand

Population of community ,n 500 1,000 1,500 2,000 2,500

Per capita water demand(liter/cap/day) 20 20 20 20 20

Daily water demand for


10 20 30 40 50
Community(m3/day)

Max. pumping hour, hr (max. Sun-hours) 7 7 7 7 7

Minimum borehole yield ( liter/sec) 0.35 0.70 1.04 1.40 1.80

Maximum head (from Chart 1),m


95 65 45 37 30

Pump models capacity2 (lit/sec)


1.60 0.73 1.00 1.00 1.77

Power required, Wp 2000 2000 2000 2000 2000

Number of modules, each with 60Wp 35 35 35 35 35

Based on this analysis, it’s possible to look at options of different designs of


solar pumping systems using different scenarios of population to be watered
by a given power of solar system but using different pump models capacity
which could meet the demand of the respective communities’ population. In
this case of analysis, for each population scenario, a solar power of 2 kw is
required, and meet by 35 inter-connected modules having 60 Wp each.
1
The performance chart of Kyocera SC series pump at 7.0-8.0 sun hours is used for the analysis. Kyocera is the
leading manufacturer of solar electric modules for the last 20 years with primary production facilities located in
Kyoto, Japan. In total, Kyocera Group produces more than 60 megawatts per year of highly efficient, multi-
crystalline solar electric modules
2
Different SD and SC pump series with different capacity are taken for the analysis to meet different water demand.
Detail capacity of the pumps with their respective picture is attached on the Annex -3

Walelign Girma: Consultant on Renewable Energies Email:walelign_gir1777@yahoo.com 5


P.O.Box: 24219, Code 1000 Tel: (251) 910-573157
Addis Ababa
AWWCE
Project proposal for solar water pumping

As the pumping station heads of boreholes increases, the numbers of people


to be water supplied will proportionally decreases. Boreholes having low to
medium pumping head will favorably have capacities of delivering water to
more number of communities.

As renewable energy technology, one of the limitations of the solar energy is


that water has only to be harnessed during daytime sun-hours between 6-7
hours. Due to this fact the quantity of water to be pumped and collected to
water tankers on a daily bases will be limited. This also attributes to limited
number of people to meet their water demand. Despite that, it’s usually
possible to offset this effect by designing water tankers storage capacity
three times the actual water storage capacity so that water to be collected
as much as possible.

As to financial appraisal analysis, annuity method (for detail see Annex -1) is
used to compare the two energy system. To do so, a representative
community water supply system with a daily requirement of 30
m3/day,lifting water from 45 meter depth serving 1,500 people can be used
from the third column of above table analyzed. With this demand a water
supply system requires electric energy3 of approximately rounded to 4 Kwh.

For the purpose of the elaboration, the pump and control unit, including the
water tank of the water supply system can be considered to be identical for

3
E= 2.725VH, in wh,
where V is daily water demand (m3/day), H is total dynamic head (m)

Walelign Girma: Consultant on Renewable Energies Email:walelign_gir1777@yahoo.com 6


P.O.Box: 24219, Code 1000 Tel: (251) 910-573157
Addis Ababa
AWWCE
Project proposal for solar water pumping

the two energy systems. Attendance and maintenance will be required for
the motor and pump, and general supervision of the system will be needed
in both cases.

To provide this amount of electricity in Afar area with a daily radiation of 6.0
kWh/m2/day, an array (modules) with an output4 of 2,000 Wp (Watt peak)
would be required. The installed cost would be about Birr 274,000 - with
practical experience of no additional charges for repair or maintenance of the
array is needed, and a lifetime of 20 years for the system, and an annual
interest rate at 8.5 percent, it is calculated that the annual cost of solar
pumping is about Birr 37,100.

Table 2: Financial analysis comparing solar and diesel energy.

System components Solar Generator

modules,# 35 at 60Wp( for solar) and 2.5 kw


capacity (for generator) 168,455 48,130
Control Unit 7,000 7000
Pump Unit 23,000 23,000
Installation 25,000 25,000
Cable, mounting structure, cables,
accessories etc. 50,000 25,000
Sum 273,455 128,130

Investment appraisal analysis

Investment, Io 273,455 128,130


Life time, n 20 10
Interest rate , i 0.085 0.085
4
Equation to estimate solar power requirement for water supply in Watt:
Wp= 2.725 VH
Io η
Where V is daily water requirements (m3/day)
H is total dynamic head (m)
Io is local solar radiation (kwh/m2/day)
η is overall efficiency of the solar system, preliminary design takes 30%

Walelign Girma: Consultant on Renewable Energies Email:walelign_gir1777@yahoo.com 7


P.O.Box: 24219, Code 1000 Tel: (251) 910-573157
Addis Ababa
AWWCE
Project proposal for solar water pumping

Liquidation yield, L 0 4813


Annual running cost, Cr 8,204 32,342
Capital Recovery Factor (CRF), i n 0.10567 0.15241
Annuity Cost, aco 37,100 53,012

The same water supply service could be provided by a 2.5 Kw diesel


generator system operating for two hours each day. The investment cost
from good brands could be around Birr 48,130 - with approximate fuel
consumption of 1,080 liters yearly at 7.15 Birr/liter, annual repairs and
maintenance at 15 % of the capital cost, additional attendance required for
the generator at 450 Birr/month, and a 10-year engine life, the annualized
cost works out at Birr 53,012. Hence, with extra 10 years of operational
life,this typical analysis depicts that solar pumping system is the most
feasible energy option for the small to medium number of community
offering the cheapest energy service by 30% over the generator. It also
demonstrates that the higher capital cost of solar pumping system is
outweighed/compensated by much lower running costs of the system for
many years.
Table 3: Advantage and disadvantage of solar energy and generator

SYSTEM TYPE ADVANTAGE DISADVANATGE


Solar powered
pump system
 Low maintenance  Relatively high initial cost
 Clean energy  Lower output during cloudy
weather
 Unattended operation

 No fuel needed

 Easy to install

 Low recurrent cost

Walelign Girma: Consultant on Renewable Energies Email:walelign_gir1777@yahoo.com 8


P.O.Box: 24219, Code 1000 Tel: (251) 910-573157
Addis Ababa
AWWCE
Project proposal for solar water pumping

 Reliable and long life


Diesel generator  Needs maintenance and replacement
 Moderate capital cost
system
 Reduced life
 Can be Portable

 Fuel often expensive, supply is


 Easy to install
uncertain

 Extensive experience available


 Operation visit is necessary

To examine degree of technical feasibility of solar water pumping system in


Afar region, existing water supply boreholes’ pumping station depth,
borehole diameter and discharge yield have been assessed.

a) Based on data assessment on 15 boreholes at four different towns


(Semera, Assayita, Mile and Dufti),the maximum pump station depth
is ranging from 90 – 110 meters. While there is wide range of solar
pump technologies (e.g Grundfos) which could lift water up to 200
meters, the existing maximum borehole depth under operation in the
region is at acceptable and feasible range for maximum use of solar
pump system service.
b) The minimum discharge yield at all 15 boreholes that have been
assessed found to be 3.5 lit/sec. This is a substantial borehole yield
which even able to meet high capacity pumps.

Walelign Girma: Consultant on Renewable Energies Email:walelign_gir1777@yahoo.com 9


P.O.Box: 24219, Code 1000 Tel: (251) 910-573157
Addis Ababa
AWWCE
Project proposal for solar water pumping

c) The existing boreholes case diameter is 6” (150mm).Most submersible


solar water pumps have a diameter of 4” (120mm), which makes them
suitable and fits to the commonly boreholes diameter.

Generally, this solar powered pumping project is feasible in longer terms,


reliable and easy to sustain and in which it enables to use water sources
ranging from shallow to deep water wells in the region. When coupled with
the recent latest solar energy technologies, solar energy has the power to
dramatically increase efficient water supply and sanitation and family well-
being of the region in the following ways:

o Help people overcome rainfall and water constraints by providing a


sustainable supply of water for domestic drinking and sanitation and
livestock watering,
o The introduction of alternative renewable energy like solar energy
technology for water pumping will help to build water supply and
sanitation capacity in the Districts and in the region at large.

3. Beneficiaries:
The beneficiaries of the solar water pumping project will be:

a) Social and economic benefits

Mainly targeted beneficiaries are women and girls. The project saves a
woman's or a girl' time everyday in each family for fetching water that can
be used for more productive work such as for income generating, social
awareness and environment conservation programs, and girls can use their
time for other homework activities. It also contributes to the sustainable

Walelign Girma: Consultant on Renewable Energies Email:walelign_gir1777@yahoo.com 10


P.O.Box: 24219, Code 1000 Tel: (251) 910-573157
Addis Ababa
AWWCE
Project proposal for solar water pumping

health and sanitation condition of the communities with less number of


patients with water-born diseases. Sustainable water supply also improves
productive livestock and sustainable economic development for the
community, and region.

b) Environmental impact

Using solar water pumping in place of diesel fuel contributes in reducing local
as well as national level greenhouse gas emissions by displacing the
consumption of diesel fuel. The solar energy used in a sustainable basis
assures the CO2, associated with diesel combustion will be reabsorbed in the
process of the growth of the fodder and food for the animals. CO 2 emissions
that are associated with the combustion of fuel can be accounted as being
displaced when replaced by solar system. According to guidelines from
Intergovernmental Panel on Climate Change (IPCC), emission coefficient to
the atmosphere from diesel fuel combustion is about 2.5 tones of CO 2 per
1000 liter of fuel. The CO2 emission savings available from the using of
single solar pumping system replacing 2.5 Kw diesel generator- average
1000 liters of fuel consumption per year - is roughly approximated at 2.5
tones of carbon dioxide equivalent . While projecting this figure into 20 years
of solar energy operational years, the environmental benefits on avoided CO 2
equivalent emission will be estimated at 50 tones.

c) Financial benefits

The average foreign currency expenditure saving on diesel fuel while using
2000 Wp solar water pumping in place of 2.5 Kw generator could roughly
estimated in the table below.

Walelign Girma: Consultant on Renewable Energies Email:walelign_gir1777@yahoo.com 11


P.O.Box: 24219, Code 1000 Tel: (251) 910-573157
Addis Ababa
AWWCE
Project proposal for solar water pumping

Table 4:.Estimate of foreign currency saving from solar pumping system, 2000 Wp
replacing 5 kw generator

Saving fuel (liter/generator5/day) 4


Fuel saving (liter/generator/year) 1460
Annual saving (Birr/year) 10,439
Annual saving (US$ ) 870
Total saving in 10 years operational
8,700
life.(US$)

4. Objectives:

 To harness solar energy technology for water supply and sanitation,


and livestock watering projects and optimizes readily available
alternative energy utilizations in the region, by which to create more
awareness about advantages of renewable sources of energy for the
region’s decision makers.

 To increase sustainable water supply and sanitation and livestock


watering services access to rural setting population, through
development of solar energy and improved capacity of beneficiaries
and stakeholders in the sector

5. Expected results:

5
A generator with a capacity of 2.5 Kw running for two hours a day consumes about 1080 liter of diesel fuel per
year.Diesel fuel price is taken as 7.15 Birr/liter.One US dollar exchange rate at 12.00 Et. Birr

Walelign Girma: Consultant on Renewable Energies Email:walelign_gir1777@yahoo.com 12


P.O.Box: 24219, Code 1000 Tel: (251) 910-573157
Addis Ababa
AWWCE
Project proposal for solar water pumping

Clearly, besides the environmental and energy aspects of solar energy,


significant results can be expected in the socio-economic field and in
training.

Following are the expected outcomes of this project:

 Sustainable and reliable energy supply to the water supply system for
the prolonged time without hassle for maintenance and replacements
for rural setting,
 Saving of time -up to 3 hours - for women and girls for fetching water,
 Improved health and sanitation condition so as less number of patients
with water borne diseases,
 Reliable water supply for domestic and livestock production thereby
improves sustainable development for pastoral farming,
 Environmental benefits will be attained with zero CO2 emission,
 Foreign hard -currency expenditure for diesel fuel will be saved.
 Local and regional technical training on the new solar energy
technology will be improved and contribute to the future development
of the region’s energy sector

6. Activities:

Once the borehole drilling and pumping tests in the anticipated rural water
supply project has been accomplished, the data will be used to precisely
design the solar water pumping system. Detailed survey and study for the
project will also be carried out. Meanwhile, in the initiative of Afar Water
Works Construction Enterprise (AWWCE), the fund will be raised and
secured. The office of AWWCE also expected to take initiative to install solar

Walelign Girma: Consultant on Renewable Energies Email:walelign_gir1777@yahoo.com 13


P.O.Box: 24219, Code 1000 Tel: (251) 910-573157
Addis Ababa
AWWCE
Project proposal for solar water pumping

water pumping system as parts of its allocated budget for commonly used
generators.

Users’ committee will be formed in the anticipated districts’ rural villages’


water supply and sanitation project development. After the required amount
of fund is secured, and design has completed, the region’s AWWCE bureau
along with technical guidance from energy expert will request quotations for
supply and erection of solar panels, motor, pump, pipe and construction of
various civil structures including a storage tank. Reliable and experienced
party (ies) on solar water pumping will be selected for supplying and
installing as well.

All the components will be transported to the site. Construction work will be
done with maximum involvement of local labor under supervision. Maximum
resources and construction material will be used from the locality. After
erection, testing and commissioning, an operator selected by local users'
committee will be given a training to operate and maintain the whole
system. Then it will be handed over to the local users' committee.

In overall view, major activities categories in the solar pumping project are
expected to include:

1. Implementation plan,
2. Guiding Local community Users' Committee,
3. Detailed survey, design, estimate,
4. Guiding and supervise suppliers/installer selection,
5. Supervise construction/installation works,
6. Project management,

Walelign Girma: Consultant on Renewable Energies Email:walelign_gir1777@yahoo.com 14


P.O.Box: 24219, Code 1000 Tel: (251) 910-573157
Addis Ababa
AWWCE
Project proposal for solar water pumping

7. Orientation, on-site training (operation and maintenance) and awareness


programs,
8. Coordinate and cooperate related bodies for site visit, monitoring etc.

7. Project schedule:

The overall scheduling objective is to have solar water pumping system in


place after anticipated borehole drilling and pumping tests for the
village/community setting has been accomplished. Preliminary milestones
are as follows.

Activity Responsible Sep.09 O N D J F M A M J J A Sep.10


Fund raising Afar Water W.C.E
Detailed Survey, AWWCE. with
Design& Estimate Energy
Consultant
Selection-of AWWCE with
Supplier/Installer, & energy
ordering Consultant.
Installation/ Installer/Supplier
Erection s
Testing, Installer/Supplier
Commissioning, and s
Handover
Operators’ Training, Water Resource
exhibition, bureau/AWWCE
awareness program with Energy
Consultant
(expert)

Walelign Girma: Consultant on Renewable Energies Email:walelign_gir1777@yahoo.com 15


P.O.Box: 24219, Code 1000 Tel: (251) 910-573157
Addis Ababa
AWWCE
Project proposal for solar water pumping

8. Project budget:

Breakdown of costs is done based on solar pumping system design for 1,500
people6 demanding water at 30 m3 per day and a solar power of 2,000 Wp
(Peak watts). The preliminary estimate which includes set of solar pumping
Equipment (modules/panels, Pump unit, Control unit, Cables, mounting
structures etc.) : Birr 273,455

While this proposed budget has attempted to emphasize on the set of solar
pumping equipment requirement, detailed budget requirement including
consulting personnel will be included during detail studies and design at
implementation phase of the project.

9. Project financing:

Reflecting a belief in the power of partnerships, Afar Water Works


Construction Enterprise (AWWCE) is seeking funding for the project from the
public, development donors and NGOs working in integrated rural
community developments on the area of water, energy, and environment
and relief activities. In doing so, the project presents an opportunity to
participate in building the foundation for a high-impact solar water pumping
program to help thousands of pastoralists in the region.

Additional funding sources being considered include UNDP-GEF co-funding


and various multi-national cooperation. The UNDP administered Global
Environment Facility (GEF) in Ethiopia would consider co-financing of a solar
pumping system. The program so far has little activities related to energy,

6
The same number of community i.e 1,500, which is taken for the financial appraisal analysis.

Walelign Girma: Consultant on Renewable Energies Email:walelign_gir1777@yahoo.com 16


P.O.Box: 24219, Code 1000 Tel: (251) 910-573157
Addis Ababa
AWWCE
Project proposal for solar water pumping

both in its core program or the GEF. Recent policy expresses increased
interest in focusing on renewable energy, including:

 Community level renewable energy solutions


 Renewable energy policy issues,
 Institutional capacity strengthening

The GEF operates in a one-on-one co-financing facility in three steps.


Submission for co-funding of program identification (PDF-A) and formulation
(PDF-B) and possibly implementation (PDF-C) should be considered.

UNICEF-WASH (UNICEF’s Water, and Sanitation, Hygiene): Even if not


tested so far, it seems that cooperation between the UNICEF-WASH program
and solar energy projects could be an opportunity. It is possible to further
explore this option.

10. Organization and administration:


Until the whole system become operational, the region’s AWWCE and/or
bureau of water resource will co-operate and facilitate the installation and
overall construction of the solar pumping system. After the installation has
completed bureau of water resource will expected to take over the
responsibility of the system. The local users committee will be formed and
basic operation and technical training will be provided for the selected
operator. The Users Committee should also provide adequate information to
bureau of water resource in case of any problem or defects that might
happen to the system.

Walelign Girma: Consultant on Renewable Energies Email:walelign_gir1777@yahoo.com 17


P.O.Box: 24219, Code 1000 Tel: (251) 910-573157
Addis Ababa
AWWCE
Project proposal for solar water pumping

Reference:

1. October 2003, University of Flensburg/SESAM: Decentralized Solar/PV


Systems, Flensburg, Germany.
2. September 2004, Ethiopian Rural Energy Development and Promotion
Center (EREDPC) and German Technical Cooperation(GTZ):
Proceedings of Symposium on Renewable Energies in Ethiopia, Addis
Ababa
3. October 2001, University Of Flensburg/SESAM: Business Management
Tools for Project Planning, Decision Taking, Monitoring and Evaluation,
Flensburg, Germany.
4. January 2008,Kyocera Corporation/Kyocera Solar Inc :Solar Water
Pumping Application Guide, Arizona, USA
5. December 1995,Stockholm Environment Institute: A guide to
Environmental Analysis for Energy, Boston

Annex 1: Annuity method (Static -cost annuity): time adjusted methods of investment
appraisal

Objective:

The static annuity is a method to calculate the average annual costs of an


investment. Thus, it is similar to the static cost comparison, but due to a
time-adjusted splitting up of the investment into annuities (instead of the
linear depreciation), it is more exact.

As running costs are used on the basis of a not time-adjusted annual


average, the annuity method is a mixture of static and dynamic elements.

Walelign Girma: Consultant on Renewable Energies Email:walelign_gir1777@yahoo.com 18


P.O.Box: 24219, Code 1000 Tel: (251) 910-573157
Addis Ababa
AWWCE
Project proposal for solar water pumping

Application: To compare different investment alternatives e.g. two energy


technologies

Abbreviation: aco
Equation: aco= Cr+ ( I0+ L). CRF + L. i
where:
Cr = annual running costs
I0 = Investment
L = liquidation yield
CRF7i, n = Capital Recovery Factor, for a determined interest rate i and
period n
i = interest rate
n = period of operation of the system

As the liquidation yield is only due at the end of the investment period,
interest has to be calculated each year. The capital of the liquidation yield is
tied-up until the project's end.

If the running costs Cr are assumed to be the same each year, the cost
annuity is "dynamic", as no time adjustment of running costs is necessary. If
running costs are a mean value of different annual costs, the cost annuity
gives a mixed (static-dynamic) result.
Example:

A mini hydro-power plant has the following data:


Investment........................................................I 0 = Birr 720,000
Running costs ....................................................C r = Birr 22,500 /year
7
Capital Recovery Factor ,CRF is a factor which split the present value up into annuities. . It’s equation is
CRF= i(1+i)n / (1+i)n-1

Walelign Girma: Consultant on Renewable Energies Email:walelign_gir1777@yahoo.com 19


P.O.Box: 24219, Code 1000 Tel: (251) 910-573157
Addis Ababa
AWWCE
Project proposal for solar water pumping

Life time .............................................................n = 15 years


Liquidation yield ....................................................L = 0
Calculatory interest rate ...................................i=11%
CRF for 11% and 15 years: ........................................0.139065

Using the annuity equation:


aco= Cr+ ( I0+ L)* CRF + L* i

Annuity cost =22,500 + 720,000 * 0.139065 = 122,580 Birr

 This result could now be compared with the cost annuity of other
energy technologies, e.g. a grid connection or a diesel generator.
The technology with the lowest cost annuity is the most
feasible energy option.

Annex 2: Solar water pumping projects from Somali and Amhara National Regions

Solar water pumping projects from nearby regions like Somali National
Regional State and Amhara National Regional state could offer a good
technical and knowledge sharing experience.

Walelign Girma: Consultant on Renewable Energies Email:walelign_gir1777@yahoo.com 20


P.O.Box: 24219, Code 1000 Tel: (251) 910-573157
Addis Ababa
AWWCE
Project proposal for solar water pumping

Solar water pumping project powered by 2.2 Kw solar energy in Somali region, Cheriti,
Negele Borena

Walelign Girma: Consultant on Renewable Energies Email:walelign_gir1777@yahoo.com 21


P.O.Box: 24219, Code 1000 Tel: (251) 910-573157
Addis Ababa
AWWCE
Project proposal for solar water pumping

Community water supply project powered by solar energy, Somali Region,Negele Borena

Walelign Girma: Consultant on Renewable Energies Email:walelign_gir1777@yahoo.com 22


P.O.Box: 24219, Code 1000 Tel: (251) 910-573157
Addis Ababa
AWWCE
Project proposal for solar water pumping

Plan International, an international NGO is widely working on community


solar water pumping in Amhara Regional State . Some of its experiences on
installed solar pumping are as follows.

Shallo Solar Water


pumping

Qyield= 1.0 lit/sec

Htotal=100 m

Power installed= 4.2 Kw

Benefiieries=3,000

7 years since installed, and


still works very good

Plan International‘s experience at Lalibela,North Wello;installed by


LYDETCO Plc.

Walelign Girma: Consultant on Renewable Energies Email:walelign_gir1777@yahoo.com 23


P.O.Box: 24219, Code 1000 Tel: (251) 910-573157
Addis Ababa
AWWCE
Project proposal for solar water pumping

Getermeda Solar Water


pumping

Qyield= 1.0 lit/sec

Htotal= 45 m

Power installed= 3.8 Kw

Benefiieries=3,000

9 years since installed, and


still works very good

Plan International‘s experience at Lalibela,North Wello

Genetemariam Solar Water


pumping

Qyield= 0.8 lit/sec

Htotal= 80 m

Power installed= 4.0 Kw

Benefiieries=2,500

7 years since installed, and


still works very good

Plan International‘s exeprience at Lalibela,North Wello

Walelign Girma: Consultant on Renewable Energies Email:walelign_gir1777@yahoo.com 24


P.O.Box: 24219, Code 1000 Tel: (251) 910-573157
Addis Ababa