Economics of Wind Power when National Grids are Unreliable

Power interruptions are a typical characteristic of national grids in developing countries. Manufacturing, processing, refrigeration and other facilities that require a dependable supply of power, and might be considered a small grid within the larger national grid, employ diesel generators for backup. In this study, we develop a stochastic simulation model of a very small grid connected to an unreliable national grid to show that the introduction of wind-generated power can, despite its intermittency, reduce costs significantly. For a small grid with a peak load of 2.85 MW and diesel generating capacity of 3.75 MW provided by two diesel generators, the savings from using wind energy (based on wind data for Mekelle, Ethiopia) can amount to millions of dollars for a typical July month, or some 5.5–17.5% of total electricity costs. While wind power can lead to significant savings, the variability of wind prevents elimination of the smaller of two diesel units, although this peaking unit operates less frequently than in the absence of wind power.