Pv tubewell economics potential pakistan

PROPLAN ASSOCIATES

Potential and Economics of Solar PV Tube Wells

Akhtar Ali

March 2013

Draft Working Paper

Potential and Economics of Solar PV Tube Wells

Solar PV modules prices have come down drastically low over the past two years and the trend is

expected to continue into the future. It appears that the target of USD 1 per Watt would be achieved

much earlier than 2020.Recent bids in California for Solar PV ground mounted utilities have been

received as low as 8 cents per kWh. Similarly in India, bids of as low as 11 cents per kWh have been

received. It is predicted that Solar PV mat compete with conventional electrical sources by 2017.Even

now, Solar PV is cheaper than Diesel based applications in day time, where storage requirement is not

there.

The total potential of Solar PV has been estimated at 6- 8000 MW for about one million existing

Diesel and electricity operated tube wells. If the entire potential is to be implemented, it will

take 10 years at the rate of 6-800 MW (60-80,000 pumps) of installations per year. Even if we

make allowance for 40% of tube well capacity to be non-operating or operating under capacity,

there would still be a potential of some 4800 MW, out of which PEPCO confirms electrical tube

wells to be consuming 2-3000 MW.

One important point to be noted is that Diesel Tube wells operate for 150-200 days per year on

the average. As Diesel Engines are comparatively cheap and Diesel oil being expensive, there is

pressure on the user to minimize its use. In case of Solar Pumps, there would be pressure for

maximization of usage, as all cost is sunk cost. This means that 2kW of Diesel Capacity may be

replaced by 1 kW Solar PV. The typical HP range is 5, 10,15,20,22 and 25 H.P., with an average

of 17 H.P. Also the most common water table depth is between 20 and 50 ft mostly in Punjab.

In Balochistan, however, the depth can go as much as 200 ft.

Tube Wells appear to be the readiest application of Solar PV; as there are a large number of

tube wells, 1 million plus; 70-80% of which run on Diesel Engines. Diesel based electricity at

currently high oil prices cost around 25 cents per kWh. On the other hand (see table ),Solar PV

,based on 1600 hours of operations per year, costs around 10 cents per kWh, as per market

prices as these prevail for Chinese origin systems. The payback period for Solar PV tube wells

has been estimated at about 3 years. Noting this, the market of Solar PV tube Wells has already

picked up without any support or incentives. PV Tube wells system (solar panels, controls and

submersible DC pump)of various capacities, ranging from 4 kW to 10-15 kW are being marketed

at a price range of )0.4 to 1.5 Million Rs.

Table 1 :Micro-economics of Solar PV in Tube well visa-vis Diesel Engine

Case study of a 15 kW Solar Tube well replacing diesel engine

Item units Amount/Value Solar PV capacity kW 15 Capacity factor hours 1600 Annual Electricity produced kWh 24000 Replacement cost of Diesel Rs/kWh 25 Annual Diesel replacement Rs/yr 600000 CAPEX Solar PV and Pump Rs 1800000 Investment Payback Period years 3 Equity @30% Rs 540000 Loan Rs 1260000 Repayment period years 10 interest rate %p.a 14 Annual Debt servicng Rs $241,559 Annual saving for first 10 yrs Rs $298,441 Equity payback Period yrs $1.81 Present Value of 25 yrs saving Rs $5,446,224 Net Present Value @10% Rs $3,646,224 IRR % 33.31

Electricity cost in1-10 years Rs/kWh $10.06 Electricity cost in11-25 years

0

At a micro level, it has been estimated that every two Acres of land requires on the average 1

KW of Solar pumping power. Keeping in view, the capital requirements, one would expect that

initially very large farm owners-cultivators would go for solar, installing several pumps each. At

a mean level, a 20-Acre farm would require 10 kW system costing around Rs.1.2 Million

currently. A 5 Acre farm would require Rs 0.3 Million. The prices are expected to go down at

about 7-10 percent per year for several years.

In search of Business Models

Conversion of Electric Tube Wells may partly replace expensive oil based electricity generation

by IPPs and GENCOs, while conversion of Diesel Tube Wells saves oil and refining capacity

directly. A number of business models may be examined to meet this demand;

User installed off-grid

Utility installed on-grid or Micro grid

User(community) installed on-grid or Micro grid

User installed off-grid business model is already under practice due to high prices of Diesel and

may continue to keep capturing large land owners market segment. It is an open question

whether our grid system would be able to operate in two way system integrating small PV

inputs of 10-20 kW. Utilities or Local governments may be able to install micro grids(AC or DC)

just to share Solar PV electricity generated by user systems. The concept of micro grids is fast

expanding specially for remote application. In developing countries, Micro Grid may be installed

even in close by locations for making use of and sharing user generated electricity.

Alternatively, excess water extracted through continuous daylight operation of Solar PV tube

wells, can be diverted to water courses and canals. In the U.S. irrigation districts have been

created which operate like a legal entity. Irrigation districts are installing Solar PV tube wells

and distributing water. In Pakistan, the equivalent may be the Water Users Associations. The

task being huge and economics being so attractive, all possible institutional arrangements and

business models may be put into use.

Table 2 : Possible Business Models Solar PV tube Wells

User Financed off grid

Leasing or agricultural loan schemes

Third Party PPA/WPA

Utility owned on or off-grid(micro-grid)

Community owned /Water users Association]

Irrigation district(Water distribution)

Tube well plus other uses(micro-grid)

Water Markets

Source:Author

Table 3 : Tube well irrigated land and potential for Solar PV

____________________________________________

Total number of Farms+8.26 Million

Total Farm Area =52.91 Million Acre

Total Cultivated Area=42.6 Million Acre

o/w irrigated by canal and tube wells both=13.89 Million Acre

and irrigated by tube wells only=6.08 Million Acres

Estimated coverage of Tube wells=12 Million Acre

@0.5 kW per acre, Solar PV potential=6000 MW

________________________________________________

Author’s Estimate, data source; Agricultural Census of Pakistan 2010

Table 4 :Existing Tube Well Statistics and Solar PV Potential

Total number of Tube Wells = 1 million plus

o/w Diesel based =834905(11000 MW)

and Electric =250,000(3000 MW)

Average HP per Tube Well=17 H.P.(12.68 kW)

Typical Capacities:10,15,20,22,25 HP

Diesel, number of days of operation=125 days per year

Electric, number of days of operations=184 days per year

Solar PV ,optimal number of days of operation=300 days per year

Estimated number of obsolete pumps(installed

before1994)=400,000

Estimated Solar PV demand for 300 days of operations=8000 MW

Assumed Target 50% conversion in 10 years=4000 MW

Yearly conversion =400 MW(40,000 solar pumps)

________________________________________________

Author’s Estimate, data source; Agricultural Census of Pakistan 2010;Agricultural Machinery Census

Table 5 :Tube wells by Horse Power Capacity and power source(2004)

Pakistan Capacity(H.P.) Diesel Electric Total

< 10 5760 20340 26100

>10<15 122575 27793 150368

>15<20 586097 20363 606460

>20<22 13165 391 13556

>22<24 14107 289 14396

>25 93207 16701 109908

Total 834911 85877 920788

RoG %p.a.upto2004 7% 2.96% 6.12%

Wt.Avg.HP 18 14 17

Provincial Distribution Punjab 697156 109097 806253

Sindh 64128 31793 95921

KpK 4223 12335 16558

Balochistan 11872 23716 35588

Total 777379 176941 954320 http://www.pbs.gov.pk/sites/default/files/agriculture_statistics/publications/Agricultural_Statistics_

of_Pakistan_201011/t

PRIVATE TUBEWELLS & LIFT PUMPS BY PURPOSE OF INSTALLATION

Total Number of Tubewells/Lift pumps by Purpose of Installation Administrative number of Supplementing Irrigation of Replacement of Unit/ Type of tubewells/ Canal water Barani/Sailaba land wells/karezes Tube-Wells lift pumps Number % of Number % of Number % of

Total Total Total

Punjab: Tubewells 829437 587146 70.78 194765 23.48 57681 6.95 Lift Pumps 5415 731 13.50 3811 70.37 914 16.87

Sindh: .

Tubewells 38330 34125 89.02 4055 10.57 283 0.73 Lift pumps 7809 6877 88.06 713 9.13 260 3.32

KPK:

Tubewells 18705 3289 17.58 14630 78.21 925 4.94 Lift Pumps 2186 379 17.33 1551 70.95 263 12.03

Balochistan:


Pakistan:


Source : Pakistan Agricultural Machinery Census - 2004.

USE AND RENTING OUT TIME OF PRIVATE ELECTRIC & DIESEL TUBEWELLS/LIFT PUMPS DURING

LAST 12 MONTHS Total Average use of time Renting out time

Administrative No. of Days Hours Number of Average Average

Unit tubewells/ per per tubewells/ Hours Hourly

lift pumps year day lift pumps rented rate

per year (Rs.)

Punjab: 110

Electric 61931 183 6 22174 619

Diesel 771642 124 5 143308 315 114

Sindh:

112

Electric 3449 151 7 513 468

Diesel 42691 123 6 6502 311 111

KPK:

106

Electric 9829 152 4 2350 431

Diesel 11020 108 5 2583 380 122

Balochistan:

120

Electric 10659 227 7 681 532

Diesel 9552 189 5 611 259 121

Pakistan:

110

Electric 85868 184 6 25718 597

Diesel 834905 125 5 153004 316 114

Source : Pakistan Agricultural Machinery Census - 2004.

DIESEL TUBEWELLS BY TYPE OF PUMP

TOTAL GOVERNMENT PRIVATE

ADMINISTRATIVE UNIT CENTRI- TUR- WELL CENTRI- TUR- WELL CENTRI- TUR- WELL

FUGAL BINE WITH FUGAL BINE WITH FUGAL BINE WITH

PUMP PUMP PUMP

1 2 3 4 5 6 7 8 9 10

PAKISTAN 784006 21572 12199 277 120 75 783729 21452 12124

N.W.F.PROVINCE 2957 2920 2850 6 14 2 2951 2906 2848

PUNJAB PROVINCE 744303 15501 5196 111 25 13 744192 15476 5183

SINDH PROVINCE 32763 915 1556 139 - - 32624 915 1556

BALOCHISTAN PROVINCE 3983 2236 2597 21 81 60 3962 2155 2537

Water Table

PRESENT DEPTH OF TOTAL * 151 TO 200 201 WATER TABLE TUBEWELLS AND ABOVE 1 2 11 12

PAKISTAN

UPTO 10 FEET 22466 46 52

11 TO 20 FEET 125382 26 10

21 TO 30 FEET 224027 28 10

31 TO 40 FEET 188707 - 41

41 TO 50 FEET 116750 - 2

51 TO 75 FEET 94999 12 17

76 TO 100 FEET 59965 16 15

101 TO 150 FEET 31053 131 31

151 TO 200 FEET 11053 7654 126

201 FEET AND ABOVE 12378 2399 8716

- 1 - -

Pump Head or Power Calculations;

: GPM x TDH / 3960 = WHP

GPM = Gallon per minute at the best efficiency point

TDH = Total discharge head (measured in feet), as shown on the pump

curve ; at the best efficiency point)

WHP = Water horse power or the amount of horse power the pump is

generating.

Doing the same thing in the metric system we would get:

M3/ HR = Cubic meters per hour of capacity as measured at the best

efficiency point on the pump curve.

TDH = Total discharge head, in meters, at the best efficiency point.

WKW = Water kilowatts of power being generated by the pump

PV Panel Selection

1. The power of solar panel=power of pump X 1.3, the voltage of solar panel=the voltage of pump, the controller should be matched

Pump kW calculations

Pump#1 Pump#2 Pump#3 Pump#4

Daily Consumption CM/d 1000 1500 2000 2500

Number of hours per day hrs/d 8 8 8 8

Hourly Flow CM/hr 125 187.5 250 312.5

Dynamic Head Meters 10 20 20 15

Efficiency % 60 60 60 60

Motor Power Reqd KW 5.79 17.36 23.15 21.70

Pv tubewell economics potential pakistan

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