A Microgrid Application of Polygeneration System Fed by Natural Gas: Effect of Fuel Price on Investment Outlook

Natural Gas (NG), which represents 95% of the fuel mix in stationary power generation in Singapore, has been seen as the replacement of traditional pollutant-heavy fuels such as diesel. In the microgrid context, NG is a crucial raw material for powering principal components such as the Reciprocating Engine (RE), which provides the base load when the microgrid is in islanded mode. In this study, the effect of NG prices on the financial viability of operating a microgrid which integrates Combined Heat and Power, solar PV, electrochemical storage, vapour chiller and the main grid has been investigated. The economic dispatch of the components indicate that at an increase of NG price by 20 cents reduces the operating hours per day of the RE by nearly half, with the option of purchasing from the grid preferred instead. Furthermore, at a higher fuel price the battery is required to operate at a heavier duty cycle, thus reducing its lifetime. A positive Net Present Value (NPV) in the order of millions of SGD is obtained in the NG price range of SGD0.4-0.6 per kg after 20 years, whilst at a price of SGD0.8 per kg, the microgrid fails to provide a positive NPV. The option of regasification of LNG prior to feeding it into the RE has been found to provide a maximum amount of cold energy in the region of 500kWh per day.