Research Paper on "Renewable Solar Power Project for Dairy Farm in Yeovil Somerset"

Research Paper 10 pages (2792 words) Sources: 5 Style: Harvard

[EXCERPT] . . . .

The big wind capacity can range from 1.97 MW to 7.5 MW sufficient to produce electric energy of 18 GWh that can be used by 5000 3-person households. However, small wind is an energy of between 100Kw, the small wind power system is effective in generating power for farm, homes, businesses and telecommunication sites. Thus, the small wind turbines can be installed at the top of the building and minimize the production of carbon emission. Similar to the solar PV, the wind power has become a source of renewable energy sources in the UK. Typically, 60% of onshore farms use the wind power to generate electricity, and cost of wind power has fallen from $70.20 ($108) per megawatt hour to $85 making it becoming cheaper and efficient to way to develop. Despite the benefits associated with wind power, the wind power is intermittent, and the application of the wind power depends on the wind speed since the wind does not blow at all time. Moreover, wind power is not as sustainable as solar power because wind turbines are noisy, and they can generate noise pollution. Although, a recent development of technology has improved the development of quieter blades, however, these type turbines may be more expensive. Moreover, the wind turbines are a threat to wildlife. For example, wind turbines can kill some exotic and law protected birds, which can make our farm break the environmental law.( Kraemer, Hu, Muto, Chen, et al. (2008).

Solar Thermal

Solar thermal systems are the energy system that captures heat water and energy for heating the building. The thermal power is different from solar PV because the process of converting solar power to heat is more twice efficient. Despite the efficiency of the thermal power in generating the power for the farm, the thermal power technology faces some constraints because its availability is limited. Moreover, solar thermal may not provide the energy suitable for our dairy farm. Thus, analysis of the Solar PV, wind power, and thermal reveals that PV solar power is the best choice for our dairy farm because of its availability, cost-efficient and sustainable efficiency. (Akhigbe, Belaief, Gursoy, 2011).

Section 3: Detailed Feasibility Assessment of Solar PV

The section develops the feasibility plan for the project using discounted cash flow, energy analysis, annual carbon savings and pictorial elements. Table 2 provides the setup costs and general information for the solar PV power. The appendix 1 reveals the solar PV panel.

Table 2: General Information for PV Solar

Setup Cost

Currency

British Pounds

Price (per kWp)

Divisor

1

Running cost

Useful Years

25

Lease (£/year)

0

Nominal Power (kWp)

5

Insurance prem. (%)

0.5

Annual Yield per kWp

Inflation rate (%/year)

2

Degradation % per year

0.5

Financing

Feed in Tariff

% of Own Fund

25%

Years

20

Loan type

Redeemable

Price per kWh

1.1874

Redemption Schedule

Uniform

Index Linked

Years

20

Own Consumption

Interest rate 4.5%

4.15%

FIT subsidy (£/kWh)

0

Disagio %

3

Own consumption (kWh/year)

0

Investment Yield %

3.5%

Electricity price projection

Price now per kWh

0.18

Tax rate

0

Energy Price Inflation % per year

3

The project uses the Excel software for the calculation, and IRR (internal rate of return) of the project is 7.3% and the NPV (Net Present Value) of the project is £5,004. The results of the NPV and IRR reveal that the project is feasible. The study also develops the discounted cash flow, and the results of the cash flow reveal that the project is feasible because our farm will enjoy an increase in the net income with the use of Solar PV as being revealed in fig 3, 4 and 5. The Appendix 2 provides the outcome of the discounted cash flow.

Moreover, the solar power is effective is reducing the carbon emission thereby enhance carbon saving. The normal amount of sunshine for solar PV is 3.5 kW (14 x 250W panels), which will produce 3,000 kWh annually. Thus, the solar PV will be able to save 445g of carbon emission from the 3,000 kWh solar power annually. (Kraemer, Hu, Muto, Chen,. et al. (2008).

Project Summary:

Nominal power (kWp)

5

Purchase value (£)

11000

Own Funds (£)

Loan amount (£)

Present value of net income1 (£)

Levelised energy cost (€/kWh)

0.173

Loan type

Redeemable

Amortization time (y)

15.2

Dividend (GBP)

Dividend (%)

4.9

IRR before tax (%)

7.3

Eff. tax rate (%)

0.0

IRR (%)

7.3

Fig 3: Income allocation (£)

Fig 4: Income Before Tax

Fig 5: Net Income After Tax

Section 4: Critical reflection on the Feasibility Assessment

A renewable energy source has become an effective source of energy that can be used to reduce the carbon emission in the UK. This project carries out the feasibility plan for the renewable energy for our dairy farm located in Yeovil, Somerset. The finding of the feasibility plan reveals that solar PV is an effective renewable energy that can increase revenue decline cost of operation for the project. The project assessment delivers several strengths. First, the project has been able to evaluate the PV solar, thermal solar and wind power energy. The study has chosen the solar PV as the best renewable energy for the dairy farm. The findings of the project will assist a potential investor of the dairy farming to choose the PV solar for the farm operation. Moreover, the assessment provides the discounted cash flow of the solar PV showing the revenue that the farm owner will generate over the next 25 years. Despite the identified strengths of the assessment, the weakness of the assessment is that the project has not yet being implemented, and the macroeconomic factors such as inflation, and an increase in the interest rates can affect the proposed revenue to be realized from the project. Despite the shortcomings identified in the project, the project collects information from the quality sources that enhances the validity of the research outcomes. Moreover, the method of arriving at the research findings also enhances the reliability and validity of the research findings. For example, the writer uses different financial tools such as discounted cash flow, IRR, NPV and carbon savings to develop the research findings. The outcome of the research will be useful for prospective dairy farmers when attempting to renovate their farms in Yeovil, Somerset.

Section 5: Conclusions and recommendations

The renewable energy has a potential in reducing greenhouse gas emission thereby reducing the environmental degradation. In the UK, the renewable energy sources have grown in popularity because it has become an important source of CERs (certified emissions reductions). The renewable energy source has also become a diverse set of a clean energy that can enhance the potential contribution of energy for the farm. This study carries out the feasibility assessment of the renewable energy resources for the old farm in Yeoviton, Somerset. The outcome of the assessment reveals that the farm will take the advantages of the abundance of the of solar power energy sources to renovate the farm. The study reveals that the solar PV are the abundant types of renewable energy resources in the UK based on its cost efficiency and carbon savings. In 2011, there was more than 230,000 solar power project with the capacity of 750 megawatts. By 2012, the capacity of the solar power capacity had reached more than 1,000 megawatts. A reduction in the costs of PV (photovoltaic) panel has influenced the use of solar power across the UK. Moreover, the UK government has influenced the use of solar power through the introduction of the FIT (Feed-in-tariff) subsidy.

Despite the benefits that our farm will derive from the use of solar PV, the… READ MORE

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