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This paper aims to propose a comprehensive methodology for setting up rural electrifications for indigenous villages with minimum budgets and the lowest possible cost of electricity (COE). The electricity accessibility of rural area in Malaysia is not fully covered and the cost of extending the grid to these areas can be high as RM 2.7m per km. Lack of vigorous policies and economic attraction of the rural areas are also the main barriers to rural electrification. Electricity is an essential element of economic activities and the lack of electricity exacerbates poverty and contributes to its perpetuation. Therefore, a hybrid standalone power system can be an alternative solution for the rural electrification. A hybrid standalone power system is studied to investigate the potential of the implementation and the budget required.

A site survey has been carried out in a village in Peninsular Malaysia, namely, Kampung Ulu Lawin Selatan. A standalone hybrid system is modeled in HOMER Pro software and the data collected from the selected site are used to obtain the system configuration with the lowest COE. The load following and cycle charging energy dispatch methods are compared to identify the optimal system configuration that yields the lowest COE. The diesel generator-only system is chosen as a benchmark for comparisons.

The results show that the hybrid system constituted from the diesel generator, photovoltaic (PV), micro-hydro and energy storage using the load following energy dispatch method yields the lowest COE of RM 0.519 per kWh. The COE of the hybrid system is 378 per cent lower than that of the diesel generator-only system. The lead-acid energy storage system (ESS) is able to reduce 40 per cent of COE as compared to the system without ESS.

The results indicate that the COE of the diesel-micro hydro-PV-ESS system with load following dispatch strategy is RM 0.519 per kWh, and this value is 35 per cent higher than the average electricity price in Malaysia. However, it is important to note that the costs of extending the grid to the rural area are not taken into account. If this cost is considered into the electricity price, then the standalone hybrid power system proposed by this study is still a competitive alternative for rural electrification.

The main purpose of this study is to provide an effective sizing method and an optimal peak shaving strategy for an energy storage system to reduce the electrical peak demand of the customers. A cost-savings analytical tool is developed to provide a quick rule-of-thumb for customers to choose an appropriate size of energy storage for various tariff schemes.

A novel sizing method is proposed to obtain the optimum size of energy storage for commercial and industrial customers based on their historical load profile. An algorithm is developed to determine the threshold level for peak shaving. One of the buildings at Universiti Tunku Abdul Rahman (UTAR), Malaysia, is chosen for this study. A three-phase energy storage system rated at 15 kVA is developed and connected to the low-voltage electrical network in the building. An adaptive control algorithm is developed and implemented to optimize the peak shaving.

The sizing analysis shows that the customer under the C2 tariff rate yields the highest saving, followed by E2, C1 and E1. The experimental results presented indicate that the proposed adaptive control algorithm has effectively optimized the peak demand to be shaved.

This study demonstrates the potential of energy storage in reducing the peak demand and cost of electricity. One of the main challenges of real-time peak shaving is to determine an appropriate threshold level such that the energy stored in the energy storage system is sufficient during the peak shaving process.

The originality of the paper is the optimal sizing method of the energy storage system based on the historical load profile and adaptive control algorithm to optimize the peak demand deduction.