Abstract
Non-renewable energy sources dominate the requirement of world’s energy. In recent years, there is a rise in electricity generation from renewable energy sources (i.e., solar photovoltaic, solar thermal, wind, biomass, etc.). These sources are fluctuating in nature and capital intensive. With increase in global energy demand, there is a need for power generation system planning, which has an optimum mix between non-renewable and renewable energy sources. In this paper, a Pinch Analysis based approach is proposed to determine the cost-optimum overall energy mix. Applicability of the proposed methodology is demonstrated through an illustrative case study of Lakshadweep Islands, India. The approach in the case study has the added benefits of reducing the dependency of Lakshadweep’s economy on external fossil fuel sources, as well as reducing the burden of subsidy on electricity borne by the government. The policy implications for subsidy are also studied in this paper.
