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Solar & Cleantech / Industrial

Energy Export Procedure for a Dairy Farm

Understand how Net Metering & Wheeling can beneficial

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Background Story
One of the leading agricultural and dairy holding companies in the UAE has embarked on its energy transition journey by exploring the implementation of a Solar Power Plant. In 2020, the client’s facility had a total energy consumption of 6.7 MWh, distributed between two main lines linked to ranches and livestock.

In Abu Dhabi, two distinct tariff rates apply to agricultural and commercial users. For the client, the ranches are charged at 4.5 Fils/kWh—a significantly lower rate compared to the livestock operations, which are charged 20 Fils/kWh. However, due to regulatory restrictions, the client is unable to benefit from existing wheeling and net-metering mechanisms. Our analysis indicates that the client has a sufficient rooftop area of 15,000 m², allowing for the installation of a Solar PV system with a capacity of up to 2 MWp.

Problems
A key challenge addressed during the project was the impact of low tariff rates for agricultural users, as set by the Al Ain Distribution Company (AADC). Given Abu Dhabi’s regulatory framework at the time, the client was unable to leverage net-metering or wheeling strategies to make use of excess energy. As a result, surplus energy generated by the system had to be curtailed.

Objective
The client’s primary objective is to implement a Solar PV system to offset energy consumption while securing a financing solution that maximizes cost savings. Since net-metering and wheeling were not viable options, Ark Energy conducted an in-depth analysis to determine the optimal Solar PV system size.

Approach
As the client’s consultant, Ark Energy applied a structured twelve-step approach to ensure the most favorable tariff rate and implement a Solar PV system designed to outlast the Solar Leasing Contract. Initially, we identified the ideal plant size through scenario analysis, optimizing solar capacity to minimize energy curtailment and enhance cost efficiency.


Table 1 Comparing plant size scenarios vs cumulative savings & cost efficiency (with optimized scenario highlighted)
System Size
(MWp)		Cumulative Savings
(mAED)		Cost Efficiency
0.84.217.512
15.287.483
1.26.317.508
1.256.567.510
1.36.837.502
1.47.287.495
1.68.307.431
1.89.197.306
29.986.956
Source: Ark Energy Analysis
 From the analysis conducted, the followed ideal assumption that the possible implemented capacity was 2MWp.Through the scenario analysis, it was determined that the optimized capacity to reduce curtailment and optimize cost efficiency was 1.25 MWp. This is emphasized in the following chart

Figure 1 Optimized Solar PV System Capacity 

Source: Ark Energy Analysis

 At a second level, was to determine the financial feasibility of the project, if the client were to proceed with self-investing or being financed by a 3rd Party . After analyzing different financing options, aside from the Self-Invest,  the option of a 3rd Party Purchase Power Agreement (PPA), using a tracking PPA rate is considered as the most ideal in the comparison.

Table 02:financing options with specified CapEX, Annual Savings & PPA Payout

Source: Ark Energy Analysis

From the financial analysis conducted, it was clear that the Self Invest model presented the highest annual and life-time savings among all but required an initial investment by the client. Among the 15- and 20-years contracts, the 15-years shows higher life-time savings while the 20-years shows higher annual savings

Figure 02 Plant capacity before and after optimization

Source: Ark Energy Analysis

Through the implementation of the activities done by Ark Energy, there is an apparent results from the optimized energy production and reduced curtailment of energy

Ark Energy was able to secure the 3rd party investor to fund the development of solar PV system, under a solar leasing (PPA) agreement, in which the client will be paying for the solar power utilized for the term of the 20-year contract. 2,000 MWh per year was produced and paid at a rate of 170 AED/MWh instead of 200.

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