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Clean, affordable and reliable energy supply for remote vietnamese village

Posted on March 10, 2025

Executive summary

Who

Local utility / network provider currently supplying a village with 100% diesel generation

Where

Vietnam

Why

Looking for an off-grid energy supply that is a reliable, affordable and green alternative to conventional diesel-only generation, with a focus on reducing energy costs and carbon emissions.

Main benefits

Access to power; Energy cost optimization; Positive environmental impact

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Remote towns and villages often do not have access to a suitable grid connection and are traditionally tied in to using expensive and carbon-intensive diesel generation. This Use Case shows an example of how a remote village in Vietnam can cut energy costs by 48%, whilst at the same time generating over 56% of their energy from renewables.

Optimizing energy costs with microgrids

To demonstrate the potential for savings with microgrids, we have calculated an example business case for a village in Vietnam using HOMER GRID™ simulation software.*

Fluctuating demand throughout the day represents an opportunity for energy storage to smooth the demand profile

Due to the lack of grid connection in remote locations, an off-grid energy supply is required. The conventional diesel solution produces excessive amounts of carbon and is expensive. Costs are driven by high fuel costs (transport and storage), and operational / maintenance costs on generators.

In our example in Vietnam, the village has plenty of space to install Photovoltaics (PV) and take advantage of plentiful cheap renewable energy. With a fluctuating demand profile and high annual peak, a combination of Battery Energy Storage (BESS) and traditional diesel generation is required to provide a stable and reliable supply.

         

Analysis of the business case

In this use case we compare the conventional case, where 100% power is supplied by diesel generation, with an optimised microgrid solution.

Investing in microgrid solutions with PV and BESS

Conventional case:
The conventional case consists of 2.4MW diesel generation providing all of the energy for the village.

Microgrid solution:
The microgrid solution requires a large capital investment with 2MWp PV generation and a large 5MWh battery to balance the load. In addition, the same-sized diesel generator as in the conventional case is also required for back-up power, peak load and extended periods with less sunshine (e.g. over night, winter).

Total capital investment: € 3.54M

Significant operational cost savings

Conventional case:
In the conventional case, all energy is generated by diesel with an assumed cost of €0.60/liter. Operating and maintenance (O&M) costs of the diesel generators are also high due to the high running hours (24/7 operation).

Total operating costs: € 1,160k / year

Microgrid solution:
In the microgrid case, 56% of the annual energy generated is produced from the PV panels resulting in reduced operating hours of the generators and therefore reduced O&M costs. The additional use of the battery to enable the generators to run at more efficient operating point,
enables an overall fuel reduction of over 70%.

Operating costs of the BESS and PV installations are relatively small allowing significant annual operational savings.

Total operating costs: € 357k / year

Payback Period

Despite a larger upfront capital investment of €3.5m, 4.4 times higher than the base case, the microgrid solution delivers a very fast pay back period of just 3.3 years.

This is mainly achieved through the low energy costs from the PV enabling significant operational savings of €803k per year. Across the lifetime of the installation (>20 years), this provides a well worthwhile investment.

Microgrid services, system integration and smart control

Our microgrid systems offer a wide variety of solutions and services. Each can be individually designed to serve specific needs. Special microgrid services we offer include consulting, planning, the single-source supply of hardware and software as well as installation and maintenance.

Start saving costs with microgrids

Are you curious if microgrids can help your facilities save on energy costs?

Contact us today at
info@ps.rolls-royce.com
Or call +49 7541 90-7 7777

Rolls-Royce Group
www.mtu-solutions.com

Rolls-Royce provides world-class power solutions and complete lifecycle support under our product and solution brand mtu. Through digitalization and electrification, we strive to develop drive and power generation solutions that are even cleaner and smarter and thus provide answers to the challenges posed by the rapidly growing societal demands for energy and mobility. We deliver and service comprehensive, powerful and reliable systems, based on both gas and diesel engines, as well as electrified hybrid systems. These clean and technologically advanced solutions serve our customers in the marine and infrastructure sectors worldwide.

Within its Net Zero at Power Systems program, Rolls-Royce has set out to sustainably reform its product portfolio so that by 2030, new technologies can save 35% of greenhouse gas emissions compared to 2019. This near-term target plays a significant role in Rolls-Royce Group’s ambition to achieve net zero by 2050 at the latest. A key element in achieving these goals is the release of the highest volume mtu engine products and systems to run on sustainable fuels as quickly as possible.

Clean, affordable and reliable energy supply for remote vietnamese village

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