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A risk-adjusted techno-economic analysis for renewable-based milk cooling in remote dairy farming communities in East Africa
journal contribution
posted on 2018-07-13, 13:23 authored by June Lukuyu, Richard BlanchardRichard Blanchard, Paul RowleyThe dairy industry accounts for 9-14% of East Africa’s agricultural gross development product. Due to lack of milk cooling facilities, dairy farmers in areas without access to reliable grid electricity face problems of high milk spoilage and limited access to formal markets, which limits their income and standard of living. This article examines the economic viability for a number of configurations of off-grid solar, wind, biomass and biogas based milk-cooling systems serving a community in Tanzania. Key risk factors having the greatest impact on system viability are identified and a stochastic approach, by means of a Monte Carlo simulation is employed to determine the
risk-adjusted economic performance of the project. The results indicate that biogas based systems offer the most viable option, with an internal rate of return of around 25%, a net present value of around $9,000 and a projected increase in farmers’ monthly income of at least 78%. Despite specific risk factors, the 300-liter cooling system had an 82% probability of a positive net present value. However, larger system cooling capacities have a significant likelihood of a financial loss. Consequently, risk mitigation strategies designed to increase the probability of economic success are proposed.
History
School
- Mechanical, Electrical and Manufacturing Engineering
Published in
Renewable EnergyCitation
LUKUYU, J., BLANCHARD, R.E. and ROWLEY, P., 2019. A risk-adjusted techno-economic analysis for renewable-based milk cooling in remote dairy farming communities in East Africa. Renewable Energy, 130, pp. 700-713.Publisher
© ElsevierVersion
- AM (Accepted Manuscript)
Publisher statement
This work is made available according to the conditions of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) licence. Full details of this licence are available at: https://creativecommons.org/licenses/by-nc-nd/4.0/Acceptance date
2018-06-25Publication date
2018-06-27Notes
This paper was accepted for publication in the journal Renewable Energy and the definitive published version is available at https://doi.org/10.1016/j.renene.2018.06.101ISSN
0960-1481Publisher version
Language
- en