Techno-Economic Assessment of a Solar PV–Battery–Diesel Hybrid Microgrid for Enhancing Energy Management in The Andaman and Nicobar Islands

Abstract

The Andaman and Nicobar Islands face significant energy-management challenges due to geographical isolation, limited grid connectivity, high fuel transportation costs, and continued dependence on diesel-based electricity generation. This study assesses the technical reliability and economic viability of a solar PV–battery–diesel hybrid microgrid for enhancing energy management in the Andaman and Nicobar Islands. The study adopts a quantitative, simulation-based techno-economic approach using secondary energy data compiled from the World Development Indicators (WDI), Energy Statistics India published by the Ministry of Statistics and Programme Implementation (MoSPI), Government of India, and supporting technical sources. HOMER Pro is employed to simulate and optimise the hybrid configuration, while MATLAB is used for supplementary data processing, statistical comparison, and hypothesis testing. The modelling framework assumes solar PV as the principal renewable source, battery storage to balance generation and demand, and diesel generation as backup during renewable and storage shortfalls. Technical performance is evaluated through annual electricity generation, renewable fraction, battery autonomy, outage hours, diesel consumption, and CO₂ emissions, while economic performance is assessed using Net Present Cost (NPC), Levelised Cost of Energy (LCOE), operating cost, and payback period. The results indicate that the hybrid system reduces annual outage hours by 77.4%, achieves a renewable fraction of 48%, reduces diesel consumption by 56.5%, and lowers CO₂ emissions by 54.3%. NPC decreases by 36.5%, while LCOE declines from ₹32.4/kWh to ₹18.7/kWh. Sensitivity analysis further evaluates variations in diesel prices, battery costs, and solar-resource conditions. The findings indicate that, under the evaluated modelling conditions, the solar PV–battery–diesel hybrid microgrid can improve supply reliability, increase renewable-energy utilisation, reduce diesel dependence and emissions, and enhance lifecycle economic performance, providing useful evidence for sustainable energy planning in remote island communities.