Difference between revisions of "Business Viability Scenario for Solar Powered Irrigation in Mozambique"

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<div class="portal-mozambique"> <!-- Defines the color of headlines, link, etc. ) -->
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{{Back to Moz PUE Hub}}
 
{{Back to Moz PUE Hub}}
===Introdução===
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{{Back to Mozambique Portal}}
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{{Portuguese Version|Cenário Modelo para a Irrigação Solar em Moçambique}}
 +
 
 +
===Introduction===
 
[[File:Solar Pumping in Mozambique.JPG|right|302x302px|alt=|Photo credits : Youssouf Diallo, Practica Foundation]]  
 
[[File:Solar Pumping in Mozambique.JPG|right|302x302px|alt=|Photo credits : Youssouf Diallo, Practica Foundation]]  
Este caso de modelo de negócios analisa a viabilidade financeira da irrigação movida a energia solar em Moçambique. Todos os dados e preços utilizados neste cenário são baseados na informação de mercado obtida em Janeiro de 2022 e foram recolhidos contactando o principal fornecedor de bombas solares e diesel em Moçambique. As informações foram coletadas via e-mail e consultas telefônicas.  
+
This business model case looks into the financial viability of solar powered irrigation in Mozambique. All the data and prices used in this scenario are based on the market information obtained in January 2022 and was collected by contacting leading solar and diesel pumps provider in Mozambique. The information was collected via email and telephone inquiries.  
  
=== Suposição de Demanda ===
+
=== Demand Assumption ===
Para o cenário de negócio , considera-se um pequeno agricultor na província da Zambézia em Moçambique que possui 1,2 hectares de terra. O agricultor quer instalar um sistema de irrigação movido a energia solar (SIES) e está praticando dois sistemas de cultivo. Este cenário também explora diferentes modelos de financiamento (doação, PAYGO...) para o financiamento do sistema SIES.  
+
For the business scenario, a smallholder farmer in Zambezia province in Mozambique  is considered and he/she owns 1,2 hectors of land. The farmer wants to install a solar powered irrigation systems (SPIS) and is practicing two crop systems. This scenario also explores different funding models (grant, PAYGO..) for financing the SPIS system.  
  
Para calcular o cenário de negócios para sistemas de irrigação movidos a energia solar (SPIS) em Moçambique, nossa metodologia incluiu quatro etapas:
+
To calculate the business scenario for solar powered irrigation systems (SPIS) in Mozambique, our methodology included four steps:
  
# Calcular a necessidade máxima anual de água da cultura
+
# Calculating the maximum annual crop water requirement
# Dimensionar o sistema SIES acordado
+
# Sizing the SPIS system accordingly
# Dimensionar o sistema diesel acordado
+
# Sizing the diesel system accordingly
# Modelar a viabilidade financeira do sistema  SIES
+
# Modelling the financial viability of the SPIS system
  
==== Calculando a Necessidade de Água da Cultura ====
+
==== Calculating Crop Water Requirement ====
[[File:Temporal_distribution_of_rain_and_temperature_in_Zambezia_Province.png|right|border]]Para esta análise, o agricultor adopta uma safra de dois cultivos com cultivo solo, ou seja, apenas uma cultura é plantada em toda a área de uma fazenda de cada vez. As culturas seleccionadas são Milho e Tomate. O milho é a cultura básica em Moçambique e o tomate é uma das culturas de alto valor. A época de colheita principal começa a partir de Outubro/Novembro e a época de colheita da segunda começa em Maio. O agricultor usa irrigação de superfície para o milho, pois é a forma mais comum de irrigação em Moçambique e tem uma eficiência de 65%. Para tomates, ele usará irrigação por gotejamento com eficiência de 90%.
+
[[File:Temporal_distribution_of_rain_and_temperature_in_Zambezia_Province.png|right|border]]For this analysis, the farmer adopts a two-farming season with solo cropping i.e., only one crop is planted in the entire area of a farm at one time. The selected crops are Maize and Tomato. Maize is the staple crop in Mozambique and tomato is one of the high value crops. The main cropping season starts from Oct / Nov and the second cropping season starts in May. The farmer uses surface irrigation for maize as it is the most common form of irrigation in Mozambique and has an efficiency of 65%. For tomatoes, he/she will use drip irrigation with an efficiency of 90%.
  
Usando o [[:File:SAFEGUARD WATER - Water Requirement Tool.xlsm|'''SIES Caixa de ferramentas (Toolbox) - Ferramenta de Necessidade de Águal''']], a necessidade máxima diária de água para irrigação das culturas é calculada em '''64 m3'''/dia no mês mais quente, com base na precipitação média e temperatura média diária da Província da Zambézia.  
+
Using the [[:File:SAFEGUARD WATER - Water Requirement Tool.xlsm|'''SPIS Toolbox – Water Requirement Tool''']], the maximum daily irrigation water requirement of the crops is calculated to be '''64 m<sup>3</sup>''' /day in the hottest month, based on the average rainfall and mean daily temperature of Zambezia Province.  
  
'''Tabela com a precipitação média e a temperatura média diária'''
+
'''Table with the average rainfall and the mean daily temperature'''
 
{| class="wikitable"
 
{| class="wikitable"
 
|
 
|
 
|Jan
 
|Jan
|Fev
+
|Feb
 
|Mar
 
|Mar
|Abr
+
|Apr
|Mai
+
|May
|Jun
+
|June
|Jul
+
|July
|Ag
+
|Aug
|Set
+
|Sep
|Out
+
|Oct
 
|Nov
 
|Nov
|Dez
+
|Dec
 
|-
 
|-
|Temperatura média diária [°C]
+
|Mean daily Temperature [°C]
 
|25
 
|25
 
|24
 
|24
Line 49: Line 54:
 
|24
 
|24
 
|-
 
|-
|Precipitação (mm/mês)
+
|Rainfall (mm/month
 
|290
 
|290
 
|290
 
|290
Line 64: Line 69:
 
|}
 
|}
  
==== Dimensionamento do sistema SIES ====
+
==== Sizing the SPIS system ====
O sistema SIES é baseado na premissa técnica e financeira apresentada na tabela abaixo. O sistema seleccionado também já está disponível no mercado moçambicano e pode atender a vazão desejada.  
+
The SPIS system is based on the technical and financial assumption shown in the table below. The selected system is also already available in the Mozambican market and can meet the desired flow rate.  
  
 
'''Technical assumptions'''
 
'''Technical assumptions'''
 
{| class="wikitable"
 
{| class="wikitable"
|Irradiância solar diária para a Zambézia
+
|Daily solar irradiance for Zambezia
 
|5.371 kWh/m<sup>2 </sup>  
 
|5.371 kWh/m<sup>2 </sup>  
 
|-
 
|-
|Perda do sistema
+
|System loss
 
|25%
 
|25%
 
|-
 
|-
|Tipo de matriz
+
|Array type
|Fixo
+
|Fixed
 
|-
 
|-
|Taxa diária de bombeamento de água
+
|Daily water  pumping rate
 
|64 m<sup>3</sup> /day
 
|64 m<sup>3</sup> /day
 
|-
 
|-
|Cabeça
+
|Head
 
|10 m
 
|10 m
 
|-
 
|-
|Taxa de fluxo necessária se a bomba funcionar por 6 horas
+
|Required flow  rate if the pump runs for 6 hours
 
|10.6 m<sup>3</sup>/hr
 
|10.6 m<sup>3</sup>/hr
 
|-
 
|-
|Taxa de fluxo da bomba seleccionada a 10 m de altura manométrica
+
|Selected pump’s flow  rate at 10 m head
 
|15 m<sup>3</sup>
 
|15 m<sup>3</sup>
 
|-
 
|-
|Elevação vertical máxima
+
|Maximum  vertical lift
 
|40
 
|40
 
|-
 
|-
|Tipo de bomba
+
|Type of pump
|Submersível
+
|Submersible
 
|-
 
|-
|Vida útil dos painéis solares
+
|Solar panels  lifetime
|25 anos
+
|25 years
 
|}
 
|}
'''Especificações financeiras'''
+
'''Financial specifications'''
 
{| class="wikitable"
 
{| class="wikitable"
|Taxa de desconto
+
|Discount  rate
 
|13%
 
|13%
 
|-
 
|-
|Preço (CAPEX)
+
|Price (CAPEX)
|80,000 MT
+
|80,000 MZN
 
|-
 
|-
|Custo de manutenção*
+
|Maintenance  cost*
 
|4% of CAPEX
 
|4% of CAPEX
  
3200 MT por ano
+
3200 MZN per year
 
|}
 
|}
''*O custo de reposição de peças de reposição como controlador de carga, inversor e bombas não foi considerado no cálculo financeiro. Para simplificar, o cenário considera 25 anos de vida útil para todos os componentes do sistema SIES.''
+
''*Replacement cost for spare parts such as charge controller, inverter and pumps was not considered in the financial calculation. For simplicity, the scenario looks at 25 years of life time for all components of the SPIS system.''
  
==== Dimensionamento da Bomba Diesel ====
+
==== Sizing the Diesel Pump ====
A bomba diesel seleccionada tem a seguinte especificação e já está disponível no mercado: 
+
The selected diesel pump has the following specification and is already available in the Mozambican market. 
  
'''Especificação da bomba diesel'''
+
'''Diesel Pump’s specification'''
 
{| class="wikitable"
 
{| class="wikitable"
|Quociente de vazão
+
|Flow rate
 
|36 m<sup>3</sup>/hr
 
|36 m<sup>3</sup>/hr
 
|-
 
|-
|Saída classificada
+
|Rated output
 
|2.8kW (3.8hp)  @3600rpm
 
|2.8kW (3.8hp)  @3600rpm
 
|-
 
|-
|Taxa de consumo de combustível
+
|Fuel  consumption rate
 
|347ml/kWh  @3600rpm
 
|347ml/kWh  @3600rpm
 
|-
 
|-
|Consumo de combustível
+
|Fuel  consumption
|Taxa de consumo de combustível * Saída nominal
+
|Fuel  consumption rate*Rated output
  
 
0.97 l/hr
 
0.97 l/hr
 
|-
 
|-
 
|CAPEX
 
|CAPEX
|34,970 MT
+
|34,970 MZN
 
|-
 
|-
 
|Maintenance  cost
 
|Maintenance  cost
 
|4% of CAPEX
 
|4% of CAPEX
  
1399 MT
+
1399 MZN
 
|-
 
|-
|Custo operacional
+
|Operating cost
|14,074 MT/ano
+
|14,074 MZN/year
 
|-
 
|-
|Preço do diesel por litro
+
|Diesel price  per litre
|62 MT/litro
+
|62 MZN/liter
 
|}
 
|}
Com base na demanda de irrigação, a bomba a diesel funcionará por aproximadamente 227 horas/ano para atender todas as nossas demandas de água (conforme mostrado na tabela abaixo).  
+
Based on the irrigation demand, the diesel pump will run for approximately '''227 hrs/year''' to meet all our water demands (as shown in the table below).  
  
'''Tempo de trabalho para bomba a diesel em um ano'''
+
'''Working time for diesel pump in a year'''
 
{| class="wikitable"
 
{| class="wikitable"
 
|
 
|
|Mai
+
|May
|Jun
+
|June
|Jul
+
|July
|Ag
+
|Au
|Set
+
|Sep
|Out
+
|Oct
 
|Nov
 
|Nov
|Dez
+
|Dec
 
|Jan
 
|Jan
|Fev
+
|Feb
 
|Mar
 
|Mar
|Abr
+
|Apr
 
|-
 
|-
|necessidades de água (m3/dia)
+
|water needs (m3/day)
 
|24,2
 
|24,2
 
|31,3
 
|31,3
Line 179: Line 184:
 
|0
 
|0
 
|-
 
|-
|horas que a bomba a diesel precisa funcionar para atender a necessidade diária de água [hr]
+
|hours the diesel pump needs to run to meet the daily water need [hr]
 
|0,67
 
|0,67
 
|0,86
 
|0,86
Line 193: Line 198:
 
|0
 
|0
 
|-
 
|-
|Tempo de trabalho do gerador [horas/mês]
+
|Generator working time [hrs/month]
 
|20,8
 
|20,8
 
|26,1
 
|26,1
Line 221: Line 226:
 
|
 
|
 
|-
 
|-
|'''Tempo de funcionamento da bomba diesel [horas/ano]'''
+
|'''Diesel pump working time [hrs/year]'''
 
|'''227,2'''
 
|'''227,2'''
 
|
 
|
Line 236: Line 241:
 
|}
 
|}
  
===Modelando a Viabilidade Financeira das Bombas Solares===
+
===Modelling the Financial Viability of the Solar Pumps===
  
==== Comparação de custos entre Bombas a Diesel e Solares ====
+
==== Cost Comparison Between Diesel and Solar Pumps ====
Uma comparação de custos foi feita para ver como a bomba a diesel e a solar se comparam ao longo de uma vida útil de 25 anos. Esta comparação analisa o CAPEX e o custo de operação e manutenção para bombas a diesel e solares (mostrado acima).
+
A cost comparison was done to see how do the diesel and solar pump compare over a lifetime of 25 years. This comparison looks at the CAPEX and operation & maintenance cost for both diesel and solar pumps (shown above).
  
Conforme mostrado na tabela e no gráfico abaixo, após 5 anos, as bombas solares serão mais baratas que as bombas a diesel.  
+
As shown in the table as well as graph below, after 5 years, the solar pumps will be cheaper than diesel pump.  
  
 
[[File:Comparison_of_diesel_vs_solar_pump.png|alt=|border]]
 
[[File:Comparison_of_diesel_vs_solar_pump.png|alt=|border]]
  
==== Esquemas de Financiamento para os Consumidores Finais ====
+
==== Financing Schemes for the End Consumers ====
'''Modelo 1: 100% de autofinanciamento sob PAYGO'''
+
'''Model 1: 100% self financing under PAYGO'''
  
PAYGO: 1,000 MT parcela mensal
+
PAYGO: 1,000 MZN monthly installment
  
CAPEX: 80,000 MT
+
CAPEX: 80,000 MZN
 
[[File:Financing for SPIS in Mozambique.png|border|left]]
 
[[File:Financing for SPIS in Mozambique.png|border|left]]
  
  
Nesse modelo, o agricultor pagará o custo de todo o sistema em 6,66 anos. O agricultor não recebe nenhuma subvenção ou subsídio e pagará a prestação mensal regularmente pelo prazo indicado.
+
Under this model, the farmer will repay the cost of the entire system in 6.66 years. The farmer do not receive any grant or subsidy and will pay the monthly installment regularly for the indicated time frame.
  
 
<div style="clear: both;"></div>
 
<div style="clear: both;"></div>
Line 261: Line 266:
  
  
'''Modelo 2: Grant e PAYGO'''
+
'''Model 2 : Grant and PAYGO'''
  
 
Grant: 40% of CAPEX
 
Grant: 40% of CAPEX
  
PAYGO: 60% at 1,000 Mt parcela mensal
+
PAYGO: 60% at 1,000 MZN monthly installment
  
CAPEX: 80,000 MT
+
CAPEX: 80,000 MZN
  
Sob este modelo, o agricultor pagará o sistema completamente em 4 anos. O agricultor também recebe 40% da subvenção e só devolverá os 60% do custo do sistema no prazo indicado.  
+
Under this model, the farmer will payback the system completely in 4 years time frame. The farmer also receives 40% of grant and will only payback the 60% of the system cost over the indicated timeframe.  
  
=== Eletricidade da Rede ===
+
=== Grid Electricity ===
Esta análise não se compara com a eletricidade da rede, pois a rede está disponível principalmente em ambientes urbanos e nas áreas onde a irrigação é necessária, os agricultores dependem principalmente de soluções fora da rede. A eletricidade também é fornecida a uma taxa fixa, independentemente do uso, especialmente no caso de uso social, como irrigação.
+
This analysis does not compare with the grid electricity as the grid is available mostly in urban settings and the areas where irrigation is needed, the farmers rely mostly on off-grid solutions. The electricity is also provided at a flat rate irrespective of the usage especially in case of social usage like irrigation.
  
=== Conclusão ===
+
=== Conclusion ===
A irrigação solar tem um grande potencial em Moçambique, tendo em conta a procura de irrigação. No entanto, o alto custo inicial e a falta de serviços pós-venda representam um desafio para a adopção mais ampla das bombas solares. Existem modelos de bombas mais baratas (principalmente chinesas) disponíveis no mercado mas, para nossa análise usamos as marcas mais conceituadas.  
+
Solar irrigation has a great potential in Mozambique, considering the demand for irrigation. However, the high upfront cost and lack of after-sales services do pose a challenge for the wider adoption of the solar pumps. There are cheaper models of pumps (mostly Chinese) available in the market but for our analysis we used the more reputed brands.  
  
Em termos de PAYGO, o desafio está em encontrar um equilíbrio entre o valor que o agricultor está disposto a pagar e o prazo que a empresa está disposta a assumir riscos. Existem outras soluções, como o financiamento de activos, onde o pagamento é distribuído na época da colheita e o agricultor é o proprietário do sistema.
+
In terms of PAYGO, the challenge lies in finding a balance between the amount the farmer is ready to pay and a time frame that the company is willing to take risks on. There are other solutions such as asset financing where the payment is distributed to harvest time and the farmer ultimately owns the system.
 
[[Category:Mozambique]]
 
[[Category:Mozambique]]
 
[[Category:Solar Pumping]]
 
[[Category:Solar Pumping]]
 
[[Category:Irrigation]]
 
[[Category:Irrigation]]
 
[[Category:Solar]]
 
[[Category:Solar]]
 +
 +
</div>

Latest revision as of 15:21, 7 March 2022

Introduction

This business model case looks into the financial viability of solar powered irrigation in Mozambique. All the data and prices used in this scenario are based on the market information obtained in January 2022 and was collected by contacting leading solar and diesel pumps provider in Mozambique. The information was collected via email and telephone inquiries.

Demand Assumption

For the business scenario, a smallholder farmer in Zambezia province in Mozambique is considered and he/she owns 1,2 hectors of land. The farmer wants to install a solar powered irrigation systems (SPIS) and is practicing two crop systems. This scenario also explores different funding models (grant, PAYGO..) for financing the SPIS system.

To calculate the business scenario for solar powered irrigation systems (SPIS) in Mozambique, our methodology included four steps:

  1. Calculating the maximum annual crop water requirement
  2. Sizing the SPIS system accordingly
  3. Sizing the diesel system accordingly
  4. Modelling the financial viability of the SPIS system

Calculating Crop Water Requirement

Temporal distribution of rain and temperature in Zambezia Province.png
For this analysis, the farmer adopts a two-farming season with solo cropping i.e., only one crop is planted in the entire area of a farm at one time. The selected crops are Maize and Tomato. Maize is the staple crop in Mozambique and tomato is one of the high value crops. The main cropping season starts from Oct / Nov and the second cropping season starts in May. The farmer uses surface irrigation for maize as it is the most common form of irrigation in Mozambique and has an efficiency of 65%. For tomatoes, he/she will use drip irrigation with an efficiency of 90%.

Using the SPIS Toolbox – Water Requirement Tool, the maximum daily irrigation water requirement of the crops is calculated to be 64 m3 /day in the hottest month, based on the average rainfall and mean daily temperature of Zambezia Province.

Table with the average rainfall and the mean daily temperature

Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec
Mean daily Temperature [°C] 25 24 23 23 21 20 20 20 22 24 24 24
Rainfall (mm/month 290 290 260 150 60 70 30 30 20 60 150 360

Sizing the SPIS system

The SPIS system is based on the technical and financial assumption shown in the table below. The selected system is also already available in the Mozambican market and can meet the desired flow rate.

Technical assumptions

Daily solar irradiance for Zambezia 5.371 kWh/m
System loss 25%
Array type Fixed
Daily water pumping rate 64 m3 /day
Head 10 m
Required flow rate if the pump runs for 6 hours 10.6 m3/hr
Selected pump’s flow rate at 10 m head 15 m3
Maximum vertical lift 40
Type of pump Submersible
Solar panels lifetime 25 years

Financial specifications

Discount rate 13%
Price (CAPEX) 80,000 MZN
Maintenance cost* 4% of CAPEX

3200 MZN per year

*Replacement cost for spare parts such as charge controller, inverter and pumps was not considered in the financial calculation. For simplicity, the scenario looks at 25 years of life time for all components of the SPIS system.

Sizing the Diesel Pump

The selected diesel pump has the following specification and is already available in the Mozambican market.

Diesel Pump’s specification

Flow rate 36 m3/hr
Rated output 2.8kW (3.8hp) @3600rpm
Fuel consumption rate 347ml/kWh @3600rpm
Fuel consumption Fuel consumption rate*Rated output

0.97 l/hr

CAPEX 34,970 MZN
Maintenance cost 4% of CAPEX

1399 MZN

Operating cost 14,074 MZN/year
Diesel price per litre 62 MZN/liter

Based on the irrigation demand, the diesel pump will run for approximately 227 hrs/year to meet all our water demands (as shown in the table below).

Working time for diesel pump in a year

May June July Au Sep Oct Nov Dec Jan Feb Mar Apr
water needs (m3/day) 24,2 31,3 59 64,3 59 15,2 3,9 0 10 0 0 0
hours the diesel pump needs to run to meet the daily water need [hr] 0,67 0,86 1,63 1,78 1,63 0,42 0,10 0 0,27 0 0 0
Generator working time [hrs/month] 20,8 26,1 50,8 55,4 49,2 13,1 3,25 8,6
Diesel pump working time [hrs/year] 227,2

Modelling the Financial Viability of the Solar Pumps

Cost Comparison Between Diesel and Solar Pumps

A cost comparison was done to see how do the diesel and solar pump compare over a lifetime of 25 years. This comparison looks at the CAPEX and operation & maintenance cost for both diesel and solar pumps (shown above).

As shown in the table as well as graph below, after 5 years, the solar pumps will be cheaper than diesel pump.

Financing Schemes for the End Consumers

Model 1: 100% self financing under PAYGO

PAYGO: 1,000 MZN monthly installment

CAPEX: 80,000 MZN

Financing for SPIS in Mozambique.png


Under this model, the farmer will repay the cost of the entire system in 6.66 years. The farmer do not receive any grant or subsidy and will pay the monthly installment regularly for the indicated time frame.


Model 2 : Grant and PAYGO

Grant: 40% of CAPEX

PAYGO: 60% at 1,000 MZN monthly installment

CAPEX: 80,000 MZN

Under this model, the farmer will payback the system completely in 4 years time frame. The farmer also receives 40% of grant and will only payback the 60% of the system cost over the indicated timeframe.

Grid Electricity

This analysis does not compare with the grid electricity as the grid is available mostly in urban settings and the areas where irrigation is needed, the farmers rely mostly on off-grid solutions. The electricity is also provided at a flat rate irrespective of the usage especially in case of social usage like irrigation.

Conclusion

Solar irrigation has a great potential in Mozambique, considering the demand for irrigation. However, the high upfront cost and lack of after-sales services do pose a challenge for the wider adoption of the solar pumps. There are cheaper models of pumps (mostly Chinese) available in the market but for our analysis we used the more reputed brands.

In terms of PAYGO, the challenge lies in finding a balance between the amount the farmer is ready to pay and a time frame that the company is willing to take risks on. There are other solutions such as asset financing where the payment is distributed to harvest time and the farmer ultimately owns the system.