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This paper presents a technical, economic, and environmental analysis and optimization of the impact of the reduction of diesel fuel subsidy in the design of an off-grid hybrid power system (OHPS). The OHPS includes a diesel generator, battery energy storage system (BESS), and a solar power system (SPS). This impact will focus on the electricity production levels of each of the OHPS components according to the increase of the fuel price and the SPS size. The Bellavista community in Ecuador was selected as the case study for this work. In this South American country, the government has begun a gradual increase in the diesel fuel price until it reaches international prices. Fifteen scenarios of OHPSs were simulated, in Homer Pro software, considering three SPS sizes and varying the diesel fuel price in five values. The annual load profile for the simulations was built based on the information of a previous study in this community. The results showed that for lower fuel prices (USD$0.26/L and USD$0.35/L), the OHPSs worked mostly with their diesel generators with reduced use of their BESSs. However, there was a higher penetration of the power delivered from the SPSs and BESSs, with higher fuel prices (USD$0.44/L, USD$0.53/L, and USD$0.62/L). These OHPSs considerably reduced their CO2 emissions compared with the standalone diesel generator scenario.

Impact of the Reduction of Diesel Fuel Subsidy in the Design of an Off-Grid Hybrid Power System: A Case Study of the Bellavista Community in Ecuador