The technical and economic challenges associated with using solar thermal systems for heating water in large-scale aquaculture applications in a cold climate country are addressed in this paper. Policies of using solar thermal heating for large aquaculture farms and the corresponding potential benefits to counteract global challenges, such as reducing CO2 emissions, are presented with a case study in Finland, where using solar water heating for aquaculture at large scale is not common. The original design characteristics of the farm had been proposed in earlier work and are based on the Danish Recirculation Aquaculture System (RAS), where water is treated and recirculated to reduce both water and energy consumption. The farm has twenty-four tanks with a total capacity of 3240 m3. In this paper, the cost and benefits of the original system will be reconstructed to adopt an arrangement of glazed solar collectors to supply a fraction (i.e., solar fraction < 100%) of the heating demand in the farm (originally supplied by electricity). Scenarios with different solar fractions are assessed to determine the effect on the Net Present Value (NPV) of the project. Accordingly, the optimum mix of solar fraction and electric energy fraction is chosen based on the economic feasibility, while the corresponding reduction in CO2 emissions is reported. Next, the effect of uncertainty of capital and operation and maintenance costs on the NPV and payback time is examined. Finally, national policies, such as increasing grants on capital costs and reducing the interest rate, are proposed to provide a more attractive return and a lower risk to private fish farm investors in order to increase dependence on solar thermal heating, favouring these projects in Finland.

1. Solar water heating for aquaculture
applications in cold climates:
A case study of Finland
Michael Anees
Maresa Bussa
Cristina Dominguez
Marco Duran
Mandar Kadam
Luis Rojas-Solórzano
Split, Croatia – May 14-17, 2017

2. Content
Introduction
Energy Model
Cost Analysis
Financial Analysis
Emission Analysis
Risk Analysis
Conclusions
Content2 IEEES-9 – Split, Croatia, 2017

3. Introduction3 IEEES-9 – Split, Croatia, 2017
Introduction
• Aquaculture has been fastest growing food product in last
2 decades, tackling food need of growing population.
• However, European Baltic Sea region has shrink or
stagnated.
• EU-Baltic Sea program developed Aquabest Project to
promote growth w/sustainable technologies & practices.
• Danish fish farm RAS-model is a good example to follow.

4. Introduction4 IEEES-9 – Split, Croatia, 2017
Introduction
• Tampere, Finland has a cold climate most of the year
and possesses an important fish farm industry.
• Finland supports 20% Grant on eligible CAPEX.
• Growing certain commercial fish species requires
control of water temperature to favor the process.
• However, most of fish farm industry in Tampere uses
electric heating for fish water tanks.
• Is it viable SWH system in Tampere to grow Raimbow
Trout at temperatures between 6-12 °C?

5. Introduction5 IEEES-9 – Split, Croatia, 2017
Introduction
Economic-
technical
evaluation of the
project
Load and RE and
EE assessment
Technology
selection
LCCA on
Proposed Case vs.
Base Case
Base case: Rainbow Trout Tampere Fish Farm running with grid electricity for water heating
Proposed case: Danish RAS model on Tampere’s Fish Farm with Grid + SWH system
Assessment Methodology (LCCA)
RETScreen 4.0 platform

6. Introduction6 IEEES-9 – Split, Croatia, 2017
Introduction
Base Case
• Rainbow Trout farm
• Grid Electricity for water heating
Proposed Case
• “Danish” RAS aquaculture
model in Finland.
• Solar power as source for water
heating + Grid Electricity.

7. Energy Model7 IEEES-9 – Split, Croatia, 2017
Energy Model (Tampere Fish Farm)
Parameter Value
Application , Load type
Hot water,
Aquaculture
Daily hot water use 200,000 L/d
(Aquabest, 2016)
Temperature needed 12°C
(FAO, 2016)
Operating days/week 7 days
Min. supplied water
temperature 1°C
Max. supplied water
temperature 8.8°C
Yearly heating load 638.6MWh
Tampere Fish Farm
Base Case
• Rainbow Trout farm
• Grid Electricity for water
heating
Fuel type Electricity
Seasonal HX efficiency 85%
Fuel consumption (annual) 751.2 MWh
Yearly Electricity bill US$ 75,000

8. Energy Model
8 IEEES-9 – Split, Croatia, 2017
Energy Model
Type of SWH Flat-Glazed
Aperture area /solar
collector
2.33 m2
Number of collectors 138
Solar Capacity 225.5 kW
Miscellaneous losses 3%
Slope 46°
System conditions
Parameter Value
Storage capacity/solar collector area 75 L/m2
Storage capacity 24,160 L
Pump power/solar collector area 10 W/m2
Electricity cost
0.1 $/kWh (Eurostat,
2016)
Yearly Electricity demand – pump 8.9 MWh
Heating delivered 219.9 MWh
Solar fraction 34%
SUMMARY
Base case Proposed case
Seasonal HX efficiency 85% 85%
Annual electric consumption 751.2 MWh 492.5 MWh
Annual Cost of Electricity US$ 75,000 US$ 49,250
Proposed Case
• “Danish” RAS aquaculture
model in Finland.
• Solar power as source for water
heating + Grid Electricity.

9. Cost Analysis9 IEEES-9 – Split, Croatia, 2017
Cost Analysis
CAPEX Amount
Feasibility, Development, Engineering
study $18,471.00
Solar collectors, equipment and
installation $246,268.00
Spare parts, Transport and
Contingencies $57,163.00
Training & commissioning $800.00
Interest during construction $1,210.00
$323,970.00
OPEX Amount
O&M (Parts and labour) $4,900.00
Scheme of proposed design

10. Financial Analysis10 IEEES-9 – Split, Croatia, 2017
Financial Analysis – Input Data
Variable Value Source
Fuel Escalation Rate 2% Consulted source
Inflation Rate 1% Historical data
Project Life Time 20yr Collector's lifetime
Grants
20% of
eligible costs
Finnish Ministry of Economic Affairs and
Employment
Debt Ratio 85% Finnvera
Interest Rate 3% Bank of Finland
Debt-term 15yr < project life time

11. Financial Analysis11 IEEES-9 – Split, Croatia, 2017
Financial Analysis – Discount Rate
Default
Discount Rate x
Technology
Risk Factor x
Country Risk
Factor x
Policy Risk
Factor x
Discount
Rate
8% 90% 1 1.18 8%

12. Financial Analysis12 IEEES-9 – Split, Croatia, 2017
Financial Analysis – Proposed Case
Initial cost – 323,970 US$
O & M – 6,500 US$
Annual Electric bill/Proposed Case – 49,000 US$
Annual Electric bill/Base Case– 75,000 US$
Simple Payback 13.5yr
Net Present Value $42,200
Annual LC savings 4,400
Benefit-Cost-Ratio 1.95

13. Emissions Analysis13 IEEES-9 – Split, Croatia, 2017
Emissions Analysis
Base case Proposed case
● Electricity (100%)
●Electricity (69.5%)
+ Solar (30.5%)
● Annual GHG Base
case Emission : 172.4
tCO2
● Electricity Consumption :
751 MWh
● Electricity
Consumption : 492
MWh
● Annual GHG
Proposed case
Emission : 115.1 tCO2
●GHG emission factor: 0.229
tCO2/MWh
●GHG emission
factor: 0.160
tCO2/MWh
●Net Annual GHG
emission reduction :
57 tCO2

14. Risk Analysis14 IEEES-9 – Split, Croatia, 2017
Risk Analysis
Parameter Range (+/-)
Initial costs 10%
O&M 10%
Fuel cost - base case 10%
Debt ratio 5%
Debt interest rate 5%
Debt term 5%

15. Risk Analysis
15 IEEES-9 – Split, Croatia, 2017
Risk Analysis
Montecarlo Analysis / Distribution of Net Present Value (NPV)
Frequency
Parameter Range (+/-)
Initial costs 10%
O&M 10%
Fuel cost - base case 10%
Debt ratio 5%
Debt interest rate 5%
Debt term 5%
Risk Min.NPV within level of
confidence
Max. NPV within level of
confidence
10% -14,000 US$ 106,800 US$
20% -1,373 US$ 88,200 US$
30% 7,800 US$ 81,900 US$
40% 15,300 US$ 77,600 US$

16. Policy Proposals16 IEEES-9 – Split, Croatia, 2017
Policy Proposals
Effect of percentage of capital grant on
NPV and Payback time
Effect of int. rate on NPV and Payback
Scenario analyses of changing the
percentage of capital grants and interest
rate on NPV and Payback time
Capital grant
% NPV
Payback
(years)
20% $ 42,200 13.5
25% $ 53,500 12.9
30% $ 67,888 12.3
35% $ 76,000 11.7
40% $ 87,400 11.2
Interest rate NPV
Payback
(years)
3.0% US$ 42,200 13.5
2.9% US$ 43,400 13.5
2.8% US$ 44,800 13.5
2.7% US$ 46,000 13.5
2.6% US$ 47,400 13.5
2.5% US$ 48,700 13.5
Capital grant
perc.
Interest
Rate NPV Payback
25% 2.80% $ 56,100 12.9
25% 2.70% $ 57,400 12.9

17. Conclusions17 IEEES-9 – Split, Croatia, 2017
Conclusions
• The techno-economic viability of using SWH in a fish farm located in Finland to support
its current electric heating system is presented.
• The project saves about 31% of electricity consumption. This saving would result in an
NPV of almost US$42,200, a benefit-cost ratio of 1.95, a simple payback time of almost
13.5 years, and a reduction of CO2 emissions by almost 57 tCO2/year.
• Increasing the capital grants from 20% to 25% and reducing the debt interest rate from
3% to 2.8%, the NPV for this project increases from US$42,200 to US$57,400, which
represents an increase of about 36%, but a marginal decrease on payback (12.9 year)
• Increasing the CAPEX grant is an effective manner to lower payback of the project
which despite of CO2 and NPV advantages, looks as the major disadvantage of the
project.

18. 18 IEEES-9 – Split, Croatia, 2017
Thank you

19. Cost Assumptions and Sources19 IEEES-9 – Split, Croatia, 2017
Cost Assumptions and Sources
Cost Assumption or value Source
Design and engineering
Feasibility Study, Development and Engineering 2.5% total cost
Case studies: Renewable and Sustainable Energy
Reviews Journal
Heating System
Solar collector Based in commercial price Manufacturer: SUNEARTH
Piping Circuits
Piping, insulation and pumps McMaster Carr price
Accessories and welding: 20% cost of pipe +
insulation
-
Installation Labour Hours National Construction Estimator 2005 taken to present
Balance of System and misc.
Spare parts 10%
Case Studies - Journal: Energy Conversion and
Management)
Transportation Freight and Shipping worldfreightrates.com
Training & commissioning Consultancy salaryexpert.com
Contingencies 10% of capital cost World Bank
O&M
Parts & labour 2% of capital cost Case studies: Science Direct ad ITT Bombay