Life Cycle Cost Analysis of Alternative Energy Supply Options for an Industrial Estate in Ondo State

This research conducts a life cycle cost analysis of alternative energy supply options for a medium-scale industrial estate in Ondo State, South West Nigeria, providing a rigorous economic decision framework for the estate's planned energy infrastructure investment. Reliable and cost-effective energy supply is widely identified as the most critical infrastructure requirement for manufacturing competitiveness in Nigeria, and industrial estates face long-term energy infrastructure decisions with significant capital implications and thirty-year operational consequences. This study evaluates five energy supply options: continued reliance on the national grid supplemented by individual tenant generators, estate-level centralised diesel generation, grid-tied solar photovoltaic with battery storage, a solar-diesel hybrid microgrid, and a gas-to-power small-scale facility. Life cycle costs are calculated over a thirty-year analysis period, incorporating capital expenditure, installation cost, operations and maintenance cost, fuel cost projections under three energy price scenarios, and decommissioning costs. Financial modelling uses real discount rate of twelve percent consistent with Nigerian infrastructure investment benchmarks. Results demonstrate that the solar-diesel hybrid microgrid option produces the lowest life cycle cost under all three energy price scenarios, with payback against the grid-plus-generator baseline achieved within seven years under the base case. Keywords: life cycle cost analysis, energy supply, industrial estate, solar-diesel hybrid, Ondo State