A study is presented on the economic evaluation of a small energy system based on the availabity of natural energy sources in the agrarian state of Rio Grande do Sul of Brazil. A combined energy system run by burning the rice husks as a by-product and the energy a available from the windy sites, especially during the irrigation period, could be a viable proposition to meet the constant deficiency of power supply in the region. The electricity generating cost from the rice husks could be as low as US$ 34.03/MWh, whereas from wind energy it could cost US$ 67.79 and 112.98/MWh at places where the annual average wind speed is 6 and 5 m/s, respectively. On average, the combined system could produce electricity at US$ 62.21/MWh based on a 7% interest rate on the investment.
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