An incisive and practical exploration of the engineering economics of microgrids
In The Economics of Microgrids, a pair of distinguished researchers delivers an expert discussion of the microeconomic perspectives on microgrids in the context of low-carbon, sustainable energy delivery. In the book, readers will explore an engineering economics framework on the investment decisions and capital expenditure analyses required for an assessment of microgrid projects. The authors also examine economic concepts and models for minimizing microgrid operation costs, including the cost of local generation resources and energy purchases from main grids to supply local loads.
The book presents economic models for the expansion of microgrids under load and market price uncertainties, as well as discussions of the economics of resilience in microgrids for optimal operation during outages and power disturbances. Readers will also find: - A thorough introduction to the engineering and economics of microgrids - Comprehensive explorations of microgrid planning under uncertainty - Practical discussions of microgrid expansion planning, operations management, and renewable energy integration - Fulsome treatments of asset management and resilience economics in microgrids
Perfect for senior undergraduate and graduate students as well as researchers studying power system design, The Economics of Microgrids will also benefit professionals working in the power system industry and government regulators and policymakers with an interest in microgrid technologies and infrastructure.
Table of Contents
About the Authors ix
Acknowledgments xi
Acronyms xiii
1 Fundamentals of Microgrids 1
1.1 Introduction to Microgrids 1
1.2 Distributed Energy Resources for Microgrids 3
1.3 The Role of Microgrid in Power Systems 6
1.3.1 Reliability 7
1.3.2 Resiliency 7
1.3.3 Power Quality 8
1.4 Microgrid Technologies 8
1.4.1 Microgrid Power Management and Control 8
1.4.2 Microgrid Islanding 10
1.4.3 Microgrid Protection 10
1.4.4 Microgrid Communications and Human--Machine Interface (HMI) 11
1.5 Overview 12
2 Microgrid Operations Economics 19
2.1 Fundamentals of Microgrid Operations Economics 19
2.2 Dynamics of Optimal Scheduling in Microgrids 21
2.2.1 T -- τ Islanding Criterion 23
2.3 An Economic Model for Microgrid Optimal Scheduling with Multi-Period Islanding 23
2.3.1 Grid-Connected Operations 23
2.3.2 Islanded Operations 26
2.4 Case Study 28
2.5 Summary 39
3 Resilience Economics in Microgrids 41
3.1 The Art of Resilience 41
3.2 The Impact of Uncertainty 44
3.3 An Economic Model for Microgrid Resilience 46
3.4 Case Study 50
3.5 Summary 55
4 Community Microgrid Operations Management 59
4.1 Principles of Community Microgrids 59
4.2 Economic Variables in Community Microgrid Operations 61
4.3 An Economic Model for Community Microgrid Operations Management 64
4.3.1 Master Controller 64
4.3.2 Local Controller 67
4.3.3 Price Signal Calculation 67
4.3.4 Uncertainty Consideration 69
4.4 Case Study 69
4.5 Summary 75
5 Provisional Microgrids for Renewable Energy Integration 79
5.1 Economic Considerations in Provisional Microgrids 79
5.2 An Economic Model for Provisional Microgrids 83
5.2.1 Component Modeling 85
5.2.2 Problem Formulation 87
5.3 Case Study 90
5.3.1 Case 1: A Baseline Case with Load, Non-Dispatchable Generation, and Market Price Uncertainties 92
5.3.2 Case 2: Considering Uncertainty in the Coupled Microgrid's Available Unused Capacity 93
5.3.3 Case 2(a): Employing Fast Charge/Discharge Energy Storage 94
5.3.4 Case 2(b): Addition of a 1MW Dispatchable Unit 95
5.4 Summary 96
6 Engineering Economics of Microgrid Investments 99
6.1 Principles of Engineering Economics in Microgrids 99
6.2 Economic Variables in Microgrid Investments 102
6.2.1 Reliability 102
6.2.2 Resiliency 103
6.2.3 Carbon Emission Reduction 104
6.2.4 Reduced Costs of Recurring System Upgrades 104
6.2.5 Energy Efficiency 105
6.2.6 Power Quality 105
6.2.7 Lowered Energy Costs 105
6.3 Capital Expenditure and Cash Flow Analysis for Microgrids 106
6.3.1 Microgrid with a Single DER 107
6.3.2 Microgrid with Multiple DERs 109
6.4 Case Study 111
6.5 Summary 112
7 Microgrid Planning Under Uncertainty 117
7.1 Dynamics of Uncertainty in Microgrids 117
7.2 Economics of Uncertainty in Microgrids 119
7.3 An Economic Model for Microgrid Planning Under Uncertainty 120
7.3.1 Microgrid Planning Objective 121
7.3.2 Planning Constraints 121
7.3.3 Operational Constraints 122
7.3.4 Economic Assessment of DER Selection 124
7.4 Case Study 125
7.4.1 PDC vs. Chronological Curve 125
7.4.2 Optimal Microgrid Planning 128
7.5 Summary 130
8 Microgrid Expansion Planning 135
8.1 Principles of Microgrid Expansion 135
8.2 Economic Variables for Microgrid Expansion 137
8.2.1 AC vs. DC Microgrid Planning 137
8.2.2 Hybrid Microgrid Planning 139
8.3 Economic Viability Assessment Model 140
8.4 Case Study 145
8.4.1 Uncertainty Consideration 153
8.4.2 Computational Complexity 154
8.5 Summary 154
9 Microgrids for Asset Management in Power Systems 159
9.1 Principles of Asset Management 159
9.2 Economic Variables in Microgrid Asset Management 161
9.2.1 The IEEE Standard -- Guide for Loading Mineral-Oil-Immersed Transformers 161
9.2.2 Transformer Asset Management via Microgrid Optimal Scheduling 163
9.3 An Economic Model for Integration of Microgrids in Asset Management 167
9.3.1 Microgrid Optimal Scheduling (Master Problem) 169
9.3.2 Transformer Asset Management (Subproblem) 169
9.4 Case Study 171
9.5 Summary 183
10 Dynamics of Microgrids in Distribution Network Flexibility 187
10.1 Principles of Distribution Network Flexibility 187
10.2 Economic Variables for Microgrids in Electricity Distribution Networks 190
10.3 Economic Models for Distribution Network Operations Under Microgrid Dynamics 191
10.3.1 Operation Constraints (Os) 193
10.3.2 Flexibility Constraints (Fs) 195
10.3.3 Islanding Considerations 196
10.4 Case Study 197
10.5 Summary 206
11 Microgrid Operations Under Electricity Market Dynamics 211
11.1 Principles of Microgrid Operations Under Electricity Markets 211
11.2 Economic Variables of Electricity Markets in Microgrid Operations 215
11.3 An Economic Model for Microgrid Operations Planning Under Market Dynamics 217
11.3.1 Microgrid Level 217
11.3.2 DMO Level 219
11.3.3 ISO Level 221
11.4 Case Study 222
11.5 Summary 229
References 229
Index 233
