Microgrid Planning Under Uncertainty

We introduced a stochastic microgrid planning model to determine the optimal capacity and combination of distributed energy resources (DERs) for a microgrid system. The proposed model minimizes the total cost during the planning horizon, including the cost of capital for DER investment as well as the cost of supplying the load. The cost savings, realized by employing local resources and selling the excess power to the main grid, should recover the relatively high amount of capital expenditure for installation of DERs in order to economically justify the deployment of a microgrid project. Price and load duration curves are employed instead of chronological curves to reduce prediction errors. Reduced error would guarantee a more accurate solution to the planning problem. The duration curves show great applicability to the planning problem and guarantee a substantial error reduction for longer prediction periods. Numerical case study demonstrates the effectiveness of the proposed model. Further, we analyzed the sensitivity of the microgrid planning to the budget constraint for additional insights needed to avoid misallocation of capital by underinvesting or overinvesting in microgrid projects. The model demonstrates that the DER selection was not only a function of DERs capital and generation costs but also of the budget ceiling on maximum allowable investment in a microgrid project.