A new simulation model to develop and assess business cases for commercial microgrids

Opportunities to develop commercial microgrids are emerging, but investors need analytical tools to assess the economics of microgrid business cases. A large part of the business case for microgrids in the real world is reliability based; yet in academic literature most tools analyze economics based on energy sales to customers or the macro grid. This work offers a new model, based on Monte Carlo simulation (MCS), that stacks both values streams - and hence makes it possible to develop business cases for microgrids which improve reliability as well as sell electricity. The tool is analytical and can be used to study the effect many real-world parameters, such as utility reliability, generator availability, gas prices or carbon taxes, have on operating costs and revenue. We demonstrate the tool in a case study based in Texas, and showcase its analytical features that can aid in developing a sound and robust business model.