Abstract
The popularity of microgrids is increasing considerably because of their environmental and technical advantages. However, the major challenge in microgrid integration is its financial feasibility due to high capital costs. To address this obstacle, renewable energy incentive programs, which are the motivation of this study, have been proposed in many countries. This paper provides a comprehensive evaluation of the technical and financial feasibility of a campus microgrid based on a techno-economic analysis using the Microgrid Decision Support Tool, which was implemented to support decision-making in the context of microgrid project investment. A method for microgrid design aiming to maximize system profitability is presented. The optimal microgrid configuration is selected depending on financial indices of the project, which directly address the returns on an investment. Most importantly, this analysis captures all the benefits of financial incentives for microgrid projects in California, U.S., which presents a key difference between the California market and other markets. The impact of incentives and uncertain financial parameters on the project investment is verified by sensitivity analysis. The outcomes show that the optimal configuration generates significant electricity savings, and the incentives strongly determine the financial feasibility and the optimal design of a microgrid.
Highlights
In recent years, electric power system design has witnessed a paradigm shift from the traditional centralized grid system toward decentralized and independent systems called microgrids, which can operate in either the grid-connected or islanded mode to supply demand targets
net present value (NPV), lifecycle cost (LCC), simple payback period (SPB), and benefit-cost ratio (BCR), which offer various criteria that can be designed for the problem of optimal design
If an investor requires a minimum period to recover the initial investment capital, SPB will be used as the primary benchmark to select the optimal microgrid configuration
Summary
Electric power system design has witnessed a paradigm shift from the traditional centralized grid system toward decentralized and independent systems called microgrids, which can operate in either the grid-connected or islanded mode to supply demand targets. Researchers have increasingly been focusing on microgrids because they offer obvious advantages, such as high penetration of renewable energy resources (RESs), improved reliability due to the autonomous operation of distributed energy resources (DERs), and significant reductions in greenhouse gas emissions as well as reductions in a power system’s operating costs. The optimal design of a microgrid considering economic and dynamic performance analysis was presented in reference [1], which contains photovoltaics (PV), wind turbines, a battery energy storage system (BESS), and two diesel generators. The study indicated important benefits by microgrid adoption such as minimization of levelized cost of energy (LCOE), maximization of renewable energy penetration and significant. The dynamic operation, transient stability, power efficiency and control of microgrid systems has been well developed and evaluated in the literature. It is clear that the technical impact and operational feasibility of microgrid systems have been convincingly validated
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
