Operating mechanism for profit improvement of a smart microgrid based on dynamic demand response

Abstract

A microgrid helps to reduce the consumption of fossil fuel by utilising distributed renewable energies (DREs). However, the stochastic nature of renewable energy makes it a big challenge for the microgrid operators to maximise the consumption of DREs while ensuring the balance between supply and demand. In order to improve the consumption of DREs and the profit of a microgrid efficiently, an operating mechanism consisting of two stages is proposed to dispatch DREs, responsive loads and plug-in hybrid electric vehicles (PHEVs) in a smart microgrid. In the first stage, we formulate the optimal unit commitment and the day-ahead time of use, which the operator concerns as a decentralised model. To address the model, the particle swarm optimisation algorithm and the interior point method are used, respectively, to minimise the operating cost and the electricity import. In the second stage, a dynamic incentive signal-based demand response for PHEVs is proposed to maximise the electricity export in the intra-day. Simulation studies are conducted on a smart microgrid, and the results have demonstrated that the proposed operating mechanism improves the consumption of DREs while satisfying the demand, meanwhile improves the average daily profit of the smart microgrid.