Optimal Management of Microgrids

H.S.V.S. Kumar Nunna (Ph.D), IIT Bombay, India, nandulifestyle@gmail.com

Ashok S., Professor, NIT Calicut, Kerala, India, ashoks@nitc.ac.in

Abstract Microgrids are the platforms to integrate DERs
into distribution systems. The optimal management of such
systems has gained importance in the era of competitive
power market. This paper mainly concentrates on functional
and logical modelling of various components and strategies
of microgrids, thereby proposes an objective function to get
economic sizing and scheduling of DERs in a microgrid. A
case study has been conducted in order to support and
strengthen the proposed method.
Keywords Microgrids, Economics of Hybrid Energy
Systems, Modelling of Distributed Generators.

1. INTRODUCTION
A microgrid is a local grid formed in either low voltage or
medium voltage distribution network. More specifically
Microgrid is an intentional island formed by a Local
Distribution Centre (LDC) Operator or by an Automatic
Control Mechanism This local grid can be formed at any
portion of the distribution network. Depending upon the
location, these grids are categorised into three groups [1]
namely microgrid, Industrial microgrid, Utility microgrid.
An autonomous microgrid can be installed in the
areas which are not having any access utility and hence
provide power to remotely located areas using renewable
energy available in the site. Hence it is also called as remote
microgrid. It provides easy way to extend utility connection
to remote areas; however there are problems in extending
utility grid to remotely located areas. Hence most of the
time this microgrid works in islanded mode.
Industrial microgrids are the local grids formed with in a
facility or Industry. Normally industries which are having
critical or sensitive loads can adopt this architecture. The
functional benefits come from reliable and quality sufficient
power generated locally. It also makes the facility cost



effective as the controller isolates the whole or a portion of
the load from the utility under high tariff instants. After
isolating the controller has to dispatch the load among the
local sources in an optimal way.
Utility microgrid can be formed as part of the
distribution systems. The role of this architecture is to
provide local support to the load under grid failures, peak
hours, and poor quality instants. Hence this microgrid
category releases the utility from peak burden and
transmission congestion. The scope of this grid can also
extend up to local voltage support by providing necessary
reactive power balance even under grid connected mode.
However there are some key challenges in providing proper
relay coordination under this mode [2 to 5].
To manage these microgrids in an optimal manner,
it is mandatory to conduct optimization study on microgrid
to be formed. But this optimization requires functional
modelling of components of microgrid. In general a
microgrid consists of Distributed Energy Resources (DERs)
and Loads. These DERs include diesel generators, gas
engine generators, Wind Turbine Generators (WTG), Solar
Photo Voltaic (SPV) cells and Battery Storage (BS) banks.
The modelling of such systems is readily available in the
literature [2]. The optimization study is needed to find the
ratings of DGs and operating schedule of the DGs. The
optimal sizing can be done by minimizing objective
function framed by considering various costs involved in the
microgrid operation [6]. Once sizing is done, next step is to
find optimal scheduling of the DGs whose ratings were
found from the optimal sizing. This paper proposes a
method to get both scheduling and sizing from the same
objective function.
2. PROBLEM FORMULATION
The optimal management of the microgrid includes
sizing the distributed generators and scheduling the
DGs as per the load pattern, export & import
regulations followed by the local utility. The former
one involves minimizing the objective function formed
by considering costs involved in microgrid
management [6]. These costs are annualised capital
cost, annualised fuel cost, annualised O&M cost,
978-1-4244-6078-6/10/$26.00 2010 IEEE 448

annualised cost of replacement, annualised cost of
electricity (import), and revenue from power export.
Annualised capital cost is the annualised value of the
cost to be spent at present, i.e.
TC
cap
ann
=
C
I
cap
. S
I
PvAF
I
N
I=1
(1)
Where S

is the rating of i
th
DER in KW, C

cup
is the
capital cost of i
th
DER in Rs/KW and PIAF

is
present value annuity factor for a life of i
th
DER.
Annualised net replacement cost comes into picture to
account the cost of replacing a component with new
one whose life (I

) is less than the desired project life

(I
P
). Normally a component whose life is less than
the desired life of the project should undergo
replacements. The numbers of replacements are given
by,
N
I
rcp
= Integei _
L
P
L
I
_ (2)
Where Integer is a function which returns the integer
part of the value in the argument
The annualised net replacement cost can be obtained
by subtracting annualised salvage value from
annualised replacement cost as,
TC
rcp
ann
= C
rcp
ann
-Sv
ann
(S)
It has been assumed that the maximum salvage of any
component is 10% of its replacement cost and the
salvage value at any time is given by,
Sv
I
= _
-u.9 - C
I
rcp
- S
I
L
I
_ - +C
I
rcp
- S
I
(4)
Where 0 is given by,
= L
I
(1 +N
I
rcp
) -L
P

The annualised salvage can be obtained as
Sv
ann
=
Sv
I
FvAFP
N
I=1
(S)
Where FIAFP is the future value annuity factor
calculated for a period of I
P
, and N is total number of
components in the microgrid.
Therefore, annualised replacement cost is given by,
C
rcp
ann
= C
I
rcp
-
S
I
FIAF

-
N
I=1

PvAF
I
rcp
PvAFP
(6)
Where FIAF

is the future value annuity factor

calculated for a period of I

.
The annualised O&M cost is given by,
IC
o&m
unn
= |C

onm
(E

unn
) +C

0
|
N
=1
. A

(7)
A

, is incorporated to take care of availability of the

DG. The value of A

depends on the maintenance

schedule of the DG, i.e. whether the DG is available to
produce power or not decides the value of A

.
Annualised fuel cost:
The cost of the fuel required by a DG is normally
accounted under this cost. But to find amount of fuel
needed it is required to find a relation between energy
generated and fuel needed. This relation can be
derived from the data provided by the manufacture.
Annualised fuel cost is given by,
IC
]ucI
unn
= c

. F

unn
N
DGM
=1
(8)
Where c

is the cost of the fuel used by the i

th
DG
and F

unn
can be obtained as
F

unn
= o

(E

unn
)
2
+b

(E

unn
) +c

(9)
However the constants o

, b

, c

can be obtained from

the manufactures data sheet. Therefore certain DGs
like WTG, SPC etc require zero cost fuel. Hence the
fuel cost for those DGs is zero.
Annualised cost of power import:
This cost accounts the cost of electricity
imported/drawn from the grid. It is mainly influenced
449

by the tariff plan followed by the industry. Hence
annual cost of power import by considering TOU tariff
plan is given by,
IC
mpo
unn
= S6S - |C
pcuk
. E
pcuk
+C
busc
. E
busc
+C
o]]pcuk
. E
o]]pcuk
]
Where C
pcuk
, C
busc
, C
o]]-pcuk
are the costs of
electricity under peak load, base load, off-peak load
hours respectively.
Annual revenue from power export (IC
cxpo
unn
) is the
revenue deserved by microgrid by exporting power to
the local utility grid. Hence total annualised cost of
microgrid is given by,
IC
unn
= IC
cup
unn
+IC
cp
unn
+IC
]ucI
unn
+IC
onm
unn
+IC
mpo
unn
-IC
cxpo
unn
(1u)
The optimal sizing and scheduling can be obtained by
minimizing unit cost of electricity (UCE) given by,
uCE =
IC
E
unn
(11)
E
unn
, is energy supplied by microgrid in a year. This
can be obtained by adding energy generated by all
DGs under all modes of operation. But the energy
generated by all DGs is not same. Hence it is required
to model each DG separately to find annual energy
output (E

unn
). The energy output from fuel based
DGs during any interval of a day depends on the
optimal share. The annual energy output is given by,
E
,]ucI
unn
= S6S - _P
]ucI

(]). I

]=1
_ (12)
Where I, size of the interval and D is number of
intervals. These two are related as, - I = 24
WTG are analysed using aerodynamic modelling [2].
The mechanical power developed by the turbine rotor
of a WTG is given by,
P
mcch
=
1
2
- nR
2
-
p
u
p
std
- (u
]
)
3
- p
std
(1S)
Where,
R = Rauius of the winu tuibine iotoi,
p
std
= stanuaiu aii uensity,
p
u
= Bensity of the aii in the site,
u
]
= winu velocity in the inteival j.
The electrical power output of WTG system is given
by,
P
LIc
= P
mcch
- (p
gcncuto
- p
gcu & tubnc
)
The annual energy output available from WTG system
is given by,
E
wtg
unn
= N
wtg
- S6S - _P
LIc
]
- I

]=1
_ - p
conctc
wtg

(14)
The output power from solar photo voltaic cell is given
by
P: (t) = N
p
. Im(t). Im(t) (1S)
Where P: (t) is power generated by solar system, N
p

is the number of modules used in solar system. Im(t)
& Im(t) are the values of maximum voltage and
current of module in the interval t, respectively.
And the annual energy output from SPV cells is given
by,
E
sp
unn
= S6S - _P:(t) - I

]=1
_ - p
conctc
sp

(16)
The total annual energy supplied by the microgrid
given,
E
unn
= E
,]ucI
unn

=1
+E
wtg
unn
+E
sp
unn
(17)
Where is the number of DGs which require fuel.
Unlike fuel generators, WTG systems and SPV cells
are not always favourable to the load. Distributed
storage came into scenario to balance/match load and
450

unfavourable generation. In general the size of the
storage system is fixed by the level of back up
required. Battery storage system will supply power to
the load under power deficiency situations by storing
the power through charging under surplus power
situations. However the minimum level during any
interval should not be less than the desired backup
level. Like storage tanks, battery systems are modelled
using cumulative sum of energy acquired. This
cumulative sum during any interval is an indication to
the capacity remained in the battery bank. By
assuming fully efficient operation of batteries, SOC
(State of Charge) can be expressed as,
S0C(t) = (1 -o). S0C(t -1)
+(P
n
(t) -P
out
(t)) (18)
Where,
o is self discharging factor of battery storage system,
P
n
(t) = P
]ucI
(t) +P
sp
(t) +P
wtg
(t) +P
mpo
(t),
P
out
(t) = P
Ioud
(t) +P
cxpo
(t).
The maximum limit on the SOC is fixed by sizing and
the minimum is fixed by desired level of backup. The
constraints are formed by load balance equations,
maximum & minimum limit of the generators.
The output of any generator must not exceed its
rating. But rating of the unit is not known prior to
the optimization. Hence temporarily choose a
maximum limit say, the maximum available size
of the same unit in the market, i.e. P
u
t
P
u
mux

The output of any generator is non-negative, i.e.
P
u
t
u
Rating of i
th
DER is the maximum share that it has
to commit, i.e.S

= Hox(P
u
t
); t = 1 to 24
The status of the battery at any instant should be
greater than the energy required to desired back up
under dead source day, i.e. S0C(t)
Bockup
dcscd

Export of the power is not allowed during off-peak
hours, i.e. from 10pm to 6am [8]. This can be
modelled using a permission variable,
say cxpo(t). Where,
cxpo(t) = _
1; i cxport is ollowcJ
u; i cxport is not ollowcJ

Export cannot exceed the limits of the contract
during export allowed hours. i.e. Export
mn

Export(t) Export
mux

Power import should not happen in peak hours. i.e.
from 6PM to 10PM.


3. CASE STUDY
In order to conduct a case study a petrochemical
industry in India has been selected. The plant has two
standby generators along with 11KV utility connection
from local distribution company. In the plant site an
average wind speed of 6 to 6.5 m/s, in south-west
direction was recorded. Available wind power in KW
from a single 50KW WTG and solar power available
in KW from a 5KW SPV panel are given in appendix.
The load curve of the plant is highly nonlinear due to
switching operations various motors. The majority of
the load is motor-pump sets used to pump crude oil,
refinery output products to their respective storage
tanks, and filling the wells with water after extracting
crude oil (to maintain ecological balance). The load
curve is also given in appendix. The plant has two
standby units of each size 600 KW (i.e. 750KVA at
0.8PF) generators coupled to diesel and gas engines
respectively. An optimization study has been
conducted on this plant by considering the maximum
limit of export is 1500KW. After running optimal
sizing, it was found that a combination of 100, 5KW
SPV panels and 10, 50KW WTG systems are optimal
to install in the plant.
4. RESULTS & CONCLUSIONS
Optimal Scheduling of the existing units after
installing WTG, Battery storage and Solar PV systems
against the load is shown figure. Depending upon the
choice given by the operator, the optimization package
will look for the possibility of power import from and
export to utility. Here it is considered that a backup
capacity of 50% of the peak load is required for one
hour. The results obtained were quite encouraging,
since storage systems (battery) are charging in the
excess power situations and contributing the same in
peak and export hours. In spite of the standby units, it
is economical to import power from the utility during
451

off-peak hours. Even if the load is less in off-peak
hours, the battery systems are scheduled to charge so
as to use the same power at peak hours. Here it is also
assumed that the battery systems installed will have
self discharging factor of 0.01% per interval.
According to local utility norms export should not
exceed 1500KW and minimum limit is 250KW and
export is allowed only in peak hours. In Figure1
negative bars reflect the charging of storage system.
The optimal sizing on the plant under case study suggested
that a combination of 100 SPV cells of each 5KW & 10
WTG sets of each 50KW is optimal to install. Optimal
scheduling study reported that unit cost of energy after
installing aforementioned combination decreases to Rs
1.15/KWH. But neither WTG nor SPV alone can give this
price. The unit cost of energy after installing WTG sets
alone is Rs. 2.05/KWH whereas SPV cells alone is
2.10/KWH.


Figure 1: Optimal scheduling of the plant after installing WTG & SPV systems.

5. REFERENCES
[1] www.leonardoenergy.com
[2] R. Yokoyama, N. Saito, Modelling and Evaluation of
Supply Reliability of Microgrids including PV and Wind
Power, IEEE-P&E, 2008
[3] Daniel J. Cox, Tom Davis, Distributed Generation
and Sensing for Intelligent Distributed Microgrids,
proceedings of IEEESMC (International Conference on
System of Systems Engineering), Los Angeles, CA, USA
- April 2006, pp 179-183.
[4] H.Asano, S.Bando, Economic Evaluation of
Microgrids, IEEE 2008.
[5] In-Su Bae and Jin-O Kim, Reliability Evaluation
of Customers in a Microgrid, IEEE Transc- Power
Systems, Vol. 23, NO. 3, August 2008, pp 1416-
1422.
[6] A. P. Agalgaonkar, C. V. Dobariya, M. G. Kanabar,
S. A. Khaparde, and S. V. Kulkarni, Optimal sizing of
distributed generators in micro-grid, Paper No. 349,
IEEE Power India Conference, April 10-12, 2006, New
Delhi.
[7] http://certs.lbl.gov/certs-der-micro.html
[8] www.powermin.nic.in
[9] http://www.rrbenergy.com/
[10] http://www.vestas.com/










-500
0
500
1000
1500
2000
2500
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
IMPORT
BAT
SHARE
SOLAR
SHARE
GAS
SHARE
WIND
SHARE
DISEL
SHARE
LOAD
EXPORT
452

Figure A: Hourly data of
Figure B: Hourly
42
44
46
48
50
1 2 3 4 5 6
P
o
w
e
r

i
n

K
W
0
1
2
3
4
5
6
1 2 3 4 5 6
P
o
w
e
r

i
n

K
W
0
200
400
600
800
1000
1200
1 2 3 4 5 6
L
o
a
d


i
n

K
W
APPENDIX

wind power available from a 50 KW WTG on a typical sunny day at pl
y data of power available from a 5KW SPV cell on a sunny day at plant

Figure C: Hourly load data of the plant
6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 2
Time of the day
7 8 9 10 11 12 13 14 15 16 17 18 19 20
Time of the day
6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Time of the day

ant site

t site.

21 22 23 24
21 22 23 24
21 22 23 24
453