Impact of Grid Pricing and Participation for Cost-Effective Operation of Microgrid System

Microgrid (MG) systems can either operate in on-grid or off-grid mode. The on-grid mode of microgrid operation can further be divided into active and passive mode. In active mode the grid both buys and sells power to the microgrid whereas in passive mode the grid acts as a backup and only sells power to the microgrid. In this study, the grid power commitment is sized optimally to incur the lowest MG system generating cost. The generation cost is reduced for three different scenarios of a low voltage microgrid (LV MG) system that comprises of battery energy storage (BES), renewable energy sources (RES), and fossil fuel generators while running in grid-connected mode. The load demand model is taken into account and distributed generator (DG) scheduling ideas are percolated for reducing the second level Microgrid system’s generating costs. The optimization tool for the study was a newly established hybrid swarm intelligence algorithm that has previously been utilized to solve a variety of power system optimization challenges. Numerical results show that there was 25% increase in generation cost when passive participation of grid was considered and 58% increase when fixed electricity pricing was considered.