lianghs@epri.sgcc.com.

cn


Optimal Planning of Microgrid applied in Remote Rural Area

Huishi LIANG, Haitao LIU, Mingtian FAN
China Electric Power Research Institute
China
SUMMARY

With the increase in requirement of low-carbon economy and demand on power supply reliability
from customers, more and more attention is being paid on distributed generations (DGs). As an
effective means of integration of DGs to the power system, microgrid is being more of a concern.
Microgrid integrates DGs, load, storage and control system into a single controllable unit, which can
either operate in grid-connected mode or in isolated mode, thus provides a new way for remote rural
electrification. There are still some remote rural areas in developing countries nowadays, to where the
cost of delivering power from the grid is relatively high. Even if lines are constructed to deliver power
from the grid, the power supply quality would be unacceptable due to long distance of power delivery.
Microgrid that utilizes renewable energy resources (RES) would be a promising solution for power
supply problem of these areas.
The main object of this paper is to develop an optimal unit sizing methodology for remote
autonomous microgrid with multiple energy sources. In order to truly reflect the value of RES, both
economical and environmental objectives are considered in the optimization model in this paper. By
deducting environmental benefit of RES DGs from their high initial capital cost, competitiveness of
RES DGs can be greatly improved.
Differing from conventional power system planning, microgrid planning should consider
operation and control problem because control strategy of microgrid has a great impact on the energy
contribution of different DGs. An energy dispatching strategy aiming to maximize the utilization of
RES and fuel saving is proposed in the paper, and hourly simulation of one year is performed in the
planning process.
Case study results show that considering the environmental benefit of RES DGs will increase the
proportion of wind turbine and PV with a considerable increase of environmental benefit. Although
there is a slight increase in the annual total cost compared with the planning result without considering
environmental benefit, the true value of RES can be better reflected.
The impact of diesel fuel price and average wind speed on unit sizing of microgrid is also
investigated. Results show that the increase of diesel fuel price and average wind speed leads to a
decrease of proportion of diesel generator in microgrid and increase of contribution of wind and PV
generation. For remote areas with a relatively high cost of diesel fuel transportation and abundant
renewable energy resource, the value of microgrid utilizing renewable resources can be even raised.

KEYWORDS

Microgrid, Unit Sizing, Optimal Planning, Particle Swarm Optimization


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1. INTRODUCTION
Nowadays, there are still some remote rural areas which are hard to be covered by the grid power
supply in developing countries. Diesel units are conventionally used to supply power to these remote
areas. Considering the relatively high fuel cost (including long distance fuel transportation) and
pollutants emission, integrating renewable energy sources (RES) into fossil-fuel based power
generation systems for remote rural areas can offer more economical and environmental-friendly
electrification schemes with merits including considerable fuel saving and pollutants emission
reductions[1]. Microgrid technology, which integrates distributed generators (DGs), load, storage and
control system into a single controllable unit, is necessary to be applied to these isolated small-scale
power systems with multiple energy sources to maintain reliability and power quality, and provide
optimal scheduling to enhance operation efficiency of the system.
Optimal sizing of DGs are important and challenging tasks in designing islanded microgrid[2],
which has been studied in much literature by establishing optimal planning model and then performing
sensitivity analysis to determine the impact of different ratings[3-7]. In these references, the object of
optimal planning of microgrid is to minimize the total economical cost, including initial capital cost
and operation cost, without considering the environmental value of RES DGs. In fact, due to zero
fossil fuel consumption and pollutants emission, RES DGs can bring considerable environmental
benefit, which is one of the important reasons of choosing them for electrification. Without
considering the environmental benefit of RES would lead to that the capacity of RES DGs in the
planning results may be lower than they should be.
The main object of this paper is to develop an optimal unit sizing methodology for remote
autonomous microgrid with multiple energy sources. In order to truly reflect the value of RES, both
economical and environmental objectives are considered in the optimization model. By deducting
environmental benefit of RES DGs from their high initial capital cost, competitiveness of RES DGs,
compared with conventional turbine-generator units, can be greatly improved.
Differing from conventional power system planning, microgrid planning should consider
operation and control problem because control strategy of microgrid has a great impact on the energy
contribution of different DGs. An energy dispatching strategy aiming to maximize the utilization of
RES and fuel saving is proposed in the paper, and hourly simulation of one year is performed in the
planning process.
This paper is structured as follows: Section II describes a typical configuration of remote
microgrid utilizing RES and diesel plant, and proposes an optimal unit sizing model with the objective
of minimizing total cost and maximizing environmental benefit subjecting to the constraint of system
reliability. Operational constraints of microgrid are presented and an optimal scheduling strategy is
proposed in Section III. In Section IV, an optimal sizing algorithm for remote rural microgrid is
developed based on Particle Swarm Optimization (PSO). In Section V, case study results are given
along with a sensitivity analysis to consider the impact of diesel fuel price and average wind speed.

2. PROBLEM FORMULATION
2.1 System Description
A typical configuration of remote rural microgrid system with multiple energy sources is shown in
Fig.1. Community load is supplied by a diesel generator which serves as a balancing plant and RES
DGs (typically wind turbine and solar PV). Energy storage system (ESS) is used in the microgrid to
smooth the output fluctuation of RES DGs and to provide peak load shaving. A dump load is used to
absorb the redundant power of the microgrid system when ESS is fully being charged or at its
maximum charging power.
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Fig.1. Diagram of typical remote microgrid system
2.2 Optimal unit sizing model
The problem of optimal unit sizing of remote autonomous microgrid studied in this paper can be
described as: given conditions of load level and energy resources (e.g., solar radiation, wind speed,
fuel prices) in the planning target years, taking annual cost minimization and environmental benefit
maximization as the objective, it is to decide the capability rating of DGs and ESS that consists
microgrid under the constraint of a certain reliability level.
AObjective function
This is a multi-objectives optimization problem with objectives of annual cost minimization and
environmental benefit maximization. This paper uses the target normalized method, deducting the
environmental benefit from the cost, so that the problem can be turned to a single objective
optimization problem. The objective function can be mathematically written as:
&
min
cap o m fuel ev
F C C C V - - - (1)
where C
cap
represents the present value of annuity of the initial capital cost; C
o&m
and C
fuel
are the
annual O&M cost and fuel cost, respectively; V
ev
is the annual environmental benefit because of
utilizing renewable energy resources.
Annualized Capital Cost, C
cap

Annualized capital cost is the capital investment cost of the system that needs to be recovered
yearly, which can be written as:
, , , ,
( , )
cap a cap i DG i ess e ess ess p ess
i
C CRF r N c P c P c E
| |
- -
|
\ .

(2)
where c
cap,i
and P
DG,i
are the capital cost of the i
th
DG in $/kW and rating of the i
th
DG in kW. c
ess,p
and
c
ess,e
are the cost of storage in power capacity and energy capacity, in $/kW and $/kWh,
respectively[12]. P
ess
and E
ess
are the rating of power and energy capacity of ESS. CRF(r,N
a
) is the
Capital Recovery Factor, a ratio used to calculate the present value of an annuity for a payback period
of N
a
years at the interest rate r [8].
Annual O&M cost, C
o&m

The annual O&M cost of DGs may be specified in $/kW, which can be written as:
& & , , & , o m o m i DG i o m ess ess
i
C c P c P -

(3)
where c
o&m,i
and c
o&m,ess
are the annual O&M cost of i
th
DG and ESS, respectively.
Annual fuel cost, C
fuel

PV and wind generators consume no fuel when generating power. Fuel cost of the system is all
consumed by diesel generator, which can be calculated by:
8760
Exp ( )
fuel fuel diesel
t
C c P t
(

(4)
4

where c
fuel
is the cost of diesel fuel per generated kWh, P
diesel
(t) is the power generated by diesel
generator during hour t of the simulation. Operator Exp[] calculates the expected value of annual fuel
cost over the simulation duration.
Annual environmental benefit, V
ev

The environmental benefit of RES DGs can be measured by the environmental value of reducing
pollutants emission relative to diesel generator generating the same capacity of power energy.
Reference [9, 10] computes the environmental value of various pollutants by studying the relationship
of the total economical and social loss because of pollutants emission and the annual pollution penalty
in some countries, as shown in Table I.
Table I. Environmental value of pollutants in power industry
Pollutant SO
2
NO
x
CO
2
CO
Environmental value ($/ ton) 923.1 1230.8 15.0 153.8
The environmental benefit of RES DGs, V
ev
, can be calculated by the following equation:

( )
8760
, ,
Exp
ev ev j j RES i
j t i
V v P t
(

(


(5)
where v
ev,j
is the environmental value of the j
th
pollutant;
j
is the amount of the j
th
pollutant emission
when diesel plant generates 1kWh power energy; P
RES,i
(t)

represents the amount of power generated
by the i
th
RES DG of the microgrid during hour t of simulation.
B. Constraint of the optimal unit sizing model
The aforementioned objective function should be subject to the reliability constraint:
max
LPSP LPSP s (6)
where LPSP is the Loss of Power Supply Probability, and LPSP
max
is the maximum allowable limit of
LPSP. In some situations when the power within microgrid is insufficient (e.g. RES DGs output is
insufficient while ESS and diesel generator output reaches their limitations), load curtailment is
necessary to be carried out to maintain power balance within the islanded system. LPSP of microgrid
can be calculated by:
( )
( )
T
lol
t
T
load
t
P t
LPSP
P t

(7)
where P
lol
(t) and P
load
(t) is the power of load curtailment and load demand during hour t, respectively;
T is the total hours of the simulation.

3. ENERGY DISPATCHING STRATEGY OF MICROGRID
Operation and control strategy of microgrid should be considered in the planning process. In order
to calculate the aforementioned C
fuel
, V
ev
and LPSP, the generated power of DGs and the power of load
curtailment during each hour should be determined through simulation considering microgrid
operation constraints and dispatching strategy. Ideally the solar radiation, wind speed and load data
should be collected over several years, but this may not be possible for such a small scale power
supply system considering practical reasons (e.g., budget, time constraints) [11]. Hourly data of one
year is used in simulation in this paper so that seasonal variations can be reflected.
A. Operational Constraints
The following constraints should be satisfied during microgrid operation:
Power Balance Constraint
, ,
( ) ( ) ( ) ( ) ( ) ( ) ( ) ( )
load dump ess ch diesel wind pv ess dis lol
P t P t P t P t P t P t P t P t - - - - - - (8)
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where P
dump
(t), P
wind
(t) and P
pv
(t) are the dump load power, wind power and PV power at hour t,
respectively. P
ess,ch
(t) and P
ess,dis
(t) are the charge and discharge power of ESS at hour t, respectively.
Energy loss is neglected here because its quite slight due to the small size of microgrid.
Diesel Constraint
,min ,max
( )
d diesel d
P P t P s s (9)
Operation of diesel generation under light-load or over heavy-load conditions may increase the risk
of engine failure or premature aging, and reduce the load following capacity of the generator [1], so
diesel generator should adjust its power output to the desired level within an operation range
constraint. When the generated power is superfluous, diesel generator can be allowed to shutdown
[12]. However, considering the inefficiency of turning off and on the diesel generator, only
continuously operation of diesel generation is considered in this paper.
ESS Power and Energy Constraint
, ,
0 ( ), ( )
ess ch ess dis ess
P t P t P s s (10)
min max
( ) SOC SOC t SOC s s (11)
where SOC represents the State of Charge of ESS. Its known that over or under charging/discharging
may shorten the lifetime of ESS. In order to sustain the system with ESS over a long period of time,
ESS is recommended to charge and discharge within a range of SOC limitation.
ESS Energy Transition
, ,
( ) ( 1) ( ) ( ) /
ess ch ess dis
SOC t SOC t P t t P t t q q - - A - A (12)
where SOC(t) and SOC(t-1) are the SOC of ESS at hour t and t-1, is the charge and discharge
efficiency of the ESS.
B. Energy dispatching strategy
The goal of energy dispatching strategy within microgrid with multiple energy sources is to
maximize the total RES energy contribution to the system and improve the overall efficiency of diesel
generation (or maximize the fuel saving). Table II shows the energy dispatching strategy in various
conditions of microgrid.
Table II. Dispatching strategy aiming to maximize RES utilization and fuel saving
Conditions Dispatching Strategy
1. The sum of
RES DGs
generation and
diesel min
generation
exceeds load
1.1. All the excess power can charged by
ESS within ESS constraints
P
diesel
(t)= P
d,min

P
ess,ch
(t)= P
RES,i
(t) + P
d,min
- P
load
(t)
P
dump
(t)=0
1.2. ESS charging power reaches P
ess
, or
SOC of ESS reaches SOC
max

P
diesel
(t)= P
d,min

P
ess,ch
(t)= P
ess
, or 0
P
dump
(t)= P
RES,i
(t) + P
d,min
- P
load
(t)- P
ess,ch
(t)
2. Load exceeds
the sum of RES
DGs generation
and diesel min
generation
2.1. All the power shortage can be
supplied by ESS without the use of diesel
generator
P
diesel
(t)= P
d,min

P
ess,dis
(t)= P
load
(t)- P
RES,i
(t) - P
d,min
P
lol
(t)=0
2.2. ESS
discharging
power reaches
P
ess
, or SOC of
ESS reaches
SOC
min

2.2.1. All the
remaining power
shortage can be
supplied by diesel
generator without load
curtailment
P
ess,dis
(t)= P
ess
, or 0
P
diesel
(t)= P
load
(t)-P
RES,i
(t) - P
ess,dis
(t)
P
lol
(t)=0
2.2.2. Diesel
generators output
reaches P
d,max

P
ess,dis
(t)= P
ess
, or 0
P
diesel
(t)= P
d,max
P
lol
(t)= P
load
(t)-P
RES,i
(t) - P
ess,dis
(t)- P
d,max

The principle of the dispatching strategy proposed in this paper is summarized as below:
1) Energy generated by RES DGs should be entirely utilized in top priory due to their
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considerable environmental benefit and the uncontrollability of their output.
2) ESS is used to absorb the excess energy of RES to avoid the abandonment of wind or solar
energy and help to shave peak load power when the power of RES is insufficient, balancing the system
power in preference to diesel generator.
3) Diesel generator serves as a balancing plant. When power balance of the system cannot be
obtained after dispatching ESS (e.g. the charge/discharge power or SOC of ESS has reached the
limitations), diesel generator should adjust its power output to maintain the power balance. If power is
still insufficient when diesel generator output reaches to P
d,max
, some amount of load that equals to the
power shortage should be shed (so that P
lol
(t) in Equation (7) can be determined). If power is still
excess when diesel generator output reaches to P
d,min
, the redundant power should be consumed by
dump load.

4. SOLUTION ALGORITHM
Particle Swarm Optimization (PSO) is used in this paper to solve the optimal unit sizing problem
of islanded microgrid. PSO is a multipoint random optimization approach with the advantages of little
requirement on empirical parameters, fast convergence rate and strong robustness, and is widely used
in electric power system research in recent years [13]. Reference [14] gives an introduction to PSO in
detail.
To deal with the reliability constraint described in Inequality (6), a new fitness function with
penalty term is constructed, which can let particles that go off the constraint be automatically
eliminated. The constructed fitness function can be written as follows:
( )
2
max
min max 0, fitness F LPSP LPSP o - - (

(13)
where F is the objective function of the problem described in Equation (1); is the penalty factor. In
order to make sure that particles that go off the constraint can be fast eliminated, the value of should
be set a large positive number.
The basic steps of the solution for the proposed optimal unit sizing model of islanded microgrid
using PSO can be summarized as follows:
Step 1: Input the economic data of microgrid, limitations of reliability and system operation, and
hourly data of solar radiation, wind speed and system load.
Step 2: Set the parameters of PSO including the number of particles, number of iterations, inertia
factor, and control coefficient.
Step 3: For each particle, run a one-year simulation based on the aforementioned dispatching
strategy; calculate the annual generated power of each DG and the total power of load curtailment, and
then calculate the fitness value of the particle by Equation (1) ~(5), (7) and (13).
Step 4: For each particle, compare its current fitness value with its previous best fitness value, if
the former is better, update the best position and fitness value of this particle; compare the best fitness
value of this particle with the global previous best fitness value, if the former is better, update the best
global position and global fitness value.
Step 5: Update the velocity and position of each particle.
Step 6: Repeat Step 3~5 until the maximum number of iterations is reached.
Step 7: Get the optimal solution of the problem and the optimal value of the objective function.

5. CASE STUDY AND DISCUSSION
The aforementioned optimization problem is implemented in Matlab and is applied to an example
of islanded microgrid to illustrate the application of the model and the verification of the proposed
methodology.
A. System Data
The DG configuration and system topology of the test system are shown in Fig.1. The input
economic parameters are listed in Table III. The project year, N
a
, is 20 years and the interest rate, r, is
set at 8%. The maximum allowable limit of LPSP is assumed to be 99.7%.
The wind and solar data for the study is taken from references [15], which provides hourly wind
speeds, solar radiation and ambient temperature for all hours of the year. Its assumed that PV system
7

has a good radiation tracking system and solar radiation from [15] is the same as the total incident
radiation on PV panels. Modeling and parameters of PV panels can be found in reference [16]. The
wind speed is converted to electric power using a similar wind power curve as described in reference
[17], with a variable rating power. The load profile is taken from the IEEE Reliability Test System
described in reference [18].
The minimum and maximum output constraints of diesel generator, P
d,min
and P
d,max
, are 30% and
95% of the diesel generator power rating, respectively. Diesel generator can momentarily tolerate up
to 10% overloading [1], but this is not considered in the study because the simulation time step is 1
hour, which is much longer than the practical overloading tolerance time of the generator (usually
several minutes). The typical amount of pollutant emission when diesel plant generates 1kWh power
energy is shown in Table IV. The efficiency of ESS, , is 0.9, and the minimum and maximum SOC
limits of ESS are 20% and 90%, respectively.
Table III. Equipment initial cost and Q&M cost
Type of DG Equipment Initial Cost Operation & Maintenance Cost
Diesel generator 550 $/kW 0.75 $/kW per year
Wind Turbine 2150 $/kW 1.5% of initial investment per year
Photovoltaic 5142 $/kW 2% of initial investment per year
ESS
c
ess,p
= 853 $/kW
1% of initial investment per year
c
ess,e
= 420 $/kWh
Table IV. Typical amount of pollutant emission when diesel plant generates 1kWh power energy
Pollutant SO
2
NO
x
CO
2
CO
Typical amount of pollutant emission (g/kWh) 1.2 3.5 635.76 1.5
B. Performance of the Dispatching Strategy
Hourly simulation of 1 year is performed in Matlab. Fig.2 shows the power profiles of microgrid
and ESS stored energy profile between hours 1920-1944, with 75kW diesel generator, 80kW wind
turbine, 30kWp PV and 8kW/15kWh ESS. As is shown in Fig.2, the dump load is in use only when
the ESS is at full capacity or if P
ess,ch
(t) reaches P
ess
, which occurs mostly during high wind at night.
During periods of low wind, the ESS is able to absorb the excess energy.
-10
10
30
50
70
90
110
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
k
W
Power Curve Load
Diesel Generation
Wind generation
PV Generation
Dump Load Consumption
Load Curtailment
ESS Power

0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
k
W
h
ESS Stored Energy
ESS Stored Energy

Fig.2. Power profiles of microgrid and ESS stored energy profile between hours 1920-1944
C. Optimization Results
Optimization is performed in two scenarios with diesel price, c
fuel
, of 0.36 $/kWh. In Scenario 1
environmental benefit of wind turbine and PV is not considered. Again in Scenario 2 the same
simulations are done with considering environmental benefit. The results of optimal sizing of DGs in
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the two scenarios are shown in Table V.
Table V. Optimization results in Scenario 1 and Scenario 2

Wind Turbine
(kW)
PV
(kW)
Battery
Diesel Unit
(kW)
Annual
Cost ($)
Environmental
benefit, V
ev
($)
F
($)
P
ess
(kW) E
ess
(kWh)
Scenario 1: 67 28 6 10 85 219,760 3217 216,543
Scenario 2: 78 31 8 15 76 221,040 4639 216,401

Results show that considering the environmental benefit of RES DGs will increase the capacity of
wind turbine and PV in the optimization result. Although the annual total cost is increased in Scenario
2, but since the environmental benefit is also increased, the value of objective function in Equation(1)
can be lower than Scenario 1, after deducting the environmental benefit from the cost. By considering
the environmental benefit of RES DGs, the true value of RES can be better reflected in the planning
result.
D. Sensitivity Analysis
A sensitivity study is performed to investigate the impact of diesel fuel price and wind speed,
which represents possible future scenarios, on the optimization result.
As shown in Fig.3 (a), the increase of diesel fuel price leads to a decrease of proportion of diesel
generator in microgrid and an increase of contribution of wind and PV generation. For remote areas
with a relatively high cost of diesel fuel transportation, the value of microgrid utilizing renewable
energy resources can be even raised.
The average wind speed, which represents the level of wind resource abundance, is an important
factor influencing the economy of wind utilization. As shown in Fig.3 (b), the proportion of wind
turbine in the optimization result increases with the increase of the average wind speed. The planning
capacity of PV has a slight increase due to the complementary characteristics of wind and solar
resource. Its noticed that, when the average wind speed is 3.5m/s, which is close to the cut-in wind
speed of 3m/s of the wind turbine [17] in this study, the capacity of wind turbine and PV is zero in the
planning result due to the low utilization value of wind.
0
20
40
60
80
100
120
0.1 0.2 0.3 0.4 0.5 0.6
P
o
w
e
r

r
a
t
i
n
g


(
k
W
)
Diesel fuel price ($/kWh)
Diesel generator Wind turbine PV ESS power

0
20
40
60
80
100
120
3.5 4.5 5.5 6.5 7.5 8.5
P
o
w
e
r

r
a
t
i
n
g


(
k
W
)
Average wind speed (m/s)
Diesel generator Wind turbine PV ESS power

a) Sensitivity of diesel price, wind speed=7.71m/s b) Sensitivity of wind speed, diesel price=0.4$/kWh
Fig. 3. Optimization results based on various diesel fuel price and wind speed

6. CONCLUSIONS
This paper presented a study on optimal unit sizing for remote autonomous microgrid with
multiple energy sources. An optimal unit sizing model is proposed, with the objective of minimizing
total cost and maximizing environmental benefit under the constraint of system reliability. Operation
and control problem is considered in the planning process. An energy dispatching strategy aiming to
maximize the utilization of RES and fuel saving is proposed in the paper. PSO algorithm is used to
solve the problem, in which hourly simulation of one year is performed when searching the optimal
solution.
The proposed approach has been applied to a representative case study in two scenarios with and
without considering environmental benefit respectively. Results show that considering the
9

environmental benefit of RES DGs will increase the proportion of wind turbine and PV with a
considerable increase of environmental benefit. Although there is a slight increase in the annual total
cost, the true value of RES can be better reflected in the planning result.
The impact of diesel fuel price and average wind speed on unit sizing of microgrid has also been
investigated. Results show that the increase of diesel fuel price and average wind speed leads to a
decrease of proportion of diesel generator in microgrid and an increase of contribution of wind and PV
generation. For remote rural areas with a relatively high cost of diesel fuel transportation and abundant
renewable energy resource, the value of microgrid utilizing renewable resources can be even raised.

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