Least‐Cost for High Renewable Energy Share in the Distributed Energy System through Integrated Supply and Demand Side Management

Abstract

This study analyzes energy supply and demand‐side management strategies to increase the renewable energy share in a distributed energy system (DES), which includes demand response (DR) options and different renewable energy sources (RES) and energy storage systems (ESS). To analyze the least costs for increasing the renewable energy share by integrating the DR, RES, and ESS, four scenarios of the DES were generated. Then, a new optimization model was proposed to identify the optimal design and operation strategies, which includes maximizing the profit as an objective function subject to various constraints, such as technical capacity and electricity price. To illustrate the capability of the proposed model, this study presented a case study of the DES for the residential sector of Jeju Island, Korea. The results showed that the optimal scenario, involving the integration of the DR, RES, and ESS, shows 0.115 $/kW hr of the levelized cost of electricity and 10% of renewable energy share, which correspond to 32.7% and 31.5% improvement, respectively, compared to the baseline. Additionally, the practical strategies to meet the Korean target of the high‐share RES were discussed through a sensitivity analysis of major external factors, such as carbon tax, incentives, and the electricity trading price in electricity markets.