Design of a Methodology to Evaluate the Impact of Demand-Side Management in the Planning of Isolated/Islanded Microgrids

Abstract

The integration of Demand-Side Management (DSM) in the planning of Isolated/Islanded Microgrids (IMGs) can potentially reduce total costs and customer payments or increase renewable energy utilization. Despite these benefits, there is a paucity in literature exploring how DSM affects the planning and operation of IMGs. The present work compares the effects of five different strategies of DSM in the planning of IMGs to fulfill the gaps found in the literature. The present work embodies a Disciplined Convex Stochastic Programming formulation that integrates the planning and operation of IMGs using three optimization levels. The first level finds the capacities of the energy sources of the IMG. The second and third levels use a rolling horizon for setting the day-ahead prices or the stimulus of the DSM and the day-ahead optimal dispatch strategy of the IMG, respectively. A case study shows that the Day-Ahead Dynamic Pricing DSM and the Incentive-Based Pricing DSM reduce the total costs and the Levelized Cost of Energy of the project more than the other DSMs. In contrast, the Time of Use DSM reduces the payments of the customers and increases the delivered energy more than the other DSMs.