The Economics of Microgrids

An incisive and practical exploration of the engineering economics of microgrids

In The Economics of Microgrids, a pair of distinguished researchers delivers an expert discussion of the microeconomic perspectives on microgrids in the context of low-carbon, sustainable energy delivery. In the book, readers will explore an engineering economics framework on the investment decisions and capital expenditure analyses required for an assessment of microgrid projects. The authors also examine economic concepts and models for minimizing microgrid operation costs, including the cost of local generation resources and energy purchases from main grids to supply local loads.

The book presents economic models for the expansion of microgrids under load and market price uncertainties, as well as discussions of the economics of resilience in microgrids for optimal operation during outages and power disturbances. Readers will also find:

• A thorough introduction to the engineering and economics of microgrids
• Comprehensive explorations of microgrid planning under uncertainty
• Practical discussions of microgrid expansion planning, operations management, and renewable energy integration
• Fulsome treatments of asset management and resilience economics in microgrids

Perfect for senior undergraduate and graduate students as well as researchers studying power system design, The Economics of Microgrids will also benefit professionals working in the power system industry and government regulators and policymakers with an interest in microgrid technologies and infrastructure.

Amin Khodaei, PhD, is a Professor of Electrical and Computer Engineering at the University of Denver. His research is focused on the climate crisis, the grid of the future, and grid-enabling technologies including artificial intelligence and quantum computing. He has published over 200 peer-reviewed technical articles on various aspects of electric grid modernization.

Ali Arabnya, PhD, (a.k.a. Ali Arab) is a Research Professor of Electrical and Computer Engineering at the University of Denver. Prior, he was a consultant climate economist with the World Bank in Washington, DC. His research is focused on climate resilience, decarbonization, energy systems, and climate finance.

Chapter 1: Fundamentals of Microgrids

            Introduction to microgrids

            Distributed energy resources for microgrids   

            The role of microgrid in power systems

                        Reliability

                        Resiliency

                        Power quality

            Microgrid technologies

                        Microgrid power management and control 

                        Microgrid Islanding

                        Microgrid Protection

                        Microgrid Communications and Human Machine Interface (HMI)

            Overview

Chapter 2: Microgrid Operations Economics

            Fundamentals of microgrid operation

Dynamics of optimal scheduling in microgrids

An economic model for microgrid optimal scheduling with multi-period islanding

Case study

Summary

Chapter 3: Resilience Economics in Microgrids

            The art of resilience

            The impact of uncertainty

            An economic model for microgrid resilience

            Case study

            Summary

Chapter 4: Community Microgrid Operations Management

            Principles of microgrid operations

            Economic variables in community microgrid operations

            An economic model for community microgrid operations management

                        Master controller

                        Local controller

                        Price signal calculation

                        Uncertainty consideration

            Case study

            Summary

Chapter 5: Provisional Microgrids for Renewable Energy Integration

            Economic considerations in provisional microgrids

            An economic model for provisional microgrids

                        Component Modeling

                        Master Problem Scheduling

            Case study

            Summary

Chapter 6: Engineering Economics of Microgrid Investments

            Principles of engineering economics in microgrids

            Economic variables in microgrid investments

            Capital expenditure and cash flow analysis in microgrids

                        Microgrid with a Single DER

                        Microgrid with Multiple DERs

            Case study

            Summary

Chapter 7: Microgrid Planning under Uncertainty

            Dynamics of uncertainty in microgrids

            Economics of uncertainty in microgrids

            An economic model for microgrid planning under uncertainty

                        Microgrid Planning Objective

                        Planning Constraints

                        Operational Constraints

                        Economic Assessment of DER Selection

            Case study

            Summary

Chapter 8: Microgrid Expansion Planning

            Principles of microgrid expansion

            Economic variables for microgrid expansion

                        AC vs. DC Microgrid Planning

                        Hybrid Microgrid Planning

            Economic viability assessment model

            Case study

            Summary

Chapter 9: Microgrids for Asset Management in Power Systems

            Principles of asset management

            Economic variables in microgrid asset management

                        The IEEE Standard

                        Transformer asset management via microgrid optimal scheduling

            An economic model for integration of microgrids in asset management

                        Microgrid Optimal Scheduling

                        Transformer Asset Management

            Case study

            Summary

Chapter 10: Dynamics of Microgrids in Distribution Network Flexibility  

            Principles of distribution network flexibility

            Economic variables for microgrids in electricity distribution networks 

            Economic models for distribution network operations under microgrid dynamics

                        Operation Constraints

                        Flexibility Constraints

                        Islanding Considerations

            Case study

            Summary

Chapter 11: Microgrid Operations under Electricity Market Dynamics

            Principles of microgrid operations under electricity markets

            Economic variables of electricity markets in microgrid operations

            An economic model for microgrid operations planning under market dynamics

                        Microgrid level

                        DMO level

                        ISO level

            Case study

            Summary

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