Abstract

Grid-connected microgrids (MG) can offer significant benefits to electricity systems by improving the security of energy supply with clean renewable energy sources. Unlocking these benefits requires designing suitable business models that can capture the value of MGs and that help removing barriers to their uptake. In this work, we evaluate the profitability and self-sufficiency of optimally designed MGs for new proposed business models. The business models are tested in seventeen different geographical locations which offer a vast diversity of renewable resources, seasonal climatic variability and electricity tariffs. Both Net Billing and Net Metering schemes are tested, for both single-dwelling and community residential customers. Electricity tariffs include both energy volumetric and peak demand charges. We model the optimal sizing and energy management of the MGs by minimizing the total customer electricity costs. The generation mix of the MGs is the result of a bilevel optimization which take into account renewable resources and costs, diesel prices and tariffs. MGs can potentially be comprised by solar PV, wind and diesel generation, together with battery storage systems and demand response resources. We find significant levels of self-sufficiency based on solar sources across the country, and also wind power in some specific locations. The community business model, case which includes the peak demand charges, is generally more profitable than the case of single-dwellings. This shows that the MGs are effective at reducing the peak demand charge of a residential electricity bill. We therefore recommend the further promotion of community energy arrangements as a key way to improve the current very slow uptake of distributed generation in developing countries.