Dedicated Microgrid Planning and Operation Approach for Distribution Network Support With Pumped-Hydro Storage

This article presents a dedicated microgrid planning and operation approach for distribution network (DN) support considering pumped-hydro storage (PHS). The term dedicated connotes the service responsibility of the microgrid rather than its operational independence. A nondedicated microgrid has a dual responsibility to serve the distribution system and commercial/industrial consumers. The payback period and lifetime benefit of a nondedicated microgrid partly rely on the time-of-use pricing mechanism, which drives the microgrid to maximize profit, and could compromise the overall operation of the DN. This article develops an approach for engaging dedicated microgrids having full obligation to serve the distribution system only. For effectively managing the operation of the microgrid without jeopardizing the operation of the DN, the approach considers a novel short-term operation capacity index, power purchase agreement, and levelized energy cost. Specific functionalities of PHSs are used to relax the microgrids sensitivity to operation penalty arising from output power deviation, and thus allowing the microgrid to increase profits. The results obtained showed mutual benefits for the system operator and microgrid owner since the DN operation cost was reduced and the microgrid owner increased its revenue.