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This paper presents an algorithm for the microgrid planning as an alternative to the co-optimization of generation and transmission expansion planning in electric power systems. The integration of microgrids in distribution systems will offer a decentralized control of local resources for satisfying the network reliability and the power quality required by local loads. The objective in this paper is to minimize the total system planning cost comprising investment and operation costs of local microgrids, the co-optimized planning of large generating units and transmission lines, and the expected cost of unserved energy. The cost of unserved energy reflects the cost of load shedding which is added to the objective function for reliability considerations. The microgrid-based co-optimization planning problem is decomposed into a planning problem and annual reliability subproblem. The optimal integer planning decisions calculated in the planning problem will be examined against the system reliability limits in the subproblem and the planning decisions will be revised using proper feasibility cuts if the annual reliability limits are violated. Numerical simulations demonstrate the effectiveness of the proposed microgrid-based co-optimization planning in power systems and explore the economic and reliability merits of microgrid planning as compared to grid-based generation and transmission upgrades.
Khodaei et al. (Mon,) studied this question.
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