Business cases for isolated and grid connected microgrids: Methodology and applications

Abstract Microgrids are receiving increasing attention from power systems planners as a means to integrate distributed energy resources (DER) including renewable energy resources into the grid, and as a means of balancing the variability of renewable resources and loads with flexible generation. A key to justifying microgrids is establishing their business case. This helps to set the structure and configuration of the microgrid, including defining the DER required to feed part or all of the loads and the level of control required from the microgrid controller. This paper proposes a systematic approach and methodology for formulating and quantifying a microgrid business case. The framework adapts the use case approach to the microgrid context. It defines stakeholders, benefits and beneficiaries and determines the dependency of the business case on microgrid technologies. A method to quantify and allocate benefits is proposed. Applications to practical microgrids are discussed, including remote communities, remote mining sites and grid connected critical distribution grids.