Optimal battery technology selection and incentive-based demand response program utilization for reliability improvement of an insular microgrid

Abstract Improvement of reliability is one of the important issues in the exploitation of microgrid (MG). In this regard, two methods of optimal use of batteries as well as interaction with the consumer in the framework of the use of various types of the demand response programs (DRPs) are the most efficient approaches to improve reliability. This paper presents approaches to select the technology, capacity and optimal rated power of the batteries used in an insular MG, which provides its power through the renewable energy sources (RESs) only. Because of the available uncertainties in power generation of RES, a scenario-based method is used. The purpose of using batteries in this paper is to improve reliability and increase profits from the sales of energy. By applying optimization of the incentive-based DRP in MG with optimization of incentive prices, their effect on the objective functions simultaneously and separately is investigated. The algorithm used for the desired optimization is exchange market algorithm (EMA). The results of optimization indicate the positive effect of the batteries and the incentive-based DRP on the reliability and profitability of the MG.