Economic multi-objective approach to design off-grid microgrids: A support for business decision making

Abstract Designing off-grid microgrids is a costly and risky activity, especially for newly electrified communities in developing countries. Private developers and researcher have been using several economic indicators to value the profitability of an investment, such as Net Present Value, Discounted Payback Period, Levelized Cost of Electricity; however, each index has its advantages and specific limitations. Selecting a single objective may lead the developer to misestimate the profitability of a project, because a single index cannot accommodate the variety of requirements of the business process. Acknowledging this, this study proposes a wide analysis for highlighting the effects of different indicators onto the optimal design of an off-grid system. A multi-objective approach that optimizes together different economic indicators is proposed, based on the results of a preliminary analysis on single-objective formulations. A sensitivity analysis with respect to the electricity price, the load curtailment cost and the dispatching strategy is also performed. A numerical case study is proposed for a possible off-grid microgrid in Soroti, Uganda, which well represents a hard environment for business development. Results suggest that the proposed multi-objective approach provides intermediate configurations that are a good compromise between multiple objectives, thus satisfying the difficult environment developers are enduring.