Economic dispatch for a microgrid considering renewable energy cost functions

Microgrids are operated by a customer or a group of customers for having a reliable, clean and economic mode of power supply to meet their demand. Understanding the economics of system is a prime factor which really depends on the cost/kWh of electricity supplied. This paper presents an easy and simple method for analyzing the dispatch rate of power. An isolated microgrid with solar and wind is considered in this paper. Generation cost functions are modeled with the inclusion of investment cost and maintenance cost of resources. Economic dispatch problem is solved using the reduced gradient method. The effects on total generation cost, with the inclusion of wind energy and solar energy into a microgrid is studied and found the most profitable solution by considering different practical scenarios. The paper gives a detailed correlation between the cost function, investment cost, lifetime and the fluctuant energy forecasting of wind and solar resources. It also discusses the advantages of including the renewable energy credits for the solar panel.