Economic Evaluation of Standalone Distributed Generators under Fuel Price Uncertainty

Standalone distributed generation (DG) is considered as a viable alternative for electrification of remote rural areas, where there is no access to electric network. This paper presents a methodology for optimal selection of fossil fuel based Distributed Generator. The model considers site-specific load constraint, technical and cost parameters of micro gas turbines (GT) and stochastic fuel price. The mathematical formulation computes the Expected unit cost of generation of each DG and arrives at the optimal choice of DG from amongst a set of available DGs. Bayes decision procedure approach has been applied here for the optimization. The model involves discrete optimization with binary decision variables. A numerical case example has been illustrated in this paper with sensitivity analysis of key cost parameters.