Multi-Objective Linear Programming for Optimizing a Local Energy Community DC Microgrid System and Business Model

Abstract

Energy security is essential to ensure that energy is always available, affordable, and socially acceptable. To realize these aspects, this paper presents a design and business model for installing and operating a local energy community DC microgrid that allows individual households to power electrical loads for their homes and the whole community. Interested households can purchase solar PV units at a discounted price through a discount by the hosting local government unit (LGU). A percentage of the energy harnessed will be transferred through the microgrid to electrify public infrastructures such as streetlights, which covers the discount given. To optimize the setup so that both parties see the cost-saving potential of this new concept, a multi-objective linear programming (MOLP) model was developed to minimize the total cost by the participating households and the LGU. The optimization model was applied to a sample case study involving a community in the Philippines. Sensitivity analysis was also performed to identify the change in the objectives’ values when the case study’s inputs were changed. With the proper inputs to the model, the developed MOLP model successfully provided the optimal design and setup of the DC microgrid where both households and LGU have a lower lifetime electricity cost than relying on the main grid alone or the typical standalone solar energy setup.

Keywords

• Cost optimization
• decentralized microgrid
• energy generation
• energy storage
• peer-to-peer energy sharing
• renewable energy