Ownership Cost Calculations for Distributed Energy Resources Using Uncertainty and Risk Analyses

TL;DR

This paper introduces a comprehensive framework for calculating ownership costs of distributed energy resources in smart grids, incorporating uncertainty and risk analysis to improve decision-making and operational efficiency.

Contribution

It proposes and compares four novel approaches for ownership cost calculation using risk analysis, selecting the best method based on simulation results for a diesel generator.

Findings

The best approach minimizes risk in ownership cost estimation.

Simulation results validate the effectiveness of the proposed methods.

Applicable to various microgrid components with minor modifications.

Abstract

Ownership cost calculation plays an important role in optimal operation of distributed energy resources (DERs) and microgrids (MGs) in the future power system, known as smart grid. In this paper, a general framework for ownership cost calculation is proposed using uncertainty and risk analyses. Four ownership cost calculation approaches are introduced and compared based on their associated risk values. Finally, the best method is chosen based on a series of simulation results, performed for a typical diesel generator (DiG). Although simulation results are given for a DiG (as commonly used in MGs), the proposed approaches can be applied to other MG components, such as batteries, with slight modifications, as presented in this paper. The analyses and proposed approaches can be useful in MG optimal design, optimal power flow, and market-based operation of the smart grid for accurate operational cost calculations.