What is a microgrid cost model?

The National Renewable Energy Laboratory was commissioned by the U.S. Department of Energy to complete a microgrid cost study and develop a microgrid cost model. The goal of this study is to elucidate the variables that have the highest impact on costs as well as potential areas for cost reduction. This study consists of two phases.

How does microgrid optimization work?

With this technique, the local demand is reduced from the microgrid, thereby reducing the total system cost. The optimization method also controls the market price based on the energy demand of baseload and peak load.

What is the DOE's microgrid cost study?

The U.S. Department of Energy’s (DOE’s) microgrid cost study is identifying the costs of components, integration, and installation of U.S. microgrids; project cost improvements; and technical accelerators during the next 5 years and beyond.

What is cost-optimized microgrid architecture?

Cui et al. presents in a traditional approach to design cost-optimized microgrid architectures subject to reliability constraints. The method is based on DP and consists on determining the optimal power line layout between microsources and load points, given their locations and the rights of way for possible interconnections.

Why is planning a cost-effective microgrid a complex process?

Despite all these advantages, planning a cost-effective microgrid is considered as a complex process due to all alternatives to consider at any decision level. Every decision taken in a planning process will influence the capacities of the system in a competitive energy market. Every planning process is built around specific goals and constraints.

What percentage of microgrid costs are soft costs?

Soft costs, which include interconnection, financing, engineering, procurement, and construction management, range from 0.4%–1.6% of total microgrid costs, as shown in Figure 24. Figure 25 shows the total percentage of soft costs in relation to total microgrid costs.