1

Microgrid Planning and Operation: Solar

Energy and Wind Energy
Wencong Su1, Student Member, IEEE, Zhiyong Yuan2, Mo-Yuen Chow3, Fellow, IEEE

heat engines or photovoltaic. The production cost of solar

Abstract--Economic, technology and environmental incentives panels is $0.99 to 2.00/W (2007) plus installation and
are changing the features of electricity generation and supporting equipment [5]. A well-planned power system
transmission. Centralized power systems are giving way to local combining wind energy and solar energy will dramatically
scale distributed generations. At present, there is a need to assess
the effects of large numbers of distributed generators and short-
reduce the overall cost and bring many other benefits.
term storage in Microgrid. To accommodate the high demand of In this paper, section II will present the planning and
renewable energy and the environment policy, the planning and operation of renewable energy such as wind energy and solar
operation of Micro-source generators has been studied using energy with respect to economic issues and environmental
HOMER. Simulation results show a case study of an optimal policy. The case study on Ontario area in Canada shows an
microgrid configuration on Ontario area in Canada. Sensitivity optimal power system configuration on a specific area.
variables are specified to examine the effect of uncertainties (e.g.
Section III will summarize the paper and briefly discuss the
diesel price and average wind speed), especially in a long-term
planning. The effect of air emission penalties on Microgrid future work.
planning is also well presented.
II. MICROGRID PLANNING
Index Terms--Microgrid, Planning, Renewable Energy, Numerous renewable and distributed generation (DG)
Distributed generation, Solar Energy, Wind Energy, Economic
Analysis.
technologies have now progressed to the stage. Prior to the
recent emergence of wind power and solar energy as the major
I. INTRODUCTION forms of generation, the conventional power planning
typically relies on a large single generator. The renewable
A s distributed generations and renewable energy are
becoming the fastest growing segment of the energy
industry, the technical issues and environmental impacts have
energy output tends to fluctuate depending on the time of a
day and the time of a year. There is a need to take the
operational impact of high penetrations of wind and solar
to be studied and understood. The large number of small-scale
power into considerations. In addition, the electricity demand
Microgrid components with their own characteristics is a big
always varies. With short-term storage devices, the mismatch
challenge for Microgrid modeling and planning.
between supply and demand tends to decrease. This section
Electricity generation is intimately embedded with the load
will model the economic and environmental performance of
in Microgrid [1]. Small-scale generators are typically located
solar and wind energy on Ontario area of Canada. Fig. 1
at the users’ sites where the energy generated is used to meet
shows the geographical map of Ontario.
the growing customer needs for electric power with an
emphasis on reliability and power quality [2]. Also renewable
energy usually has lower emissions and operating cost.
Accordingly, there are two fastest-growing renewable energy:
wind energy and solar energy.
The total amount of economically extractable power
available from the wind is considerably more than present
human power use from all sources [3]. An estimated 72TW of
wind power on the Earth potentially can be commercially
viable [4]. Solar energy is the radiant light and heat from the
sun. Solar power provides electrical generation by means of
1
Wencong Su is with the Department of Electrical and Computer
Engineering, North Carolina State University, Raleigh, NC, 27606, USA.
2
Zhiyong Yuan is with the Bradley Department of Electrical and Computer
Engineering, Virginia Polytechnic Institute and State University, Blacksburg,
VA, 24061, USA.
3
Mo-Yuen Chow is with the Department of Electrical and Computer Fig. 1. Geographical map of Ontario, Canada [6]
Engineering, North Carolina State University, Raleigh, NC, 27606, USA.

978-1-4244-6551-4/10/$26.00 ©2010 IEEE


A. Parameters for Planning
All the load data originally comes from the public database
established by the Independent Electricity System Operator
(IESO). The IESO is a non-profit corporate entity established
in 1998 by the Electricity Act of Ontario. The proposed hybrid
power system is schematically shown in Fig. 2. The
components include wind turbines, PV panels, diesel genset,
battery, primary load and converters (e.g. rectifiers, inverters).
Fig. 3 shows the primary load profile used in this study.
Fig. 2. MHOMER implementation of the wind-PV-diesel-battery system
Fig. 3. Daily load profile
PV capital cost and replacement cost are assumed as
$6,000/KW, respectively. The operating and maintenance cost
is relatively negligible. The lifetime of the photovoltaic panels
is assumed to be 40 years. A derating factor of 90%
approximates some uncertainties that reduce electrical output.
The solar resource data of Ontario area
( 4 3 ° 2 3 ′ N 7 9 ° 5 9 ′W ) can be obtained from the NASA
Surface Meteorology and Solar Energy [7]. The annual
average solar radiation of Ontario area is about
3.59 kwh / m 2 / day . Fig. 4 shows the solar resource profile,
namely the clearness index and average radiation, over a
period of 12 months.
2
Fig. 4. Solar resource: clearness index and average radiation over a period of
12 months
The wind statistics are obtained based on observations on
the Ontario area taken between February 2007 - August 2009
daily from 7am to 7pm local time [8]. AOC 15/50 wind
turbine is selected based on its power curve and capacity.
Fig. 5. Wind source of Ontario, Canada
Fig. 6. AOC 15/30 wind turbine power curve
The inverter and converter efficiencies are both assumed to
be 95%. In this case, the peak load is about 259 kW. A
300KW converter must be selected to meet the load for any
hour. A series of converters below 300KW allows us to find
out whether a smaller converter can reduce the overall system
cost. Considering the available capacity and cost, Surrette
4KS25P is chosen. The battery provides bursts of power as a
generator essentially when the load increases sharply at peak
load period, while it absorbs the excessive energy at low load
period. Basically an AC generator is not allowed to operate at
less than 30% capacity. The capital and replacement cost is
 3

assumed to be $21,500/60KW and $20,000/60KW, 100KW converters is preferable when the fuel price is $0.7/L
respectively. and the annual average wind speed is around 5m/s. The cost
of energy (COE) is $0.439/KWh, which is less than any other
B. Economic Analysis in Microgrid Planning
system design. The COE is defined as the ratio between total
The HOMER software, NREL’s micropower optimization annualized cost in dollars and the total electrical energy output
model, can evaluate a range of equipment options over in kW/h per year.
varying constraints and sensitivities to optimize small power Fig. 7 displays a typical daily power output (kW) of the
systems [9]. In this paper, an optimal combination of wind generation in the simulation scenario correlated to hours
Microgrid components is found to meet the required electrical of a day over a period of 12 months. It is shown that power
load with the least total net present cost (NPC). Economics output begins to increase shortly after 7am until 11pm. Wind
play an important role in HOMER simulation. This single power output during the day steadily varies in the similar way
value NPC includes all costs and revenues that occur within and the output reaches its maximum in the middle of a day.
the project lifetime, with future cash flows discounted to the Due to seasonal variations, wind power output begins
present. The total net present cost includes the initial capital decreasing during the months of June, July, August,
cost of the system components, the cost of any component September and October. Accordingly, Fig. 8 shows the diesel
replacements that occur within the project lifetime, the cost of genset’s daily power output over a given year. With the load
maintenance and fuel, and the cost of purchasing power from following dispatch regimes, the power output from the diesel
the grid [10]. The NPC includes the initial cost, component generator will be higher in summer to compensate for wind
replacements, maintenance, and miscellaneous costs [11]. energy shortfalls to meet required load demands.
C1 C2 C3 Cn t
C
NPC=C0 + + + +⋅⋅⋅+ =C0 +∑ n n (1)
1+r 1+r 1+r 1+r n=1 (1+r)
Where NPC is the net present cost; C n is the total annual
costs in any period; r is the interest rate; n is the project
lifetime. At this moment, the annual interest rate is considered
as 8%.
The first fifteen most cost-effective system configurations
of each combination are listed in Table I. Under the
assumption of this analysis, adding wind turbines and battery
banks would indeed reduce the life-cycle cost.

TABLE I OVERALL OPTIMIZATION TABLE Fig. 7. Hourly power output of wind generators over a period of 12 months

Fig. 8. Hourly power output of diesel genset over a period of 12 months

As the concept of Microgrid is becoming more pervasive, a

mixed power system makes the best use of the different types
of local generators. Obviously the electricity supply and
demand is not always balanced at every instantaneous time. It
tends to fluctuate depending on the time of the day and the
time of a year. More specifically, overall wind speed changes
in a predictable way with respect to time factors (e.g.
day/night, seasons). Solar energy depends on the physical
In this case study, a hybrid system with 4 wind turbine
locations and the weather patterns. The energy storages
generators, 240KW diesel generator, 108 batteries and
implemented in Microgrid need to be able to store up

sufficient electrical energy at low electricity consumption and
provide the required power into the power system when
demand increases. In this case study, the storage devices are
represented by batteries.
The daily profiles of the excess electrical production over a
period of 12 months are shown in Fig. 9. The battery state-of-
charge is affected by power output fluctuation. The storage
device provides bursts of power as a generator essentially
when the load increases sharply at peak load period, while it
absorbs the excessive energy at low load period. The daily
profiles of battery state-of-charge in Fig. 10 show high
correlations with the excess electrical energy.
Fig. 9. Daily excess electrical production over a period of 12 months
Fig. 10. Daily battery state-of-charge over a period of 12 months
C. Sensitivity Analysis
At present, the market diesel price is roughly estimated at
$0.7/L. In order to evaluate the effect of fuel price changes on
the optimal system configuration, the prices are also evaluated
in increments of $0.1/L. Thus the average diesel price ranges
4
from $0.5/L - $1.0/L. Accordingly, the next question is
coming up: how do changes in average wind speed and fuel
price affect the optimal system configuration? The planners
should consider this question especially in a long-term
Microgrid planning. Sensitivity analysis are used in this paper
to address this problem.
Fig. 11 shows the result of the sensitivity analysis over a
wide range of wind speed and diesel price. Regardless of the
diesel price, Wind-Diesel-Battery systems are optimal when
the annual average wind speed is no less than 5.5 m/s. At low
wind speeds, the least-cost option changes to Diesel-Battery
and finally diesel-only mode as the diesel price declines.
Otherwise, the hybrid system with Wind-PV-Diesel-Battery is
the optimal system type.
Fig. 11. Sensitivity analysis of fuel price and wind speed
On the optimal system type graph in Fig. 11, we can see the
results for all wind speeds and fuel prices. The optimal system
configuration depends both on the wind speed and the fuel
price. In performing the previous optimal analysis, it was
assumed that the fuel price would be always $0.7/L over the
project lifetime and the annual average wind speed remains
the same. Obviously these assumptions might not be valid as
time changes. We use sensitivity analysis to examine the
effect of these uncertainties on the overall system
performance.
Based on the simulation results, a modeler might be
informed to decide what type of distributed generators to use
over a wide range of wind speeds and fuel price of each area.
For example, at an annual average wind speed of 5.74m/s and
the fuel price of $0.763/L, Wind-Diesel-Battery is the optimal
configuration. At an annual average wind speed of 4.42m/s
and the fuel price of $0.883/L, Wind-PV-Diesel-Battery
outperforms any another combinations. At an annual average
wind speed of 4.06m/s and the fuel price of $0.619/L, the
optimal type changes to Diesel-Battery. But at an annual
average wind speed of 4.22m/s and the fuel price of $0.523/L,
Diesel-Only should be selected over the other systems. The
optimal system configurations under various conditions are
shown in Fig. 12. The total net present cost of each
component is listed as well.
 5

TABLE II OVERALL OPTIMIZATION TABLE (5.881M/S AND $0.78/L)

(a)

(b)

To some extent, wind source is one of the most effective

renewable energy in Ontario. According to the simulation
results, as many wind generators as possible should be used.
In fact, Ontario is at the forefront of wind generators in
Canada with almost 1,100 MW of installed capacity on the
transmission system. Seven large-scale wind farms are in
operation. Ontario is well-positioned for considerable growth
(c) in wind generation with a good selection of sites across the
province [12]. The following wind projects are currently
under development. The simulation results reflect the actual
scenarios in Ontario energy usages.
TABLE III EXPECTED DATE OF WIND FARM IN ONTARIO, CANADA [12]

(d)
Fig. 12. Optimal System Configurations: (a) 4.42m/s,$0.883/L; (b)
5.74m/s,$0.763/L; (a) 4.06m/s,$0.619/L; (a) 4.22m/s,$0.523/L Fig. 11 implies that PV energy does not seem to contribute
to the least-cost configuration too much. An explanation is
The current annual average wind speed is 5.881m/s and the
that the intensity of sunlight at ground level varies with
diesel price is approximate $0.78/L on the area of Ontario. At
latitude and the input data is coming from Ontario area of high
this point, Wind-Diesel-Battery is the optimal system. Five
latitude.
wind turbines, which reach the maximum limit of wind
Solar radiation is unevenly distributed throughout the
turbine capacity, are put into operation to reduce the overall
world. In term of latitude, we can roughly define three zone:
system costs.
the most favorable belt (15-35° N), the moderately favorable
 6

belt (0-15° N), and the least favorable belt (35-45° N) [13].
Ontario area is at a location of 43°N, which is included in the
least favorable belt. As you can see in the solar source data of
Ontario area, the average solar radiation value 3.59
kwh / m 2 / day is quite low. The cloudiness index is another
important factor that can affect the solar radiation
significantly. Although solar energy is one of the most popular
renewable energy with an ample supply, it might not be a
good option in this specific area due to the economic issues.
Thus, more photovoltaic panels probably cannot offer
financial benefits in the area of Ontario. An energy planner Fig. 13. Optimal system configuration with $30/t carbon emission penalty
should take the uncertainty in key variables (e.g. wind speed
and fuel price) into account.
D. Environmental Issues in Microgrid Planning
The growing need of reducing Carbon emissions makes the
concept of Microgrid even more attractive. Microgrid has the
ability to reduce emissions compared to centralized utility
systems. The air emissions of the proposed Microgrid system
on Ontario area of Canada are estimated in Table IV. The data
can be used to explore the effect of emission penalties on
Microgrid planning.
Fig. 14. Optimal system configuration with $50/t carbon emission penalty
TABLE IV AIR EMISSIONS FOR THE PROPOSED SYSTEM

In previous simulations, the emission penalties for a

particular pollutant are not taken into consideration. However,
Fig. 15. Optimal system configuration with $70/t carbon emission penalty
under the latest update to the Canada federal climate-change
plan, the price in all cases would start at $15 per ton of carbon
and rise in steps to $65 by 2018 [14]. Thus we applied a
specific carbon dioxide emission penalty $30/ton, $50/ton and
$70/ton to reschedule the dispatchable energy source. The
emission cost appears in addition to the operating and
maintenance costs. For the systems with identical or similar
configurations, carbon dioxide penalty index will be an
important factor. As shown in Figs. 13, 14 and 15, the
renewable energy fraction keeps increasing as the carbon Fig. 16. Monthly average electric production with $30/ton carbon penalty
dioxide emission penalty changes from $30/ton to $70/ton.
Accordingly, the renewable energy fraction goes up to 62.1%
starting from 39.4%. Figs. 16 and 17 show the monthly
average electric production with various carbon dioxide
penalties. The environment efficiency is significant. All air
emissions have been reduced by a considerable amount. Table
V and Table VI show the air emissions reduction with Carbon
penalties. On the other hand, conventional generators like the
diesel gensets are playing a less important role to obtain
emission-reduction benefits.
Fig. 17. Monthly average electric production with $70/ton carbon penalty
 7

TABLE V AIR EMISSIONS WITH $30/T PENALTY [4] "Mapping the global wind power resource," [Online]. Available:
Pollutant Emission(kg/yr) Reduction http://www.ceoe.udel.edu/windpower/ResourceMap/index-world.html.
[5] "Nano solar begins production of $1 per watt thin-film panels," [Online].
Carbon Dioxide 574,304 9.31% Available: http://www.nextenergynews.com/news1/next-energy-
Carbon Monoxide 1,418 9.28% news12.19d.html.
Unburned Hydrocarbons 157 9.25% [6] Map of Ontario, Available: http://ontario.alarmforce.com/blog/wp-
content/uploads/ontario.jpg
Particulate Matter 107 9.32% [7] NASA Surface Meteorology and Solar Energy. 2009 [cited 2009 Sep
Sulfur Dioxide 1,153 9.36% 10]; Available: http://eosweb.larc.nasa.gov.sse.
Nitrogen Oxides 12,649 9.31% [8] Wind Statistic 2009, Windfinder, [cited 2009 Sep 5]; Available:
http://www.windfinder.com/windstats/windstatistic_toronto_island.htm
[9] T. Givler, P. Lilienthal, "Using HOMER® software, NREL’s
TABLE VI AIR EMISSIONS WITH $70/T PENALTY
micropower optimization model, to explore the role of gen-sets in small
Pollutant Emission(kg/yr) Reduction solar power systems case study: Sri Lanka." NREL/TP-710-36774,
Carbon Dioxide 426,462 32.65% National Renewable Energy Laboratory, Golden, CO, May 2005.
[10] T. Lambert, P. Gilman, P. Lilienthal, "Micropower system modeling
Carbon Monoxide 1,053 32.63% with HOMER," Integration of Alternative Sources of Energy, John
Unburned Hydrocarbons 117 32.37% Wiley & Sons, Inc. 2006
Particulate Matter 79.4 32.71% [11] P. Bailey, O. Chotimongkol, S. Isono, "Demand analysis and
optimization of renewable energy - sustainable rural electrification of
Sulfur Dioxide 856 32.70% Mbanayili, Ghana," Department of Natural Resources and Environment,
Nitrogen Oxides 9,393 32.65% University of Michigan, 2007, p. 255.
[12] "Wind power in Ontario," IESO. [cited 2009 Oct 1]; Available:
http://www.ieso.ca/imoweb/marketdata/windpower.asp.
In future, other emission factors (e.g. carbon monoxide, [13] A. Acra, M. Jurdi, H. Mu'allem, Y. Karahagopian, Z. Raffoul, "Solar
unburned hydrocarbons, particulate matter, sulfur dioxide, Radiation," in Solar Radiation in Water Disinfection by Solar Radiation:
nitrogen oxides) will be specified to further take the Assessment and Application, International Development Research
Centre (IDRC - Canada), 1990
environmental issues into account. More and more countries [14] P. Gorrie, "Ontario catches break on coal plants," TheStar. 2008.
have developed emissions-trading schemes to impose a cost [Online]. Available: http://www.thestar.com/sciencetech/article/339591
on energy generators that produce carbon dioxide, favoring
renewable generation. For example, tax changes would give a
financial incentive for installing distributed generations that V. BIOGRAPHIES
mainly rely on renewable energy. Utilities are also highly Wencong Su is currently working toward Ph.D.
encouraged to reduce carbon emissions so as to obtain degree in the Department of Electrical and Computer
Engineering at North Carolina State University. He
financial benefits from the long-term view. Eventually, the received B.S. with distinction in Electrical
customers will be highly encouraged to switch to the most Engineering from Clarkson University in 2008
efficient forms of energy generation with less carbon followed by a M.S. in Electrical Engineering from
Virginia Tech in 2009. He also worked as a R&D
emissions if the price of the carbon emissions is fully factored engineer at ABB U.S. Corporate Research Center in
into the energy price. Raleigh, NC, from May to August 2009. His current
research interests are Microgrid modeling and
simulation, distributed control, and Intelligent Energy Management System
III. CONCLUSION
for Charging of Plug-in Hybrid Electric Vehicles.
In this paper, an economic and operational case study of a
Zhiyong Yuan is currently a postdoctoral
hybrid system on Ontario area along with the corresponding
researcher in the Department of Electrical and
simulation is carried out to analyze the optimal combinations Computer Engineering at Virginia Tech. He
of renewable and conventional energy. The use of renewable received his B.S. from Chongqing University in
energy and emission penalty can significantly reduce the total 2001, M.S. and Ph.D. degrees from Tsinghua
University in 2004 and 2007. From February 2007 to
carbon emissions. In future work, we will model a more September 2008, he was an engineer in the State
detailed Microgrid with extended capabilities. There is a need Grid DC Project Construction Company, China. His
to account for various combinations of Microgrid components research interests include EMC in power and
electronic systems, high voltage DC transmission
to evaluate the optimal operating configurations using design, power system wide area monitoring and dynamic analysis.
advanced planning technologies.
Mo-Yuen Chow received the B.S. degree from the
University of Wisconsin, Madison, in 1982 and the
IV. REFERENCES
M.Eng. and Ph.D. degrees from Cornell University,
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Society General Meeting, Oct 16, 2006 Department of Electrical and Computer Engineering,
[2] R. Lasseter, A. Akhil, C. Marnay, J, Stephens, J, Dagle, R. Guttromson, North Carolina State University, Raleigh, and has
S. A. Meliopoulous, R. Yinger, J. Eto, " Integration of distributed energy held the rank of Professor since 1999. His core
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