Optimal Control of Distributed Energy Resources and Demand Response under Uncertainty

Abstract

presented at IAEE’s Rio 2010 International Conference, June 6-9, 2010, InterContinental Rio Hotel – Rio de Janeiro, Brazil
Abstract: We take the perspective of a microgrid that has installed distribution energy resources (DER)in the form of distributed generation with combined heat and power applications. Given uncertainelectricity and fuel prices, the microgrid minimizes its expected annual energy bill for various ca-pacity sizes. In almost all cases, there is an economic and environmental advantage to using DERin conjunction with demand response (DR): the expected annualized energy bill is reduced by 9%while CO2 emissions decline by 25%. Furthermore, the microgrid's risk is diminished as DER maybe deployed depending on prevailing market conditions and local demand. In order to test a policymeasure that would place a weight on CO2 emissions, we use a multi-criteria objective function thatminimizes a weighted average of expected costs and emissions. We ¯nd that greater emphasis onCO2 emissions has a bene¯cial environmental impact only if DR is available and enough reservegeneration capacity exists. Finally, greater uncertainty results in higher expected costs and riskexposure, the e®ects of which may be mitigated by selecting a larger capacity.
Keywords: Distributed generation, demand response, CO2 emissions, stochastic optimization