Abstract
Economic operation of a microgrid is becoming increasingly important due to the rapid increase in the number of microgrids now being investigated and deployed. Energy storage becomes an essential part in microgrids, not only to manage technical challenges, but also to provide economic benefits. A battery energy storage system (BESS) is used in this study, since it is the most flexible and reliable storage device now available in distribution networks. This paper presents an optimization method to minimize the economic operation of a microgrid with BESS. The proposed method defines the relation between the rated energy of the BESS and the total economic operation cost of a microgrid when operating in on-grid and off-grid modes. The optimization formulation applies economic dispatch and unit commitment techniques using mixed integer programming (MIP). The examples studied show the effectiveness of energy storage in the economic operation of a microgrid.