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The role of co-optimization in trading off cost and frequency regulation service for industrial microgrids

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Listed:
  • Lyu, Chenghao
  • Wang, Weiquan
  • Wang, Junyue
  • Bai, Yilin
  • Song, Zhengxiang
  • Wang, Wei
  • Meng, Jinhao

Abstract

The growing adoption of renewable energy-based industrial microgrids challenges grid frequency stability. It highlights the need for microgrids to participate in Frequency Regulation (FR) service while preserving their economic benefits. Current policies, which prioritize FR participation based on revenue incentives, result in a suboptimal balance between economic and FR objectives. To address this issue, this study introduces a co-optimization approach and underscores its role in trade-off exploration. An actual case study validates the approach and reveals the conflict between these two objectives. The results of co-optimization reveal the impacts of Renewable Energy Sources (RES) and Energy Storage Systems (ESS) through Pareto front analysis. While RES can significantly reduce the power cost of EIIMs by up to 96.1%, it has a negative impact on frequency stability. This negative impact, measured through an energy-based method, results in deviations from the grid's preferred frequency regulation power by up to 154.0%. Meanwhile, the positive impact of ESS on improving the trade-off situation is demonstrated through the “Least Misery” principle. Compared to having no ESS, incorporating a 100 kW·h ESS achieves win-win outcomes, enhancing minimal dissatisfaction by 10.16%. Furthermore, a comparative analysis with the current policy approach showcases the risks of obtaining suboptimal solutions under existing policies. Some radical policy settings result in a dissatisfaction rate larger than 100%. This study elucidates the role of co-optimization by advancing comprehension of the impacts of RES and ESS while providing a method to achieve the appropriate trade-off.

Suggested Citation

  • Lyu, Chenghao & Wang, Weiquan & Wang, Junyue & Bai, Yilin & Song, Zhengxiang & Wang, Wei & Meng, Jinhao, 2024. "The role of co-optimization in trading off cost and frequency regulation service for industrial microgrids," Applied Energy, Elsevier, vol. 375(C).
    • Handle: RePEc:eee:appene:v:375:y:2024:i:c:s0306261924015149
    DOI: 10.1016/j.apenergy.2024.124131
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