Analysis of Microgrid Operation for Distribution System Support with Different Power Purchase Agreement Terms

Recently in the power system, different scales of micro-grid can connect to the distribution system to support the distribution system operation. However, depending on the power purchase agreement terms determined by the distribution system operator for the microgrid investors, cost of energy could become elevated, making the inclusion of distributed energy resources less attractive to some other stakeholders in terms of cost. This study presents the analysis of microgrid operation for distribution system support considering different power purchase agreement terms. A two-level approach is proposed. In the first level, the optimal capacity of the MGs is determined. The second level includes the yearly co-operation of the distribution system operator and microgrids. The decision-making of the distribution system operator and microgrids under the management of a responsible aggregator and their consequences on the distribution system customer cost of energy is analyzed. Case studies are performed on a modified IEEE 33 -Bus System. Relevant results and suggestions are provided for an effective stakeholders' participation.