New Dynamic Time-of-Use Tariff for Islanded Microgrid System with High Penetration of Renewable Energy

Abstract

This paper proposes a dynamic time-of-use (d-TOU) tariff scheme for microgrid (MG) systems in islanded mode. The main problem for the islanded MG is the high cost of electricity, and the output from renewable energy is uncontrollable compared to the traditional grid. Therefore, this paper focuses on developing a suitable tariff scheme that provides reliability and financial benefits for both utility and customer. The time zone energy prices based on the Levelized Cost of Energy (LCOE) are introduced for islanded MG. The results show a contradiction between islanded MG with the standard traditional power generation TOU. Even though the LCOE obtained for MG is higher than conventional electricity rates, the greenhouse gas (GHG) emissions rate is reduced by 85%. In conclusion, the proposed d-TOU tariff scheme is suitable for the islanded MG system and it is beneficial for both the utility and the customer by not causing a financial burden to the utility and encouraging the customer to make a demand response in the future.