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Please use this identifier to cite or link to this item: http://hdl.handle.net/1942/26569

Title: The impact of policy on microgrid economics: A review
Authors: Milis, Kevin
Peremans, Herbert
Van Passel, Steven
Issue Date: 2018
Abstract: This paper investigates the impact of government policy on the optimal design of microgrid systems from an economic cost minimisation perspective, and provides both an overview of the current state of the art of the field, as well as highlighting possible avenues of future research. Integer programming, to select microgrid components and to economically dispatch these components, is the optimisation method of choice in the literature. Using this methodology, a broad range of policy topics is investigated: impact of carbon taxation, economic incentives and mandatory emissions reduction or mandatory minimum percentage participation of renewables in local generation. However, the impact of alternative tariff systems, such as capacity tariffs are still unexplored. Additionally, the investigated possible benefits of microgrids are confined to emissions reduction and a possible decrease in total energy procurement costs. Possible benefits such as increased security of supply, increased power quality or energy independence are not investigated yet. Under the expected policy measures the optimal design of a microgrid will be based on a CHP-unit to provide both heat and electricity, owning to the lower capital costs associated with CHP-units when compared to those associated with renewable technologies. This means that current economic analyses indicate that the adoption of renewable energy sources within microgrids is not economically rational.
Notes: [Milis, Kevin; Peremans, Herbert; Van Passel, Steven] Univ Antwerp, Fac Appl Econ Sci, Dept Engn Management, Antwerp, Belgium. [Van Passel, Steven] Hasselt Univ, Ctr Environm Sci, Hasselt, Belgium.
URI: http://hdl.handle.net/1942/26569
DOI: 10.1016/j.rser.2017.08.091
ISI #: 000417078200117
ISSN: 1364-0321
Category: A1
Type: Journal Contribution
Appears in Collections: Research publications

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