Analyzing the Impact of Renewable Energy Incentives and Parameter Uncertainties on Financial Feasibility of a Campus Microgrid
The popularity of microgrids is increasing considerably because of their environmental and technical advantages. However, the major challenge in microgrid integration is its financial feasibility due to high capital costs. To address this obstacle, renewable energy incentive programs, which are the...
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| Format: | Article |
| Language: | English |
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MDPI AG
2018-09-01
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| Series: | Energies |
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| Online Access: | http://www.mdpi.com/1996-1073/11/9/2446 |
| _version_ | 1811279089719312384 |
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| author | Vu Ba Hau Munir Husein Il-Yop Chung Dong-Jun Won William Torre Truong Nguyen |
| author_facet | Vu Ba Hau Munir Husein Il-Yop Chung Dong-Jun Won William Torre Truong Nguyen |
| author_sort | Vu Ba Hau |
| collection | DOAJ |
| description | The popularity of microgrids is increasing considerably because of their environmental and technical advantages. However, the major challenge in microgrid integration is its financial feasibility due to high capital costs. To address this obstacle, renewable energy incentive programs, which are the motivation of this study, have been proposed in many countries. This paper provides a comprehensive evaluation of the technical and financial feasibility of a campus microgrid based on a techno-economic analysis using the Microgrid Decision Support Tool, which was implemented to support decision-making in the context of microgrid project investment. A method for microgrid design aiming to maximize system profitability is presented. The optimal microgrid configuration is selected depending on financial indices of the project, which directly address the returns on an investment. Most importantly, this analysis captures all the benefits of financial incentives for microgrid projects in California, U.S., which presents a key difference between the California market and other markets. The impact of incentives and uncertain financial parameters on the project investment is verified by sensitivity analysis. The outcomes show that the optimal configuration generates significant electricity savings, and the incentives strongly determine the financial feasibility and the optimal design of a microgrid. |
| first_indexed | 2024-04-13T00:47:27Z |
| format | Article |
| id | doaj.art-2b02c4cdee9046d1a0cdb9cf069fd03e |
| institution | Directory Open Access Journal |
| issn | 1996-1073 |
| language | English |
| last_indexed | 2024-04-13T00:47:27Z |
| publishDate | 2018-09-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Energies |
| spelling | doaj.art-2b02c4cdee9046d1a0cdb9cf069fd03e2022-12-22T03:09:57ZengMDPI AGEnergies1996-10732018-09-01119244610.3390/en11092446en11092446Analyzing the Impact of Renewable Energy Incentives and Parameter Uncertainties on Financial Feasibility of a Campus MicrogridVu Ba Hau0Munir Husein1Il-Yop Chung2Dong-Jun Won3William Torre4Truong Nguyen5School of Electrical Engineering, Kookmin University, 861-1, Jeongneung-dong, Seongbuk-gu, Seoul 02707, KoreaSchool of Electrical Engineering, Kookmin University, 861-1, Jeongneung-dong, Seongbuk-gu, Seoul 02707, KoreaSchool of Electrical Engineering, Kookmin University, 861-1, Jeongneung-dong, Seongbuk-gu, Seoul 02707, KoreaDepartment of Electrical Engineering, Inha University, 100, Inha-ro, Michuhol-gu, Incheon 402-751, KoreaUniversity of California San Diego, 9500 Gilman Drive, La Jolla, CA 92093, USAUniversity of California San Diego, 9500 Gilman Drive, La Jolla, CA 92093, USAThe popularity of microgrids is increasing considerably because of their environmental and technical advantages. However, the major challenge in microgrid integration is its financial feasibility due to high capital costs. To address this obstacle, renewable energy incentive programs, which are the motivation of this study, have been proposed in many countries. This paper provides a comprehensive evaluation of the technical and financial feasibility of a campus microgrid based on a techno-economic analysis using the Microgrid Decision Support Tool, which was implemented to support decision-making in the context of microgrid project investment. A method for microgrid design aiming to maximize system profitability is presented. The optimal microgrid configuration is selected depending on financial indices of the project, which directly address the returns on an investment. Most importantly, this analysis captures all the benefits of financial incentives for microgrid projects in California, U.S., which presents a key difference between the California market and other markets. The impact of incentives and uncertain financial parameters on the project investment is verified by sensitivity analysis. The outcomes show that the optimal configuration generates significant electricity savings, and the incentives strongly determine the financial feasibility and the optimal design of a microgrid.http://www.mdpi.com/1996-1073/11/9/2446microgrid designfinancial feasibility analysisrenewable energy incentivestax credits |
| spellingShingle | Vu Ba Hau Munir Husein Il-Yop Chung Dong-Jun Won William Torre Truong Nguyen Analyzing the Impact of Renewable Energy Incentives and Parameter Uncertainties on Financial Feasibility of a Campus Microgrid Energies microgrid design financial feasibility analysis renewable energy incentives tax credits |
| title | Analyzing the Impact of Renewable Energy Incentives and Parameter Uncertainties on Financial Feasibility of a Campus Microgrid |
| title_full | Analyzing the Impact of Renewable Energy Incentives and Parameter Uncertainties on Financial Feasibility of a Campus Microgrid |
| title_fullStr | Analyzing the Impact of Renewable Energy Incentives and Parameter Uncertainties on Financial Feasibility of a Campus Microgrid |
| title_full_unstemmed | Analyzing the Impact of Renewable Energy Incentives and Parameter Uncertainties on Financial Feasibility of a Campus Microgrid |
| title_short | Analyzing the Impact of Renewable Energy Incentives and Parameter Uncertainties on Financial Feasibility of a Campus Microgrid |
| title_sort | analyzing the impact of renewable energy incentives and parameter uncertainties on financial feasibility of a campus microgrid |
| topic | microgrid design financial feasibility analysis renewable energy incentives tax credits |
| url | http://www.mdpi.com/1996-1073/11/9/2446 |
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