Planning Framework of the Residential-scale Microgrid
with Battery Storage
Jeeng-Min Ling, Pin-Lian Chen
Department of Electrical Engineering
Southern Taiwan University of Science and Technology
Tainan City, Taiwan
jmling@stust.edu.tw, DA120103@stust.edu.tw
Abstract—This paper presents the planning framework for
integration of renewable energy resources and battery storage
device in a residential-scale microgrid. The proposed algorithm
combines time-series meteorological data and dispatched
information, conducting the demand response control strategies
of an energy management system, into an optimization
framework for system planning. The optimization technique
achieves near-optimal capacity allocation of renewable energy
resources and storages. Three typical scenarios with different
feed-in tariff and electricity fee are investigated and discussed to
demonstrate the economic effectiveness of the proposed
framework applied to future residential microgrid planning.
Index Terms-- Capacity Planning, Design Optimization, Energy
Resources, Energy Storage.
I. INTRODUCTION
In order to reduce adverse global warming effects caused
by greenhouse gas emissions, developed countries were
obligated with binding reduction targets by Kyoto Protocol
agreement, and Doha Amendment. The rise in global mean
temperature can be expected to be limited below 2 degrees
Celsius relative to the pre-industrial level. The promotion of
renewable electricity generation is recognized as one of the
most effective methods to achieve the reduction of greenhouse
gas emissions.
In response to these climate agreements, most developed
countries set benchmarks for renewable energy utilization,
such as Renewable Portfolio Standards (RPS), which stands
for the ratio of renewable energy or renewable electricity to
total energy. According to the 2014 energy technology
perspectives from International Energy Agency (IEA), global
penetration of renewable energy generation by 2025 must
attain 27% of global energy supply to meet the 2 degrees limit
[1]. IEA World energy Outlook 2013 predicted that the global
power utilities may gain from the growth of wind, solar
power, and other renewable energy sources, and global
average RPS may reach 31.3% by 2035 [2].
Grid complexity is increasing with technological
innovation. Small-size distributed energy resources (DERs)
This work was supported by the Ministry of Science and Technology,
Taiwan, R.O.C., under Grants MOST 105-2221-E-218-020.
evolves rapidly under generic incentive-based demand
curtailment at the demand side of a distribution system. The
characteristics of renewable energy are intermittency, and high
geographical diversity of electricity output. The climate-
dependent nature causes uncertainty in predicting the impacts
of these random renewable generations. With limited control,
high DERs penetration could adversely affect power quality
and system reliability. Analysis of energy management
method with DERs and distributed storage (DS) is becoming
indispensable in the demand-side of a microgrid [3-5].
Well consideration of the operational features of DERs and
DS in the stage of system planning is an encouraging attempt.
Recent papers used alternative schemes to decide the
charge/discharge mode of a battery to increase utilization of
the surplus and deficit energy from DERs [5-8]. However,
long-term uncertain information encountered in short-term
energy management scheduling strategies, such as intermittent
DERs generation from solar and wind, are not adequately
addressed in a future-oriented grid planning [9]. Some of
future scenario in a smart grid, including net energy metering
(NEM) and feed-in tariff (FiT) subsidy variations, should be
properly handled in the stage of system planning. The purpose
of this paper is to propose a planning framework which
considers short-term operational requirements applied
coordinately to photovoltaic, wind turbine and battery storage
device into consideration. The volatile characteristics of
renewable generation deal with the time series simulation of
historical weather recorder reasonably. The near-optimal
allocation of renewable resources is designed to meet actual
needs of the future smart grid operation.
II. THE PROPOSED FRAMEWORK
The proposed planning framework combines distributed
renewable energy generation with energy storage system, and
the hybrid statistical and computational optimization
algorithm evaluates the optimal solution for installation of
DERs system in a microgrid. Qualitative uncertainty due to
variations of meteorological temperature, solar radiation and
wind speed recorder was dealt with statistical Monte Carlo
simulation technique.
A. Battery model
Main energy storage devices used in a DERs system are
lead acid batteries. The energy stored in battery at any state is
related to its previous state and power balance between
generation and consumption during the time span of the
simulation. The storage state can be described using relative
relationships between charge/discharge current at the moment
of present state and next state. The battery state of charge
(SOC) per hour represents a nonlinear interior relationship
associated with its efficiency and resistance in the
charging/discharging mode. During the charging process,
generation from DERs is greater than load consumption, and
during the discharging process the action is reversed. The
available power of battery at a specified time t can be
described as (1), and the equivalent circuit model of battery is
shown in Fig. 1. The Lh shown in (1) represents as self-
discharge leakage rate of battery, 0.007% per hour was used to
simulate for the tested acid-lead battery in the paper.
S (t + Δt ) = S (t )(1− LhΔt ) +ηb (Vb Ib − RIb2 )
Figure 1. Battery equivalent circuit model.
B. System framework
The schematic framework of the proposed system is
depicted in Fig. 2. Energy streams from power conversion
and storage device dominate demand-side energy utilization in
the residential microgrid planning. After considering load
consumption under specified demand, the power
surplus/deficit can be evaluated to control the direction of
battery charging or discharging streams. Noted that the
dispatched information flow in an energy management system,
marked as dotted line in Fig. 2, were conducted based on the
information of energy balance, FiT, and electricity fee. The
power conditioning system in Fig. 2 consists of AC/DC
rectifier, DC/DC converter and DC/AC inverter. Its
framework is depicted in Fig. 3.
Figure 2. Energy and information stream in the proposed system.
Figure 3. Power condition system.
The power conition system is an energy regulator which
controls and converts the power flow in the residential home
energy management system (HEMS). The red and yellow
lines in Fig.2 & 3 represent AC and DC power flow,
respectively. The power output from PV array and wind
turbine is greater than the load demand, the energy surplus
can be scheduled to charge the battery storage system or to
sell out to utility with FiT under a NEM environment of smart
(1) grid. One of important control modes of hourly scheduling in
the HEMS depends on the tariff differnce between FiT and
residential electricity fee.
C. The Optimization Model
Some planning scenarios with different allocations of
battery storage array and hybrid renewable energy system
were investigated to analyze the impacts on system cost and
reliability. Increasing the size of the solar panel, wind turbine
and battery improves system's reliability, but are an expensive
investment. How to achieve an optimal configuration solution
to the proposed system in a micro-grid can be approached as
an optimization problem.
The net present value of the proposed system can be well
reflected by the payback year (PY) of the system investment.
The PY index is used as the objective function to investigate
the performance of the designed system. It summarizes initial
installation capital investment, total maintenance and
operating (M&O) cost and economic profits from selling and
saving electricity during 20 years evaluation period of system
planning. The total investment cost, initial installation cost and
20 years M&O cost are shown in (2)~(4), respectively.
C = Cinstalled + CM &O (2)
Cinstalled = C pv × PV + Cwtg ×WTG + Cbty × BTY + Ci (3)
CM &O = Cbty ,rep + Cwtg ,rep + Cconv ,rep + Cma int (4)
where
Cinstalled : the total initial installed cost,
CM&O : the maintenance and operation (M&O) cost,
Ci : the initial material cost of system wiring and
hardware,
PV,WTG,BTY : the size of PV panel, wind turbine and battery,
 Cpv,Cwtg,Cbty : the unit cost of PV panel ($/Wp), wind turbine
($/Wp) and battery ($/Wh),
Cconv,rep : the replacement cost of power conversion,
Cwtg,rep : the replacement cost of wind turbine,
Cbty,rep : the replacement cost of battery,
Cmaint : the other M&O cost.
The life-cycle total investment cost is the sum of the initial
installation cost and M&O cost. The initial installation cost
can be summarized by the installation cost and material cost
(hardware and wiring). The material cost Ci was assumed to
be 20% of the initial installation cost in the study. The present
value of system must extract the replacement cost of
components occurring throughout system lifetime. Battery
bank, wind turbine and power conversion device are
associated with a shorter lifetime than the complete 20 years
installation, and need to be replaced periodically. In the study,
the battery bank, wind turbine and power conversion device
replaced every 4, 7 and 5 years respectively. The PV array is
assumed to have the same lifetime as the proposed system.
The other M&O cost (Cmaint) except for the replacement cost
was assumed to be 10% of the initial capital invested.
After implementation of some future scenarios of NEM,
different economic profits can be gained from selling
electricity with the rate of FiT. Installation of energy storage
system is considered an effective way to storage surplus
energy from renewable generation and to save electricity fee
in the period of high load tariff. The total financial gain of the
proposed system is shown as (5):
Cprofits = (kWhsave + kWhFiT ) (5)
where
kWhsave ：electricity fee saving from the use energy from
battery bank and renewable energy
kWhFiT : FiT returns from solar and wind energy
Under environment of NEM, the payback year shown in (6)
can be considered as a compromised index after trade-off
between summarized system investment cost and economic
profits sourced from FiT subsidy. In some senses, the PY
index can be well reflected the value of the designed system.
Other indices, e.g., net present value, return on investment,
can also be used for evaluation.
(Cprofits − Cinstalled − CM &O ) (6)
PY =
C
( profits )
20
Optimum sizing of the proposed system is evaluated on
an hourly basis. Many control and state variables should be
properly compromised with the short-term hourly scheduling
results and the long-term planning process in the design stage.
The assessment of the system economics using annualized
life-cycle costing methods is an important step which
considers as the main criterion of optimization [10]. It has
always been a considerable technical difficulty, especially
when the future environment of a residential micro-grid
system itself is filled with a high degree of uncertainty. To
deal with the long-term subsidy uncertainty, some possible
tariff scenarios were investigated by setting different values
of control variables. In some senses, the flexibility of the
proposed system can be extended to cover and consider
possible variations in the future. The general simulation
framework for the proposed system is depicted in Fig. 4.
System state/control variables
and weather tested data
Adjust control variables
Release dispatching flexibility
NO
YES
Information flow
Power flows Energy management from control
from DERs and system variables and
storage
tariffs
Adjust control variables
NO Release planning flexibility
YES
Evaluate System
reliability
Evaluate optimal configuration
and economic solutions
STOP
YES
Accept ?
NO
Figure 4. The simulation framework of the proposed system.
III. SIMULATION AND DISCUSSIONS
The proposed micro-grid was evaluated to conduct optimal
configurations under different scenarios with actual yearly
time series meteorological data of the Central Weather Bureau
at 28 different sites on the year of 2015. In this paper, the
experimental system located at laboratory A300 in the
building A of Southern Taiwan University of Science and
Technology was used to test. Daily average of the actual
yearly load profile shown in Fig. 5 for the building A was
used as an benchmark, the tested load was modified to be the
amount of hourly average is 500W with the same load profile.
The uncertainty resulted from variations of FiT for renewable
generation and residential electricity fee that was implemented
by the three tariff scenarios shown in Table I. The rates of FiT
and electricity fee are New Taiwan dollar (NTD). Table II
shows the tested parameters of the proposed system.
The control of energy flows in energy storage device is
based on NEM scenario. After satisfying residential load
demand, surplus energy from renewable generation can only
be stored into battery or be fed into grids depending on the
difference between FiT and electricity fee. Table III shows
the economical benefit from the proposed microgrid system
associated with the optimal allocation of the system's (b). Case 2
components. The results were ordered in payback year. The Wind PV Battery PY
Regions (W) Cinst CM&O Csell
(Wp) (Wh) (year)
symbols used in Table III are the following: Cinst is initial
Tongchitao 10000 9920 10080 188.6 431.56 1838.6 4.69
installation cost of the proposed micro-grid system, CM&O and
Pengjia 10000 9920 8640 187.6 426.56 1790.1 4.77
Csell are the maintenance and operation cost and profits from
electricity selling for 20 operational years, respectively. PY Yushan 0 9920 18720 78.6 135.56 544.58 4.98
represents payback year. The units of different cost used in Chiku 2000 10240 11520 103.2 182.32 696.30 5.24
Table III is ten thousand NTD. Hengchun 0 9920 24480 82.6 155.56 540.38 5.76
Lanyu 4000 10240 8640 121.2 234.32 802.83 5.84
Penghu 0 9920 21600 80.6 145.56 482.23 6.04
Taichung 0 10240 25920 93.2 170.32 521.28 6.53
Wuci 2000 10240 15840 106.2 197.32 601.62 6.56
Chenggong 0 9920 25920 83.6 160.56 457.81 7.01
Dawu 0 9920 30240 86.6 175.56 475.82 7.38
Tainan 0 9920 44640 96.6 225.56 572.09 7.89
Taitung 0 9920 34560 89.6 190.56 455.86 8.36
Kaohsiung 0 10240 38880 102.2 215.32 504.67 8.53
Chiayi 0 9920 41760 94.6 215.56 475.88 9.06
Figure 5. Experimental load profile. (c). Case 3
Wind PV Battery PY
Regions (W) Cinst CM&O Csell
(Wp) (Wh) (year)
TABLE I. TESTED FEED-IN TARIFF AND ELECTRICITY FEE
Yushan 0 9920 18720 78.6 135.56 411.60 6.59
Wind Photovoltaic Chiku 1000 10240 17280 97.2 171.32 452.11 7.58
Electricity
Scenarios (Land-based) (Rooftop)
fee Hengchun 0 9920 24480 82.6 155.56 409.74 7.59
capacity FiT capacity FiT
1kW~10kW 7.07 Tongchitao 1000 8960 10080 77.8 131.28 336.37 7.81
Case 1 1kW~10kW 8.17 2.719
10kW~100kW 6.34 Penghu 0 9920 21600 80.6 145.56 372.55 7.81
1kW~20kW 17.03 1kW~10kW 10.90 Taichung 0 9920 27360 84.6 165.56 387.25 8.55
Case 2 8.196
≧20kW 6.81 ≧10kW 11.15 1000 10240 14400 95.2 161.32 364.39 8.85
Pengjia
1kW~10kW 6.98
Case 3 ≦50kW 3.61 10.032 Chenggong 0 9920 25920 83.6 160.56 358.85 8.95
10kW~40kW 6.62
Wuci 0 9920 28800 85.6 170.56 380.99 8.95
TABLE II. TESTED PARAMETERS OF THE PROPOSED SYSTEMER Lanyu 1000 10240 12960 94.2 156.32 333.52 9.37
Dawu 0 9920 30240 86.6 175.56 369.97 9.49
Capacity Cost (NTD)
Tainan 0 9920 44640 96.6 225.56 429.72 10.50
PV pannel 320(WP) 16,000
Wind turbine 1(kW) 100,000 Taitung 0 9920 34560 89.6 190.56 357.40 10.66
battery 720(Wh) 5,000 Kaohsiung 0 10240 38880 102.2 215.32 387.04 11.13
Power condition device 10(kW) 80,000 Chiayi 0 9920 41760 94.6 215.56 368.86 11.69

TABLE III. OPTIMAL CONFIGURAION SIMULATION RESULTS

The economic benefits from the installation of battery
(a). Case 1 storage can be described from the results of optimal payback
Wind PV Battery PY year shown in Table III. The initial installation cost of the
Regions (W) Cinst CM&O Csell
(Wp) (Wh) (year)
battery is much less than that of a photovoltaic panel and a
Yushan 0 9920 18720 78.6 135.56 319.09 8.5
wind turbine, but not so cheap when the operation and
Chiku 2000 10240 11520 103.2 182.32 407.68 8.9
maintenance cost for 20 years was also considered given it’s
Tongchitao 1000 10240 10080 92.2 146.32 324.56 9.0 shorter lifetime. Significant benefits associated with larger
Pengjia 5000 9920 8640 129.6 263.56 577.72 9.1 battery storage installation can be seen in the case of lower
Hengchun 0 9920 24480 82.6 155.56 315.92 9.8 FiT and highest electricity fee, i.e., case 3.
Penghu 0 9920 21600 80.6 145.56 278.18 10.5
Another promising result with shortest payback year
Lanyu 4000 10240 8640 121.2 234.32 436.09 10.8
conducted from the case 2 scenario, like Japan. The highest
Taichung 0 10240 25920 93.2 170.32 303.43 11.2
FiT can be referred to as the best investment opportunity for
Wuci 1000 10240 20160 99.2 181.32 318.59 11.4 renewable installation extension, since it depends on the
Chenggong 0 9920 25920 83.6 160.56 261.28 12.3 environment of global warming impacts and the deployment
Dawu 0 9920 30240 86.6 175.56 273.18 12.8 of positive renewable energy promotion policy. The worst
Tainan 0 9920 44640 96.6 225.56 336.66 13.4 case results from case 1 because of the lowest electricity rate,
Taitung 0 9920 34560 89.6 190.56 260.13 14.6 like Taiwan. It can be regarded as the main obstacle to DERs
Kaohsiung 0 10240 38880 102.2 215.32 292.67 14.7 expansion and promotion even implementing quite higher FiT
Chiayi 0 9920 41760 94.6 215.56 273.85 15.7 rate.
 The weather complementary features can be concluded
from the simulation results of Table III. The Tongchitao site
always achieves a lower payback year because of its quite
good complement between solar energy and wind energy.
Conversely, Chiayi always has relatively worse result
compared with other regions because of its sole dependence
on rich solar energy but lack of wind energy. Particular
weather complementary characteristics of regions can be
considered as the most important design issue in the planning
of the renewable-based microgrid system.
IV. CONCLUSIONS
This paper proposes a simulation framework combining
renewable energy resources and storage device in the planning
of the proposed residential micro-grid. Yearly time series
meteorological recorder was applied to handle the intermitted
long-term stochastic uncertainty from renewable generation.
For any residential user, the proposed hybrid framework can
be used to investigate micro-grid economic effectiveness after
considering some feed-in tariff and electricity fee scenarios at
the design stage. Optimal configuration of components in the
proposed residential micro-grid is conducted. Experimental
simulation at different regions of Taiwan concludes that
region with good weather complementary characteristics
between solar radiation and wind speed achieves best payback
year performance. These regions can be encouraged to
promote the future-oriented residential microgrid.
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