A method for cost minimization applicable to load centers containing distributed generation

Distributed energy resources (DER), located close to end use loads, have the potential to meet consumer requirements more efficiently than the existing centralized grid. In this paper, a specific scenario is considered, where the consumer center uses distributed resources to meet a part of its energy requirements, while the rest of the needed electricity is purchased from the utility distribution company. In order to minimize total consumer costs, a robust optimization algorithm based on a search method has been developed. The main outputs of this algorithm are optimal dispatch between distributed resources generation and the electricity purchased from the utility as well as the particular contribution of every on-site generating unit in the dispatch schedule. The algorithm was tested using several characteristic simulations and two basic areas of its application have been discovered-optimal dispatching of existing distributed energy resources and economic evaluation concerning installation of new generating facilities.