WIND-BASED MICROGRIDS: COMPETITIVE VIABILITY AND GRID CONGESTION REDUCTION
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Date
2023-05
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Abstract
This paper discusses observed grid congestion costs in the United States, and what contributes to those congestion costs. It then proposes microgrids that rely on wind generation as a method to reduce grid congestion costs by providing electricity that does not rely on the wider grid. The economic viability of wind-based microgrids in two locations representative of areas in the United States with high grid congestion costs were determined using the Homer Pro modeling software. Similar models were developed for equivalent gas turbine sites to provide a point of comparison to a common grid-connected alternative. Based on economic factors including the net present cost and internal rate of return, the wind based microgrid and gas turbine projects at each
location were compared. The modeled microgrid results had net present values ranging from $234M to $259M and internal rates of return ranging from 20% to 24%, and the modeled gas turbines had net present values ranging from $433 M to $833 M and internal rates of return ranging from 15.6% to 21.2%. This indicates that, while gas turbines can return a greater profit overall, microgrids that incorporate wind power can return a higher profit proportionally to the capital necessary. Finally, the grid congestion cost reductions that would occur as a result of microgrid projects similar to the modeled sites were estimated. This analysis demonstrated that the modeled microgrid could reduce congestion costs by 3.4%-4.4%, depending on the area in which the site is located.
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“microgrid”, “wind”, “transmission” and “congestion.”