Microgrids are low-voltage (LV) distribution networks comprising various distributed generators (DGs), storage devices, and controllable loads that can operate either interconnected or isolated from the main distribution grid as a controlled entity. This paper describes the operation of a central controller for microgrids. The controller aims to optimize the operation of the microgrid during interconnected operation, i.e., maximize its value by optimizing the production of the local DGs and power exchanges with the main distribution grid. Two market policies are assumed including demand-side bidding options for controllable loads. The developed optimization algorithms are applied on a typical LV study case network operating under various market policies and assuming realistic spot market prices and DG bids reflecting realistic operational costs. The effects on the microgrid and the distribution network operation are presented and discussed.

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Restructuring of power markets has helped in the penetration of Distributed Generation (DG) in the electricity networks. Microgrids are Low Voltage distribution networks comprising various distributed generators (DG), storage devices and controllable loads that can operate interconnected or isolated from the main distribution grid, as a controlled entity. This paper describes the main functions of the Microgrid Central Controller required for the optimization of Microgrid operation its interconnected operation. This is achieved by maximizing its value, i.e. optimizing production of the local DGs and power exchanges with the main distribution grid.

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