Impact of local balancing of Microgrids

Satisfaction of local consumption implies that the power produced by microgeneration is used to supply partly or wholly in-site consumption. In such a case, there is no requirement for separate metering of microsource generation (also called “net-metering”). However, on-site generation and on-site load need to be metered separately when microsource units appear as independent generators that sell all their production directly to the network and are not financially related to end consumers. In this case, local consumption is a market opportunity that can be easily overlooked by all players (see Figure). There are two main advantages of promoting local consumption satisfaction within a microgrid:

1. End consumers are provided with more choices in retail power supply.

2. Microsource operators have the possibility to obtain quasi-retail prices via selling locallyto minimize network charges.

The local retail market concept is therefore directly linked to the local consumption mechanism, which can also be seen as a two-sided hedging tool for both demand and supply players for reducing market risk: consumers can use the local market to hedge against high market price, while microsources can use the local market to hedge against low market price.

Source:
Nikos Hatziargyriou. “Microgrids Architectures and Control”. 2014 John Wiley and Sons Ltd. ISBN: 978-1-118-72068-4.




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