Framework of virtual microgrids formation using community energy storage in residential networks with rooftop photovoltaic units

Abstract This paper presents a framework for forming Virtual Microgrids (VMs) centered around Community Energy Storage (CES) in residential networks with Photovoltaic (PV) units. The framework considers major revenue streams for CES to justify the economic viability and operational feasibility of the VMs. In this framework, a methodology is introduced to optimally cluster a residential distribution grid into VMs. Subsequently, a cost-benefit analysis considering a new business model is conducted to identify the optimal location, size and operational characteristic of CES in each VMs. The proposed framework is tested on IEEE 33-bus test distribution grid, which reflects a typical residential network. Numerical results demonstrated that the proposed framework enables power utility or third party companies to cluster a residential network with rooftop PV into a specified number of VMs and identify the optimal allocation of CES in each VM for maximizing the total net present value of CES deployment. Furthermore, the presented business model generates a profit of almost 35% of the total financial benefit of CES and effectively assist in reducing consumers’ electricity bills.