Electrical Power and Energy Systems 124 (2021) 106422

Contents lists available at ScienceDirect

Electrical Power and Energy Systems

journal homepage: www.elsevier.com/locate/ijepes

A two-stage stochastic p-robust optimal energy trading management in T

microgrid operation considering uncertainty with hybrid demand response
⁎
H.J. Kim, M.K. Kim , J.W. Lee
Department of Energy System Engineering, Chung-Ang University, 84, Heukseok-ro, Dongjak–gu, Seoul 06974, Republic of Korea

A R T I C LE I N FO A B S T R A C T

Keywords: This study proposes a two-stage stochastic p-robust optimal energy trading management for microgrid, including
Optimal energy trading management photovoltaic, wind turbine, diesel engine, and micro turbine. To achieve optimal energy management for an
Stochastic p-robust optimization microgrid, a hybrid demand response, which combines improved incentive-based and price-based demand re-
Multi-scenario tree method sponses, is incorporated to reduce peak period load while ensuring the reliability of the microgrid. A multi-
Hybrid demand response
scenario tree method is used to generate scenarios for uncertain parameters such as wind turbine, photovoltaic,
Gaussian-based regularized particle swarm
optimization
loads, and market-clearing prices, where each probability density function has been discretized by certain in-
tervals. Then, using a scenario reduction technique, a differential evolution clustering, a set of reduced scenarios
can be obtained. The proposed energy management combines a Gaussian-based regularized particle swarm
optimization with a fuzzy clustering technique to solve the optimization problem and determine the best
compromise solution according to cost-effectiveness and reliability. The effectiveness of the proposed approach
has been analyzed for a typical microgrid test system, and then the results demonstrate that the robustness can
be improved substantially while guaranteeing the economical operation of microgrid. Therefore, the proposed
energy trading management determines the most reasonable solution in terms of economic and reliability issues
for the microgrid operator.

1. Introduction can complicate accurate day-ahead forecasting of an MG [2]. In addi-

1.1. Background
Currently, with the global growth in energy consumption, aware-
ness toward the economics, environmental impacts, reliability, and
quality of energy challenges have increased worldwide. MG represents
a promising solution for predefined energy crises through integrating
small-scale DERs with renewable and non-renewable generators, energy
storage systems, and responsive and non-responsive loads. MG, as low
voltage distribution network, generally operates in a grid-connected
mode. However, it can switch to an “island” mode when disturbances
such as outages occur in high voltage networks. MG can also provide
economic and environmental benefits, as well as reduced losses, with
high energy efficiency by using renewable energy sources, such as PV
and WT [1]. To achieve the benefits of renewable energies, modeling of
the uncertainty parameters related to renewable sources is essential so
that day-ahead OETM of MG can be achieved. Loads and energy prices
are also variable parameters that must be considered when modeling
uncertainties. Flexible loads are highly dependent on the fluctuations of
hourly market prices, customer decisions, and weather conditions that
tion, the high level of variations in MCP can decrease the prediction
accuracy [3]. Therefore, considering the MG’s renewable energies,
loads, and MCP forecasting errors may cause significant effects on day-
ahead OETM of the MG.
1.2. Literature review
Various optimization techniques have been used for OETM in MG
operation, such as stochastic, robust, chance-constrained, and interval
optimizations. Stochastic optimization is the most general scheme to
address uncertainties when solving OETM problem of the MG. This
method generates a number of scenarios with corresponding prob-
abilities based on the PDFs of uncertain parameters and simulates
possible utilizations of the uncertainties [4-8]. A scenario generation
and reduction method were also utilized in the stochastic optimization
technique because the optimality and accuracy of MG energy trading
management are dependent on the precisions of PDFs. Notably, several
scenarios can improve the better modeling of uncertainties while occurs
high computational burden [5]. Therefore, in such works, proper sce-
nario reduction methods have been also utilized to overcome the

⁎
Corresponding author.
E-mail addresses: glen625@cau.ac.kr (H.J. Kim), mkim@cau.ac.kr (M.K. Kim), jiwon7542@cau.ac.kr (J.W. Lee).

https://doi.org/10.1016/j.ijepes.2020.106422
Received 22 March 2020; Received in revised form 22 July 2020; Accepted 2 August 2020
Available online 12 August 2020
0142-0615/ © 2020 Elsevier Ltd. All rights reserved.
H.J. Kim, et al. Electrical Power and Energy Systems 124 (2021) 106422

Nomenclature Variables

Sets c, d scale and shape factor

fB(SI) beta PDF of SI
s/Ns set/maximum number of scenarios fw(wWT) Weibull PDF of wind speed
t/Nt set/maximum number of time periods fN(l), fN(p) normal PDF of load and MCP
x/Nx set/maximum number of uncertain variables ρs weight of each scenario
i/Ni set/maximum number of DE units Co centroid of clusters
j/Nj set/maximum number of MT units d(Xo, Xh) distance between Xo and Xh
q/Nq set/maximum number of PV units Zs(X) value of the objective function
u/Nu set/maximum number of WT units Ps minimization problem of s scenario
e/Ne set/maximum number of pollutants CDE,s(t), CMT,s(t) cost function of DE and MT
y/Ny set/maximum number of I-IBDR customers CTR,s(t) cost function of transactional power
b/Nb set/maximum number of PSO iterations CP,s(t) cost function of pollutant treatment
z/Nz set/maximum number of particles CDR,s(t) cost function of I-IBDR
χ set of solution feasible for all Ps CRE,y(t) cost function of customer revenue
n set of particles dimension Ps,i(t), Ps,j(t) power of DE and MT
Ps,grid(t) power from main grid
Parameters Ppv(t) power from PV
PWT(t), Pr(t) power from WT and rated WT power
Ao data point set DRs(t) percentage of base load at time t in s scenario for parti-
α, β parameters of the Beta PDF cipation in PBDR
ai, bi, ci cost coefficient of DE Inct,s increased amount at time t in s scenario for participation
aj, bj, cj cost coefficient of MT in PBDR
γs(t) power trading coefficient for scenario s at t Ls(t) load after PBDR
δs,i,e, δs,j,e
pollutant emission coefficient of DE and MT for e type in s
scenario Abbreviations
ηPV, SPV efficiency and area of PV
vWT,rated rated wind speed of WT OETM optimal energy trading management
vWT,cut-in cut-in wind speed of WT MG microgrid
vWT,cut-out cut-out wind speed of WT PV photovoltaic
θy customer type SI solar irradiation
LsBase(t) base load at time t in s scenario WT wind turbine
Incmax maximum amount of load increasement PDF probability distribution function
DRmax maximum amount of PBDR participation MCP market-clearing price
K1, K2 cost coefficient of customer function MSTM multi-scenario tree method
r1, r2 random value ranges from 0 to 1 DEC differential evolution clustering
c1(b), c2(b) acceleration and cognitive parameters DE diesel engine
PDEmin, PDEmax minimum and maximum power of DE MT micro turbine
PMTmin, PMTmax minimum and maximum power of MT HDR hybrid demand response
PPVmin, PPVmax minimum and maximum power of PV I-IBDR improved incentive-based demand response
PWTmin, PWTmax minimum and maximum power of WT PBDR price-based demand response
PTRmin, PTRmax minimum and maximum transactional power EOC expected operating cost
CMy daily interruptible limit for y customer MRR maximum relative regret
G-RPSO Gaussian based regularized PSO

limitations of general clustering algorithm, k-means clustering, and
reduce the burden. A stochastic economic-environmental optimization
for MG energy management was validated by using a modified PSO
algorithm that considered an IBDR [4]. The authors demonstrated that
considering uncertain parameters gives an MG operator reasonable
criterion during decision making to account for unprecedented sce-
narios. Additionally, a DB validity index was utilized to reduce initial
scenarios when solving optimal energy management problems. In [5], a
scenario-based optimal scheduling of MG was created by considering
the uncertainties of PV, WT, and MCP via mixed integer linear pro-
gramming. The adopted approach combined a backward method to
decrease the initial scenario sets and revealed that considering the
uncertain parameters in objective functions can lead to an enhancement
in these functions. Although a proper scenario generation and reduction
method was successfully employed, still the economic and security
constraints were not fully guaranteed in the optimization problem. As a
result, the robustness of this method could deteriorate if obtained
forecasting errors and samples are widely different from the actual
values. To overcome the limitations of pure stochastic optimization, a
risk measurement index, CVaR, has been utilized to guarantee the ro-
bustness of stochastic programming [6–9]. A risk-aware stochastic op-
timization method was proposed in [6] for MG energy trading by in-
tegrating the uncertainties into the optimization problem. The risks of
day-ahead and real-time markets of MG were also considered by
adopting the CVaR. A combination of two different scenario reduction
methods, backward reduction and forward selection, was addressed to
downsize the initial scenarios. In [7], stochastic-based optimal energy
management of an energy hub considering the uncertainties of market
price and wind speed was presented. Decisions were obtained under a
risk-aversion strategy by applying CVaR. Moreover, a stochastic-CVaR
optimization solution was provided in [8], where the uncertainties of
prices and wind power were considered while the CVaR was used to
control the potential risk of operating cost increase. The study in [9]
presented the CVaR-based optimal energy management of battery en-
ergy storage in a building MG for increasing its resilience while redu-
cing operating cost. Although the CVaR-based stochastic optimization

2
H.J. Kim, et al.
problem can effectively deal with the risk of uncertain variables and
costs, it requires complete information on the distribution of uncertain
variables. In addition, because the results of CVaR vary with respect to
confidence level and risk aversion parameters, these parameters could
be suitably determined in advance.
Robust optimization is the latest strategy that optimizes the energy
trading management problem of MG. This strategy ensures that any
nominal sub-optimal solutions remain feasible for any realization of
pre-defined volatility [10-12]. In [10], a day-ahead robust energy
scheduling for an MG was adopted by considering uncertainties through
mixed integer non-linear optimization programming. The authors re-
vealed that an adaptive robust strategy led to a lower expected cost and
cost variance. A mixed integer robust energy management approach
was also presented in [11], in which a worst-case scenario for renew-
able energy and loads was developed to show the robustness of this
strategy in eliminating model uncertainty. In another study, a multi-
stage microgrid energy trading management was implemented by ap-
plying a robust optimization method [12]. The authors demonstrated
that this optimization method bolstered the robustness of operating
conditions and increased energy efficiency. However, as the robust
method optimizes worst-case scenarios, its results may tend to be overly
pessimistic compared to the stochastic optimization method when sol-
ving OETM problems of MG. Although dynamic uncertainty sets and
budgets can be implemented to control the level of energy conservation,
systematic procedures are still needed for determining proper con-
servation levels.
Another technique for optimizing the day-ahead OETM of MG is
chance-constrained optimization. This is a competitive tool for solving
optimization problems and ensures that the likelihood of satisfying a
particular constraint is maintained above a certain level [13,14]. A
confidence-based chance-constrained optimization method was em-
ployed for day-ahead energy trading of MG by evaluating wind speed
uncertainty [13]. The chance-constrained method was adjusted to a
stochastic optimization and sample average approximation method and
they were compared to show the effectiveness and robustness of each
approach. In [14], an OETM for an islanded MG was represented by
using chance-constrained mixed integer linear programming to mini-
mize its operating cost. The authors insisted that this method improved
the optimization results in terms of stability and calculation times by
handling multiple uncertainties. Since the chance-constrained method
uses a non-Gaussian PDF and tends to be non-convex, its ability to solve
optimal OETM problems may be inadequate for MG. Interval optimi-
zation was also employed for day-ahead MG scheduling where un-
certain variables were represented as interval numbers [15,16]. The
interval optimization method was applied in [15] to address the un-
certainty of WT and solve a multi-objective OETM problem of MG. The
authors demonstrated the benefits of this method to profit intervals
through evaluating WT uncertainty levels. A multi-objective optimal
energy management was also considered in [16] by using the interval
optimization method to fulfill the quality, security, and economics of
MG. Notably, the interval optimization method is more conservative
but has a lower computational burden than the stochastic optimization
method. Meanwhile, compared with the robust optimization method,
the interval optimization method is less accurate in evaluating OETM of
MG, as robust optimization accounts for worst-case scenarios.
1.3. Contribution and paper organization
The above-mentioned studies have their own advantages when
computing OETM of an MG with uncertainties. However, developing an
advanced method in terms of optimality, cost, robustness, and addres-
sing computational challenges is a nontrivial task when applied to the
day-ahead OETM problem. To this end, this study proposes a two-stage
stochastic p-robust OETM method for MG that is financially economical,
adjustably robust, and computationally viable, and considers un-
certainties for PV, WT, load, and MCP. The proposed approach for day-
3
Electrical Power and Energy Systems 124 (2021) 106422
ahead optimal MG energy management is more robust than pure sto-
chastic programming case with minimal increase in EOC. By in-
corporating a G-RPSO together with the fuzzy clustering method, the
proposed OETM becomes capable of obtaining the best optimal solution
between economic and robustness issues through the proper selection
of robustness value p.
The major contributions of this work can be summarized as follows:
• An efficient scenario generation and reduction method is adopted to
model the uncertain variables to ensure that the accuracy and re-
liability of the final solutions are close to the optimal real-world
solution. A MSTM is used to generate primary scenarios; then, the
differential evolution algorithm (DEC) is applied for clustering.
• A robustness factor is adopted in the proposed OETM model, which
bounds the relative regret in each scenario when minimizing the
EOC of MG.
• The proposed two-stage stochastic p-robust OETM of MG, which
considers the uncertainties of PV, WT, loads, and MCPs, can present
the more robust solution with a minimal increase in EOC.
• A HDR, which combines I-IBDR and PBDR is implemented to lessen
and shift the peak period load of MG, thus reducing the EOC while
ensuring reliability of the MG peak period load.
• Comparison analyses with respect to pure and CVaR-based sto-
chastic optimizations are presented, to demonstrate the advantage
of the proposed p-robust stochastic OETM.
The rest of this paper is organized as follows: Section 2 describes the
scenario generation and reduction method to increase the accuracy of
system modeling of MG. In Section 3, the proposed two-stage stochastic
p-robust OETM for MG with mathematical formulations is illustrated.
Section 4 presents the proposed algorithm and overall solution proce-
dure. Section 5 shows and analyzes the simulation results and, finally,
Section 6 concludes the paper.
2. Uncertainty modelling and evaluation
2.1. Uncertainty modelling
2.1.1. PV generation modelling
In most studies, Beta PDF has generally been selected as an appro-
priate model to express the behavior of hourly SI [17]. The relationship
between the SI and the PV output power can be obtained as follows:
Γ(α + β )
× SI (α − 1) × (1 − SI )(β − 1) 0 ⩽ SI ⩽ 1, α ⩾ 0, β ⩾ 0
fB (SI )={ Γ(α )Γ(β )
0 otherwise
(1)
The mean (μ) and the standard deviation (σ) are used to calculate
the values of the parameters (α and β). These parameters of Beta PDF
can be obtained through the following equations:
μ (1 + μ)
β = (1 − μ) × ( − 1)
σ2 (2)
μβ
α=
(1 − μ) (3)
Once the parameters of Beta PDF are obtained for a specific time
interval, the output power of PV can be defined as
PPV = η PV × SPV × SI (4)
The power outputs from PV are dependent on the efficiency, plane
area, and SI of the PV module. Since the hourly power output of PV is a
stochastic variable in the MG energy trading problem, the continuous
Beta PDF parameters can be divided into several discrete intervals to
model the SI and its associated probability in different states.
H.J. Kim, et al. Electrical Power and Energy Systems 124 (2021) 106422

2.1.2. WT generation modeling 1

Co =
|Ao |
∑ xh
The Weibull PDF [18] has been previously used for wind speed data x h ∈ Ao (11)
analysis. The mathematical model of Weibull PDF can be expressed as
The CS measure can be formulated as follows:
d vWT d − 1 v d
fW (vWT ) = ⎛ ⎞ exp ⎜⎛−⎛ WT ⎞ ⎞⎟ K
∑ ⎡ {d (Xo , Xh )} ⎤
c⎝ c ⎠ 1 1
⎝ ⎝ c ⎠ ⎠ (5) K ⎢ No ∑ Xmax ⎥
o=1 ⎣ Xo ∈ Co h ∈ Co ⎦
The scale factor (c) can be obtained via the mean (μ), standard CS (K ) = K
1
deviation (δ) and shape factor (d), which can be calculated as K
∑ [ min {d (Xo , Xh )}]
o=1 h∈K , h≠o
μ
c= , d=2 K
∑ ⎡ {d (Xo , Xh )} ⎤
1 1
Γ(1 + d ) (6) ⎢ No ∑ Xmax ⎥
= ⎣ Xo ∈ Co h ∈ Co
o=1 ⎦
Similar to the SI distribution model, the wind speed data can be K
∑ [ min {d (Xo , Xh )}]
divided into discrete sections according to the wind speed and its cor- o=1 h∈K , j≠o (12)
responding probability. Given the wind speed and wind speed-to-power
conversion function, the WT output power can be determined as fol- This measure can be defined as the ratio of the sum of within-cluster
lows: scattering to between-cluster separation. In the end, a minimization
target can be adjusted to the CS as follows:
⎧ 0 if vWT < vWT , cut − in or vWT min CS (K ) (13)
⎪
⎪ > vWT , cut − out
PWT = vWT − vWT , cut − in
From equation (13), the smallest CS(K) value can be a valid optimal
⎨ Pr × if vWT , cut − in ⩽ vWT ⩽ vWT , rated
⎪ vWT , rated − vWT , cut − out partition. By applying the DEC technique, a certain number of centroids
⎪ Pr if vWT , rated ⩽ vWT ⩽ vWT , cut − out (7) can be obtained and updated by assigning them to the nearest scenario
⎩
set; then, a redistribution of probabilities is performed sequentially.
This process includes the probabilities of scenarios that have not been
2.1.3. Load and MCP modeling chosen from the centroids that are updated in every cluster until the
The normal PDF [19,20] is used to model the uncertainty of hourly end of the process. Therefore, a typical scenario set is obtained that
loads and MCP; its PDF can be obtained as follows: maintains the behavioral properties of the primary scenarios.
1 (l − μN )2 ⎞
fN (l) = exp ⎛⎜− ⎟ 3. Stochastic p-robust optimal energy trading management of MG
2πσN2 ⎝ 2σN2 ⎠ (8)
Here, μN and σN represent the forecasted load and forecast accuracy, 3.1. Stochastic p-robust optimization
respectively. In a proposed OETM problem of the MG, the continuous
normal PDF also can be divided into finite discrete intervals to evaluate In our study, the p-robust method is applied to solve the day-ahead
the stochastic hourly load parameters. OETM problem of MG. This approach combines the advantages of the
stochastic and robust optimization techniques with the uncertain vari-
2.2. Scenario generation and reduction ables. In the stochastic optimization, although it can be financially
optimal in most cases, it may potentially lead to losses in other sce-
The MSTM is applied to combine the different states of PV, WT, narios. In contrast, by using minmax costs and regret measures, it tends
loads, and MCP in each interval during a 24-h energy trading horizon. to produce highly pessimistic solutions because it addresses worst-case
This method is used to generate and compose possible scenarios of scenarios. In this regard, our proposed approach combines the benefits
uncertainties for each PDF as they are created by MCS founded on a of both stochastic and robust optimization techniques (minimized EOC
random sampling of each scenario. Each scenario forms a certain vector and minmax regret) by exploiting the minimum EOC, which is p-robust
and the total number of scenarios can be given by [23].
To represent the robust measure p, we assume p ≥ 0 and that X is a
Ns = ∏ Nx deterministic feasible solution to minimization problem Ps indexed by
x (9) each scenario s ∈ NS. Also, let Zs(X) be the value of the objective
The probability of each scenario vector can be calculated by mul- function. Meanwhile, let Zs* be the optimal value of the objective
tiplying the probability of the occurrence of its uncertain variables since function of PS. We also assume that the structures of Ps with different
the stochastic variables are independent of each other. Accordingly, the data are identical. Thus, the robustness level can be computed as
weight of each scenario can be obtained as follows: Zs (X ) − Zs∗
⩽p
ρs = ∏ ρx,s s = 1, ..., N s Zs∗ (14)
x (10) S
If X meets equation (14) for N , then X is p-robust. In equation (14),
Since the large number of scenarios can cause computational burden the left-hand side is referred to as the relative regret for each s and Zs
of the problem, an efficient scenario reduction technique is required to (X) − Zs* is the absolute regret. The relative regret is usually con-
decrease the computation time by adopting a heuristic or analytical sidered in the stochastic p-robust optimization process, so a suitable
method. In general, the K-means clustering algorithm has been widely modification can be made to consider the absolute regret or operating
used because of its simple implementation [21]. However, it contains cost.
disadvantages, such as a requirement to specify the number of classes
Zs (X ) ⩽ (1 + p) Zs∗ (15)
prior to running the algorithm. Besides, the performance of the tech-
nique is highly dependent on the input data, which often leads to Specifying a limit regret ps is sometimes convenient for each sce-
suboptimal solutions rather than a global solution [22]. To overcome nario s. This allows scenarios that have a low probability to denote
these disadvantages, the DEC algorithm is applied, as it considers the large regrets. Thus, we can simply replace p with ps in equations (14)
uncertain parameters as an optimization problem. In this work, a CS and (15). Representing the vector (p1, …, ps) by p, the solution for
measure is introduced for the automatic clustering algorithm. At first, a equation (15) is applicable for all s if the solution is p-robust. In our
centroid of clusters can be computed as work, it is assumed ps = p for NS for the sake of convenience, although

4
H.J. Kim, et al. Electrical Power and Energy Systems 124 (2021) 106422

the obtained results can be easily extended to more universal cases. The ⎧ γs (t ) × Ptr , s (t ) Ptr , s (t ) > 0
p-robustness measurement can be combined with the minimization of Ctr , s (t ) = 0 Ptr , s (t ) = 0 ∀ s, t
the EOC function as an objective, which can be described as ⎨
⎩ − γs (t ) × Ptr , s (t ) Ptr , s (t ) < 0 (24)
min ∑ ρs Zs (X )
s ∈ NS (16) Cp, s (t ) = ∑ (Cs, e δs, i, e) × ps,i (t )+ ∑ (Cs, e δs, j, e) × ps,j (t )
e e
which is subject to + ∑ (Cs, grid δs, grid, e) × ps,grid (t ) ∀ s, t
e (25)
Zs (X ) ⩽ (1 + p) Zs∗ s ∈ NS, X ∈ χ (17)
y k
N N
Equation (16) refers to the minimization of EOC while equation (17) CDR, s (t ) = ∑ ∑ λsDR k
, y, k PDR, s, y (t ) ∀ s, t
guarantees the stochastic p-robust condition. For any solution, the ob- y=1 k=1 (26)
jective value of each scenario s must be smaller than (1 + p)Zs*. The
constraints, as described in equations (14), (15), and (17), force the The total EOCs for time t can be computed as the sum of operating
objective function to search for the solution that is feasible under any costs for DE, MT, procurement costs, pollutant treatment costs, and
existing scenario while obtaining the minimum EOC of MG. costs from I-IBDR as described in equation (21). Equations (22) and
To ensure the existence of a feasible solution for the day-ahead (23) refer to the operating costs of DE and MT, respectively. The
OETM problem, the limit of the relative regret p cannot be infinitesimal. transactional power cost between the main grid and MG is explained in
Consequently, determining a LB for the relative regret limit is essential. equation (24). The power trading coefficient of scenario s, γs(t), is as-
When p reaches its lower bound, the relative regret for the worst-case sumed to be the value of MCP [24]. The pollutant treatment costs of DE,
scenario reaches the lowest level, thus achieving the day-ahead OETM MT, and the main grid for e type (CO2, NOx, and SO2) is given in
in the worst case. The constraint (17) must be satisfied, even in a worst- equation (25) [25]. According to equation (26), the cost for I-IBDR can
case scenario. The LB of p is the smallest value that guarantees the be described as a multiplication of the bid price and the amount of
existence of a feasible solution to the day-ahead OETM of MG. In this power curtailed.
regard, the LB of the relative regret limit p can be obtained as:
3.2.2. Constraints
LB = min p
s. t Zs (X ) ⩽ (1 + p) Zs∗ ∀ s • p-robustness constraint
p⩾0 (18)
As mentioned in equation (17), the p-robustness measure should
When the relative regret limit p is large enough, constraint (17) meet the following equation:
relaxes, resulting in a pure stochastic optimization problem. Thus, it is
also necessary to set an upper bound for the relative regret limit that EOCs ⩽ (1 + p) EOCs∗ , ∀ s (27)
enables the EOC of MG to reach its minimum value as closely as pos- Since in this case, p is equal to infinity, equation (27) is relaxed and
sible without constraint (17) in the day-ahead OETM problem. Equation the p-robustness optimization problem (equation (20)-(26)) becomes a
(17) ensures that the EOC of each scenario s is less than or equal to conventional stochastic optimization problem. Noted that EOCs* is the
(1 + p)Zs*, and the UB of the objective function can then be defined minimum operating cost for each s scenario. By reducing p, we can
with an extra constraint, Z = Zmin: obtain a single solution that demonstrates a low regret and a high op-
UB = min p erating cost.
Zs (X ) ⩽ (1 + p) Zs∗
• Power balance constraint
s. t
Z = Zmin
p⩾0 (19)
The sum of the total output power of DERs (DE, MT, PV and WT)
and transferred power between the main grid and MG should be equal
to the estimated load with DR.
3.2. Problem formulation
Ni Nj Nq Nu

3.2.1. Objective function ∑ Ps,i (t ) + ∑ Ps,j (t ) + ∑ Ps,PV ,q (t ) + ∑ Ps,WT ,u (t ) + Ps,TR (t )

i=1 j=1 q=1 u=1
According to equation (16), the objective function of the proposed
Ny
stochastic p-robust OETM of MG is as follows:
= D (t ) − ∑ PDR,s,y (t ) ∀ s, t
Nt Ns
y=1 (28)
min ∑ ∑ ρs EOCs (t )
t=1 s=1 (20)
• Generation and ramp rate constraints
The EOC of corresponding scenario s can be calculated as
To manage the DERs in a feasible and secure condition, they must be
EOCs (t ) = CDE , s (t ) + CMT , s (t ) + Ctr , s (t ) + Cp, s (t ) + CDR, s (t ) ∀ s, t operated within limited conditions.
(21) min
PDE max
(t ) ⩽ Ps, DE , i (t ) ⩽ PDE (t ) ∀ s, i, t (29)
where min max
PMT (t ) ⩽ Ps, MT , j (t ) ⩽ PMT (t ) ∀ s, j, t (30)
Ni
min max
CDE , s (t ) = ∑ (ai + bi ps, i (t ) + ci ps, i (t )2) ∀ s, t PPV (t ) ⩽ Ps, PV , q (t ) ⩽ PPV (t ) ∀ s, q, t (31)
i=1 (22)
min max
PWT (t ) ⩽ Ps, WT , u (t ) ⩽ PWT (t ) ∀ s, u, t (32)
Nj
CMT , s (t ) = ∑ (aj + bj ps, j (t ) + cj ps, j (t )2) ∀ s, t Psmin
, DE , i (t ) δs, DE , i (t ) ⩽ Ps, DE , i (t ) + ΔPs, DE , i (t ) ⩽ Psmax
, DE , i (t ) δs, DE , i (t ) ∀ s, i, t
j=1 (23) (33)

5
H.J. Kim, et al. Electrical Power and Energy Systems 124 (2021) 106422

Psmin
, MT , j (t ) δs, MT , j (t ) ⩽ Ps, MT , j (t ) + ΔPs, MT , j (t ) ⩽ Ps, MT , j (t ) δs, MT , j (t ) ∀ s , j , t
Equations (29)-(32) ensure that the power generation from DE, MT,
PV, and WT, respectively, should be more than their minimum outputs
but smaller than their maximum outputs. Equations (33) and (34) de-
note that the DE and MT ramp rate limits are not violated.
• Power exchange constraint
max
customers is also included, in that the incentive paid to the customers
(34) has to be at least equal to their cost of the participating DR. Here, the
loads are considered as an aggregate of individual loads that could be
classified into different types based on their willingness for DR parti-
cipation. Customer types can range from 0 to 1, where 0 refers to the
least willing customer whereas 1 refers the most willing customer for
DR participation [27].
Meanwhile, during load reduction, the cost occurs to the customers
for their level of power consumption PkDR can be described as follows:

The transferable power between the main grid and MG can be k k 2 k k

c (θy , PDR, s, y (t )) = K1, y PDR, s, y (t ) + K2, y PDR, s, y (t ) − K2, y PDR, s, y (t ) θy (43)
limited due to transmission line facilities.
maax
− PTR maax
(t ) ⩽ Ps, TR (t ) ⩽ PTR (t ) ∀ s, t Equation (43) explains the cost incurred by the customer by a re-
(35)
duction of PkDR,s,y(t). Thus, customer revenue should be more than or
equal to zero to induce DR participation. A mathematical model of
• Demand response constraints customer revenue with the following constraints can be modeled as

In the current work, the HDR, combining PBDR and I-IBDR, is im- CRE , y (t ) = λsDR k k
, y, k PDR, s, y (t ) − c (θy , PDR, s, y (t )) ⩾ 0 ∀ s , k , y , t (44)
plemented primarily to reduce the peak period load when solving
OETM of MG. The cost of generating and purchasing energy is higher in
Nt
the peak period, compared with the off-peak period. Therefore, the
application of HDR can lead to EOC reduction, while securing the re-
∑ (λsDR k
, y, k PDR, s, y (t )
k
− c (θy , PDR, s, y (t ))) ⩾ 0 ∀ s , k , y , t
t=1 (45)
liability of the MG peak period load.
The main purpose of PBDR, based on time-of-use rates, is to shift
Nt
some percentage of demand from the peak period to off-peak periods to
∑ (λsDR k k
, y, k PDR, s, y (t ) − c (θy , PDR, s, y (t ))) ⩾
flatten the load profile and lessen the EOC of MG [26]. The mathe- t=1
matical model and its corresponding constraints of time-of-use can be Nt
expressed as ∑ (λsDR k−1
, y, k − 1 PDR, s, y (t )
k−1
− c (θy , PDR, s, y (t ))) k ≠ 1, ∀ s , k , y , t
t=1 (46)
Ls (t ) = (1 − DRs (t )) × LsBase (t ) + PDR, s (t ) (36)

LsBase (t ) − Ls (t ) = DRs (t ) × LsBase (t ) − PDR, s (t ) Nt Ny Nk

(37)
∑ ∑ ∑ λsDR k
, y, k PDR, s, y (t ) ⩽ TB ∀s
Relations (36) and (37) show that the amount of shifted loads varies t=1 y=1 k=1 (47)
in response to the price differences between the time periods and the
consumption costs. Nt Nk

N t
N t ∑ ∑ λsDR k
, y, k PDR, s, y (t ) ⩽ CMy ∀s
(48)
∑ PDR,s (t )= ∑ DRs (t ) × LsBase (t ) t=1 k=1

t=1 t=1 (38)

Equations (44)-(48) are the constraints for the I-IBDR program.
PDR, t (s ) ⩽ Inct , s × LsBase (t ) (39) Equation (44) implies that the revenue of the customer is at least equal
to zero. Equation (45) is a substitute for equation (44) over a 24-h
DRs (t ) ⩽ DRmax (40) horizon rather than one-time interval. From equation (46), customer
incentives ensure that the more customer curtails their energy con-
Incs (t ) ⩽ Incmax (41) sumption, the more they are reimbursed. Constraint (47) indicates that
Constraint (38) ensures that the total increased and decreased load the total remuneration to the customers is, at most, equal to the daily
remains constant during OETM. In relation (39), the increased load MG total budget. The constraint represented by equation (48) re-
should be less than some percentage of the base load. Equation (40) and presents the customers’ daily interruptible power limits, which regulate
(41) limit the decreased and increased rates to a certain range. the amounts of daily load reductions by individual customers.
The I-IBDR program is also applied in the HDR program so that the
load profile can be flattened because most of the demand curtailment
occurs at peak time periods due to greater incentives at that period. The
mathematical formulation of the I-IBDR incentive payment is:
Nk
CDR, s, y (t ) = ∑ λsDR k
, y, k PDR, s, y (t ) ∀ s, t
k=1 (42)

The concept λs,y,k is an advantage of I-IBDR over conventional

DR

IBDR, which utilizes a fixed value, regardless of the period. Instead,

employing a function of the peak intensity, such as λs,y,kDR can lead to a
higher incentive payment during the peak period than the off-peak
period for the same amount of load reduction. Fig. 1 shows a k-stepwise
bid quantity to model the I-IBDR program for participating customers.
As can be inferred, bid prices corresponding to the DR quantities of the
I-IBDR participants are applied to the customers according to the
period. The load reduction should be greater than its minimum PDRmin
while remaining smaller than its maximum PDRmax.
Besides, in the I-IBDR program, the incentive compatibility of Fig. 1. K-step-wise bid price quantity for DR.

6
H.J. Kim, et al. Electrical Power and Energy Systems 124 (2021) 106422

Fig. 2. Schematic of two-stage stochastic p-robust OETM process.

7
H.J. Kim, et al. Electrical Power and Energy Systems 124 (2021) 106422

4. Solution methodology xP, i, n (b + 1) = xP, i, n (b) + vP, i, n (b + 1) (50)

4.1. Gaussian-based regularized PSO Equations (49) and (50) represent the velocity and position up-
dating formula, respectively. For solving the stochastic p-robust OETM
The PSO [28] is a meta-heuristic optimization algorithm that is of MG via the PSO algorithm, improvements are needed as a conven-
based on the swarm intelligence of particles that share their explora- tional PSO tends to fall into local optima or converge prematurely when
tions among themselves. We assume that the z-th particle in N dimen- the dimension of the problem increases. Thus, the velocity of the par-
sional space xP,z=(xP,z1, xP,z2, ⋯, xP,zN) has a position vector pP,z = ticles should be adjusted to overcome the limitations of the conven-
(pP,z1, pP,z2,⋯, pP,zN) and velocity vector vP,z = (vP,z1, vP,z2, ⋯, vP,zN). tional PSO, ensure global optima, and maintain the speed and simpli-
The local and global optimal solutions for iteration b can be denoted as city of the algorithm. In this work, we propose the G-RPSO with the
pP,best,z,n(b) and gP,best,z,n(b), respectively. According to pP,best,z,n(b) and following equations:
gP,best,z,n(b), the particles’ velocity and position will change and are
1 ⎛ ⎛ ⎛ b ⎞l ⎞
updated via the following expressions: wP = ⎜cos ⎜ π ⎟ + 1⎞⎟
2 ⎝ ⎝⎝ Nb ⎠ ⎠ ⎠ (51)
vP, z, n (b + 1) = wP × vP, z, n (b) + c1 × r1 × (pP, best , z, n (b) − xP, z, n (b))
b
+ c2 × r2 × (gP, best , z, n (b) − xP, z, n (b)) (49) c1 (b) = (c1, final − c1, initial ) + c1, initial
Nb (52)

Fig. 3. Grid-connected MG test system.

8
H.J. Kim, et al. Electrical Power and Energy Systems 124 (2021) 106422

b EOCs∗ = min EOCs (59)

c2 (b) = (c2, final − c2, initial ) + c2, initial
Nb (53)
This function is subjected to equations (27) - (48) to solve the de-
Equation (51) ensures that inertia weight wp decreases non-linearly
terministic optimization problem. In this step, the minimum operating
to guarantee both the accuracy and search speed simultaneously.
cost in scenario s is achieved via G-RPSO.
Equations (52) and (53) guarantee that c1(b) and c2(b) increases and
decreases linearly, respectively. Based on those characteristics, we can
Set p at a sufficiently large value to release constraint (27) for sto-
improve the global search speed in the early stage and the search ac-
chastic optimization.
curacy in the later stage. Gaussian random variables are also applied in
Start loop iteration.
the velocity equation to improve the solution quality and guarantee the
Solve the problem (20) - (48) by G-RPSO. Compute the relative re-
global optima without losses to convergence speed and the simplicity of
gret for s ∈ Ns in accordance with equation (14) and obtain
the algorithm. The mathematical model of Gaussian random variables
MRR = max {RR1, RR2, …, RRNs}.
can be expressed as
Set p = p-e and redo step 7 until no feasible solution can be found.
f (x z ) Extract the final best solution via the fuzzy clustering method in
σz =
pP, best , z, n (54) accordance with equations (57) and (58).

f (x z ) The flowchart of the proposed OETM of grid-connected MG is

εz =
gP, best , z, n (55) shown in Fig. 2.
These variables also regulate the particles’ velocity perturbation and
prevent the algorithm from falling into local optima. According to
5. Case study
equations (51)–(55), the final velocity of G-RPSO can be rewritten as

vP, z, n (b + 1) = wP × vP, z, n (b) + c1 (b) × N (0, σz2) 5.1. Data and description
× (pP, best , z, n (b) − xP, z, n (b)) + c2 (b) × N (0, εz2)
To demonstrate the superior performance and validity of our work,
× (gP, best , z, n (b) − xP, z, n (b)) (56) the grid-connected MG test system has been used as a case study. Fig. 3
shows the structure of the MG test system, which consists of 10PV,
10 WT, 5DE, 2MT, and five responsive loads. The characteristics of PV
4.2. Fuzzy-clustering method
and WT are listed in Table 1. The hourly forecasted wind speed and
corresponding standard deviation are taken from [29,30] and the pre-
In the proposed stochastic p-robust OETM problem, the best solution
dicted mean and standard variance of SI are listed in Table 2 [17]. The
that consists of trade-off between MRR and EOC is chosen. In this re-
techno-economic parameters of DE and MT are presented in Table 3
gard, a fuzzy-clustering method [29] is applied in this study to choose
[29,31]. Table 4 presents the cost coefficient and daily DR limit of each
the final optimum solution among a Pareto optimal set. An appropriate
customer [29] as per five responsive loads. The characteristics of k-step
membership function is defined for both EOC and MRR as follows:
wise price-quantity data for I-IBDR customers are illustrated in Table 5
⎧ 1 fτ (ϕ) ⩽ f τmin [32]. To implement the PBDR, the maximum rate increase and decrease
⎪ f min − f are set to 20 percent. Discharge coefficients of pollutants from DE and
τ (ϕ)
μτ (ϕ) = τ
f τmin ⩽ fτ (ϕ) ⩽ f τmax MT were adopted from [28]. We assumed that the MG operator’s TB is
⎨ fτmax − fτmin
⎪ $2000.
0 fτ (ϕ) ⩾ f τmax (57)
⎩ The G-RPSO algorithm was applied to solve the proposed OETM
In considering both EOC and MRR to obtain the best solution, the problem, whose performance changed according to the particles’
overall satisfying value can be described as number of iterations and sizes. Hence, 100 and 20,000 for the number
of maximum iterations and particles, respectively, were adopted. The
∑ wF , τ μτ (ϕ)
τ
initial and final values of learning factors were set to
μ (ϕ) = c1,initial = c2,final = 2.5 and c1, final = c2,initial = 0.5. The fuzzy-clustering
∑ ∑ wF , τ μτ (ϕ)
ϕ τ (58) method was also utilized to select the best compromise solution against
the trade-off between the economic and robustness issues. The con-
The weight value of wτ can be determined based on the importance
ventional PSO and regularized PSO (RPSO) [28] were compared to
of cost and robustness issues. Finally, the highest value of membership
show the effectiveness and robustness of our proposed approach. In
function μ(ϕ) with respect to others can be the best operating solution.
addition, five cases have been considered to reveal the beneficial of
proposed OETM in terms of peak load management and EOC. The si-
4.3. Solution procedure
mulation was performed in Matlab R2019b on a 3.4 GHz CPU with
16 GB RAM and a Windows 10 Pro 64-bit operating system.
The overall procedure of the proposed stochastic p-robust OETM of
MG can be summarized as follows:

Enter the required data for scenario generation, such as historical

Table 1
wind speed, SI, load, and MCP. Divide the PDF of each uncertain
Basic parameters of renewable energies.
parameter info finite intervals.
Implement the MSTM to generate primary scenarios for WT power, Renewable sources Parameters Value
PV power, loads, and MCP scenarios during a 24-h energy trading PV η (%)
pv
18.6
horizon. Apply the DEC algorithm to obtain typical scenarios that Spv (m2) 140
have the same probable behavior as the primary scenarios.
WT vrated (m/s) 12
Apply the input data of DE, MT, hourly bid prices of customers, HDR vcut-in (m/s) 3
program, and G-RPSO parameters. vcut-out (m/s) 25
Define the objective function as Pr (kW) 25

9
H.J. Kim, et al. Electrical Power and Energy Systems 124 (2021) 106422

Table 2 EOC and MRR has been then obtained. When the robustness becomes
Mean and standard deviation of SI. smaller than 0.0175, in this case constraint (27) bounds the relative
Hour μ σ regret of each scenario. By reducing the value of p with 0.0005, the EOC
and the corresponding MRR can be updated. When p reaches 0.001, we
8 0.307 0.182 modified the decrement from 0.005 to 0.001. Furthermore, new EOC
9 0.406 0.217
and MRR values are achieved until p reaches 0.0006. As can be seen in
10 0.522 0.253
11 0.575 0.273
the second and fourth columns, the MRR is decreased while EOC is
12 0.576 0.284 increased when the robustness factor decreases. This means that the
13 0.567 0.282 robustness of MG shows a negative correlation with p. Meanwhile, the
14 0.561 0.235 third and fifth columns represent the reduction and increase ratios of
15 0.520 0.237
MRR and EOC, respectively. By setting p = 0.0006, for example, a
16 0.454 0.204
17 0.391 0.164 substantial reduction have been occurred for the MRR (96.971%) with
18 0.294 0.152 only a minimal increase (1.7098%) with EOC value. These results show
that by adjusting the robustness factor, the proposed approach can
present the more robust solution with small increase in EOC for MG
Table 3 operator to assist in a decision making with respect to economic and
Technical characteristics of DE and MT. robustness issues. No feasible solution could be found for p ≤ 0.0005,
Parameters Unit

DE1 DE2 DE3 DE4 DE5 MT1 MT2

Pmin(kW) 30 33 27 20 37 10 10
Pmax(kW) 150 143 120 80 60 55 30
UR(kW/h) 80 60 60 40 40 25 20
DR(kW/h) 80 60 60 40 40 25 20
a($/h) 0.6 0.5 0.8 0.07 0.4 2.62 2.55
($/kWh) 0.05 0.053 0.068 0.25 0.5 0.015 0.02
c($/kW2h) 0.02 0.12 0.112 0.03 0.06 0.015 0.02

Table 4
Customer cost function and daily DR limit.
y K1,y K2,y θy CMy(kWh)

1 0.0019 2.5747 0 180 (a) SI distribution model

2 0.0021 2.6541 0.1734 230
3 0.0020 2.7924 0.4828 310
4 0.0025 2.8847 0.7208 390
5 0.0031 3.0201 0.84 440

Table 5
Bid price quantity for I-IBDR participants.
Off-peak period Peak period

Quantity (kW) Price ($/kW) Quantity (kW) Price ($/kW)

0–60 1.24 0–60 1.51

60–150 1.77 60–150 2.15
150–280 2.34 150–280 2.74
280–440 2.88 280–440 3.12

(b) Wind speed distribution model

5.2. Results of proposed OETM

In order to implement the MSTM, the continuous PDF is divided into

certain intervals, in each of which the SI, wind speed, load, and MCP
are set within specific limits as illustrated in Fig. 4. The number of
intervals has been adjusted to 5 for SI and wind speed and 7 for load
and MCP. The probability of each interval are obtained through in-
tegration and the forecast errors are assumed to be 20%, 20%, 10%, and
10% for PV, WT, loads, and MCP, respectively. Then, hourly
5 × 5 × 7 × 7 = 1, 225 primary scenarios can be obtained through the
MSTM by implementing MCS to model the uncertainties. Fig. 5 shows
the hourly predicted values of (a) PV power, (b) WT power, (c) load,
and (d) MCP. Subsequently, the DEC algorithm is used to obtain 25
typical scenarios by omitting repetitive scenarios.
Table 6 depicts the MRR and EOC values corresponding to robust- (c) Load and MCP distribution model
ness factor p. First, through setting p as infinity to relax constraint (27),
the pure stochastic programming has been solved and the following Fig. 4. Discretized PDF for uncertain variables.

10
H.J. Kim, et al. Electrical Power and Energy Systems 124 (2021) 106422

(a) PV

(b) WT

(c) Load
Fig. 5. Hourly forecasted results.

which means that existing scenarios could not satisfy the MRR con- robustness factor p on the results of the proposed OETM for grid-con-
straints. nected MG. In the stochastic programming case (p = ∞), the results
Fig. 6 represents the comparative analysis of the effect of the show that the EOC is widely distributed from $ 14,120 to $ 14,480.

11
H.J. Kim, et al. Electrical Power and Energy Systems 124 (2021) 106422

(d) MCP
Fig. 5. (continued)

Table 6 Meanwhile, when reducing the values of p = 0.0025 and p = 0.0006,

Variation of EOC and MRR with respect to p. the low probability scenarios disappear. Therefore, the proposed sto-
p MRR MRR reduction (%) EOC ($) EOC increasement (%) chastic p-robust OETM of MG shows a high confidence confirming the
confidence of the obtained EOC.
+∞ 0.019116 0 14,142 0 Fig. 7 shows the optimal scheduling result of MG by implementing
0.0175 0.017290 9.552 14,144 0.141
the proposed stochastic p-robust OETM. It shows the generation sche-
0.0160 0.015880 16.928 14,149 0.0495
0.0135 0.013191 30.995 14,153 0.0777
duling of renewables, conventional generators, power exchanges be-
0.0120 0.011924 37.623 14,155 0.0918 tween the main grid and amount of HDR. Priority-list rule is adopted
0.0095 0.009320 51.245 14,156 0.0989 from [33] to ensure that the renewable production has been exploited
0.0075 0.007480 60.870 14,163 0.1483 in advance; then, the conventional generator, HDR, and the power
0.0060 0.005643 70.480 14,169 0.1906
exchange from the main grid have been dispatched sequentially in ac-
0.0050 0.004710 75.361 14,173 0.2187
0.0040 0.003749 80.388 14,185 0.3031 cordance with each of the operating costs. PV and WT are the first-
0.0035 0.003230 83.103 14,198 0.3944 generation units to be scheduled since the operating cost of renewable
0.0025 0.002292 88.010 14,211 0.4855 sources was zero. Then, conventional generators and the power ex-
0.0020 0.001839 90.380 14,222 0.5625
change from the main grid have been deployed to fulfill the load. The
0.0015 0.001477 92.273 14,245 0.7231
0.0010 0.000972 94.915 14,271 0.9039
HDR program is also implemented to reduce and shift the peak load to
0.0009 0.000891 95.339 14,297 1.0841 off peak periods when the operating cost of conventional generators
0.0008 0.000787 95.883 14,313 1.1947 and power purchasing form the main grid is high. As shown in Fig. 7,
0.0007 0.000731 96.176 14,351 1.4563 this leads to a decrease in power generation from conventional gen-
0.0006 0.000579 96.971 14,388 1.7098
erators, namely 9 h to 20 h, due to responses to demand. Specifically,
0.0005 – – – –
between 8–15 h and 17–18 h, the power should be sold to the main grid
because the price of HDR and conventional generators are more

Fig. 6. The impact of robustness factor p.

12
H.J. Kim, et al. Electrical Power and Energy Systems 124 (2021) 106422

Fig. 7. The optimal energy scheduling of MG.

reasonable from the MG operator’s perspective.

Table 7 indicates the results of HDR for OETM of MG. The total
energy curtailed by the I-IBDR participants is 650.35 kWh and the total
incentives paid to the customers are $ 1745.42. It can be noticed that
customers daily interruptible limits are not violated at the same time,
the total incentive payments to I-IBDR participants are implemented
within MG’s total budget. Especially, customer 4 have received the
greatest incentives compared to other customers due to their largest
reduction in energy usage. Meanwhile, customer 1 have received the
lowest amount of incentives due to their high energy usage and low
curtailment. This means that the customers are remunerated appro-
priately with the level of energy that they are willing to curtail without
violating incentive compatibility constraints. Accordingly, the proper
amount of incentives should be paid to the customers to motivate their
participation in the I-IBDR program and reducing the peak load of MG
to lessen the operating costs. Besides, PBDR results show that 103.44
Fig. 8. Performance of G-RPSO algorithm.
kWh of peak period demand is shifted to the off-peak period. While the
total load is not changed in the 24h OETM horizon, this can also lead to
the reduction of EOC when the energy price is higher in the peak better global and local search ability, and thus proposed algorithm
period, compared with the off-peak period. provides a higher convergence rate and running time when solving the
OETM problem. As shown in Fig. 8, the convergence rates of G-RPSO
are superior in terms of iterations compared to those of conventional
5.3. Comparison analysis PSO and RPSO algorithms. Specifically, the G-RPSO reached its
minimum fitness value after 14 iterations, which did not change
In our study, the validity of the proposed G-RPSO in solving the day- thereafter, while the conventional PSO and RPSO algorithms converged
ahead OETM with respect to other PSO algorithms can be verified. at 32 and 29 iterations, respectively. It can be also confirmed that the
Fig. 8 shows the performance of the convergence and run time char- EOC no longer varies when they reach the convergence points. When
acteristics of the proposed G-RPSO algorithm against that of the con- observing the computational time of each algorithm, the shortest
ventional PSO and RPSO algorithms. It is evident that the G-RPSO has

Table 7
The HDR program results.
HDR results

I-IBDR results PBDR results

Customer (y) DR volume (kWh) Incentives ($) Customer cost ($) Customer benefit ($) Amount of load shifting (kWh)

Peak period OFF peak period

9 h – 20 h
1h–8h 21 h – 24 h

1 58.53 164.76 151.67 13.10 103.44 93.21 10.23

2 125.54 341.35 278.3 63.05
3 117 320 171.7 148.99
4 206.85 543.52 175.73 367.79
5 142.44 375.09 74.4 300.70
Total 650.35 1745.42 851.786 893.63

13
H.J. Kim, et al. Electrical Power and Energy Systems 124 (2021) 106422

running time is obtained by G-RPSO (7 m 50 s), followed by G-RPSO To elucidate the advantageous nature of the proposed OETM ap-
(11 m 30 s) and PSO (15 m 01 s). Because of the effect of the modified proach against CVaR-based stochastic optimization, the obtained re-
inertia weight, acceleration parameters, and added Gaussian-random sults are compared in Table 9. In the stochastic CVaR optimization,
variables, the proposed G-RPSO can provide the lowest convergence confidence level α is set to 0.9 and risk-averse solutions are obtained by
iteration and CPU time, among others. Certainly, these characteristics varying the risk aversion parameter (β) from 0 to 1. Details of the CVaR-
reveal the benefits of the proposed algorithm in solving the day-ahead based stochastic optimization are described in Appendix A. The sto-
OETM problem of MG. chastic CVaR results illustrate that as the level of β increases, the CVaR
In order to show the effects of the HDR on the proposed approach decreases, while the EOC of MG increases. Both stochastic optimiza-
and to reduce the EOC of grid-connected MG, five cases have been tions can sufficiently compute the loss of tail and appropriately deal
considered: with numerous samples along with convenient operations. Never-
theless, the stochastic variables, which are related to the risk mea-
Case 1: The OETM without considering DR surement CVaR are highly dependent on the accuracy of the distribu-
Case 2: The OETM with conventional incentive-based DR tion data of uncertain parameters. Due to limited data on renewable
Case 3: The OETM with PBDR sources, end users, and MCP in MG system, CVaR has difficult to pro-
Case 4: The OETM with I-IBDR vide precise presentation on risk in most practice when applied to real
Case 5: The OETM with HDR and large MG system. Moreover, the results of CVaR vary according to
the risk parameters; the MG operator must estimate the confidence level
Fig. 9 shows the result and performance of the proposed OETM in as well as the risk aversion parameter when considering the risk aver-
the day-ahead MG operation for five different cases. As mentioned in sion level. In this regard, a suitable risk parameter must be chosen for
Table 6, it can also be also shown in Fig. 9 that the minimal operating the MG operator for day-ahead OETM. On the other hand, the proposed
cost was obtained at p = ∞, but the robustness of MG was not fully stochastic p-robust OETM is beneficial in terms of easy implementation,
guaranteed. Meanwhile, the maximum robustness of MG was observed i.e., by simply bounding the relative regret limit (p) in each scenario,
at p = 0.0006, and no feasible solution could be found at a value the robustness of MG is guaranteed, while ensuring economic opera-
smaller than 0.0005. The best operating solution is represented at the tion. Additionally, the increasing computational complexity of the
11th point which is indicated in the red square; the EOC and MRR added CVaR measurement is avoided, thus enhancing the effectiveness
values are $ 14,211 and 0.002292, respectively. Note that the weight of the proposed approach to solve the day-ahead OETM.
values of wτ for cost and robustness were set to 0.5. As shown in Fig. 9,
the superiority of our proposed OETM is evident in terms of the EOC.
6. Conclusion
The EOC values of the optimal operating point obtained from fuzzy
clustering for cases one to five are $16,002, $15,773, $15,301, $15,072,
In this work, an advanced framework was proposed based on the
and $14,211, respectively. Although Case 2 to 4 present a decreased
two-stage stochastic p-robust OETM model considering HDR. Uncertain
EOC with respect to Case 1, the benefit of implementing HDR is realized
variables, such as PV, WT, loads, and MCP, were considered in the
in Case 5. Certainly, by varying incentives according to the period and
proposed OETM of MG. The continuous PDF of each uncertain variable
demand shifting, the proposed OETM can flatten the demand when the
was divided into certain segments to generate primary scenarios by
cost of energy is higher. In other words, when the generating and
implementing MSTM. Then, the DEC algorithm was applied to reduce
transactional costs are high in the peak period, Case 5 can reduce the
the scenario sets and obtain the typical scenarios. The problem was
EOC significantly with respect to cases 1 to 4 by reducing the peak
formulated as minimizing the value of EOC while ensuring the p-ro-
period load as well as selling the remaining power to the main grid, as
bustness constraints for each scenario. The proposed OETM problem
already depicted in Fig. 7.
was solved by the G-RPSO, and, the fuzzy clustering was then employed
Fig. 10 illustrates the new load profile of MG considering each case.
to obtain the best compromise solution by a proper choice of p that
In Case 1, the base load of MG is given. Because the incentive rate is the
reduced the EOC while simultaneously improving the robustness. The
same regardless of the period, Case 2 shows a similar amount of load
comparative results between pure stochastic programming and the
curtailment at all hours, rather than a greater peak period reduction. In
proposed stochastic p-robustness method confirmed that the robustness
Case 3, 218.97 kWh of load has been shifted from peak period to off-
peak period. Case 4 decreases the demand mainly in the peak period
since the incentive payment differs according to the period. It is evident
that the most flattened profile of MG is achieved in Case 5, owing to the
implementation of both parts of the HDR. These results demonstrate the
superiority of the proposed approach because Case 5 can reduce the
EOC while improving the reliability of MG by effectively flattening the
demand of MG.
Table 8 summarizes the effectiveness of the proposed OETM in
terms of economic and peak load management issues. It can be seen
from Case 5 that it shows a beneficial result in terms of the EOC because
substantial reduction in the peak period load is implemented. The
quantitative results of the peak to average ratio also demonstrate the
superiority of our proposed approach. Note that the peak to average
ratio was calculated as the total demand divided by the peak load. In
Case 5, the peak to average ratio increased up to 22.3, which represents
a better performance in terms of peak load reduction implemented by
HDR. This lies in fact that although Case 2 to 4 have also reduced the
EOC and ensured the reliability of the peak period demand, Case 5
provides the most reasonable OETM solution for the MG operator.
Therefore, it should be noted that the proposed OETM provides a more
reliable operating condition by peak load reduction at the same time,
enables operating MG with much reduced cost. Fig. 9. Trade-off between MRR and EOC.

14
H.J. Kim, et al. Electrical Power and Energy Systems 124 (2021) 106422

Fig. 10. Load curve of MG for each case.

Table 8 Furthermore, comparison analyses with respect to the CVaR-based

Comparative results of each case. stochastic optimization have demonstrated the benefits of the proposed
Case 1 Case 2 Case 3 Case 4 Case 5 OETM. Accordingly, the proposed OETM can help MG operators in
decision-making processes to determine the best operating solution
EOC ($) 16,002 15,773 15,301 15,072 14,211 against economical and robustness issues associated with uncertainty.
Decreased EOC ($) – 229 701 930 1791
Decreased EOC (%) – 1.43 4.38 5.81 11.19
Total DR amount (kWh) – 883.95 218.87 637.23 753.78 Declaration of Competing Interest
Peak period reduction (kWh) 372 218.87 470.97 606.29
Peak to average ratio 19.49 18.54 21.06 20.41 22.3
The authors declare that they have no known competing financial
interests or personal relationships that could have appeared to influ-
improved by approximately 88.010% with a minimal increase (0.486%) ence the work reported in this paper.
in the EOC of the MG. The impact of robustness value p showed that the
low probability scenarios were not obtained with respect to pure sto- Acknowledgement
chastic programming, which guarantees the confidence of the obtained
EOC value. In addition, provided that the incentive compatibility was This research was supported by the Chung-Ang University Research
ensured, the HDR efficiently reduced the peak period load at the same Scholarship Grants in 2020. This research was also supported by the
time, effectively shifted the load from peak period to off peak period. Korea Electric Power Corporation (Grant number: R19XO01-37)

Appendix

CVaR-based stochastic optimization method

To assess the risk, two risk control measurements, VaR and CVaR, are realized. VaR indicates the probability of loss excess, while CVaR reflects
the expectation of loss excess. In this regard, CVaR is widely used for risk control measurement that utilizes fat tailed loss distribution functions. By
combining risk measurement with CVaR, the objective function of CVaR-based OETM can be expressed as
Nt Ns
min ∑ ∑ ρs EOCs (t ) + βCVaR α
t=1 s=1 (A.1)
where
Ns
1
CVaR α = ς −
1−α
∑ ρs ηs
s=1 (A.2)

Table 9
Comparison of stochastic results for OETM.
Stochastic p-robustness solution Stochastic CVaR solution

MRR EOC ($) CPU EOC ($) CVaR ($) CPU

Min Max Min Max Average β=0 β = 0.5 β=1 β=0 β = 0.5 β=1 Average

0.000131 0.019116 14,142 14,388 7 m 50 s 14,142 14,232 14,382 15,174 13,718 13,122 8 m 21 s

15
H.J. Kim, et al.
Here, ζ and ηs are auxiliary variables. In equation (A.1), the objective of the function is to minimize the EOC, while maintaining the risk at an
acceptable level. For the risk measurement expressed in equation (A.2), the CVaRα at the confidence level (α) is utilized. β is a risk aversion
parameter that represents the MG operator’s risk-aversion attitude. Moreover, the objective function (A.1) is subject to constraints (28)–(47).
References
[1] Mahmoud MS, Hussain SA, Abido M. Modeling and control of microgrid: an over-
view. J Franklin Inst 2014;351:2822–59.
[2] Khodaei A, Bahramirad S, Shahidehpour M. Microgrid planning under uncertainty.
IEEE Trans Power Syst 2015;30:2417–25.
[3] Zareipour H, Bhattacharya K, Canizares CA. Electricity market price volatility: the
case of Ontario. Energy Pol 2007;35:4739-48.
[4] Mostafa S, Masoud E, Atefeh J, Mohammad-H G. Stochastic multi-objective eco-
nomic-environmental energy and reserve scheduling of microgrids considering
battery energy storage system. Electr Power Energy Syst 2019;106:1–16.
[5] Mosayeb B, Rahmat-A H, Amin K, Moein R. Optimal stochastic scheduling of CHP-
PEMFC, WT, PV units and hydrogen storage in reconfigurable micro grids con-
sidering reliability enhancement. Energy Convers Manage 2017;150:725–41.
[6] Fazlalipour P, Ehsan M, Mohammadi-Ivatloo B. Risk-aware stochastic bidding
strategy of renewable micro-grids in day-ahead and real-time markets. Energy
2019;171:689–700.
[7] Najafi A, Falaghi H, Contreras J, Ramezani M. Medium-term energy hub manage-
ment subject to electricity price and wind uncertainty. Appl Energy
2016;168:418–33.
[8] Wang Y, Yang Y, Tang L, Sun W, Zhao H. A stochastic-CVaR optimization model for
CCHP micro-grid operation with consideration of electricity market, wind power
accommodation and multiple demand response program. Energies 2019;12:3980.
[9] Tavakoli M, Shokridehaki F, Akorede MF, Marzband M, Vechiu I, Pouresmaeil E.
CVaR-based energy management scheme for optimal resilience and operational cost
in commercial building microgrids. Int J Electr Power Energy Syst 2018;100:1–9.
[10] Mohammad RE, Nima A. Adaptive robust optimization framework for day-ahead
microgrid scheduling. Electric Power Energy Syst 2019;107:213–23.
[11] Xiang Y, Liu J, Liu Y. Robust energy management of microgrid with uncertain re-
newable generation and load. IEEE Trans Smart Grid 2016;7:1034–43.
[12] Zhang C, Xu Y, Li Z, Dong ZY. Robustly coordinated operation of A multi-energy
microgrid with flexible electric and thermal loads. IEEE Trans Smart Grid 2018;1–1.
[13] Shi Z, Liang H, Huang S, Dinavahi V. Distributionally robust chance constrained
energy management for islanded microgrids. IEEE Trans Smart Grid
2019;10:2234–44.
[14] Li Y, Yang Z, Li G, Zhao D, Tian W. Optimal scheduling of an isolated microgrid
with battery storage considering load and renewable generation uncertainties. IEEE
Trans Ind Electron 2019;66:1565–75.
[15] Bai L, Li F, Cui H, Jiang T, Sun H, Zhu J. Interval optimization based operating
strategy for gas-electricity integrated energy systems considering demand response
and wind uncertainty. Appl Energy 2016;167:270–9.
[16] Li Y, Wang P, Gooi HB, Ye J, Wu L. Multi-objective optimal dispatch of microgrid
under uncertainties via interval optimization. IEEE Trans Smart Grid
2019;10:2046–58. (chaotic group search).
[17] Zakariazadeh A, Jadid S, Siano P. Smart microgrid energy and reserve scheduling
with demand response using stochastic optimization. Int J Electr Power Energy Syst
16
Electrical Power and Energy Systems 124 (2021) 106422
2014;63:523–33.
[18] Wang MQ, Gooi HB. Spinning reserve estimation in microgrids. IEEE Trans Power
Syst 2011;26:1164–74.
[19] Liu C, Wang X, Guo J, Huang M, Wu X. Chance-constrained scheduling model of
grid-connected microgrid based on probabilistic and robust optimisation. IET
Gener, Transm Distrib 2018;12:2499–509.
[20] Jadid-Bonab M, Dolatabadi A, Mohammadi-Ivatloo B, Abapour M, Asadi S. Risk-
constrained energy management of PV integrated smart energy hub in the presence
of demand response program and compressed air energy storage. IET Renew Power
Gener 2019.
[21] Sachs J, Sawodny O. Multi-objective three stage design optimization for island
microgrids. Appl Energy 2016;165:789–800.
[22] Das S, Abraham A. Automatic clustering using an improved differential evolution
algorithm. IEEE Trans Syst 38:218-237.
[23] Snyder LV, Daskin MS. Stochastic p-robust location problems. IIE Trans
2006;38:971–85.
[24] Kim MK, Nam YW, Park JW. Market-clearing for pricing system security based on
voltage stability criteria. Energy 2011;36:1255–64.
[25] Hongbin W, Wingyue L, Ming D. Dynamic economic dispatch of a microgrid:
Mathematical models and solution algorithm. Int J Electr Power Energy Syst
2014;63:336–46.
[26] Nojavan S, Qesmati H, Zare K, Seyyadi H. Large consumer electricity acquisition
considering time-of-use rates demand response programs. Arab J Sci Eng
2014;39(12):8913–23.
[27] Fahrioglu M, Alvarado FL. Using utility information to calibrate customer demand
management behaviour models. IEEE Trans Power Syst 2001;16: 317–22. Zifa L,
Jianhua Z. Optimal planning of substation of locating and sizing based on GIS and
adaptive mutation PSO algorithm. In: IEEE Int Conf Power Syst Tech; 2006. p. 1–5.
[28] Zakariazadeh A, Jadid S, Siano P. Economic-environmental energy and reserve
scheduling of smart distribution systems: a multiobjective mathematical program-
ming approach. Energy Convers Manage 2014;78:151–64.
[29] Kim HJ, Kim MK. Multi-objective based optimal energy management of grid-con-
nected microgrid considering advanced demand response. Energies
2019;12(21):4142.
[30] Mohammadreza M, Alireza Z, Shahram J, Pierluigi S. Integrated scheduling of re-
newable generation and demand response programs in a microgrid. Energy Convers
and Manage 2014;86:1118–27.
[31] Mohiti M, Monsef H, Anvari-moghaddam A, Guerrero J, Lesani H. A decentralized
robust model for optimal operation of distribution companies with private micro-
grids. Int J Electr Power Energy Syst 2019;106:105–23.
[32] Rezaei N, Ahmadi A, Khazali AH, Guerrero JM. Energy and frequency hierarchical
management system using information gap decision theory for islanded microgrids.
IEEE Trans Ind Electron 2018;65:7921–32.
[33] Fioriti D, Giglioli R, Poli D, Lutzemberger G, Micangeli A, Del Citto R, et al.
Stochastic sizing of isolated rural mini-grids, including effects of fuel procurement
and operational strategies. Electr Power Syst Res 2018;160:419–28.