Renewable and Sustainable Energy Reviews 58 (2016) 1664–1683

Contents lists available at ScienceDirect

Renewable and Sustainable Energy Reviews

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

A compendium of optimization objectives, constraints, tools

and algorithms for energy management in microgrids
Aftab Ahmad Khan b, Muhammad Naeem a,b, Muhammad Iqbal b, Saad Qaisar c,
Alagan Anpalagan a,n
a
Department of Electrical and Computer Engineering, Ryerson University, ON, Canada
b
COMSATS Institute of IT, Wah Campus, Wah, Pakistan
c
SEECS NUST, Pakistan

art ic l e i nf o a b s t r a c t

Article history: Microgrid equipped with heterogenous energy resources and a bank of energy storage devices presents
Received 8 November 2014 the idea of small scale distributed energy management (DEM). DEM facilitates the minimization of the
Received in revised form transmission and operation costs, peak load and environmental pollution. Microgrid also enables active
8 October 2015
customer participation by giving them the access to the real time information and control. The capability
Accepted 27 December 2015
Available online 2 February 2016
of fast restoration against physical/cyber attack, integration of renewable energy resources and infor-
mation and communication technologies (ICT) make microgrid as an ideal candidate for distributed
Keywords: power systems. The energy management system of microgrid can perform real time energy forecasting of
Optimization renewable resources, energy storage elements and controllable loads in making proper short term
Algorithms
scheduling to minimize total operating costs. Cost benefit analysis of microgrid reveals that cooperation
Microgrid
among different microgrids can play an important role in the reduction of import energy cost from the
utility grid. Cooperation among microgrids in smart microgrid network (SMN) brings the energy sharing
and management issues. In this paper we present a review of existing optimization objectives, con-
straints, solution approaches and tools used in microgrid energy management. This review paper can
provide a foundation to embark on an in depth study in the area of energy management for smart
microgrid network.
& 2016 Elsevier Ltd. All rights reserved.

Contents

1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1665
2. Related work (energy management problem in microgrids). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1665
2.1. Reports and publications which are utilized in the practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1666
2.2. Objective functions of energy management problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1666
2.3. Constraints in energy management problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1667
2.4. Optimization types used in energy management problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1667
2.4.1. Linear programming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1667
2.4.2. Non-linear programming. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1672
2.4.3. Stochastic programming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1674
2.4.4. Dynamic programming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1674
2.4.5. Non-differential programming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1675
2.5. Solution approaches of energy management problem. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1675
2.5.1. Heuristic approach. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1675
2.5.2. Agent based approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1676
2.5.3. Evolutionary approach. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1676
2.5.4. Model predictive control approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1678
2.5.5. Neural network approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1678

n
Corresponding author.
E-mail address: alagan@ee.ryerson.ca (A. Anpalagan).

http://dx.doi.org/10.1016/j.rser.2015.12.259
1364-0321/& 2016 Elsevier Ltd. All rights reserved.
 A. Ahmad Khan et al. / Renewable and Sustainable Energy Reviews 58 (2016) 1664–1683 1665

2.5.6. Round robbin approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1678

2.5.7. Gauss Seidel approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1678
2.5.8. SD Riccati equation approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1678
2.6. Tools used to solve energy management problem. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1678
2.6.1. Anylogic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1678
2.6.2. CPLEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1678
2.6.3. DigSILENT Power Factory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1678
2.6.4. DSTATCOM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1679
2.6.5. DSpace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1679
2.6.6. FuseViz . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1679
2.6.7. GAMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1679
2.6.8. MATLAB/Simulink . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1679
2.6.9. MATPOWER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1679
2.6.10. PSCAD/EMTDC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1679
2.6.11. Java REST services developed in Glassfish 3.1 application server . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1679
2.6.12. SIMPLORER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1679
2.6.13. SCENRED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1679
2.6.14. VERA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1679
3. Conclusion and future work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1679
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1679

1. Introduction proposed in [20]. The authors have used an integrated framework

Consortium of Electric Reliability Technology Solutions (CERTS)
describes a microgrid as a semi-autonomous system of distributed
generators and dispatchable loads acting together for reliable and
secure power supply and heating to a local community. In addi-
tion, microgrid can also have energy storage devices [1,2]. Micro-
grid can operate in grid-connected or island mode [3]. Different
power conversion systems, controllers with advanced commu-
nication features [4] and electric vehicles [5,6] are significant parts
of microgrid. Microgrid fulfills the requirement of Smart Grid
Initiative Policy (GIP) [7]. Microgrid also enables active customer
participation by giving accessibility of real time information and
control to the customer [8,9]. The capability of fast restoration
against physical/cyber attack, integration of renewable energy
resources and Information and Communication Technologies (ICT)
[10,11] make microgrid as an ideal candidate for distributed power
systems despite various challenges [12]. The deployment of
microgrids have been forecasted to reach 3.1 GW by 2015. These
installations will have monetary value of six billion dollars in the
market [7].
The classification of microgrids is based on ownership, appli-
cation and loads [13]. The utility microgrid provides electric supply
to central urban downtown loads. The commercial/industrial
Microgrid serves loads that are large and need highly reliable and
premium power quality. The remote microgrid is a rational choice
to the loads that are situated far away from dedicated feeders. A
new paradigm in microgrids, called customer driven microgrid,
presents real time information and associated controls to the
customers [14,15]. Proliferation of microgrids in the new power
system paradigm requires advanced tools and techniques for
optimal operation and management. Short-term load forecasting
is a fundamental and essential task for the operation of a micro-
grid [16,17]. In [18], a forecasting model of power generation to
optimize the operation of the microgrid is presented which opti-
mizes the energy management. The aim of energy management in
microgrid is to minimize operating costs such as maintenance
costs, fuel costs and energy purchase cost from the utility grid. In
[19], the authors have proposed a stochastic model for optimal
energy management with the goal of cost and emission mini-
mization. A microgrid energy management framework for the
optimization of individual objectives of microgrid stakeholders is
of agent-based modeling and robust optimization for microgrid
energy management. An experimental framework has been pro-
posed in [21] to execute day-ahead scheduling and real time
scheduling of standalone microgrids. In [22], the authors pre-
sented a modified simulated annealing triple-optimizer to search
for an optimal energy management scheme in terms of financial
gain maximization in a microgrid. The energy management system
exists in centralized, distributed and hybrid mode [23–27]. Most of
the existing work considers single microgrid's energy manage-
ment. The energy management of Smart Microgrid Network
(SMN) is in preliminary stage [28,29]. The microgrids in SMN can
cooperate to exchange surplus energy when unable to handle their
loads solely. The SMN concept has initially been introduced in [29–
31] where a group of microgrids shares their stored energy to
increase the utilization of renewable resources and to reduce the
amount of energy imported from the utility grid. In this paper we
present a review of existing optimization objectives, constraints,
solution approaches and tools used in microgrid energy manage-
ment. We also highlight some of the reports and publications
which are utilized in the practice to guide the researchers and
practicing engineers. These reports enable them to know about the
practical value of different technologies, implementation and
benchmark for the comparison purpose. This review paper can
provide a foundation to embark on an in depth study in the area of
energy management for smart microgrid network.
2. Related work (energy management problem in microgrids)
Smart energy management system can perform real time
energy forecasting of renewable resources [42], energy storage and
controllable loads to make proper short term scheduling to
minimize total operating costs [43,44]. Various strategies for
energy management have been proposed in the literature
depending upon the consumption and utilization of electric power
[45]. Existing reviews/surveys relating to optimization of micro-
grid are shown in Table 1. In this section literature review of
existing energy management techniques in microgrids have been
elaborated. Different optimization formulations used for the
energy management in microgirds have been focused to minimize
microgrid's operating costs namely maintenance costs, fuel costs
1666 A. Ahmad Khan et al. / Renewable and Sustainable Energy Reviews 58 (2016) 1664–1683

and energy purchase cost from the utility companies. These opti- based systems. They argued that the applications that require
mization formulations have been classified on the basis of Objec- batteries to serve as a backup energy service rather than a cycling
tive functions, constraints, optimization types, solution types and service will find that PbA batteries are better choice. The roof top
tools used to solve the energy management problem in microgrids. microgrid system comprising of two wind turbines with a total
capacity of about 6.4 kW and photovoltaic system with a capacity
2.1. Reports and publications which are utilized in the practice of 3.6 kW has been investigated in [51]. Performance analysis of
the developed model showed that the variation in wind can be
It is due to the realization of the dire need of replacing con- effectively taken care by combine operation with PV system along
ventional fossil fuel based energy resources with renewable with battery storage. The results also verified that the intermittent
energy resources that different organizations are contributing to nature of the renewable sources can be handled effectively by
achieve this objective. These organizations are contributing using hybrid system. The following section describes some com-
towards the development of the microgrid in different aspects as monly used objective functions in energy management problem.
shown in Table 2. For example, in [3], the standards and technol-
ogies of the microgrid are elaborated. A vision report, Grid 2030 2.2. Objective functions of energy management problem
[46] by the US department of energy, highlights the necessity of
microgrid and its future growth. In [47], a pilot project at Santa The energy management in microgrid can have different
Rita Jail Campus, about 70 km east of San Francisco is elaborated. objective functions. These objective functions are based on user
This project is the true demonstration of microgrid as it is locally preferences, geographical area, equipment installed in microgrid,
controlled system and can operate both grid connected and capacity of microgrid, government regulations, types of tariff,
islanded mode [48]. The technical report [49] suggests policy energy storage and generation. Fig. 1 presents the types of opti-
recommendations for a microgrid demonstration program, with mization used to solve the problem of energy management.
specific recommendations for China. This report also outlines the A collection of objective functions is described in Tables 3–6.
drivers for microgrids emphasizing renewable energy, identifies Table 3 presents objectives related to capital and operational costs
the barriers to microgrid development and suggests potential of microgrid. Operational costs include production costs, fuel costs,
solutions, and lists policy recommendations. An energy system maintenance costs, start-up and shut-down costs, degradation
costs and purchase costs from the utility grid in case of shortage.
model (ESM) has been developed in [50] to perform the realistic
Table 4 describes the objectives of battery and other storage
battery modeling and economic evaluation. The authors compared
devices such as hydrogen storage and ultra-capacitors. Objectives
Aqueous Hybrid Ion (AHI) based microgrids with lead acid (PbA)
related to Costs and efficiencies of Charging and discharging is also
included. In Table 6, miscellaneous objectives namely power los-
Table 1
Existing reviews/surveys relating to optimization microgrid. ses, penalty costs, worst case net transaction costs and dis-
satisfaction costs are presented. Table 5 shows the carbon emis-
Ref. no. Review type MG mode of operation sions and penalty costs for these emissions [61]. Single and multi-
objective work is presented in Table 7.
OFS Generic OF Const. Tools Standalone Grid connected
The multi-objective optimization is considered in [62–75]. In
[32] √ √ √ √ √ [62], authors describe a multi-objective framework to minimize
[33] √ √ power losses, carbon emissions, generation and capital costs.
[34] √ √ Supply and frustration costs are discussed in [63]. Zhao et al. [64]
[35] √ √ √
[36] √ √ √ √
present a minimization objective of fuel, maintenance and startup
[37] √ √ √ √ costs. In [65], authors used a multi-objective approach to minimize
[38] √ √ the generation and storage costs. The authors use a multi-objective
[39] √ √ √ paradigm in [66] to minimize shortage, storage and grid costs. Ma
[40] √ √ √
et al. [67] present minimization of consumer bill and dissatisfac-
[41] √ √ √
tion costs. In [68], financial gain of user and penalty cost are
OFS, optimization function specific; OF, optimization function; Const., constraints; combined in multi-objective optimization. Financial gain of user is
MG, Microgrid. maximized while penalty cost is minimized. A multi-objective

Table 2
Reports and publications which are utilized in the practice.

Ref. no. Organization Emphasis

Academics Industry Government Regulatory Statistics/ analysis Future plan/ prediction Pilot project

[3] √ √
[47] √ √
[49] √ √
[50] √ √
[51] √ √
[52] √ √
[53] √ √
[54] √ √
[55] √ √
[56] √ √
[57] √ √
[58] √ √
[59] √ √
[60] √ √
 A. Ahmad Khan et al. / Renewable and Sustainable Energy Reviews 58 (2016) 1664–1683
Fig. 1. Objective functions.
approach to maximize the best set of sellers and weights is dis-
cussed in [69,70,76,77]. Jiang et al. [71] propose a multi-objective
optimization of revenue while considering loads, supply, storage
and grid costs. The authors consider all costs of supply, storage and
penalty costs due to loadshedding. A multi-objective optimization
frame work has been considered in [72] to maximize the economic
benefit of the microgrid. Nguyen et al. [73] present a multi-
objective methodology. The methodology includes minimization
of grid, star-up and shut-down, operating, demand response,
loadshedding, penalty of wind and solar costs separately. Garca
[74] proposes a multi-objective optimization technique to mini-
mize the cost of grid, battery, ultra-capacitor and hydrogen. Pen-
alty costs of operation and carbon emissions are considered in
[75]. Guyen et al. [78] use a multi-objective paradigm to minimize
fuel consumption costs and maximize charge/discharge efficiency.
In [79], a multi-objective optimization is considered to maximize
the revenue from loads and to minimize supply cost and worst
case net transaction cost. Minimization of generation, operation,
start-up and purchase cost is discussed in [80]. In [18], authors
present a multi-objective approach to maximize benefit due to
lower time of use (ToU) prices and minimize hourly capital and
storage costs of energy storage elements. To maximize reliability
index of microgrid and minimize allocation costs of distributed
generation (DG) and line loss index, a multi-objective approach is
proposed in [81–83]. Corso et al. [84] focus on minimization of fuel
costs, carbon emissions, and energy losses (supply–demand). A
multi-objective problem to minimize the payment of dispatchable
loads and cost of supply is considered in [85].
Single objective approach is presented in [28,86–92]. The
minimization of import energy from grid [28], Gaussian distance
between the consumption pattern of home appliances [86], grid
costs [87,88], tracking error [89], supply costs [90,91] and gen-
eration cost [92] are the single objective formulations.
2.3. Constraints in energy management problem
In real life, the optimal energy management system for
microgrid is affected by a number of constraints. Table 8 presents
constraints related to the objectives discussed earlier. Constraints
of power generation are the maximum and minimum power
output limits. A distributed generator must operate within these
1667
limits for a safe and economic operation. All types of loads, such as
residential, commercial and industrial, consume electric power
according to their operating limits. These are consumption or load
constraints. Battery or other storage devices such as hydrogen and
ultra-capacitors have limits for charge and discharge rate. These
storage elements also have a specific limit of discharge. Excessive
charge and discharge rates affect life time and efficiency of these
elements. All of these operating limits are taken as storage con-
straints. Operational constraints are used for spinning, non-
spinning reserves, ramping limits and start-up and shut-down
rates of generating elements. In some countries like the US,
existing prices of selling and purchasing electricity from grid in
case of excess or shortage, e.g. real time electric prices depend
upon the online load, as the load exceeds certain specified limit,
energy price goes on increasing. This scheme reduces peak load on
supplying units.
Microgrids rely more on renewable energy resources to reduce
carbon emissions. Wind, solar and fuel cell energy resources are
being integrated into microgrid. Wind and solar energies are
uncertain and have specific output limits. Fuel cell also has specific
operating limits. These operating conditions are taken as con-
straints while solving the optimization formulations related to the
energy management for microgrids utilizing renewable resources.
2.4. Optimization types used in energy management problem
Various optimization techniques have been used by the
research community to tackle the problem of energy management
in microgrids. Fig. 2 presents the types of optimization used to
solve the problem of energy management. The preceding section
discusses the relevant work related to each specific technique.
2.4.1. Linear programming
A microgrid consisting of hybrid renewable energy systems has
been modeled by using a linear programming in [112] to reduce
the demand fluctuations and improve energy balance. The authors
argued that the demand fluctuations could be reduced up to 19%.
Mixed integer linear programming (MILP) has been proposed in
various articles to solve different energy related problems. For
example in [99], total annualized cost has been minimized by
optimally selecting different system components and renewable
1668 A. Ahmad Khan et al. / Renewable and Sustainable Energy Reviews 58 (2016) 1664–1683

Table 3
Objective functions for minimization of capital and operational cost.

Objectives Equation Details

Generation cost [62] N X

X 24 X
n
d is interval, h is hour, i represents generating unit, C pi is cost function, P g;h;d
F¼ C pi P g;h;d Δt i
i (1) generated power, Δt is time taken, g represents generation.
d¼1h¼1i¼1
F ¼ ½A1 ; A2 ; …; ANDG  (2)
Capital cost [62] A is rated size of power of generating unit to be optimized, ANDG represent
nth distributed generator.
Fuel costs [63] F ¼ ai P 2i;t þ bi P i;t þ ci (3) a ; b ; c are the fuel cost coefficients of a unit i, t is time interval, P is output
i i i i;t
power of ith generator at time t.
F ¼ di P i;t (4)
Maintenance cost [64] di maintenance cost coefficients of a unit i, t is time interval, P i;t is output of
   ith unit in t.
Start-up costs [64]  TDi;t CSC is cold start up cost of uniti, HSC is hot start-up costa of unit i, t is time
F ¼ HSC i þ CSC i 1 exp ð1 ui;t  1 Þ (5)
ρi interval, T total time horizon of 1 day, ρi cooling time constant of a unit i,
ui;t  1 unit status indicator (1 for ON), Di;t forecasted demand for ith unit
during time t.
Energy cost [65] X
T
CG(t) is cost function and PG(t) generated power and t is interval, T is max-
F¼ C G ðtÞP G ðtÞ
(6) imum taken time.
t¼0
Energy cost from utility grid [93] XT
FC is energy cost of utility grid at each time interval, P G ;t is power from the
F¼ FCðP G ;t Þ
(7) utility grid at time t and T is the number of considered time intervals.
t¼1
F¼ xð  Þ E½maxðL1 ðiÞ  βm βd Q 1 ðiÞ; 0Þ (8)
Shortage cost [66] L is load, Q is energy from grid and i is time interval, βm and βd are the main
grids transmission efficiency to the microgrid and the microgrid's distribu-
tion efficiency to consumers, respectively, xð  Þ showing shortage cost at the
beginning of time slot t, E[.] is an expectation function.
F ¼ pQ 1 ðTÞ (9)
Grid cost [66] p is energy price, Q 1 ðTÞ is the total energy from the grid.
All costs of DG [71] XX X
LGi
θ and θT are set of variables and time set respectively, i is for ith unit, A1 fuel
F¼ ½U tGi A1i ðF ki Dt;k
i Þ cost for initial power of piece 1, Fk is fuel cost for unit power of piece, cGiON
t A θT i A θG 1 (10)
ith generator Startup cost, U tGin is operation state of ith controllable unit,
þ K OMi P tGi þ cON t
Gi U Gin 
K OMi Operation and maintenance costs of dispatchable DG unit, Dk power of
X dispatchable DG in piece, PGit is active power of controllable units.
Grid cost [71] F¼ ðC grid þ P tgrid þ  C grid  P tgrid  Þ C grid þ and C grid  are prices of power buying from/selling to the main grid,
t A θT
(11)
P tgrid þ and P tgrid  power to buy from or sell to main grid.
Grid cost [87] X
T
Pr(k) is price per kw, SU(k) power to/from grid, Δt is time duration.
F¼ ðPrðkÞnSU ðkÞnΔtÞ
(12)
k¼1
 
Grid cost [88] F ¼  P MG npload þ bidDG ðP DG Þ þ bidload ðP LC Þ PMG is total load of the MGs, PLC is amount of load curtailment, P DG is
þ ð1 þ PMÞðA  P 2central þ B  P central þ CÞ (13) production of the DG units, PM represents profit margin, bidDG ðÞ is DG
þ C grid  P central production bids, bidload ðÞ is load curtailment bids, A; B; C are cost parameters
of the upper level unit, pload represents retail prices, Pcentral is production
 level of the central unit, Cgrid is electricity system charges.
Grid cost [88] F ¼  P MG npload þ bidDG ðP DG Þ þ bidload ðP LC Þ (14) PMG is total load of the MGs, PLC is amount of load curtailment, P DG is
þ ðA  P 2central þ B  P central þ CÞ þ C grid  P central production of the DG units, PM represents profit margin, bidDG ðÞ is DG
production bids, bidload ðÞ is load curtailment bids, A; B; C are cost parameters
of the upper level unit, pload represents retail prices, Pcentral is production
  level of the central unit, Cgrid is electricity system charges.
Electrolyzer cost [72] Cost loan;elz δelz ðt k Þ is binary variable of on/off state, A is degradation factor, N hours;elz is
F¼ þ Cost o  m;elz  δelz ðt k Þ
N hours;elz (15) number of life hours, Δz change in electric power with logical state.
þ Cost start  up;elz  Δδelz ðt k Þ þ Adegr;elz  ðΔzelz ðt k ÞÞ2
 
Cost loan;fc
Fuel cell cost [72] F¼ þ Cost o  m;fc  δfc ðt k Þ δfc ðt k Þ is binary variable of on/off state, A is degradation factor, N hours;fc is
N hours;fc (16)
number of life hours, z electric power with logical state.
þ Cost start  up;fc  Δδfc ðt k Þ þ Adegr;fc  ðΔzfc ðt k ÞÞ2
Grid cost [73] NH X
X NM
NH and NM are the number of hours and microgrids respectively, dt is
F¼ ðdt  ai;M  P grid
i;t  et Þ (17) duration of time, a is binary variable, P grid is power related to grid, e is
t ¼1i¼1 i;M i;t t

price.
Shut-down and start-up costs [73] X
NH X
NM X
NG
NH, NM and NG are the number of hours, microgrids and distributed gen-
F¼ ðSU k;i;t þ SDk;i;t Þ
(18) erators respectively, SU k;i;t is the start up Cost function, SDk;i;t is the shut
t ¼1i¼1k¼1
down cost function.
Operating cost [73] X
NS X
NH X
NM X
NG
NH, NM, NG and NS are the number of hours, microgrids, distributed gen-
F¼ ρs C  P sk;i;t
(19) erators and scenarios respectively, ρs is probability of scenarios s ¼ 1,2 … C is
s¼1 t ¼1i¼1k¼1
production cost function, P sk;i;t is output power of the ith generator
Xh
Operating cost [94] F¼ ðC mgd
t ðpmgd;eim
t  pmgd;eex
t Þ þ C ngs
t pt
ngs;gim
The bidirectional exchange of electricity with the main grid is modeled by
t AT
decision variables pmgd;eim
t and pmgd;eex
t , natural gas imports from the utility
þ C evh;eim pevh;eim
t ÞΔt þ C fri;buf ðetfri;buf ;pop company are modeled by decision variable pngs;gim , pevh;eim represents the
t t
;prp ;pop
þ efri;buf
t Þ þ C hhw;buf ðehhw;buf
t charging rate of the EV's battery, Ctmgd represents the rate of electricity from
i (20)
þ ethhw;buf ;prp Þþ C boi;csc vboi
t þC
chp;csc chp
vt micro grid, Ctngs represents the rate of natural gas, C evh;eim represents the
depreciation rate of the electric vehicles battery.
6 h
X
Grid costs [74] wsale and wpur are the cost functions, Psale and Ppur are selling/purchasing
F¼ wsale ðP sale ðt k þ j Þ  P sch
sale ðt k ÞÞ
2
powers, tk and t k þ j are the time intervals, Psch is scheduled energy
j¼1
i (21) exchanged with main grid.
Total costs [90] Ni X
X Nj þ wpur ðP pur ðt k þ j Þ  P sch
pur ðt k ÞÞ
2
Cij is capital cost, Nij is power rating of distributed generator j in microgrid i,
F¼ C ij N ij þ M ij
i¼1j¼1
(22) Mij operational and maintenance cost of unit j in microgrid i.

Total costs [95] F ¼ CRF PV  C PV B B

INV þ CRF  C INV CRFB represents the capital recovery factor of boiler, CRFCHP represents
þ CRF CHP
 C CHP HST
 C HST capital recovery factor of CHP unit, CRFHST represents capital recovery factor
INV þ CRF INV
of heat storage tank, CRFMG represents capital recovery factor of microgrid,
þ CRF PL  C PL þ CRF MG
 C MG PV
INV þ C OM
INV
CRFPL represents capital recovery factor of heating pipeline network, CRFPV
 A. Ahmad Khan et al. / Renewable and Sustainable Energy Reviews 58 (2016) 1664–1683 1669

Table 3 (continued )

Objectives Equation Details

þ C BOM þ C CHP HST PL

OM þ C OM þ C OM (23) represents capital recovery factor of PV unit, C nINV represent investment cost
þ C GRID GRID
PUR þ C CARBTAX  C SAL
of boiler, CHP unit, heat storage tank, microgrid, heating pipeline network
and PV units. C nOM represent the operating costs, C nPUR represent the purchase
cost and CSALGRID represents the income from selling electricity to the grid in
" # €/year.
Fuel consumption cost [78] X
N X
m1
Cdgi is fuel price function, Hdgi is fuel consumption function, P dgi;k is output
F¼ C dgi  Hdgi ðP dgi;k ÞT
(24) power of distributed generator i in duration k and T is total taken time.
k¼1 i¼1
XX
Cost of supply [85] F¼ C i;t P gi;t g
(25) C i;t cost function of generating unit i in duration t and P i;t generated power.
t AT iAI
Supply cost [79] X T X
M
t is time and m is no of generators, Cmt is cost function , P tGm is output power.
F¼ C tm  P tGm
(26)
X X
t¼1 m¼1
Importing energy [28] F¼ C j ðtÞ  δji Cj(t) is cost function of import energy, δij binary variable for exchange of
(27)
i ji a j power between microgrid i and j.
Generation and operation costs [80] T X
X N
T is for time intervals, N is number of distributed generators, X t;i is binary
F¼ X t;i ðf i ðP t;i Þþ C fixed Þ
i (28) variable of on/off state, fi is fuel consumption cost function, P t;i is output
t ¼1i¼1
power of generator i in duration t and Cifixed is fixed operating cost.
Start-up costs [80] X
T X
N
T is for time intervals, N is number of generating units, C t;i is start-up cost
F¼ C t;i max ðX t;i  X t  1;i ; 0Þ
(29) function of unit i in duration r, X t;i is binary variable of on/off state for unit i
t ¼1i¼1
in duration t.
Allocation costs [81] X
N
C(i) is sum of allocation costs of distributed generator i.
F¼ CðiÞ
(30)
i
Supply cost [91] X
G
C i is cost function, Pi generated power and ΔT total time.
F¼ C i P i nΔT
(31)
i¼1
Fuel costs [84] X X
NDER
h is interval, i is ith distributed generator, CPi is fuel consumption cost, P g;h;d
F¼ CðP gh
i ; hÞ
i
(32) is generated power, Δt is time taken.
h ¼ 1;24 i ¼ 1
Generation costs [92] XN
f i ðP i Þ is running cost function and Pi is demand power.
F¼ f i ðP i ÞnP i
(33)
i¼1 (34)
Cost function [92] F ¼ f i ðP i Þ ¼ gi ðP i Þþ ei ðP i Þ gi ðP i Þ is fuel consumption cost and ei ðP i Þ is environmental externality cost
Supply cost [63] X M X
a is number of appliances , h is hour h , Eh;a is consumption of appliance a , rh
F¼ Eh;a nr h
(35) is energy price at hour h.
a ¼ 1 hAT
Purchase cost [80] X T
P t;u is purchasing power and Rtsell is price for purchase power.
F¼ P t;u Rsell
t (36)
t¼1
F ¼ Pricepur ðt k Þ  P pur ðt k Þ  T (37)
Purchase cost [72] Pricepur ðt k Þ price of electric power at time tk, P pur ðt k Þ is power to be pur-
chased, T total time taken.
Operational costs [96] 48 X
X 3
δi ðtÞ represents the state of micro gas turbine at any time t, C i ðP MGT_i ðtÞ is
F¼ δi ðtÞ  ðC i ðP MGT;i ðtÞÞ þC pe;c;i ðδi ðt þ1ÞÞ; δi ðtÞÞ (38)
t ¼1i¼1 cost of the consumed gas, C pe_c_i ðδi ðt þ 1ÞÞ; δi ðtÞÞ represents the startup
penalties.
Operational cost [97] Nd X
X n
P wi ðtÞ represents the power generation of wind turbine at time t, P P vi ðtÞ
F¼ C wi ðtÞ  P wi ðtÞ
i¼1t ¼1
represents the power generation of photovoltaic at time t, P F Ci ðtÞ represents
þ C P vi ðtÞ  P P vi ðtÞ þ C F C i ðtÞ  P F Ci ðtÞ fuel cell power limits capacity in each time interval t, P Sd ðtÞ represents
i

þ C Sd ðtÞ  P Sd ðtÞþ C Sd ðtÞ  P Sd ðtÞ storage battery 1 maximal power discharge limits in each time interval t,
i i 2i 2i
P SC ðtÞ represents storage battery 1 maximal power charge limits in each
 C SC ðtÞ  P SC ðtÞ  C SC ðtÞ  P SC ðtÞ i
i i 2i 2i
time interval t.
þ C ENSi ðtÞ  P ENSi ðtÞ
Nd X
X n
(39)
 C EX i ðtÞ  P EX i ðtÞ 
i¼1t ¼1
▵
C i ðtÞ  P 2i ðtÞ

F ¼ C K þ C B þ C PV þ C grid (40)
Operational cost of Smart Poly- CK, CB and CPV are the costs incurred for the operation of the two cogen-
generation Microgrid [98] eration gas turbines, the two boilers and the photovoltaic system respec-
tively. Whereas the Cgrid is the cost due to the electricity exchange with
external grid.
F ¼ C INV þ C OP þ C PUR SAL (41) C PUR
Total annualized cost of the micro- GRID þ C CARBTAX  C GRID INV is investment cost, COP operating cost, CGRID purchase cost from grid,
grid [99] CCARBTAX penalty cost for carbon emissions and CGRIDSAL is a sale cost to the
main grid.
Total cost of hybrid energy system Cost  ðMinðCostÞÞ Where λ1 and λ2 are the weighing factors that can be defined by the
F ¼ λ1
[100] MaxðCostÞ  MinðCostÞ designer, A is the index of availability and Cost is the total cost including
A  ðMinðAÞÞ (42) initial and operational cost.
 λ2
MaxðAÞ  MinðAÞ
Total cost [101] X
N
Xi is the electrical active-power generated (kW) and f i ðX i Þ is the electrical
F¼ X i  f i ðX i Þ
(43) generation cost function ($/kW h).
i¼1
Operational cost [102] XN
Pi is the power output related to the DG unit i in kilowatt hours, FCi is the
F¼ FC i ðP i Þ þ P b  P B  P s  P S þ M i ðP i Þ
(44) fuel consumption cost related to the DG unit i, in dollars per kilowatt hour,
i¼1
Pb is the actual hour electricity buying price in dollars per kilo Watt hour, PB
is the amount of purchased electricity, Ps is the actual hour electricity selling
price in dollars per kilowatt hour, PS is the sold electricity in kilowatt hours
and Mi is the maintenance cost related to the DG unit i in dollars per kilo-
watt hour.
F ¼ F DEG þ F MT OP (45) Where C OP indicates operation and maintenance costs of MG, SC represents
Operation and maintenance cost t t þ C t þ SC t t t
[103] startup costs of DEG.

a
Hot startup cost is ….
1670 A. Ahmad Khan et al. / Renewable and Sustainable Energy Reviews 58 (2016) 1664–1683

Table 4
Minimization objectives of energy storage.

Objectives Equation Details

Storage cost [18] X

T 
F¼ C B Deff CB is battery cost function, Deff
B is effective depth of charge and PB(t) is power being
B P B ðtÞ (46)

t¼0   charged or discharged
Hourly capital cost of ESS [18] F ¼ rð1 þ rÞn C capital Cp and Cw are cost functions, Pmax and Wmax represent the power and the energy
ð1 þ rÞn  1 knT a (47) respectively, Ta is operating hour, k is capacity factor and r is interest rate
,,,,, C capital ¼ C p P max þ C w W max
Hourly storage cost of ESS CO and CM are operating and maintenance costs respectively, Pmax and Whourly are
[18] power and energy respectively
F ¼ C2 ¼ C max (48)
 O P þ C M W hourly 
Storage cost [66] L1 ðiÞ xð þ Þ is the storage cost per unit surplus energy, βm and βd are the main grid's
F ¼ xð þ Þ E max βm Q 1 ðiÞ ;0 (49)
βd transmission efficiency to the microgrid and the microgrid's distribution efficiency
to consumers, respectively, L1 ðiÞ is load during interval i, Q 1 ðiÞ is energy from grid, E
[.] is an expectation function
X X
Storage cost [71] F¼ C Si þ P tSi þ θ is set of variables, θT is time set,S is the state of storage device, C Si þ ; C Si  is
t A θT t A θS t t cycle
(50) charging/discharging cost of ESS, P Si þ ; P Si  are charge/discharge powers, CSi is
þ C Si  P tSi  þ C cycle
Si U tSin cost of ESS for periodic duty, U is operation state of controllable units
Charging cost [72] Cost loan;bat  P ch  ηch Cost loan;bat is capital cost, ηch is charge efficiency and Pch is charging power, Ncycles
F¼ þ Adegr;ch  P 2ch ðt k Þ (51)
2  N cycles number of lifecycles, Adegr;ch is the battery cell degradation factor, tk is the time
interval
Discharging cost [72] Cost loan;bat  P dis Cost loan;bat is capital cost, ηdis is discharge efficiency and Pdis is discharging power,
F¼ þ Adegr;dis  P 2dis ðt k Þ (52)
2  N cycles  ηdis Ncycles number of lifecycles, Adegr;dis is the degradation factor of battery cells, tk is the
time interval
 2
Battery costs [74] F ¼ wbatt SOC batt ðt k þ 6 Þ SOC sch wbatt, wlife;ch , wlife;dis and wdegr;ch are the weights of cost function, tk and t k þ j are time
batt ðt k þ 6 Þ
intervals, SOC is state of charge, Pch and Pdis are charge and discharge powers
X
6
þ ½wlife;ch  P ch ðt k þ j Þ þ wlife;dis  P dis ðt k þ j Þ
j¼1 (53)
þ wdegr;ch  P 2ch ðt k þ j Þ þ wdegr;dis  P 2dis ðt k þ j Þ
 2
Cost of ultra-capacitor [74] F ¼ wuc SOC uc ðt k Þ  SOC refuc
(54) wuc is the weight of cost function of ultra-capacitor, SOC uc ðt k Þ is state of charge of
ultra-capacitor during tk and tk is time interval, SOCucref is a reference for SOC
 2 X
h2 , W life þ O  m , wst  up and wdegr are the weights of cost function, δ is logical
6
Hydrogen storage costs [74] w
F7 ¼ wh2 LOHðt k þ 6 Þ  LOHsch ðt k þ 6 Þ þ
j¼1
variable of on/off state and LOH is level of hydrogen in tank, tk and t k þ j are time

intervals, elz and fc represent electrolyzer and fuel cell respectively
W  δ ðt Þ þ W
life þ O  m;elz elz kþj  δ ðt Þ
life þ O  m;fc fc kþj
þ wst  up;elz  Δδelz ðt k þ j Þ þ wst  up;fc  Δδfc ðt k þ j Þ
i(55)
þ ðwdegr;elz  Δδelz ðt k þ j ÞÞ2 þðwdegr;fc  Δδfc ðt k þ j ÞÞ2
80 1
Charging/Discharging effi- > P esj;k is the power related to storage, ηc and ηd are the charge and dis-charge effi-
>
>
>
> B Pm2 P esj;k C
ciency [78] >
> B j ¼ 1 C ciencies, m2 is the number of storage units
>
> B C if discharging
< @Pm2 P esj;k A
F¼ j¼1 d
ηesj ðP esj;k Þ
>
> !
>
> Pm2
>
> j ¼ 1 P esj;k ηesj ðP esj;k Þ
c
>
> P
>
: m if charging
j ¼ 1 P esj;k
2
(56)

resources for the smartgrid. The MILP framework proposed in
[113] tackles the problem of optimal distributed generation by
dividing it into two phases, namely site planning model and
capacity planning model. The authors argued that their proposed
model was computationally efficient with better optimal solution.
In [71], a novel double-layer coordinated control approach for
microgrid energy management is proposed. The proposed
approach involves two layers: the schedule layer and the dispatch
layer. The schedule layer is a mixed integer linear program (MILP).
The schedule layer provides an economic operation scheme based
on forecasting data, while the dispatch layer provides power of
controllable units based on real-time data. Energy management
problem of a standalone MG integrated with RES has been for-
mulated as MILP problem in [114,115] to minimize the operation
cost and penalties related to unmet energy. In [116], the authors
present an optimization model to study the increase in self-
consumption of PV power by smart charging EVs using smart
grid technology.
A MILP is used to solve the multi-objective framework in
[73,117]. The framework facilitates an efficient tradeoff between
low operation cost and good energy services to the end users. The
objective includes the cost of power exchange with the main grid,
the startup and shutdown costs, the operating cost of distributed
generators, the payment for demand response load, the penalty
costs for involuntary load curtailment and renewable energy
spillage. A generic mixed integer linear programming model has
been proposed in [94,118] to minimize the operating cost of a
residential microgrid. A mixed integer linear program optimiza-
tion has been used in [119] for the operation of energy storage in
microgrids. The technique is focused to minimize the electricity
usage cost and battery operation cost. A mixed-integer linear
programming model has been proposed in [120] for the optimal
design and operation of an energy system consisting of combined
heat and power. The proposed model has been used to formulate a
multi-objective function to minimize the capital and operational
costs along with minimization of the CO2.
The authors in [28,121] proposed a Cost-Aware Smart Micro-
grid Network (CoSMoNet) scheme that facilitates economic power
transactions within the microgrid network. The scheme based on
integer linear programming (ILP) matches the excess energy in the
storage elements of microgrid network to the demands of other
microgrid network whose load cannot be accommodated by their
local supply. The authors argued that CoSMoNet enables cost-
efficient power transactions among microgrid communities,
increases the utilization of renewable energy, reduces the depen-
dency of the microgrids to the main grid and reduction of load on
the main grid. The preceding section summarizes the work done in
the area of energy management for microgrids by using non-linear
programming.
 A. Ahmad Khan et al. / Renewable and Sustainable Energy Reviews 58 (2016) 1664–1683 1671

Table 5
Minimization objectives of carbon emissions.

Objectives Numeric Details

Carbon emissions [62] N X

X 24 X
n
Emi is the amount of carbon emissions, d is interval, h is hour and i is the no. of
F¼ Eh;d
mi (57) distributed generators
d¼1h¼1i¼1
Carbon emissions with pen- X48 X
M
t is for time intervals, M is no. of generating unit, CF 2  i  ðP MGT i ðtÞ; tÞ carbon
F¼ ðδi ðtÞ  CF 2  i  ðP MGT i ðtÞ; tÞÞ
alty costs [62,75]
t ¼1i¼1 (58) emissions, C pe  co2  i penalties for carbon emissions, δi ðtÞ is binary variable for
þ C pe  co2  i ðδi ðtÞ; tÞ the state of generating unit at time t
Carbon emissions [84] X
X NDER k is hour, i is the no. of device, Emhi is amount of carbon emissions, NDER is the
F¼ Emhi
(59) Nth number of distributed energy resource and δi is the state of each gen-
k ¼ 1;24 i ¼ 1
erating unit during each time period
Carbon emissions [96] X 48 X 3
δi ðtÞ represents the state of micro gas turbine at any time t, ðCO2_i ðP MGT_i ðtÞÞ is
F¼ δi ðtÞ  ðCO2_i ðP MGT_i ðtÞÞ þ C pe_CO2 _i ðδi ðt þ 1ÞÞ; δi ðtÞÞ (60)
t ¼1i¼1 the CO2 equivalent emissions of each generator, C pe_CO2 _i ðδi ðt þ 1ÞÞ; δi ðtÞÞ repre-
sents the shutdown penalties
Carbon emissions [102] X N X M
Pi is the power output related to the DG unit i in kilowatt hours, PB is the
F¼ ðEF ij P i Þþ GEF:P B  ðGEF  MGEFÞ  P S
i¼1j¼1
(61) amount of purchased electricity, PS is the sold electricity in kilowatt hours, EFij
is the emission factor related to the DG unit i in pounds per kilowatt hour, j is
the emission type, MGEF is the microgrid average emission factor in pounds
per kilowatt hour, and finally, GEF is the main grid average emission factor in
pounds per kilowatt hour

Table 6
Minimization of miscellaneous objectives.

Objectives Equations Details

N X
X n 
24 X
Power losses [62] d is interval, h is hour, i is the no. of distributed generators, Pig is generated
F¼ P g;h;d  P c;h;d Δt
i i (62) power, Pic is consumed power and Δt is time taken
d¼1h¼1i¼1
n
Frustration cost [63] hX 1
n
h is hour, rh is energy price at h, hn is the most preferred slot for the appliance
F ¼ δa ¼ ðh  hÞj r h  r n j a, da is the duration of activation of appliance a, rh is the current energy price
h¼1
in slot h, r n is the average energy price in slot hn and K is the deadline of the
X
K
þ
n
ðh  ðh þ da ÞÞj r h  r n j (63) current schedule
n
h ¼ ðh þ da Þ

Distance b/w Gaussian-dis- ~ P~i ; P~j Þ þ Dð

Dð ~ P~j ; P~i Þ ~ ~
F ¼ dKL ðP~i ; P~j Þ ¼ (64) dKL ðP i ; P j Þ is Kullback-Leibler divergence for home appliances consumption
tribution [86] 2 pattern, P i and Pj are Gaussian mixture models
Consumer price [67] 1
F¼ P l
k
Lk is generating capacity, lik is ith consumer consumption and k is time slot, N
k i
λLk  li (65) is the number of appliances, λ is a constant parameter determined by energy
iAN
! provider to implement elastic pricing
k
Dis-satisfaction cost [67] li k
ai is cost parameter, di is nominal energy consumption, lik is ith consumer
F ¼ ai 1 
di
k (66) consumption and k is time slot
!
Financial gain of user [68] X
24
EPV output of solar panel, Eg;h import power from grid, r PV ;h selling price to
F ¼  EPV nr PV;h  Eg;h nr g;h
(67) grid and r g;h is purchase price from grid and h represent hour
8 h¼1
n 2
Penalty cost [68] >
< 1 þ EPV EPV nC PV ,,, EnPV o EPV EPV output of solar panel, EnPV is actual power sold to grid and CPV is price
F¼ EPV imposed on customer due to unmet PV supply
>
:
0 ,,, EnPV ¼ EPV (68)
Best set of sellers [69] S X
X S is the total number of seller in market, Iði; tÞ is binary variable and Wði; tÞ is
F¼ Wði; tÞnIði; tÞ
(69) weight given by seller to interval i
i ¼ 1 tAΩ
Best set of weights [69] X Ψ X
OT
I(j) is binary variable, Ψ is the number combination and OT is the time interval,
F¼ ðIðjÞn eðj þ k  1ÞÞ
j¼1 k¼1
(70) e is an element of best set of weights BSW, j is number combination, k is time
X X interval
Revenue from loads [71] F¼ C tL P tLi θT is time set, θL is consumption set, CLt is cost for supply to customer during t
t A θT i A θLN;LI
(71)
XX and PLt represent consumption during t
Penalty cost for load-shedding F ¼ K L ð1 U tli ÞP tLi t
t A θT t A θLI
(72) θT is time set, θL is consumption set, KL Punishment cost for load shedding, U li
[71] is a control variable to determine the operation state of interruptible load, PLit
Z is consumption for load i
1
Tracking error [89] 1 Q and R are constant symmetric matrices and non-negative definite and
F¼ ½eT Qe þ unT ðxÞRun ðxÞ dt (73)
2 to positive definite respectively, eT is transpose of tracking error e and unT is
control variable and un ðxÞ is optimal control law
F ¼  Pricesale ðt k Þ:P sale ðt k Þ  T (74)
Sale cost [72] Pricesale ðt k Þ price of selling power at interval tk, P sale ðt k Þ power to be sold at tk, T
is total time taken
Demand response cost [73] X
NS X
NH X
NM 
ρs Probability of scenario s, s ¼1, 2, …, N, dt duration of time slot (h), er;1
i;t and
F¼ ρs dt er;1 r;2 s
i;t :r i;t :ei;t :r i;t (75)
s¼1 t ¼1i¼1 er;2
i;t are prices of demand response load capacity and realized demand
response of load respectively, r i;t and r si;t are Offer and realized curtailment of
demand response load in microgrid. i
Load-shedding cost [73] X
NS X
NH X
NM
ρs Probability of scenario s, s¼ 1, 2, …, N, dt duration of time slot (h), V lli;t is
F¼ ρs dt ðV lli;t P s;shed Þ
i;t (76)
s¼1 t ¼1i¼1 price of lost load, P s;shed
i;t is the lost load, NH number of time slots, NM number
of microgrids, NS number of scenarios
Penalty cost of wind-turbine X
NS X
NH X
NM
ρs Probability of scenario s, s¼ 1, 2, …, N, dt duration of time slot (h), wi binary
F¼ ρs dt ðwi :V W s;ws
t :P i;t Þ
[73] (77) variable, VtW cost of wind energy spillage, P s;ws
i;t is wind output power
s¼1 t ¼1i¼1
Penalty cost of solar [73] XNS XNH XNM
pvs ρs Probability of scenario s, s ¼1, 2, …, N, dt duration of time slot (h), pvi binary
F¼ ρs dt ðpvi :V PV
t :P i;t Þ (78) variable, VtPV cost of solar energy spillage, P pvs is solar output power
s¼1 t ¼1i¼1 i;t
1672 A. Ahmad Khan et al. / Renewable and Sustainable Energy Reviews 58 (2016) 1664–1683

Table 6 (continued )

Objectives Equations Details

Operational and penalty costs 48 X

X M
t is time, i is the number of device, δi ðtÞ is a binary variable to represent the on/
F¼ ðδi ðtÞ:C i :ðP MGT i ðtÞ; tÞÞ
[75]
t ¼1i¼1 (79) off state of unit i , Ci operational cost function, P MGT i ðtÞ is output power and
þ C pe  c  i ðδi ðtÞ; tÞ C pe  c  i penalties for start-up and shut-down
X X I X II X III
Payment of dispatchable loads F ¼ μt ð P j;t þ P k;t þ P l;t Þ Each P represents type of load, μt Lagrange multiplier associated with the
t AT jAJ kAK lAL
(80)
[85] ! power balance equation at period t
Revenue [79] X T XN X Q
n and q are no of loads, U are utility functions for loads, P tDn and P tEq are power
F¼ U tn :P tDn þ U tEq ðP tEq Þ
t¼1 n¼1 q¼1
(81) consumptions of nth and qth load
Worst case net transaction X
T
t is time and fP tR g net power delivered to microgrid by renewable and storage
F¼ GðfP tR gÞ
cost [79] (82) elements
t¼1
Benefit at lower ToU prices X
24
CT(t) is cost function and P(t) is power purchased from the utility grid
F¼ C T ðtÞPðtÞ
[18] (83)
PðtÞ o 0;t ¼ 1
PNl P l
Reliability Index of MGs [81] i¼1 N i :8760  N i ¼ 1 Ni U i N l no of loads in microgrid, Ni no of clients connected at load node i and Ui is
F¼ PNl
N :8760 (84) average annual outage hour at node i
i¼1 i
Line loss index [81] P loss Ploss power lost and Pload power consumed by load
F¼ (85)
P load 
 
Purchase Cost [66] L1 ðTÞ βm transmission efficiency of main grid to microgrid, βd transmission efficiency
F ¼  vE max βm Q 1 ðTÞ  Smax ; 0 (86)
βd of microgrid to users, Q 1 ðTÞ energy taken from grid in time T, L1 ðTÞ aggregate
" # load in time T, Smax is max limit for stored energy, v is the energy price
Energy losses [84] X X
n
h is hour, i is for no of supply and load units, Pigh is generated power, PiLh
F¼ ðP gh
i
 P Lh
i Þ nh
(87) consumed power, h is total time taken
X
h ¼ 1;24 i ¼ 1
I I
Energy purchase cost [104] F¼ ΔT ðC I2 ðptp þ pIts Þ þ C It1 ðptp  pIts ÞÞ First term corresponds to the cost associated with grid tie. This term includes
t AT
XX the cost of access to the grid CI2 and the vector of final energy prices C It1 ,
EV
þ ΔT C P EVd
t;w second term accounts for the discharged energy from the EVs battery and the
t A Tw A W
XX third term penalizes the undelivered adjustable load
A A (88)
þ ΔT K A ðD t;b  dt;b Þ
t A Tb A B

Maximization of net present X

N
aj X
8760  N is the project life time in year, Dij is the load demand in jth year and the ith
F¼ Dij C ij  F 1ij þ V 1ij :
value [105]
j¼1
1þp i¼1
hour, Cij is the cost of electricity in the jth year at the ith hour, F1 is the
! objective function for economic-environmental dispatch, F2 is annual cost of
(89) operation and maintenance for microgrid, F3 is the initial investment cost of
þ F 2j þ V 2j  F 3
microgrid installation, V1 is credit obtained due to pollution reduction, V2 is
profit obtained due to improvement of reliability resulting from DG
installation

2.4.2. Non-linear programming

In [108,122], the power consumption model of transaction and Table 7
References with objectives.
communication based applications is presented into a modified
simple power consumption (MSPC) model of a server. A non-linear References Equations Single/multi-objective
program is used for the model. The proposed algorithm selects one
[62] (1), (2), (57) and (62) Multi-objective
of the servers for mixed types of applications so that the total
[63] (35) and (63) Multi-objective
power consumption of servers can be reduced. A non-linear pro- [64] (3)–(5) Multi-objective
gramming based approach has been used in [87] to optimize the [65] (46) and (7) Multi-objective
system with the objective function of maximization of the revenue [86] (64) Single-objective
[66] (49), (8), (9), and (86) Multi-objective
due to power trade between microgrid and the utility grid. A
[67] (65) and (66) Multi-objective
mixed integer non-linear programming based computational fra- [68] (67) and (68) Multi-objective
mework has been proposed in [123] to evaluate the performance [69] (69) and (70) Multi-objective
of a hybrid renewable energy system. [71] (50), (10), (11), and (71) Multi-objective
[71] (50), (10), and (72) Multi-objective
The authors in [89] suggested an optimal controller to get a
[87] (12) Single-objective
trajectory tracking for non-linear systems to minimize a quadratic [89] (73) Single-objective
cost function. The developed optimal control law is a result of the [88] (13) Single-objective
solution of Hamilton–Jacobi–Bellman (HJB) equation. This equa- [88] (14) Single-objective
[72] (51), (52), (15), (16), (37), and (74) Multi-objective
tion is used for state-dependent coefficient factorized non-linear [73] (17), (18), (19), (75), (76), (77), and (78) Multi-objective
systems. The presented scheme is used to ensure an efficient [74] (53), (54), (55), and (23) Multi-objective
power flow exchange between different sources in a microgrid [75] (79) and (58) Multi-objective
[70,106] (69) and (70) Multi-objective
with the help of power converters. This problem has been for-
[90] (22) Single-objective
mulated as non-linear quadratic program. A bilevel programming [78] (24) and (56) Multi-objective
approach is presented in [88] to analyze the competitive situations [85] (25) and (80) Multi-objective
of hierarchical decision between an energy services provider (ESP) [79] (26), (81), and (82) Multi-objective
[28] (27) Single-objective
and a large central production unit. The ESP includes several
[80] (44), (29), and (36) Multi-objective
microgrids, each one comprising of controllable loads and dis- [18] (47), (48) and (83) Multi-objective
patchable distributed generation units. The scheme is compared [81] (30), (84), and (85) Multi-objective
with the vertically integrated operation of the system, in which [91] (31) Single-objective
[84] (32), (59), and (88) Multi-objective
only one entity manages both the central production unit and the
[92] (33) Single-objective
distributed resources of the microgrid.
 A. Ahmad Khan et al. / Renewable and Sustainable Energy Reviews 58 (2016) 1664–1683 1673

Table 8
Constraints table.

Ref Supply Demand Storage Operation Prices Wind Solar Fuel cell Carbon emissions

[62] ✓ ✓
[63] ✓ ✓
[107] ✓ ✓
[64] ✓ ✓ ✓ ✓ ✓
[65] ✓ ✓ ✓
[108] ✓
[66] ✓
[67] ✓ ✓
[68] ✓ ✓
[69] ✓ ✓ ✓
[71] ✓ ✓ ✓ ✓ ✓
[87]
[88] ✓ ✓ ✓
[72] ✓ ✓ ✓
[73] ✓ ✓ ✓ ✓ ✓
[74] ✓ ✓ ✓
[75] ✓ ✓
[109] ✓
[110] ✓ ✓
[90] ✓ ✓
[78] ✓ ✓ ✓ ✓ ✓
[85] ✓
[79] ✓ ✓
[28] ✓ ✓ ✓
[80] ✓ ✓
[111] ✓ ✓
[18] ✓ ✓
[81] ✓ ✓
[84] ✓ ✓ ✓
[92] ✓ ✓

Fig. 2. Optimization-types.

The automation level in a microgrid is a complex, non-linear
and discrete optimization problem. The authors in [124] presented
a procedure which is a scenario-based search method using local
automation and remote control strategies in a combinatory man-
ner considering achievable benefits for each scenario. The authors
simulated their proposed methodology on a sample microgrid.
The authors in [64] solved an operation scheduling problem
based on integer non-linear programming for renewable-powered
microgrids. The problem involves the least-cost unit commitment
(UC) and the associated dispatch challenges, while meeting the
load, environmental, and system operating requirements. A new
concept, probability of self-sufficiency (PSS), is presented to indi-
cate the probability of microgrid to meet local demand in a self-
sufficient manner. The mixed-integer UC problem is solved from a
convex optimization perspective. The coordination among
renewable resources in microgrids and proper relation among
different microgrids and the utility grid are the critical challenges.
Capacities of renewable resources are to be optimized for reliable
supply of energy lower cost. In [90], the problem is formulated as a
non-linear mixed-integer program which minimizes capital and
annual operational costs of renewable energy subject to a variety
of system and unit constraints. With a broader use of distributed
generation and storage, many buildings and campuses will
become microgrids. Specific supply-side and demand-side aspects
include on-site renewable generation, storage technologies, elec-
tric cars, dynamic pricing, and load management. A non-linear
mixed integer optimization is used in [80] to solve these technical
challenges.
The authors formulated a long term scheduling optimization
problem of a grid-tied renewable energy microgrid with hybrid
1674 A. Ahmad Khan et al. / Renewable and Sustainable Energy Reviews 58 (2016) 1664–1683
energy storage as mixed quadratic program (MQP) in [72,125]. The
lifetime, degradation, start up/down, operation and maintenance
costs of the hybrid energy storage system are included. A non-
linear model is presented for continuous/discrete dynamics and
switching between different operating conditions. An MQP is used
in [74] to optimize short-term regulation services of a grid-
connected and renewable powered microgrid. A non-linear con-
strained multi-objective optimization is applied in [126,127] to the
environmental and economic problems of the microgrid consisting
of hybrid energy sources. The authors considered operation and
maintenance costs as well as emission of harmful gases.
2.4.3. Stochastic programming
In [128], the authors have used stochastic linear programming
approach for the optimal modeling of reliability of microgrids and
to solve the scheduling issues of batteries. A framework for
sequential Monte Carlo simulations is developed in [129] to seek
the performance of autonomous microgrid having ability to
interconnect with other microgrids for adequate load service.
Detailed models of the various microgrid components and inter-
connection policies are provided. Authors used stochastic program
to minimize the exposure of each microgrid to vulnerabilities. A
stochastic energy and reserve scheduling method for a microgrid
which considers various types of demand response (DR) programs
has been proposed in [130]. In the proposed scheme, all types of
customers namely residential, commercial and industrial ones can
take part in demand response programs which will be considered
in either energy or reserve scheduling. To accommodate maximum
user preferences and minimize the cost of electricity, a multi-
objective dynamic stochastic programming model has been for-
mulated in [131]. A probabilistic energy management system to
optimize the operation of the microgrid based on an efficient point
estimate method is proposed in [132,133]. The authors have used
the proposed method to model the uncertainty associated with
the wind power generation systems and the solar power genera-
tion systems, the market prices and the load demands. In
[134,135], the authors have proposed a probabilistic approach for
the energy and operation management of renewable microgrids
under uncertain environment. In [136], the authors have proposed
a strategy for constructing microgrids with optimized supply
adequacy. The problem has been formulated as multi-objective
optimization. The authors used three different types of algorithms
at different stages namely tabu search optimization algorithm,
graph theory related algorithms and forward-back-ward-based
probabilistic algorithm. They argued that the proposed planning
framework can help utility engineers and system planners in
designing microgrids capable of working in island mode. A new
stochastic programming algorithm is presented in [137] for reac-
tive power scheduling of a microgrid. The authors used a multi-
objective function to minimize the loss and to maximize the
reactive power reserve and the security margin of voltage. The
authors argued that Particle Swarm Optimization algorithm per-
formed better as compared to stochastic programming algorithm.
A probabilistic gravitational search algorithm has been used in
[134,135] for the optimal energy and operation management of a
microgrid consisting of hybrid renewable energy sources and
energy storage devices including hydrogen storage. A stochastic
optimization formulation has been used in [138] to minimize the
expected operational cost of the microgrid and power losses. The
proposed technique also considered the intermittent nature of the
renewable sources. An improved PSO has been used in [139] to
solve the scheduling problem of an MG composed of the combined
cooling, heating and power (CCHP) units, PV panels, wind turbines,
and storage batteries. The authors illustrated the benefits of the
proposed solution to the real-time dispatching by considering the
uncertainty of renewable energy in day-ahead scheduling.
The following sub-section presents the review of dynamic
programming used for optimal energy management in microgrids.
2.4.4. Dynamic programming
A dynamic model is proposed in [63] which requires customers
to submit energy demand schedules and actively monitor energy
price signals. In this suggested scheme, microgrid is required to
relay energy forecast information to the main grid. Moreover,
customers have to participate in energy bids and to respond to
energy management signals in real time. Hence, smart system is
presented that independently executes all these tasks without
prompting of the end users. The microgrid is equipped with dis-
tributed generation, grid connection, energy storage elements and
various loads. A dynamic program is used to minimize energy cost
and maximize battery's lifetime simultaneously [65]. For this, the
authors suggested that the central controller of microgrid has to
find out the best pattern of charging and discharging the battery.
This can be achieved by using time-of-use (TOU) grid electricity
rates. The electricity consumption patterns in a household are
modeled by a mixture of Gaussian distributions. The dynamic
programming is used to solve the problem [86]. Using the sym-
metrized generalized Kullback–Leibler divergence as a distance
measure of the distributions, authors have extracted typical pat-
terns of the consumption of hierarchical clustering.
Authors have proposed a dynamic contract mechanism to
regulate microgrids energy purchasing over time in [66]. The
proposed contract sets time-specific purchasing commitments for
a microgrid to fulfill the requirements of its load, while providing
the microgrid with flexibility to change future commitments. A
stochastic dynamic program is used to update commitments
according to the current storage status and future load prediction.
An energy consumption scheduling problem is formulated as
dynamic program on the basis of a real time pricing strategy in
[67]. The energy consumption scheduling problem is cast into a
non-cooperative energy consumption game, in which consumers
compete with each other to minimize their usage cost. Authors
have argued that the non-cooperative energy consumption game
has a unique Nash equilibrium point, i.e., optimal energy con-
sumption solution. The critical issues to be addressed for a grid-
connected microgrid include the amount of renewable power that
can be fed to the utility grid and the related energy price. In
[68,140], the authors presented the demand side energy man-
agement for a grid-connected household with a locally generated
photovoltaic energy and solved this optimization formulation by
using Dynamic Programming.
In [69], an agent-based energy-management system is pre-
sented to facilitate power trading among microgrids with demand
response and distributed storage. The dynamic programming is
used to utilize diversity in load consumption patterns of the end
users and energy availability from the distributed generation and
storage. The proposed approach facilitates demand response in
reducing the peak demand and minimizing the cost of electricity.
The authors in [75] presented a scheme of day ahead operational
planning. The unit commitment problem is solved using dynamic
programming. The objective of the program is to minimize CO2
equivalent emissions, the fuel consumption or a tradeoff between
these two. To reduce uncertainty in forecasted values for solar
production or load demand, a smart energy manager recalculates
the generators power references 1 h ahead if necessary. In [78],
dynamic programming is used to optimize the analysis for energy
and power management in microgrid. The microgrid has renew-
able energy resources and diesel generators to supply its loads.
The total daily cost of the system is minimized while the total
efficiency of the energy storage unit is maximized.
 A. Ahmad Khan et al. / Renewable and Sustainable Energy Reviews 58 (2016) 1664–1683
Fig. 3. Solution-types.
2.4.5. Non-differential programming
A non-differential program is formulated to minimize the
microgrid net cost, which includes distributed generation and
storage costs, utilities of dispatchable loads, and worst-case
transaction cost owing to the intermittent nature of renewable
energy [79].
2.5. Solution approaches of energy management problem
Different researchers have used different solution approaches
to solve the optimization framework related to energy manage-
ment in microgrids. Fig. 3 presents the types of solution approa-
ches used in solving energy management problem. These
approaches and the relevant work are discussed below.
2.5.1. Heuristic approach
In [141], different control algorithms are proposed to manage the
distributed energy resources at different operating conditions in
interconnected microgrids. This scheme facilitates a share of surplus
energy and local load within the network. Authors argued that this
approach provides reduction or prevention of load shedding. A control
strategy has been investigated in [142] which is based on a combi-
nation of flatness and fuzzy logic control. A hybrid system is evaluated
for the new European drive cycle. The use of fully functional standa-
lone software, interactive simulations allows the customers to evaluate
the impact of the energy management and the power control on the
efficiency of the DC microgrid. In [67], an energy consumption sche-
duling problem is solved using a heuristic approach on the basis of a
real time pricing strategy. A novel double-layer coordinated control
approach for microgrid energy management is proposed in [71]. Errors
between the forecasted and real-time data are resolved through
coordination control of the two layers by reserving adequate active
power in the schedule layer. Then, the reserve is allocated in the
dispatch layer to deal with the intermittency of uncontrollable units.
A control algorithm is investigated in [143,144] which enables
energy storage device to control active power and minimize cur-
rent harmonics, unbalance and reactive power introduced to the
network by disturbing loads. The energy storage device
1675
participates in energy management according to the defined
control strategy and additionally contributes to power quality
improvement. Effectiveness is examined by means of the simula-
tion model of low voltage test microgrid. Heuristic optimization
methods are proposed in [124] to solve the automation level in a
microgrid. The presented procedure is a scenario-based search
method using local automation and remote control strategies in
combinatory manner considering achievable benefits for each
scenario. The authors simulated their proposed methodology on a
sample microgrid. An autonomous operation of microgrid relies on
energy storage devices to keep a balance between generation and
load. Authors in [5,145] investigated innovative methodology to
coordinate the microgrid storage capacity with smart charging
strategies and demand response schemes of electric vehicles. The
effectiveness of the algorithm is validated through extensive
simulations.
In [86], the authors have used a heuristic approach to extract
the specific trends of consumption of hierarchical clustering. In
this scheme the microgrids are required to relay energy forecasts
information to main grid. Similarly, customers have to submit
energy demand schedules, actively monitor energy price signals,
participate in energy bids and to respond to energy management
signals in real time. In [146], a decentralized approach to load
management is presented which has been implemented in the
Swiss2Grid project. Single households make use of a local algo-
rithm that is based on local voltage and frequency measures, dis-
patches the pre-emptiable loads in time to minimize the costs for
the consumer and to maximize the grid stability. A decentralized
energy management system based on distributed intelligence for
the design and control of autonomous polygeneration microgrids
has been proposed in [147] to minimize the Net Present Cost (NPC)
of the system for a 20 year investment period. Genetic algorithm
has been used in [148,149] to optimize the parameters of pro-
portional integral controller to ensure stable frequency of the
microgrid power system.
In [68], the authors presented the demand side energy man-
agement for a grid-tied household with a locally generated pho-
tovoltaic (PV) energy by using heuristic methods. A multi-
1676 A. Ahmad Khan et al. / Renewable and Sustainable Energy Reviews 58 (2016) 1664–1683
objective approach involves an efficient tradeoff between low
operation cost and good energy service for end users [73]. A
heuristic algorithm has been used to solve the problem of total
cost of power exchange with the main grid, the startup and
shutdown costs, the operating cost of distributed generators, the
payment for demand response load, the penalty costs for invo-
luntary load curtailment, and renewable energy spillage. In [75],
the authors have used a heuristic strategy to solve the objective of
minimizing CO2 equivalent emissions, the fuel consumption or a
tradeoff between these two. To reduce uncertainty in forecasted
values for PV production or load demand, a smart energy manager
calculates the generators power references 1 h ahead if necessary.
Specific supply-side and demand-side aspects of buildings and
campuses have been solved using heuristic methods. These
buildings and campuses have on-site renewable generation, sto-
rage technologies, electric cars, dynamic pricing, and load man-
agement [80]. In [29,150,151], the authors present an idea of
energy sharing among microgrids in a smart microgrid network to
increase reliability. An algorithm based on heuristic methods has
been used. This reliability means supplying power to the loads
using the energy generated in the microgrid network without
purchasing power from the main grid. A reliable overlay topology
design scheme is presented to maximize the usage of renewable
energy in the network. The planning issue of distributed gen-
erators at different locations is presented in [81,152]. The authors
have used heuristic methods to tackle the problem. The multi-
objective function is normalized to form a minimized optimal cost
function when the capacities and the number of distributed gen-
erators and the demands at various locations are known.
In [92,153], the authors have proposed a new active power
dispatch algorithm capable of managing microgrid generation to
demand online in grid-tied mode. The algorithm also minimizes
the greenhouse gas emissions, and optimizes running costs of
distributed resources. A heuristic approach based on cost function
of microsources has been tested to solve different power dispatch
optimization problems. The authors argued that their proposed
scheme outperforms the other state of the art optimization
methods, in terms of global costs and emissions, system stability
and computational resources requirements.
2.5.2. Agent based approach
An agent-based energy-management system is presented in
[69,76] to facilitate power trading among microgrids with demand
response and distributed storage. This system finds a way to utilize
diversity in load consumption patterns of the end users and
energy availability from the distributed generation and storage.
The proposed approach facilitates demand response in reducing
the peak demand and minimizing the cost of electricity. Demand
side energy management is important for the optimal energy
planning to reduce the cost of power purchase from the main grid
[154,155,130]. In [110], a framework is proposed that maintains an
auction market, in which energy sellers and buyers shall practice
trading. This framework uses distributed energy storage as a part
of demand side management. It enables end users with low
priority loads to participate in demand response.
In [70], the authors have proposed an agent based intelligent
energy management system to facilitate power trading among
microgrids and allow users to participate in demand response. The
proposed system uses demand response, diversity in electricity
consumption patterns of the customers and availability of power
from distributed generators as the vital sources in managing
power in the system. It has been found that multi-agent based
demand response is successful in decreasing the system peak in
addition to cost benefit for the customers with high priority index.
A distributed agent based microgrid control strategy is presented
in [156,157] that is capable of coordinating and cooperatively
achieving user-defined objectives. In their article different chal-
lenges are discussed that are faced by operating a distributed
architecture that must self-organize to appropriately coordinate
the cooperative behavior of agents.
2.5.3. Evolutionary approach
The coordination among renewable resources and the proper
communication among the microgrids and the utility grid are
critical challenges. Capacities of renewable resources are to be
optimized for reliable supply of energy at lower cost. In [90], the
optimal capacity planning has been proposed by using evolu-
tionary strategy which minimizes capital and annual operational
cost of renewable energy subject to a variety of system and unit
constraints. In [98], the authors have focused on a mathematical
model developed to optimally manage the smart polygeneration
microgrid in order to minimize daily operational costs and carbon
dioxide emission. A multi-objective approach has been adopted in
[158] to formulate the objective functions focusing on charging/
discharging cost, losses and voltage profile. The authors proposed
an algorithm based on differential evolution to solve the problem.
Short Term Load Forecast (STLF) for microgrids has the highly non-
smooth and non-linear behavior of the load time series. Char-
acteristics of the load time series of traditional power systems are
described. A new bi-level prediction strategy is presented for STLF
of microgrids in [159]. The proposed approach is composed of a
feature selection technique and a forecast engine (including neural
network and evolutionary algorithm) in the lower level as the
forecaster. This approach is used as an enhanced differential evo-
lution algorithm in the upper level to optimize the performance of
the forecaster. The proposed prediction strategy is evaluated by
the real-life data of a university campus in Canada.
1. Swarm Optimization: In [62], the authors proposed a Glow
Warm Swarm Optimization (GWSO) approach to the problem
of optimal sizing of distributed energy resources in medium
voltage or low voltage microgrids. In [109], the optimization of
an innovative device operation is presented for traffic energy
harvesting applications. The optimization problem is solved by
means of Particle Swarm Optimization (PSO) to get the best
efficiency and reduce the overall impact on the environment.
The authors in [160] focused on microgrid management in
scenarios belonging to unique stakeholder. They proposed a
novel combination of optimization algorithms to exploit differ-
ent control capabilities of the envisioned devices (schedulable,
dimmable and thermal-like), including renewable sources and
electric vehicle fleets. In [161], the performance of a standalone
hybrid system consisting of a wind generator and photovoltaic
(PV) system has been simulated. The authors have used a
general regression neural network with an improved PSO
algorithm to extract the maximum power from wind and PV
energy sources. A hybrid renewable energy system with battery
storage and diesel generator is considered in [162,163]. The
Multi-Objective Particle Swarm Optimization (MOPSO) method
is used to find the best configuration of the system and for
sizing the components. The PSO algorithm has been used in
[164,165] to control the flow of the active and reactive power
between the main grid and the microgrid consisting of dis-
tributed generation. The authors argued that the proposed
algorithm ensures that the required load power is shared
equally between the microgrid and the utility company.
2. Ant Colony Optimization: Ant Colony Optimization (ACO)
method for renewable integrated microgrid is used in an
intelligent supervisory controller that utilizes dispatch control.
The approach solves the rapid microgrid power management
problem given complex constraints and objectives including
environmental, fuel/resource availability, and economic
 A. Ahmad Khan et al. / Renewable and Sustainable Energy Reviews 58 (2016) 1664–1683 1677

Table 9
Tools used in energy management.

Tools Features Applications Developer

Anylogic [181] General purpose modeling and simulation Control systems, traffic, system dynamics XJ Technologies
tool for discrete, continuous and hybrid manufacturing, supply chain, logistics,
systems, UML-based OO modeling, block- telecom-networks, computer systems,
based flowchart modeling, statecharts (state mechanics, chemical engineering, water
machines), differential and algebraic equa- treatment, military and education
tions and explicit modeling in Java
CPLEX [28,29] An IBM framework with C, Cþ þ , Java, .NET Linear optimization, quadratic convex IBM
and Python libraries, mathematical problem optimization
solver
DigSILENT Power Factory [146] Geographical diagrams and enhanced tools Standard power system analysis needs, DigSILENT
for visualizing topological networks struc- handling wind power and distributed
tures, supporting standards and tests for generation design
power system, integration with GIS, DMS
and EMS
DSTATCOM [141] Compensating device, similar to STATCOM, Acts as a source or sink for reactive power S and C Electric
based on power electronic voltage source on electricity networks, used on AC Company
converter, member of the FACTS family transmission networks
devices
DSpace [182] Open source software for organizations capture and describe digital material DSpace Foundation
using a submission workflow module, or a
variety of programmatic ingest options,
distribute an organization's digital assets
over the web through a search and
retrieval system, preserve digital assets
over the long term
FuseViz [183] A framework for web-based services of Addresses the challenges posed by large, Oracle Corporation
smart environments live, heterogenous, dynamic data streams
from autonomous data sources and lay
user with two basic features fusion and
visualization
GAMS [88,73,85] Algebraic modeling language, High level Modeling and solving linear, non-linear GAMS develop-
modeling system for mathematical optimi- and mixed integer optimization, allows ment Corporation
zation, input format to NEOS server, inte- hybrid algorithms combining different
gration to solvers as BARON, COIN-OR, solvers
CONOPT, CPLEX, DICOPT, GUROBI, MOSEK,
SNOPT and XPRESS
LINDO Global GAMS and LINDOGlobal are same Same applications LINDO Systems
MATLAB/ Simulink Multi-paradigm numerical computing Matrix manipulations, Plotting of func- Math-Works
[64,65,67,68,71,87,129,178,124,185,75,178] environment, fourth generation program- tions and data, implementation of algo-
ming language rithms, creation of user interfaces, com-
patible languages are C, C þ þ, Java,
Fortran
MATPOWER [129] A package of Matlab M. files, simulation too Solving optimal power flow problems PSERC at Cornell
for researchers, planning and analysis too University
power systems
PSCAD/ EMTDC [141,143,111] Simulator used by engineers and research- It is used in planning, designing, devel- Manitoba HVDC
ers for AC power systems, power electronics, oping new concepts, testing ideas, Research Center
HVDC, flexible AC transmission systems understanding what happened when
(FACTS), distribution systems and flexible equipment failed, commissioning, pre-
controllers paration of specification and tender
documents, teaching and research
REST J F [186] Structural style software for development of Used in the designing of HTTP 1.1 and URI, Roy Fielding
Web Services, alternative to distributed describes desired web architecture, iden-
computing SOAP tifies existing problem, compares alter-
native solutions
SIMPLORER [182] A comprehensive suit of tools for simula- Modeling, simulating and analyzing dif- Ansoft corporation
tions, simulation models with electric circuit ferent programs
components, block elements and State
machine structures, graphical interface, fast
and reliable simulation algorithms
SCENRED [73] Tool for the reduction of scenarios modeling Stochastic and deterministic programs GAMS develop-
the random data processes, provides 3 sce- ment Corporation
nario, reduction of algorithms, collection of
C þ þ routines, reduced problem is then
solved in GAMS
VERA [80] A vision screening programm comprised of – Visual tests Visual Technology
different tests as DISTANCE VISUAL ACUITY, Applications, Inc.
FARSIGHTEDNESS, PHORIA

considerations. This method finds Pareto optimal dispatch
solutions for the microgrid [166].
3. Genetic Algorithm: In [84,167], an optimization framework has
been proposed that considers the management of storage
systems concentrated at some of the grid buses. The multi-
objective framework is focused to minimize generator annual
cost, carbon emissions of the overall system and line losses. The
model uses the hourly power production of distributed energy
resources and the hourly storage element level as decision
variable. Non-dominated Sorting GA-II (NDSGA-II) approach is
1678 A. Ahmad Khan et al. / Renewable and Sustainable Energy Reviews 58 (2016) 1664–1683
used to solve the problem. Authors have used genetic algorithm
in [64] to solve the operation scheduling problem in renewable-
powered microgrids. The problem is used to determine the
least-cost unit commitment (UC) and the associated dispatch,
while meeting load, environmental, and system operating
requirements. A probability-based idea, namely the probability
of self-sufficiency (PSS), is introduced to indicate the probability
of microgrid meeting local demand in a self-sufficient manner.
In [18,168], a smart energy management system (SEMS) is
proposed to optimize the operation of the microgrid. The SEMS
involves energy storage system (ESS) and modules of power
forecasting, management and optimization.
A matrix real-coded genetic algorithm (MRC-GA) optimization
module is presented to achieve a practical method for load
management involving three different operation policies. The
genetic algorithm has been used in [169] to model the operation
of microgrid for the objective of minimizing the operational and
maintenance cost. Genetic algorithm has also been used in [170]
for the evaluation of a typical microgrid participating in a power
market under hybrid electricity market policy to maximize the
net present worth of the hybrid microgrid consisting of photo-
voltaic cell, fuel cell and battery bank. A multiobjective optimi-
zation has been used in [171] to minimize power generation
cost and to maximize the useful life of lead–acid batteries. The
authors have used nondominated sorting genetic algorithm to
solve the problem. A multiobjective approach to multi-
microgrid system design has been proposed in [172,173] to
maximize the utility of microgrid system components.
2.5.4. Model predictive control approach
A multi-objective framework has been considered in [65,174–176]
to model the energy management in microgrids. The proposed model
considers the microgrid to be composed of distributed generation, grid
connection, energy storage elements and various loads. Model Pre-
dictive Control (MPC) approach is used to minimize energy cost and
maximization of battery's lifetime simultaneously. For these objectives,
microgrid central controller has to find the best pattern of charging
and discharging the battery. Energy management problem is solved
using Model Predictive Control (MPC) to maximize the economical
benefit of the microgrid while minimizing the use cost of each storage
system [72]. The MPC approach is used to solve the optimization
problem of maximizing the economical benefit and minimizing the
degradation causes of each storage system. In order to capture both
continuous/discrete dynamics and switching between different oper-
ating conditions, the plant is modeled with the framework of mixed
logic dynamic (MLD) [74,177].
2.5.5. Neural network approach
The Artificial Neural Networks (ANN) approach can be used to
forecast load and availability of energy resources at microgrids in
different daily, seasonal, and yearly scenarios. For example, the layered
ANNs strategy is developed and trained with Levenberg–Marqurardt
Back Propagation algorithm in [178]. The proposed idea can be used in
today's real time energy infrastructure to minimize the risks of future
energy crisis with enhanced reliability and smooth cooperation among
microgrids deployed at different locations. In [179], the authors pre-
sented a hybrid artificial intelligence technique comprising of simu-
lated annealing (SA) and ant colony optimization (ACO) techniques to
solve a complex energy resource management problem with a large
number of resources, including electric vehicles connected to the
electric network. A new recurrent neural network approach has been
proposed in [180] to determine the optimal amount of power over a
time horizon of one week for hybrid renewable energy resources in
order to minimize the power acquired from the utility grid and to
maximize the power generation from renewable energy sources. An
optimization framework has been proposed in [161] to extract the
maximum power from the wind and photovoltaic energy sources. The
authors have proposed a general regression neural network with an
improved particle swarm optimization algorithm.
2.5.6. Round robbin approach
The power consumption models of transaction and commu-
nication based applications are presented into a modified simple
power consumption (MSPC) model of a server. The Round Robin
(RR) approach is used to select one of the servers for mixed types
of applications so that the total power consumption of servers can
be reduced [108].
2.5.7. Gauss Seidel approach
In [87], the Fuzzy logic and Gauss Seidel (GS) approach is used
to maximize the balance/revenue due to power trade between
microgrid and the utility grid. Five different scenarios are tested
for local load and microgrid assembly operation.
2.5.8. SD Riccati equation approach
The authors have designed an optimal controller to get a tra-
jectory tracking for non-linear systems to minimize a quadratic
cost function. The developed optimal control law is a result of the
solution of Hamilton–Jacobi–Bellman (HJB) and SD Riccati equa-
tions. The HJB equation is used for state-dependent coefficient
factorized non-linear systems. The presented scheme is used to
ensure an efficient power flow exchange between different sour-
ces in a microgrid with the help of power converters [89].
2.6. Tools used to solve energy management problem
Table 9 presents a collection of tools used to solve the problems
of energy management in microgrids. Their use in particular work
are discussed below.
2.6.1. Anylogic
Anylogic is a general purpose modeling and simulation tool for
discrete, continuous and hybrid systems. The simulation uses an
agent based and system dynamics modeling. In [181], a draft
model has been developed in Anylogic using system dynamics to
demonstrate basic features of several smart houses, equipped with
demand side management capabilities, renewable resources, dis-
tributed storage and basic electricity price base consumption
controller. Obtained results were close to the desired results.
2.6.2. CPLEX
In [28] Cost-Aware Smart Microgrid Network (CoSMoNet)
design scheme is presented. This scheme enables economic power
transactions within the SMGN. CoSMoNet is based on an Integer
Linear Programming (ILP) formulation that has been solved using
CPLEX. This problem compares the excess energy in the storage
units of a group of smart microgrids to the demands of other
microgrids whose load cannot be accommodated by themselves.
Obtained results show that CoSMoNet provides cost-efficient
power transactions among microgrid communities, increased
utilization of renewable energy, reduced load on the grid and
dependency of the microgrids to the utility grid. Similarly, CPLEX is
used to solve the problem of energy sharing among different
microgrids in Smart Microgrid Network (SMN) [29].
2.6.3. DigSILENT Power Factory
DigSILENT Power Factory tool is used to solve the approach
proposed by the Swiss2Grid project. The proposed method is a
decentralized approach to load management. A household uses a
local algorithm, based on voltage and frequency measures, shifts
the pre-emptiable loads relative to time. The approach helps to
minimize the costs for the consumer and to maximize the grid
 A. Ahmad Khan et al. / Renewable and Sustainable Energy Reviews 58 (2016) 1664–1683
stability. The voltage drop of low voltage network is evaluated
using the DIgSILENT grid simulator. For each time step, the
household simulator determines the load imposed on the grid at
the point of common coupling. Such data is automatically impor-
ted in DIgSILENT, and a power-flow computation is triggered [146].
2.6.4. DSTATCOM
In [141], the interconnected microgrids share, energy available
form renewable energy resources, the surplus energy among their
neighbors. This requires a control mechanism for voltage regula-
tion. DSTATCOM is used to solve this challenge.
2.6.5. DSpace
DSpace is used to test a model of composite energy storage sys-
tem. This system involves battery and ultra-capacitors with dynamic
energy management in a microgrid. This proposed power converter
configuration and the energy management scheme can actively
distribute the power demand among the different energy storage
elements. Results are presented to show the feasibility of the pro-
posed scheme [182].
2.6.6. FuseViz
In [183], the FuseViz is used to develop a web-based application
for integrated electricity consumption and contextual information
visualization.
2.6.7. GAMS
GAMS is an algebraic modeling language, high level modeling
system for mathematical optimization, input format to NEOS server
and integration to solvers such as BARON, COIN-OR, CONOPT, CPLEX,
DICOPT, GUROBI, MOSEK, SNOPT and XPRESS. Applications are for
modeling and solving linear, non-linear and mixed integer optimiza-
tion. The tool supports hybrid algorithms combining different solvers.
GAMS is used to solve the objective function of power exchange with
the main grid, the startup and shutdown costs, the operating cost of
distributed generators (DGs), the payment for demand response load,
the penalty costs for load and renewable energy spillage [88,73,85].
2.6.8. MATLAB/Simulink
MATLAB is a multi-paradigm numerical computing environ-
ment. It is 4th generation programming language and used for
matrix manipulations, plotting of functions and data, imple-
mentation of algorithms and creation of user interfaces. Compa-
tible languages are C, C þ þ , Java and Fortran. The tool is being
widely used in solving the problems of energy management.
Home appliance and operation scheduling problems, multi-
objective energy management problems, analysis, modeling and
simulation problems of microgrids are being solved using MATLAB
[64,65,67,68,71,87,129,178,78,81,184]. Simulink is a data flow
graphical programming language. It has customizable set of block
libraries and has tight integration with rest of MATLAB environ-
ment. Applications include modeling, simulating, control theory
and digital signal processing for multi-domain dynamic systems.
In microgrids, it is used to solve the problems of optimal auto-
mation level, modeling and simulation, environmental and eco-
nomical optimization of long term planning [124,185,75,178].
2.6.9. MATPOWER
MATPOWER is used to support a simulation framework that
utilizes sequential Monte Carlo simulations to investigate the
performance of autonomous microgrids. In autonomous system,
microgrids have the ability to interconnect to achieve adequate
load service. In order to minimize the exposure of each microgrid
to vulnerabilities, minimal number of interconnections is desired.
Various simulation results show the impact of storage capacity,
intermittent distributed energy resources (DERs) and
1679
interconnection with other microgrids on each microgrid's secur-
ity and reliability as measured using standard risk indices [129].
2.6.10. PSCAD/EMTDC
The proposed power control, energy sharing and management
among distributed energy resources in multiple interconnected
microgrids is validated through extensive simulation studies using
PSCAD/EMTDC [141,143,111].
2.6.11. Java REST services developed in Glassfish 3.1 application
server
A potentially common platform in a smart grid city requires fast
development of applications for energy services. Such energy
services have been analyzed and implemented in a wider enter-
prize system architecture. The authors provide an insight on the
functionality, usage, development, challenges and experience of
energy services. All the services have been implemented as Jave
REST services on Glassfish 3.1 Application server [186].
2.6.12. SIMPLORER
SIMPLORER is used to test a model of composite energy storage
system [182]. The system involves battery and ultra-capacitors with
dynamic energy management in microgrids. This proposed power
converter configuration and the energy management scheme can
actively distribute the power demand among the different energy
storage elements.
2.6.13. SCENRED
SCENRED has been used to solve multi-objective formulation of
power exchange with the main grid, the startup and shutdown costs,
the operating cost, the payment for demand response load, the pen-
alty costs for involuntary load curtailment, and renewable energy
spillages [73].
2.6.14. VERA
VERA can solve a combination of problems including unit com-
mitment, economic dispatch, fuel switching, balancing of local gen-
eration with utility purchases, and optimal utilization of the capacity of
storage devices. VERA is used to formulate the supply-side problem
with the integration of renewable generation and storage [80].
3. Conclusion and future work
In this paper, we provide a compendium of optimization objectives,
constraints, tools and algorithms for energy management in micro-
grids. The paper also provides the detailed discussion of optimization
techniques, solution approaches and tools used to solve energy man-
agement problem in microgrids. A brief review of Linear optimization,
non-linear optimization, integer and mixed integer optimization and
stochastic optimization is also described for Microgrid energy man-
agement. A number of approaches have been used by the research
community to solve the energy management problem in microgrids.
The approaches include heuristic, agent-based, model predictive con-
trol, evolutionary algorithms, round robbin, Gauss Seidel, and SD
Riccati equation. The tools used to solve energy management problem
include the Anylogic, CPLEX, DigSILENT Power Factory, GAMS, Matlab/
Simulink, MATPOWER, PSCAD/EMTDC, SIMPLORER, SCENRED and
VERA. This work will provide foundation for further investigation of
the cost effective energy management techniques for Smart Microgrid
Network (SMN).
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