1
Economic Dispatch of Micro-Grid Based on
Improved Particle-Swarm Optimization
Algorithm
Huiqiu Cao, Jian Xu, Member, IEEE, Deping Ke, Chengxu Jin, Shengchu Deng , Chenghui Tang, Mingjian
Cui, Ji Liu
Abstract—For micro-grid system under isolated and parallel
operation mode, two kinds of economic dispatch operation model
are established. The objective function of the model is
formulated considering time-of-use (TOU) price and the electric
energy transaction. The theory of particle swarm optimization
(PSO) is proposed, and the key parameters are improved to
enhance the performance of the algorithm. An actual case study
with typical daily load data from a specific micro-grid is selected
to examine the performance of the improved PSO(IPSO)
algorithm. The effectiveness of the IPSO is verified through the
comparison of optimization results. Under parallel mode, the
operation cost of the micro-grid decreases 2.9% by applying
IPSO algorithm, comparing to the one of PSO, while the
operation cost is only 2.7% from original algorithm under
islanding mode.
Index Terms—Micro grid, economic dispatch, improved particle
swarm optimization (IPSO) algorithm.
I. INTRODUCTION
Economic dispatch (ED) problems generate along with the
evolution of dispatch operation in power grid [1,2], which are
key issues of ensuring the stable and orderly operation of the
power market [3]. Through the theory research of operation
and energy optimization, the efficiency and economy of
micro-grid can be achieved [4, 5]. Under the constraints of
equipment capacity and system operation, the economic
operation and reasonable allocation of energy in the
micro-grid can be achieved through the reasonable power
allocation of the distributed generation (DG) systems [6] and
dispatch of energy storage systems, which reduces the costs of
power supply [7].
Micro-grid can operate in both parallel and islanding
modes. Under normal circumstances, the micro-grid is
connected into the main grid, which supplies power to the load
in the micro-network along with micro-sources [8]. When
there were faults or maintenance in power grid, or electricity
quality can not meet the requirement of power systems.
Micro-grid will be cut off from the main grid and operate in
the islanding mode [9]. Different from the source power in
traditional large power grid, the various micro sources in the
micro-grid have the characteristics of different power
generation efficiency. Therefore, the optimal economic
dispatch strategy can be achieved through reasonable
scheduling, which can improve the energy efficiency and
reduce the operating cost [10-11].
This work was supported in part by the Ministry of Science and
Technology of China (2012CB215201), in part by the National Natural
Science Foundation of China (51477122)
H. Cao, J. Xu, D. Ke, C. Jin, S. Deng, M. Cui, C. Tang and J. Liu are with
the School of Electrical Engineering, Wuhan University, Wuhan, 430072
China. (e-mail: xujian@whu.edu.cn;)
978-1-5090-3270-9/16/$31.00 ©2016 IEEE
For impacts of various uncertainties in micro-grid
operations, a dynamic economic dispatch model based on
chance constrained programming is proposed. The balance
between operation economy and reliability is analyzed and
discussed in reference [12]. However the cost optimization of
generation for each micro source is not analyzed specifically.
Economics and environmental protection of smart grid were
quantified with active power loss and pollution gas emissions
as assessment factors, considering the effects of the
penetrations of high capacity wind power. The multi-objective
optimization problem in the smart grid is solved preferably in
reference [13]. However, an analysis of the micro-network
economy with a variety of DG is omitted. In [14], the authors
consider the constraints of various power output, take
minimizing operating costs as objective function, and solve
the economic dispatch problem by using genetic algorithm.
However, the case of energy exchange and trading between
the micro-grid and extranet are not considered. These studies
generally consider optimizing scheduling system under
parallel operation situations, whereas a dispatch model under
the isolated operation also needs to be established; on the other
hand, the constraints are simplified unduly for indices and
constraints, such as power exchange, charge-discharge
operation of energy storage system are rarely considered.
The paper is organized as follows. In Section II, the
economic dispatch optimization model for micro-grid is
established, which take the different operation modes that
micro-grid under into account, the micro grid system selected
in this paper is composed of wind power (WT), photovoltaic
(PV), micro gas turbine (MT) and energy storage device
(BT).The improved particle swarm algorithm (IPSO) is
proposed in Section III, which is applied to solve the
micro-grid scheduling model and calculate the output of each
micro-source under isolated and parallel operation mode. The
effectiveness of the improved algorithm is proved in Section
IV. Conclusions are ¿nally presented in Section V.
II.MICRO-GRID ECONOMIC DISPATCH MODEL
A. Micro-grid structure
In this paper, a realistic case study selected from a certain
area in Northern China is analyzed, and the structure of the
micro-grid is shown in Fig. 1. The micro-grid is connected
with the substation of the power grid through a static switch. It
includes renewable energy such as wind power, photovoltaic,
micro gas turbine and energy storage battery systems. The
economic dispatch model is established according to the costs
of power generation and constraints of different micro-source.
 2

Where, ‫ܥ‬஺஼஼ǡ௜ is the annual average cost of installation costs of

generation unit i; ܲ௥௜ is the rated power of unit i; ݂௖௙ǡ௜ refers to
capacity factor; ‫ܥ‬ூேௌǡ௜ is the installation cost of unit i; ݂௖௥
refers to capital recovery factor; d is interest rate, and i is
depreciation period.
‫ܥ‬௚௥௜ௗ is the costs of energy exchange between micro-grid
and the main grid, which can be formulated as:
Cgrid = CP(t ) × CGP(t ) − CS (t ) × CSP(t ) ˄5˅
In (5), ‫ܲܥ‬ሺ‫ݐ‬ሻ , ‫ܵܥ‬ሺ‫ݐ‬ሻ represent prices of purchasing
Fig.1. Micro-grid structure electricity from and selling electricity to the main grid
respectively, and ‫ܲܩܥ‬ሺ‫ݐ‬ሻ , ‫ܲܵܥ‬ሺ‫ݐ‬ሻ represent volumes of
B. Objective function electricity purchased from and sold to the main grid,
This article does not consider the characteristics of rapid respectively.
changes of operating state of micro-sources, and still uses 2) Minimize the operation cost of micro-grid under
conventional day-ahead scheduling model, whose objective islanding operation.
function is to minimize the generation costs (such as fuel The objective function of minimizing the operation cost
costs, depreciation costs of investment, operation and can be expressed as:
maintenance costs, energy exchange costs between T
min C2 = ¦ (C f (t ) + COM (t ) + CL + CDEP (t )) ˄6˅
micro-grid and the main grid under parallel operation) t =1
within a day. In this paper, the cost of the micro-grid is In (6), ‫ܥ‬ଶ is the operation cost of the micro-grid in
assumed to be only related to active power. islanding mode, and T refers to the total number of scheduled
1) Minimize the operation cost of micro-grid under parallel time t.
operation, ‫ܥ‬௅ is compensation cost of load shedding, which can be
The multi-objective function can be expressed as: expressed as:
T
min C1 = ¦ (C f (t ) + COM (t ) + CDEP (t ) + CL + Cgrid ) ˄1˅ CL = Cbu ·Load (t ) ˄7 ˅
t =1
Where, ‫ܥ‬௕௨ is the expenses paid to the user by the grid for
In (1),‫ܥ‬ଵ is the total operation costs of the micro-grid, and power loss of every kW, while ‫݀ܽ݋ܮ‬ሺ‫ݐ‬ሻ is volume of power
T refers to the total number of scheduled time. ‫ܥ‬௙ ሺ‫ݐ‬ሻ refers to loss at time t.
fuel costs for each generation unit at time t, and it can be
formulated as: C. constraints
N T
1 Pi (t ) 1) Power balance constrain
C f (t ) = ¦ C fuel × ×¦ ˄2˅ The micro-grid should meet power balance in operation.
i =1 LHV t =1 ηi (t )
N
Where, N is the total number of generation unit; i is the index
of generation units; ‫ܥ‬௙௨௘௟ is the price of gas fuel ($/݉ଷ ), LHV ¦ P (t ) + P
i =1
i grid (t ) + Pbatt (t ) = PL (t ) − Load (t ) ˄8 ˅
is low calorific value of natural gas ( ൉ ŠȀ݉ଷ ); ܲ௜ ሺ‫ݐ‬ሻ is the N
output power of generation unit i; ߟ௜ ሺ‫ݐ‬ሻ is the fuel efficiency Where, ¦ P (t ) is the total output power of each
i
of generation unit i, namely the ratio of output power to input i =1

fuel. generation unit; Pgrid (t ) is the power exchange between the

‫ܥ‬ைெ ሺ‫ݐ‬ሻ is the operation and maintenance costs of each
generation unit at time t, and it can be formulated as:
micro-grid and the main grid at time t; Pbatt (t ) is the output
N
COM (t ) = ¦ KOM ,i Pi (t ) ˄3˅
power of the battery; PL (t ) is the load power of the system,
i =1
and Load (t ) refers to load shedding power.
Where, ‫ܭ‬ைெǡ௜ is operation and maintenance coefficient of
2) Output power limit of generation unit
generation unit i, which refers to the operation and
maintenance cost of every kilowatt-hour generated by the unit. Pi min ≤ Pi ≤ Pi max ˄9 ˅
‫ܥ‬஽ா௉ ሺ‫ݐ‬ሻ is the depreciation cost for each generation unit Where, Pi
min
, Pi
max
represents the lower and upper
at time t, which can be formulated as:
N C ACC ,i limit of generation unit i, respectively.
CDEP (t ) = ¦ Pi (t )
i =1 8760 Pri f cf , i
3) Climbing rate constraints
C ACC ,i = CINS ,i f cr ˄4˅
When the load increases, the constraint can be expressed
d (1 + d )l as:
f cr = l
(1 + d )l − 1 Pi (t ) − Pi (t − 1) ≤ Rup ,i ˄10˅
 3

Similarly, when the load decreases, the constraint is multi-peak complex optimization problems, and is relatively
expressed as: easy to implement with high accuracy, so PSO is applied to
Pi (t − 1) − Pi (t ) ≤ Rdown,i solve the dispatch model in this paper.
˄10˅
The particle swarm has excellent global characteristic, and
inserted disturbance factors make the algorithm difficult to get
Where, Rup ,i Rdown ,i represents output limits of increase into local optimum. Inertia weight w and the learning factor
and decrease in unit interval of generation unit i. ܿଵ and ܿଶ are key parameters to affect the search performance.
The inertia weight w determines the global and local
4) Constraints of power exchange between micro-grid and optimization ability of particles, while the learning factors
the main grid determine the ability to learn from the more excellent.
Constraints of power exchange between micro-grid and With a relatively high w, the particles have great ability to
the main grid search for optimal position in the whole solution space, while
min max the particles are able to find the optimal position in the vicinity
Pgrid ≤ Pgrid ≤ Pgrid ˄8 ˅
with a small w. In order to balance the global and local search
min max
Where, Pgrid , Pgrid represents the lower and upper ability and of PSO algorithm, a nonlinear dynamic inertia
weight coefficient formula is used in the algorithm. As for
limits of power exchange, namely the maximum power that learning factor, with a greater learning factor, particles search
can be purchased from and sold to the main grid. the entire solution space wider; while the convergence speed
becomes faster with a smaller one.
5) Operation constraints of battery
In this paper, corresponding adjustment in the process of
The micro-grid should meet power balance in operation. searching for optimization is adopted to accelerate the
T convergence speed and prevent the algorithm from early
¦P δ = 0
i =0
t
bt
ripening, which reduces the chance of getting stuck in a local
optimum.
min The formula is expressed as:
P bt ≤ Pbt ≤ Pbtmax
˄8 ˅
T ­ ( wmax − wmi n ) × ( f − f mi n )
SOC min ≤ Sinit − ¦ ≤ SOC max °wmi n +
w = ® f avg − f mi n , f ≤ f avg ˄8 ˅
i =1 ° wmax , f > f avg
¯
min max
Where, Pgrid , Pgrid represent the maximum and t
c1 = ( c1f − c1i ) + c1i
minimum discharge and charge rates of the battery; (15) t max
represents the energy balance constraints in a dispatch period, ˄9 ˅
t
while δ refers to interval. SOC min , SOC max represents the c2 = ( c2f − c2i ) + c2i
t max
maximum and minimum remaining capacity of the battery.
where, wmax , wmin represent the maximum and minimum of
Where, ‫ܭ‬ைெǡ௜ is operation and maintenance coefficient of
generation unit i, which refers to the operation and
inertia weight, which are set as wmax =0.9, wmin =0.4; f avg ,
maintenance cost of every kilowatt-hour generated by the unit. f mi n represent the average and minimum value of fitness of all
‫ܥ‬஽ா௉ ሺ‫ݐ‬ሻ is the depreciation cost for each generation unit
at time t, which can be formulated as: current particles; c1 f , c1i are the final and initial value of c1 ,
N C ACC ,i while c2 f , c2i are the final and initial value of c2 .In the
CDEP (t ) = ¦ Pi (t )
i =1 8760 Pri f cf , i
formula, initial values are set as c1 f = c2i =2.5, c2 f = c1i =0.5.
C ACC ,i = CINS ,i f cr ˄4 ˅ Fitness value represents the merits of current position of a
d (1 + d )l particle. When the fitness value of a particle is higher than
f cr = l average, the possibility is relatively high that the global
(1 + d )l − 1
optimal solution are located in the vicinity of the particle. As a
result, by reducing the value of w, the local optimization
capability of the particles can be enhanced, it can also
III. IMPROVED PARTICLE SWARM OPTIMIZATION ALGORITHM accelerate the process of looking for the optimal solution. On
FOR SOLVING SCHEDULING MODEL the other hand, increasing the value of w help particles to leave
The economic dispatch of power grid is an optimization the current area, which will enhance global optimization
problem which can be solved with several algorithms. PSO ability to approximate the optimal solution.
has excellent ability to solve nonlinear, non-differentiable and
 4

Asynchronous learning factor makes the particles have 10:00-15:00, 18:00-21:00, the price of energy exchange are
higher self-learning and lower social-learning ability and shown in Table II.
strengthen the global search capability in the initial
optimization stage. In late stage, particles have higher TABLE II. PURCHASING AND SELLING PRICE ($/kW·h)
social-learning and lower self-learning ability, which is
Period Peak period Flat period Valley period
conducive to converge to the optimum.
Other parameters of the IPSO algorithm are set as Power purchase 0.13 0.077 0.027
follows: the population size is 120, the maximum iteration Power sale 0.10 0.060 0.020
number is 200. Next, according to previously established objective
The block diagram of improved algorithm is presented function and scheduling optimization ideas, we will calculate
below. the output of each micro-source under isolated and parallel
operation modes. The concrete results are as described below.

B. Optimization results
A typical winter daily load forecasting curve and wind
power generation, photovoltaic power generation output curve
is shown in Fig. 3, due to the low temperature in winter,
residents need electricity to keep warm, the load power is high
from 10:00 to 12:00 and 18:00 to 21:00. The output of the
wind turbine is relatively large for high winds in winter,
however, due to the weak intensity of the sun and the hours of
light is few in winter, the output of photovoltaic power
generation is small.
200 Power load Wind turbine Photovoltaic

150
Power(kW)

100

50

0
0 5 10 15 20 25
Time(h)
Fig.2. Block diagram of improved particle swarm algorithm
Fig.3. Photovoltaic, wind power output power and load forecasting
IV. CASE STUDY
A. Case system 1˅Parallel operation mode
In order to verify the model and algorithm proposed above,
a practical micro grid system is analyzed, and the simplified With IPSO optimization, the power equilibrium curve of
model of the power generation system is described in the paper the micro-grid system in a typical winter day is shown in Fig. 4.
above. The period of dynamic economic dispatch is 1 day, From 0:00 to 10:00, the price of electricity is relatively low,
which is divided into 24 periods. The parameters of the and the cost of MT is higher than purchasing power from the
distributed element model in the micro grid are set as listed in main grid, so the MT is turn off, the micro-grid buy electricity
Table I, per cubic meter of natural gas cost about $ 0.32.: from the main grid to meet the power shortfall and BT begins
to charge, which ends at 8:00. In the electricity peak period
TABLE I. DISTRIBUTED GENERATION UNITS IN A MICRO GRID from 10:00 to 15:00, the sales price of electricity to the main
Installatio grid is higher than the cost of MT, so MT operates at its
Power /kW Lifespan
Type n cost / maximum output, with the excess electricity sold to the main
Floor Upper limit /Year
($ /kW) grid; BT discharges to meet the power balance. The price of
Photovoltaic 0 20 20 10467 electricity is relatively low from16:00 to 18:00, so the micro
Wind turbine 0 40 10 3739 grid purchases electricity from the main network to meet the
Micro turbine 0 150 10 6729 load demand, BT charges at its maximum charging power to
When micro grid operates in the grid-connected mode, the prepare for the next peak period. In peak hours from 19:00 to
price of energy exchange(micro-grid buys and sells electricity 21:00, MT operates at its maximum power, BT discharges at
to the main network system)is divided into peakǃ flat and its maximum discharge rate until no remaining charge; From
valley period, valley time: 23:00-7:00, peacetime: 22:00 to24:00, the micro grid achieves a balance between
15:00-18:00, 21:00-23:00, 7:00-10:00, peak time: 18:00-21:00, supply and demand through power purchase from the main
grid.
 5

200 150 Micro turbine Cut Battery

Micro turbine Grid Battery

100
Power(kW)

100

Power(kW)
50

0
0

-100 -50
0 5 10 15 20 25 0 5 10 15 20 25
Time(h) Time(h)

Fig.4. Optimization results of a typical winter day Fig.7. Results with IPSO algorithm

Micro turbine Cut Battery

This article also analyzes the cases that optimization 150

algorithm isn’t adopted (batteries not involved in the 100

regulation) and that PSO algorithm is used to solve the

Power(kW)
economic dispatch problem, and optimization results are 50

shown in Fig. 5, Fig. 6 respectively. 0

200 Micro turnine Grid Battery

-50
0 5 10 15 20 25
100 Time(h)
Power• kw)

Fig.8. Results with PSO algorithm

0

-100

-200
0 5 10 15 20 25
Time• h)

Fig.5. Results without optimization algorithm

200 Micro turbine Grid Battery

150

100
Fig.9. Optimization convergence curves of PSO and IPSO
Power(kW)

50
The convergence characteristics of the two algorithms are
0
shown in Fig. 9 when the PSO and IPSO are used to solve the
-50 economic dispatch strategy under parallel operation. As
-100 shown in Figure 9, the convergence of PSO algorithm is
0 5 10 15 20 25
Time(h) flawed in solving the dynamic optimization problems with
multi-time periods, the solution is of low quality, and easy to
Fig.6. Results with PSO algorithm fall into local optimum, while IPSO algorithm improves the
accuracy and the speed of calculation and has good
2˅Islanding operation mode convergence.
When micro-grid is in isolated operation mode, 24 hours
output curves of each generation unit solved by PSO and IPSO C. Optimization results analysis
are shown in Fig. 7, Fig. 8, respectively.
As shown in Figure 7, WT and PV power generation are Without optimal scheduling, the battery charge and
in priority in winter. From 0:00 to 4:00, the required electricity discharge regularly. In this paper, the IPSO and PSO are used
is supplied by the MT for low WT and PV output, and the BT to solve the output of each micro source to minimize the cost
charges for future use. From 4:00 to 6:00, BT becomes fully operating of the micro-grid, and then the costs are calculated
charged gradually; From 6:00 to 9:00, WT and the PV output according to the objective function, respectively. The
increases, however, the power output of MT still increases due comparison of daily operation costs calculated by PSO and
to the increased load demand; From 10:00 to 15:00, MT power IPSO are presented in Table III.
reduces as load power decreases; In 16:00, BT begins to TABLE III. COMPARISON OF RESULTS OF DIFFERENT ALGORITHMS
discharge as power consumption increases; From 23:00 to
24:00, load power drops, so MT begins to charge BT as the Parallel Without
IPSO algorithm PSO algorithm
operation optimization
battery depleted.
costs˄$˅ 466 444 457
Islanding Without
IPSO algorithm PSO algorithm
operation optimization
costs˄$˅ 601 573 589
 6

From the data in the table, we can see that daily operation Meeting- Conversion and Delivery of Electrical Energy in the 21st
cost of the micro-grid without economic scheduling strategy is Century, 2008.
[12] C. Chen, S. Duan, T. Cai, B. Liu, and G. Hu, “Optimal allocation and
higher than that of using PSO and IPSO algorithms under both economic analysis of energy storage system in microgrids,” IEEE Trans.
parallel and isolated operation modes. Under parallel mode, Power Electron., vol. 26, no. 10, pp. 2762–2773, Oct. 2011.
the operation cost of the micro-grid decreases $ 22 by applying [13] H. W. Dommell and W. F. Tinney, "Optimal Power Flow Solutions",
IPSO algorithm, the one of PSO is $ 9, the decrease cost of IEEE Trans. on PAS, Vol. 87, pp. 1866-1876, 1968.
IPSO is about 2.9% higher than that of PSO, while under [14] F. Abu-Mouti and M. El-Hawary, “Optimal dynamic economic dispatch
including renewable energy source using artificial bee colony
islanding mode, the operation cost of the micro-grid decreases algorithm,” in Proc. IEEE Int. Syst. Conf., Mar. 2012, pp. 1–6.
$ 28 by applying IPSO algorithm, the one of PSO is $ 12, the [15] A. Hoke, A. Brissette, S. Chandler, A. Pratt, D. Maksimovic,
decrease of IPSO is about 2.7% higher than that of PSO, the “Lookahead Economic Dispatch of Microgrids with Energy Storage,
optimization results of IPSO is better than that of PSO. It Using Linear Programming”, IEEE Conf. on Technologies for
could be concluded that the usage of IPSO algorithm in Sustainability (SusTech), Aug 2013.
economic dispatch of micro-grid can effectively increase the
economic efficiency, which verifies effectiveness of the
models and algorithm studied in this paper.
V. CONCLUSION
In this paper, the economic dispatch model of micro-grid
optimal operation is established, and its objective function is
formulated. Because of the good performance of PSO
algorithm in nonlinear optimization problems, the mechanism
of PSO algorithm is analyzed, and the IPSO algorithm is
introduced to solve the scheduling model. Finally, a real
micro-grid system is used as an example to verify the
feasibility and effectiveness of IPSO.
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