Reliability-Constrained Planning Framework for Smart Distribution Systems Considering Generation Sufficiency for Virtual Microgrids

As modern electricity system evolve toward smart grids, increasing technological and regulatory complexity makes distribution system planning a challenging task. This paper develops new planning and reliability models to help local distribution companies (LDCs) achieve cost-effective, reliable solutions amid these changes. Furthermore, this paper offers a novel iteration-based optimization model incorporating reliability and security considerations. Also, this work proposes the concept of virtual microgrids to enhance distributed generation (DG) penetration in weak areas, thereby improving reliability where it is most needed. The proposed model reduces an LDC’s total planning cost covering substation and feeder upgrades, market energy purchases, payments to DG owners, energy losses, and operations while ensuring that reliability indices and energy not supplied stay within regulatory limits. To ensure compliance with operational security limits as DG penetration rises, the DG capacity is split into normal operating capacity and reserve capacity. The results confirm the proposed algorithm’s superiority relative to current state-of-the-art planning methodologies.