A Conceptual Framework for Determining the Economically Optimal Level of Microgrid Resilience

Abstract

Microgrids are considered to be an effective measure for resilience due to their ability to operate in island mode during a power outage and to ensure continuity of supply. Current standard frameworks for microgrid resilience evaluation overlook the economic parameters, which are important for decision-making about investments in resilience enhancement. To bridge this gap, a new methodology is proposed in order to evaluate the economically optimal level of microgrid resilience. An availability-based resilience evaluation framework is used for quantification of the resilience using both a deterministic and a stochastic approach. The quantified resilience values are monetized using the economic indicator Value of Lost Load. The economically optimal resilience level is evaluated using the Net Present Value capital budgeting method.