Real-Option-Based Planning of Utility-Owned Distributed Energy Resources for Islanded Distribution Networks in Southeast Asia

This paper proposes a new approach for planning distributed energy resource (DER) units in islanded distribution networks (DNs) of Southeast Asia, a region characterized by abundant solar irradiance, high temperature, and volatile weather conditions. First, a comprehensive thermal model for stationary energy storage systems (ESSs) is introduced with a detailed assessment of ESS internal cooling power consumption. Then, to address voltage fluctuation caused by intermittent photovoltaic (PV) power output due to the region’s highly variable weather conditions, the PV inverter oversizing is modeled to provide reactive power support, considering the degradation of the inverter lifespan. Last, supply chain risks are considered a growing concern in the power industry. Real option-based criteria are then applied to provide deferral options for flexible investment. The whole problem is formulated as a two-stage stochastic programming model and a solution method based on candidate bus selection and model linearization and relaxation is developed. Simulation results on an IEEE-34 bus three-phase DN illustrate the necessity and efficiency of the proposed approach.