Estimating the value of demand-side management in low-cost, solar micro-grids

Demand-side management has the potential to reduce the cost of solar based community micro-grids and solar home systems for electricity access. This paper presents a methodology for optimal least-cost sizing of generation assets while meeting explicit reliability constraints in micro-grids that are capable of active demand management. The battery management model considers kinetic constraints on battery operation and represents dispatch in the field to regulate the depth of discharge. The model allows consideration of the trade-off between depth of discharge, cycle life, and calendar lifetime in lead-acid batteries. Separate reliability targets for disaggregated, residential load profiles at hourly timesteps are considered to evaluate the performance and cost reduction potential of demand-side management capabilities — with economic results and sensitivity analyses around key input assumptions subsequently presented. We find that demand-side management can reduce the number and cost of requisite solar panels and batteries with the integration of real-time management and controls – a key result for justifying next generation micro-grids for electricity access. Keywords: Micro-grids, Electricity access, Demand-side management, Reliability, Asset selection, Off-grid, Techno-economic model, CostMassachusetts Institute of Technology. Tata Center for Technology and Desig