Cost-Based Droop Scheme with Lower Generation

Costs for Microgrids

Inam Ullah Nutkani1,2, Poh Chiang Loh2,3 and Frede Blaabjerg3
iExperimental Power Grid Centre, Agency for Science, Technology and Research, Singapore
2School of Electrical and Electronic Engineering, Nanyang Technological University, Singapore
3Department of Energy Technology, Aalborg University, Denmark
inam0003 @e.ntu.edu.sg

Abstract - In an autonomous microgrid where centralized

management and communication links are not viable, droop
control has been the preferred scheme for power sharing among
distributed generators (DGs). At present, although many droop
variations have been proposed to achieve proportional power
sharing

based

on

the

DG

kVA

ratings.

Other

operating

characteristics like generation costs, efficiencies and emission

penalties at different loadings have not been considered. This
makes existing droop schemes not too well-suited for standalone
microgrids without central management system, where different
types of DGs usually exist. As an alternative, this paper proposes
a cost-based droop scheme, whose objective is to reduce a
generation

cost

realized

with

various

DG

operating

most centralized cases, where power dispatch commands are

usually decided from a combination of factors rather than
ratings alone [3]-[5]. The same thought has however never
been tried with droop control for an autonomous islanded
microgrid.
To address the concern raised above, a cost-based droop
scheme has been proposed, whose power sharing in the
steady state will result in a lower total generation cost (TGCi
for the microgrid, as compared to the traditional droop
schemes. The proposed scheme methodology, simulation and
experimental findings are given in subsequent sections
followed by review of traditional droop scheme.

characteristics taken into consideration. The proposed droop

scheme therefore retains all advantages of the traditional droop
schemes, while at the same time keep its generation cost low.
These findings have been validated through simulation and
scaled down lab experiment.

Index Terms- Microgrids, distributed generation, droop

control, autonomous control, power converters.

I. I NTRODUCTION
Distributed generators (DGs), when clustered to form
small microgrids, offer many advantages like resource
optimization, improved power quality, stability and reliability
[1]-[3]. The formed microgrids can certainly be controlled by
centralized management systems [3]-[5], but for widely
dispersed DGs where communication links are not viable,
autonomous droop schemes might be more appropriate. So
far, the common objective focused by the droop schemes has
been proportional power sharing among the DGs based on
their respective kVA ratings [5]-[6]. This objective is no
doubt fme if the DGs are of the same type just like in the
earlier control of parallel synchronous generators [7],
uninterruptible power supplies [8] and interlinked ac
microgrids [9]-[10]. It is however usually not the case for
standalone microgrids, where different types of DGs havmg
different cost functions and emission characteristics usually
exist, like for an example microgrid shown in Fig I.
Proportional power sharing based on ratings alone might
therefore not be sufficient or appropriate for microgrids.
Other factors like costs, efficiencies, pricing schedules and
emission penalties should rightfully be considered just like in

978-1-4799-0482-2/13/$31.00 2013 IEEE

339

II. TRADITIONAL DROOP SCHEME

The basic droop scheme explained in the literature is
based on the two linear expressions written in (1) and (2),
where x, I, V , {P, Q and S}, and {max and min} are the DG
unit number, frequency, terminal voltage, active, reactive and
apparent power generations, and their corresponding
maximum and minimum values, respectively. Also included
in the two expressions are the active wand reactive u droop
coefficients, which no doubt are just the gradients of the two
droop lines. Implementation of the two droop lines would
generally mvolve measuring the DG terminal voltages and
currents for computmg its active and reactive power
generations [11]-[12]. The obtamed powers Px and Qx can
then be substituted into (1) and (2) to obtain the frequency Ix
and voltage Vx references for forming a set of three-phase
sinusoidal commands. The sinusoidal voltages can finally be
tracked by a standard multi- or single-loop controller, whose
design can be found in [5],[13].

Ix

Vx

wx -

Imax- wxPx;
Vmax- uxQx

Ux

fmax-f min
Sx,max
Vmax-Vmin

SX,max

(1)
(2)

Many variations have since been extended from the two

basic droop lines, whose common objective is still to
mamtain proportional power sharmg based on the DG ratmgs
i TGC is used here to refer to a weighted combination of factors
like fuel, emission, maintenance and operational costs, which
rightfully can be freely tuned by the users and/or operators

[5]-[12],[14]-[15]. For (1) and (2), it would mean setting the

droop coefficients according to (3) and (4).
WISI,max

W2S2,max

. . .

WxSx,max

. . .

[max - [min

(3 )

To demonstrate the effectiveness of (3) and (4), a simple

microgrid with three DGs is considered, which in the steady
state, will share a single common network frequency [
(= [1 = [2= [3)' Substituting [ into (1) leads to (5), which
would force the higher rated DG to produce more active
power in order to satisfy the equality. The same principle can
be applied to reactive power sharing, whose resulting
expression is shown in (6). In (6), the equality shown is only
approximate due to the practical fact that terminal voltages of
DGs will never be exactly equal in the steady state. This
imperfection has led to many variations, whose sole objective
is to improve on reactive power sharing based again on
ratings.
PI

P2

P3

51,max

52.max

53max

51,max

III.

52,max

53,max

The similar function can also be derived to represent total

generation costs of a dispatch-able renewable DG such as
fuel cell, wind or photovoltaic with storage even though it is
derived differently, by adding the direct or fix operating cost
and emission penalty/incentive cost and then dividing it by
inverter loss-efficiency function [19]-[21].
To illustrate, TGC curves of two engine driven DGs (CI
and C2) and one renewable DG ( C3 ) for the example
microgrid shown in Fig 1 are plotted in Fig. 2(a), where the
cost function (y-axis) of the DGs has been normalized and
plotted against the P (x-axis). The definition of the
normalized cost and power is given by (8) and (9),
respectively.

(5)
(6)

PROPOSED COST-BASEDDROOP SCHEME

Although tried by many researchers and proven effective,

the traditional droop scheme based only on ratings might not
be suitable for microgrids with different types of DGs. In
addition, it should be mentioned that most droop schemes
proposed so far have always been based on those linear
expressions shown in (1) and (2). It is certainly not a strict
requirement, meaning that nonlinear droop curves can also be
used for the intended autonomous control. This is in fact the
case for the proposed droop scheme based on reducing the
TGC of the overall microgrid. Details of the scheme are
discussed as follows.
A.

Fig. 1. Three DGs example microgrid

Generation Cost Curves

Generation costs of a DG can include many factors, which

in general, can be grouped under two categories named as
operating cost Cx,o(Px) and emission penalty-incentive cost
Cx,((Px)' When added together like in (7), the TGC of each
DG represented by Cx (Px) can rightfully be drawn as a
quadratic function.
(7)
Referring back to the operating cost, fuel costs of a diesel
generator driven by an internal combustion engine or a DG
driven by a micro-turbine can usually be represented by a
second-order quadratic function [16]-[18]. Adding to these is
a second set of quadratic functions, whose purposes are to
account for emission penalties faced by the engine or turbine
driven generator or incentives rewarded to the renewable DG
[17]-[18].

C'x (Px)

Cx(Px)
Px,max

Cx(Px)

(8)

P x,rated

(9)

p'==
X
PX,max
px.rated

The cost nonnalization in (8) based on individual DG

maximum/rated power (Px,max)helps to place the cost ofDGs
within a common range for comparison on equal scale
regardless ofDGs different kVA rating.
Further it shall be noted that at zero P, the costs are noted
to be non-zero. These no-load costs are always there so long
as their associated droop controlled DGs are operating. Being
independent of P , they should be removed from
consideration when deciding on the amount of active power
generation. The modified cost curves shown in Fig. 2(b) can
hence be represented by (10).
C;(Px) = C(Px) - C(Px

= 0)

(10)

B. Cost Based Droop Methodology

340

Using the generation cost function given in (10), the

proposed droop scheme is expressed as:
kx

imax-i min

= max

(Cmax)

(11)

0.3 ,------,
0.199

0.3

-.,

), 0.2

0.2

-\,.)
'"

0.1 0.0602
0 .0 51
1
C
0 03476
0======: =::=========== = =J
0.4
0.2
0.6
0.8

0.1

0.2

0.4

Fig. 2. Generation cost curves of DGs (a) C(Px)and (b) C(Px)

51.5 r----------'

51

50.5 r-=;;;;:-----.!._J
50

0.8

0.6

Active Power p'

Active Power p'

51

-: 50.5
c-

49.7511z

tt

50

49.5

49 L-------------L---LL----

49 L-----------------L-L-

0.2

0.4

0.6

Active Power p'

r=::::::
::: __

0.8

0.2

0.6

0.8

A ctive Power p'

Fig. 3. Frequency versus power curves for the cost-based droop scheme with (a)

In (11), the max( ) function is used to extract the highest

maximwn generation cost among the DGs when they are
at the 100% generation limit (P; = 1). Applying it to
the example microgrid with three DGs of cost curves
shown in Fig 2(b), results in:

min imax-i min

k1 - k2 - k3 - mimax-i
axCCmax) - c:max
C'CPl) = C'CP 2 ) = C'CP 3 )

0.4

max

(C max) and (b) C max in the denominator of kx

.
.

lower cost objective and other parameter limits to be

discussed next.
(14)
C.

(12)

Substituting (12) to (11) for the example microgrid with

three DGs leads to the following expression.

(13)

To satisfy the equality in (13), it simply means that the

DG with the lowest TGC would produce more and vice versa.
Pictorially, it can also be seen by either drawing a horizontal
constant cost line in Fig. 2(b) or a horizontal constant
frequency line in Fig. 3(a). The overall TGC of the microgrid
can hence be an addition of three DGs TGC, which will
surely be lower than that produced by the traditional droop
scheme. From the understanding gained from (13), it should
rightfully be mentioned too that the denominator of kx in (11)
should not be mistaken as G.max. Else, the resulting equality
will become (14), which will also depend on the individual
maximum TGCs of the DGs when at full-loadCP; = 1). This
dependence is not encouraged since it causes the DG with the
lowest TGC to produce less active power in order to give a
smaller C;CPx) to counter the smaller Gmax . This
shortcoming can also be seen by drawing a horizontal line
across Fig. 3(b), which shows the cost curves plotted with
(9), but with the denominator of kx replaced by C.max' It is
hence important to set kx appropriately in order to meet the

Parameter Limits

C;CPx) ClFmax- lFmin ) ; X = 1,2 or 3 (15)

lFmin = lFmax-
1,max
The maximum frequency [max is obviously arrived at
when P; = 0 and hence C;CPx) = 0 according to the cost

curves drawn in Fig. 2(b). On the other hand, the minimum

frequency [min is arrived at when the most costly DG is
operating at its full-loadCP = 1). For the example microgrid,
it happens when C;CPx) = C',max' which confIrms that the
proposed droop scheme can operate within the defined
frequency range from [min to [max ' It should however be
noted that the minimum frequency [min is somehow not
reached by the other two less costly DGs since their
maximum costs at the full-load is lesser than C,max' Their
respective frequencies at full-load are hence higher than [min
but smaller than [max according to those cost curves drawn in
Fig. 3(a). Because of that, for a common steady state
frequency close to [min, active power outputs of the two
lower cost DGs must be limited to P;,max (or lower), which in
practice can be done by adding a simple proportional-integral
controller (16) to (11).

341

Experiment Results

Simulation Results
o.8 ,------,---,--,,-

Time(vec)

O--5O-1OO-15O2OO-250-300

00

00

1
0----4L- -6- --L--10- -2

Tillie

(sec)

Fig. 4. Variation of microgrid TGC(PJ as load changes with traditional and cost-based droop scheme (a) simulation and (b) experiment results
.

'"

"

.
-.:

0.8
0.6
0.49:t====j=

0.2

OL----L-----L--0
1 ---2
1

Time(sec)

Thne

00

00

51.5
51
505
"' 50
49.5
<t 49
48.50

(sec)

Fig. S. Variations of DG active powers as load changes in the cost-based droop scheme (a) simulation and (b) experiment results.

: 50.87

,-------r---,----,----...,----__,

51
50.5
50
S. 49.5

48.5

>l'

"

-..,"

12

300

nme (,wc)

00

00

Fig. 6. Variations of microgrid frequency as load changes in the cost-based droop scheme (a) simulation and (b) experiment results.

Ix

(p.max- px')

Kp

where
and
respectively.

Ki are

(Kp Ki/S);
+

Px' P,max

(16)

the proportional and integral gains,

IV.

TABLE I
MJCROGRlD SYSTEM PARAMETERS

SIMULATION RESULTS

To illustrate the effectiveness of the proposed cost-based

droop scheme, the example microgrid shown in Fig. 1 was
simulated in Matlab/Simulink software. The DGs rating and
other system parameters are given in TABLE I. Their
respective cost and droop curves are similar to those shown in
Fig. 2(a) and Fig. 3(a), which when applied to (11), lead to
kl

k2

k3

2
__
0.245

certainly in agreement with Fig. 5(a), which shows the

individual DG active outputs for the three loading conditions.
Their corresponding common frequency variation is also
shown in Fig. 6(a) for easier correlation of events happened
during the three load intervals.

8. 16. With these defined parameters,

the proposed droop scheme is verified with three different

loading conditions
30%(Iow), 6O%(moderate) and
90%(heavy) of the total microgrid generation capacity.
Figure 4(a) shows the corresponding microgrid total
generation cost obtained with the cost-based and traditional
droop schemes, where the fonner clearly shows a reduction in
TGC for the studied microgrid. The saving is, as anticipated,
achieved by forcing the low-cost DG to produce more and the
high-cost DG to produce less. According to Fig. 2(b), the
low-cost DG will always be unit 3, while the high-cost DG
will be unit 2 from 0 to 60% loading (P
0.6), and then
unit 3 from 60% loading ( P
0.6) onwards. This is
=

342

Parameters

Values

{min H {max
Vmin H Vmax

49 H SlHz

Phases

Max. Pl, P2 P3
Max. Ql Q2
Q3
Max. P; and Q
Base Power 5
Base Voltage
=

kl

k2 k3
(,max

0.9SpUH 1.0Spu
3
IkW
0.7SkVAr
1.0 each
1 kVA
190.S
8.16
shown in Fig 2(b)

From the presented figures, it should also be mentioned

that the 14% saving in TGC for the second loading condition
in Fig. 3 is greater than the 2% saving experienced in the first
interval. This is undeniably the case as differences in the cost
curves become more prominent at higher loading condition.
An increase in saving is however not observed in the third
interval during which the load has further increased. The
reason for that is due to the saturation of DG unit 3 at its rated
value (full-load), which to a sizable extent, has hindered its

contribution to saving even though it has the lowest cost. The

saving in the third interval has hence dropped from 14% to
6.8% in Fig. 3, which after all is still a saving as compared to
the traditional scheme.
V.

[10]

EXPERIMENTAL RESULTS

The microgrid DGs and loads shown in Fig 1 were

emulated using digitally controlled three phase inverters and
variable active and reactive load banks. The DGs rating,
frequency, cost curves and other parameters were set same as
described in section IV, also given in TABLE I. The
experiment was carried with three different loading
conditions. However, the total % load in all three intervals
was not exactly same as simulation cases, this relatively
higher loading during experiment can be observed from the
cost and power values shown in Fig. 4 and Fig. 5. The
experiment results for TGC saving, power sharing among
DGs agrees with the proposed scheme theoretical findings
and simulation results, as shown in Fig. 4(b) to Fig 5(b). The
experimental results for microgrid frequency variation are
also shown Fig. 6(b).
VI.

CONCLUSION

A cost-based droop scheme has been proposed for

autonomous microgrid applications with different types of
DGs considered. Instead of relying only on the DG power
ratings, the proposed scheme arrives at a steady-state power
sharing based on various cost factors grouped under the
general term of TGC. The goal is to reduce the overall
microgrid TGC without affecting the simplicity of the droop
scheme. Effectiveness of the proposed scheme has been
dually verified through simulation and scaled-down lab
experiment.
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