International Journal of Energy and Environmental Engineering (2020) 11:73–89

https://doi.org/10.1007/s40095-019-00332-1

ORIGINAL RESEARCH

Review on the cost optimization of microgrids via particle swarm

optimization
Sengthavy Phommixay1 · Mamadou Lamine Doumbia1 · David Lupien St‑Pierre2

Received: 15 July 2019 / Accepted: 14 December 2019 / Published online: 27 December 2019
© The Author(s) 2019

Abstract
Economic analysis is an important tool in evaluating the performances of microgrid (MG) operations and sizing. Optimiza-
tion techniques are required for operating and sizing an MG as economically as possible. Various optimization approaches
are applied to MGs, which include classic and artificial intelligence techniques. Particle swarm optimization (PSO) is one
of the most frequently used methods for cost optimization due to its high performance and flexibility. PSO has various ver-
sions and can be combined with other intelligent methods to realize improved performance optimization. This paper reviews
the cost minimization performances of various economic models that are based on PSO with regard to MG operations and
sizing. First, PSO is described, and its performance is analyzed. Second, various objective functions, constraints and cost
functions that are used in MG optimizations are presented. Then, various applications of PSO for MG sizing and operations
are reviewed. Additionally, optimal operation costs that are related to the energy management strategy, unit commitment,
economic dispatch and optimal power flow are investigated.

Keywords Cost minimization · Particle swarm optimization · Operations · Sizing · Microgrid · Renewable energy

Introduction batteries, capacitors, hydrogen, and flywheels, with loads

that are interconnected by a local electric power distribution
Microgrid description system, is called an MG [1–3]. Hybrid renewable energy
systems (HRESs) consist of a group of two or more RESs
Microgrids (MGs) have provided substantial motivation for and conventional energy sources and are often referred to
the development of a smarter, more resilient and cost-effec- as MGs [4–6].
tive approach for producing energy. MGs are mainly con- An MG, DER or HRES can take the form of an AC, DC
structed from renewable energy sources (RESs) by focusing or hybrid AC–DC network depending on the generation
on the independence of local energy supplies, as illustrated sources or load connections. The characteristics of AC, DC
in Fig. 1. Distributed energy resources (DERs), which are and hybrid AC–DC networks are compared in [7, 8]. Fur-
also known as distributed generation (DG), can be combi- thermore, various ESS technologies and MG control types
nations of conventional energy sources, such as diesel units are presented in [7]. The authors in [9] have classified MGs
(DUs) and combustion gas turbines, and RESs, such as wind in four scales, as listed in Table 1.
turbines (WTs) and photovoltaics (PVs). The integration of An MG encourages the integration of RESs to realize
groups of DERs and energy storage systems (ESSs) such as the objective of sustainable development. This improves the
reliability, efficiency, and security of power supply systems.
An MG can connect to the grid (in grid-connected mode)
* Sengthavy Phommixay or operate independently without a grid connection (as an
[email protected]
islanded grid, off-grid, standalone grid, or autonomous grid).
1
Department of Electrical and Computer Engineering, The main economic issue for MGs is the efficient utili-
Université du Québec à Trois-Rivières, 3351 Boulevard des zation of renewable and conventional energy sources. The
Forges, Trois‑Rivières, QC G9A 5H7, Canada energy cost is minimized by tuning the size and opera-
2
Department of Industrial Engineering, Université du Québec tions of MGs [1, 10–12]. The authors in [10] provide an
à Trois-Rivières, 3351 Boulevard des Forges, Trois‑Rivières, approach for realizing an optimal operation and sizing
QC G9A 5H7, Canada

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74 International Journal of Energy and Environmental Engineering (2020) 11:73–89

Fig. 1  MG architecture

Table 2  Optimization techniques

Table 1  MG scale classification Scale Power Classical methods Artificial intelligence methods

Micro 1 W–5 kW Linear programming (LP) Artificial neural network (ANN)

Small 5 kW–5 MW Nonlinear programming (NLP) Fuzzy logic method (FL)
Medium 5 MW–50 MW Newton–Raphson (NR) Genetic algorithm (GA)
Quadratic programming (QP) Evolutionary programming (EP)
Large 50 MW–300 MW Interior point (IP) Ant colony optimization (ACO)
Particle swarm optimization (PSO)
Dynamic programming (DP)
Bacterial foraging optimization
(BFO)
of an MG that guarantees the minimum energy cost. In Simulated annealing (SA)
[11], the authors demonstrate the influence of the size on Differential evolution (DE)
the operational cost. Small sources and storage may not
provide economic benefits, flexibility or reliability in an
MG. However, large sources and storage require higher Optimization techniques
investment and incur higher maintenance costs [12].
Thus, it is highly important to know how the MG oper- Without optimization techniques, the cost–benefit of an
ates when sizing the system. The optimal size is found MG may not be justified. Optimization aims at identify-
when the energy cost is minimized and may be subject to ing the best alternative from a set of specified solutions
technical and environmental constraints. Furthermore, the that are the most cost-effective or have the highest realiz-
minimum energy cost is made possible by energy manage- able performance under the specified constraints. Many
ment strategy (EMS), unit commitment (UC), economic approaches are available for addressing optimization prob-
dispatch (ED) and optimal power flow (OPF), which are lems when classic optimization techniques are unable to
parts of an optimal operation strategy. The uncertainties of find an optimal solution. Artificial intelligence (AI) is a
renewable energy sources may affect the cost–benefits of promising method for cost optimization. The main advan-
MGs. Thus, it is difficult for grid operators to control and tage of AI is the ability to combine more than one method:
manage these energy sources. Renewable power forecast- first, in finding the best primary solution and subsequently,
ing is an important task for the grid operator for enhanc- finding a better solution.
ing the effectiveness of the grid operation. Furthermore, Table 2 lists various optimization techniques that are
renewable power forecasting has attracted attention from used to identify the most feasible solution to the problem
academic research communities [13] since it can play an of cost minimization in MGs [15–17].
important role in identifying the optimal operation [14].

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International Journal of Energy and Environmental Engineering (2020) 11:73–89 75

Various optimization techniques, such as PSO for MG are outlined. We summarized various objective functions
sizing, are applied in [18]. The authors discuss the conver- and constraints equations for MG optimization. We clas-
gence speeds of and the quality of the solutions that are sify the cost function type, and linear, quadratic and cubic
derived by various methods. Another application of opti- models, along with smooth and nonsmooth models, are dis-
mization techniques is presented in [19], namely, finding cussed. The comprehensiveness of these models leads to as
the optimal parameters of the Weillbul distribution for wind high of a performance in PSO implementation as any other
turbine projects in Brazil. In this study, the authors compare algorithms.
the performances of heuristic algorithms with deterministic The remainder of the paper is organized as follows: in
numerical methods. Sect. 2, MG cost optimization is presented. Additionally,
A review of various optimization techniques and sizing the versions and combination methods of PSO that are used
methods of MG systems is presented in [20]. This paper for MG optimization are described. Section 3 describes the
presents a comprehensive study on finding the best com- mathematical model for the cost analysis of the MG. Sec-
promise between the MG cost and the system reliability. In tion 4 presents the cost–benefit that is related to the size
another review [6], the authors discuss sizing methodologies of the MG. Finally, the cost–benefits that are related to the
for both isolated and grid-connected MGs. Sizing criteria operations are presented in Sect. 5.
that are related to the operating costs, reliability and loads
are investigated. Reference [21] reviews sizing strategies
that are based on optimization techniques. It also presents MG cost optimization
a cost analysis and a reliability index that are used in MG
sizing. In [22], the authors focus on optimization techniques Optimization is the procedure of finding the minimum or
for optimal MG sizing. In addition, optimization techniques maximum value of a function by choosing variables, subject
and computer tools for MG sizing are analyzed. The authors to constraints. The optimization function is called the fit-
in [23] present an overview of the optimization techniques ness or objective function and is typically calculated using
for MG sizing, placement and design, in which they high- simulation tools.
light the successful application of PSO, whereas the authors An optimization method is not always guaranteed to find
in [24] focus on optimization techniques and tools that are an optimal solution. Sometimes, this can be unrealized due
used for optimal operation and deployment of MGs. In this to the characteristics of the problem. The choice of an opti-
review, many objective functions are presented for vari- mization technique depends on the type of the cost function
ous types of operations and renewable energy sources. The to be solved. According to the authors in [26, 27], some
authors in [25] discuss the application of optimization tech- techniques are unable to deal with nonsmooth and noncon-
niques for finding the optimal sizes and operation schedules vex optimization. These techniques have difficulty handling
of MGs. This review focuses on the ED problem for inves- inequality constraints.
tigating operation scheduling. PSO is a robust optimization technique and is applied in
Various reviews have been conducted on optimization various applications of MGs. It can solve continuous and
techniques for MG sizing in the aforementioned studies; only discrete optimization problems. In addition, it is simple to
a few reviews examine the optimization techniques for MG implement, flexible and computes quickly. PSO is the most
sizing, including the optimal operation of MGs. In addition, frequently used method for MG optimization problems [23];
the optimization techniques are discussed with little detail. consequently, approximately 70 research papers that are
No analysis of the efficiency, robustness, or flexibility of the based on PSO have been studied in this work.
algorithms is provided. However, an optimization technique
is required for MG sizing and operations and for enhanc- • Classic version of PSO
ing the reliability, environmental effects, and component   PSO is based on a swarm (population) of N particles.
lifetime. These particles are randomly placed in the search space
In this paper, we consider the PSO algorithm and its D. Each particle i of the swarm is defined by its position
application to MG optimization. Additionally, we explain Xij = (Xi1, Xi2,…, XiD) and its velocity Vij = (Vi1, Vi2,…,
how the performance analysis and the selection of param- ViD) in the search space D. Index i varies from 1 to N,
eters and stopping criteria of the PSO algorithm are con- and index j varies from 1 to D.
ducted. To the best of the authors’ knowledge, this is the   The particles move at each iteration by considering
first attempt to identify both the optimal operation and size their best position and the best position of their neighbor-
of an MG via the PSO algorithm. We investigate various hood. The velocity and position equations are presented
types of operations, such as EMS, UC, ED, and OPF. In as follows:
addition, the cost optimization of the operations and size

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76 International Journal of Energy and Environmental Engineering (2020) 11:73–89

  The optimization parameters determine the perfor-

( )
Velocity Vijk+1 = w ⋅ Vijk + c1 ⋅ r1 ⋅ Pbest − Xijk
mance of the algorithm in searching for the global opti-
mum of a problem. The selection of these parameters is
( )
+ c2 ⋅ r2 ⋅ Gbest − Xijk ,
(1) a crucial step in the optimization process. The analysis
of each parameter selection is described as follows:
Position Xijk+1 = Xijk + Vijk+1 , (2)
– Number of particles (N): if the number of parti-
where w is the inertia weight, c1 and c2 are the accelera- cles is small, it can influence the performance of
tion coefficients, and r1 and r2 are random numbers PSO. If we increase the number of particles, we
between 0 and 1. Xijk is the position of the ith particle in can decrease the number of iterations. Thus, the
the jth dimension in the kth iteration. Vijk is the velocity algorithm can still find an optimal solution.
of the ith particle in the jth dimension in the kth iteration. – Acceleration coefficients (c 1 and c 2): the accel-
Pbest is the personal best position, and Gbest is the global eration coefficients c1 and c 2 guide the particles
best position. V can be limited to [− Vmax, Vmax], where to move toward Pbest and Gbest, respectively. Small
Vmax is the maximum velocity limit. X is limited to [Xmin, values may limit the particle movements toward a
Xmax], where Xmin and Xmax are the minimum and maxi- satisfactory solution. However, a large value may
mum particle position limits, respectively. k varies from lead the particles to move away from the solution.
1 to Maxite, where Maxite is the total number of itera- – Maximum velocity (V max): the particle velocity
tions. The procedure of PSO is illustrated in Fig. 2. is typically restricted within a specified range to
  The choice of parameters and stopping criteria influ- prevent the particles from moving away from the
ences the performance of the PSO algorithm. If suitable search space. If Vmax is too small, the particles may
parameters and stopping criteria are selected, the algo- only explore the local best, whereas if Vmax is too
rithm can provide a better result. large, then the particles may pass over a satisfac-
• Parameter selection tory solution.
– Inertia weight (w): the inertia weight balances
the local and global explorations. A large inertia
weight provides a strong global search, whereas a
small inertia weight provides a strong local search.
The value of the inertia weight can change during
the optimization process. Therefore, self-adaptive
approaches that modify the value of inertia weight
during the search procedure are recommended in
the literature.
• Stopping criterion
  The stopping criterion is fundamental in PSO opti-
mization because the algorithm must not terminate
prior to reaching the global optimum. However, the
algorithm must automatically terminate when the opti-
mal solution is found to avoid wasting computational
resources during the execution. Therefore, the choice
of stopping criterion has a large influence on the dura-
tion of the optimization processes. Many stopping cri-
teria are presented in the literature, such as a tolerance,
the number of function evaluations, and the maximum
number of iterations.
• Binary version of PSO (BPSO)
  In the binary version of PSO, a particle represents the
position in binary space and the particle’s position vec-
tors can take on a binary value 0 or 1. The same equation
as that for the classic version of PSO is used to update the
velocity. The equation for updating a particle position is:
Fig. 2  Flowchart of PSO

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International Journal of Energy and Environmental Engineering (2020) 11:73–89 77

the time for reaching the optimal solution, the time

⎧ 1 if ukij < skij
for computing each iteration, and the total running
xijk = ⎨ (3)
⎪
,
time (or the time for computing all iterations).
⎪ 0 if ukij ≥ skij
⎩ – Quality of the solution: the quality of the solution
refers to the closeness of the solution to the optimal
where ukij is a random number between 0 and 1, and skij is solution. If the optimal solution is unknown, it is
the sigmoid function. difficult to evaluate the quality of the solution. This
is a common issue when dealing with optimization
1
Sigmoid function skij = k
. (4) techniques. In this regard, comparison with a pub-
1 + e−vij lished solution or with a solution that was obtained
The velocity Vijk is limited within the range [− Vmax, via another technique is typically required.
Vmax]. These bounds correspond to the probabilities for • Robustness
the particle position xijk to change to 0 and 1. The maxi-   Robustness is an important criterion for evaluating the
mum velocity Vmax = 5 corresponds to a maximum prob- performance of an algorithm. It refers to the ability of an
ability for a particle to be 1. The minimum velocity algorithm to reach an optimal solution for any instance
Vmin = − 5 corresponds to a minimum probability for a of various test problems. A robust algorithm must also be
particle to be 0. relatively insensitive to the parameter values. When the
• Many versions of PSO have been introduced in [28, 29] parameters are selected, the measurement of the sensitiv-
and are summarized as follows: ity to the small changes in the parameter values is useful
for investigating the robustness.
– Modifications of PSO: quantum-behaved PSO, bare- • Flexibility
bones PSO, chaotic PSO, fuzzy PSO, PSO time-   PSO is a flexible method that can solve all complex
varying acceleration coefficient, opposition-based optimization problems. Many definitions are used to
PSO, topology, improved PSO, adaptive PSO, and define flexibility. In our work, we define flexibility as
mutation PSO, among others. the adaptiveness of the algorithm, as it can automati-
– Combinations of PSO with other metaheuristic meth- cally adjust and adapt to consider the uncertainties and
ods (hybrid PSO): GA, evolutionary programming, to generate the best possible solutions.
artificial immune system (AIS), tabu search (TS),   Implementation issues can influence the computational
ACO, simulated annealing (SA), artificial bee col- effort of the algorithm. Thus, the choices of program-
ony (ABC), DE, biogeography-based optimization ming language, libraries, and compiler play a significant
(BBO), harmonic search (HS), Lagrange relaxation role in enhancing the optimization performance, espe-
(LR), and guaranteed convergence PSO with Gauss- cially in terms of the computational effort. Moreover,
ian mutation (GPSO-GM), among others. the computer characteristics (such as the processor and
– Extensions of PSO: multi-objective, constrained, RAM) and the operating system are important for per-
combinatorial, and discrete (binary and integer) forming a variety of tasks with high computational per-
optimization, among others. formance. The engineers must weigh various choices and
identify the solutions that best satisfy the requirements.
  The evaluation of the performance of the algorithm is
Furthermore, the engineers must identify the available
typically recommended for all optimization problems.
resources to solve an optimization problem efficiently.
We should be able to demonstrate that the selected algo-
rithm provides a superior solution faster than other algo-
Offline and online optimizations
rithms. Here, we provide insight into the performance
analysis:
Offline and online optimizations are required for enhancing
• Effectiveness
MG operations in terms of the power demand, renewable
  The effectiveness consists of the computational effort
energy resources, and economic aspects.
and the quality of the solution.
• Offline optimization: power management is typically
– Computational effort: the computational effort is the
formulated as an offline optimization problem. This
required time for the algorithm to converge to an
approach is based on a priori knowledge of the weather
optimal solution. The parameters that significantly
conditions and a pre-established load profile. This strat-
influence the computational effort of PSO are the
egy is also used to evaluate the quality of real-time EMS
swarm size and the number of iterations. The compu-
tational effort can also refer to various terms such as

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78 International Journal of Energy and Environmental Engineering (2020) 11:73–89

since it determines the theoretical minimum realizable – Power generation [45, 46]
energy cost. – Loadability [47]
• Online optimization (real-time optimization): the load – Net present value [33]
profile, weather conditions, and fuel costs change over
time. Real-time optimization is needed to identify the Multi‑objective function
optimal solution regardless of the variation of these
parameters. However, the implementation of online When there is only one criterion to be optimized, an opti-
algorithms requires a performance computation tool for mization problem is described as a single-objective-func-
evaluating the problem in each time interval, especially tion optimization problem. In other cases, there are several
when the time step is short. criteria to be optimized simultaneously; such an optimiza-
tion problem is described as a multi-objective optimization
Objective functions problem.
Multi-objective optimization (MOO) problems consist
Single‑objective function of several objectives that must be realized simultaneously.
MOO is the process of finding a compromise among con-
In single-objective-function optimization, a single-objective flicting objective functions. Reference [24] summarizes vari-
function is minimized or maximized. The following parts ous multi-objective optimizations that are applied in MG,
summarize the objective functions that are typically imple- which are listed in Table 3.
mented in MG optimization:

• Minimize Optimization constraints

– Life cycle costs [30] Equality constraint

– Gas emissions ­(CO2, ­NOx, ­SO2, ­PM2.5, and ­PM2.5–10)
[31–33]
– Power losses (active and reactive losses) [34–36] • Power balance: the total power that is generated should
– Lifetime degradation [37–39] match the load demand.
N
• Maximize ∑
Pload,t = Pi,t , (5)
i
– Benefits or profits [40–42]
– Reliability: by minimizing the loss of power supply where Pload is the load power, N is the total number of
probability (LPSP), loss of load probability (LLP/ generating units, Pi is the power output of the ith generat-
LOLP), unmet load (UL), system performance level ing unit and t is the time.
(SPL), loss of load hours (LLH), loss of load risk
(LOLR), or level of autonomy (LA) [33, 43, 44]

Table 3  Multi-objective First objective function Second objective function References

optimizations
Maximization of revenue Minimization of emissions [48]
Maximization of reliability [49]
Minimization of operating costs Maximization of reliability [50–55]
Minimization of emissions [56–62]
Maximization of components lifetimes or [63, 64]
minimization of lifetime degradation
Maximization of power availability [65]
Maximization of profit [66, 67]
Minimization of investment costs Maximization of reliability [52, 53, 68, 69]
Minimization of emissions [58, 60, 70]
Minimization of fuel consumption [30]
Minimization of operating cost [71]

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International Journal of Energy and Environmental Engineering (2020) 11:73–89 79

Inequality constraints [75]. Here, we summarize those that are most frequently
used in the literature.
• Rate power unit: the power output of each generating unit must
be within its minimum (Pmin) and maximum limits (Pmax). (a) Initial investment cost (IC): this consists of the initial
costs for unit installation [76].
Pi,min ≤ Pi,t ≤ Pi,max . (6) ∑
IC = Cinv,i ⋅ Pi , (12)
• Ramp rate power limit: these constraints determine the
maximum variation of the power output for each unit where Cinv,i is the investment cost of the ith unit ($/
[72]. kW), and Pi is the output power of the ith unit.
(b) Replacement cost (RC): this cost is incurred since the
Pi,t − Pi,t−1 ≤ RUi (7)
lifespans of the units differ from the project duration
[77, 78].
Pi,t−1 − Pi,t ≤ RDi , (8) ∑
RC = Crep,i ⋅ SFF i , (13)
where RUi is the ramp-up limit and RDi is the ramp-down
limit of the ith unit. SFF i is the sinking factor:
• Minimum uptime/maximum downtime: these con-
r
straints specify a minimum time for each unit to be SFF i = , (14)
maintained before it can change its status [72, 73]. (1 + r)t − 1

where Crep,i is the replacement cost of the ith unit, r is

If the unit is turned on, there will be a minimum run- the interest rate of the ith unit, and t is the lifetime of
ning time before it can be shut down: the ith unit.
Tton − MUT ≥ 0, (c) Capital cost (CC): the capital cost for MG power gen-
(9)
eration and energy storage includes the cost of the
where Tton is the duration for which the unit is continuously equipment and the costs that are associated with its
ON, and MUT is the minimum uptime. installation [78].
Once a unit has been shut down, it may not be turned ∑
back on immediately: CC = (Cinv,i ⋅ Pi ) ⋅ CRF i , (15)

Ttoff − MDT ≥ 0, (10) CRF i is the capital recovery factor of the ith unit, which
is expressed as follows:
where Ttoff is the duration for which the unit is continuously
OFF, and MDT is the minimum downtime. r ⋅ (1 + r)y
CRF i = , (16)
(1 + r)y − 1
• Maximum start/stop limits: the maximum number of
where r is the interest rate and y is the lifetime of the
starts/stops should be included in the optimization
system.
process. This depends on the generation unit and the
(d) Levelized cost of electricity (LCOE): the LCOE is the
operator [74].
total cost of the installation, replacement, fueling, and
Sstart/stop ≤ Nmax , (11) maintenance of an MG. It represents the price of elec-
tricity per kWh over the system’s life. A low LCOE
where Sstart/stop is the number of starts/stops during the
corresponds to a low electricity cost [44, 77, 79, 80].
simulation time, and Nmax is the maximum number of
start/stop sequences.
( )
MC + IC + RC + FC
LCOE = , (17)
E

where E is the annual energy output of the system, MC

Cost functions that are related to MG is the maintenance cost, IC is the investment cost, RC
operations and sizing is the replacement cost, and FC is the fuel cost.
(e) Maintenance cost (MC): the MC is typically related
In this section, cost functions that are related to opera- directly to the power output. It is assumed to have a
tions and sizing are presented. Various cost definitions proportional relationship with the power that is pro-
and equations were reported in a previous research paper duced [77, 78].

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80 International Journal of Energy and Environmental Engineering (2020) 11:73–89

Linear (1st order)

∑
MC = KOM i ⋅ Pi ⋅ ΔT, (18)
Quadratic (2nd order)
where KOMi is the proportionality constant ($/kWh) of Cubic (3rd order)
the ith unit, Pi is the output power of the ith unit, and
ΔT is the sampling time.

Fuel cost ($/hr)

(f) Emission reduction benefit (ERB): compared to tradi-
tional generators, renewable energy is clean and pol-
lution-free, thereby reducing the cost of the system in
terms of environmental protection throughout the life
cycle [77].
4
∑
(19)
( )
ERB = Eout − Ebuy ⋅ Cemis, i ⋅ Cenv,i ,
i=1

where Eout is the energy output of the unit, Ebuy is the Output power (kW)
purchased energy from the grid, Cemis is the emis-
sion value of the ith type of greenhouse gas, and Cenv Fig. 3  Fuel cost function
is the environmental cost of the ith type of greenhouse
gas.
(g) Start-up cost: the start-up cost of each unit depends on
the duration for which the unit has been shut down and With valve points effect
is expressed as follows [73]:
Without valve points effect
∑
( (
−Toff
)) D
STC = ai + bi ⋅ 1 − exp , (20)
Ti
Fuel cost ($/hr)

C E
where ai is the hot start-up cost of the ith unit, bi is the
cold start-up cost, Toff is the duration for which the ith B
unit has been continuously shut down, and Ti is the A
cooling time of the ith unit.
(h) Net present cost (NPC): NPC can be referred to as the
life cycle cost. It is defined as the sum of the capital,
maintenance, fuel and replacement costs [81, 82].
(
1
) Output power (kW)
NPC = CC + RC + MC × , (21)
CRF
Fig. 4  Valve-point cost function with 5 valves: a primary valve. b
where CC is the capital cost, RC is the investment cost, Secondary valve. c Tertiary valve. d Quaternary valve. e Quinary
MC is the maintenance cost, and CRF is the capital valve
recovery factor.
(i) Fuel costs
(22)
( )
FCi Pi = ai Pi + bi .
There are many characteristics of fuel cost functions,
which can be represented as follows: – Second-order function (quadratic model)

FCi Pi = ai P2i + bi Pi + ci . (23)

( )
• Smooth model

– Third-order function (cubic model)

Smooth cost functions can be represented as first-order
equations (linear models), second-order equations (quadratic FCi Pi = ai P3i + bi P2i + ci Pi + di ,
( )
(24)
models), or third-order equations (cubic models). These cost
functions are plotted in Fig. 3 and are formulated as follows where a, b, c and d are the fuel cost coefficients and Pi is
[83, 84]: the generated power of the ith unit.

– First-order function (linear model)

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International Journal of Energy and Environmental Engineering (2020) 11:73–89 81

• Nonsmooth model Pmin ≤ Pi ≤ Pli,1 ,

i (26)

In Fig. 4, a cost function with the valve point effect is

plotted. In practical operations, steam turbines have many Pui,j−1 ≤ Pi ≤ Pli,j j = 2, 3, … , ni , (27)
steam valves that control the power that is generated. The
opening of these valves causes losses in the generation Pui,n ≤ Pi ≤ Pmax
i
, (28)
unit, thereby resulting in ripple effects on the input–output i

characteristic cost function. This feature makes the cost where j represents the number of prohibited operating zones
model nonsmooth. A sinusoidal function that represents of the ith unit, ni is the total number of prohibited operating
the valve point effect is added to the quadratic cost func- zones of the ith generating unit, Pui,j−1 is the upper limit of
tion and is modeled as [84, 85]: the (j − 1)th prohibited operating zone of the ith unit, and
Pli,j is the lower limit of the jth prohibited operating zone of
FCi Pi = ai P2i + bi Pi + ci + |ei ⋅ sin fi Pmin −Pi |, (25)
( ) | ( ( ))|
| i | the ith unit [88].
For a power plant with many generators and fuel types
where ei and fi are coefficients that are related to valve points
for each unit, the fuel cost function for fuel type j of the ith
of the ith generation unit, and Pmin is the minimum power
i unit is plotted in Fig. 6 and is expressed as:
limit of the ith generation unit.
( ( ))|
FCij Pi = aij P2i + bij Pi + cij + ||eij ⋅ sin fij Pmin
( ) |
• Nonconvex model ij
−Pi ||.
| |
(29)
Optimization problems can be divided into two types
according to the fuel cost function: convex and nonconvex
problems. In a convex problem, the fuel cost function does
not consider the valve point effect and is expressed as a quad- Implementation of PSO for cost
ratic function. The fuel cost function in a nonconvex problem minimization in MG sizing
considers the following elements: prohibited operating zones,
valve-point loading effects, and combined valve-point loading Among the various factors that influence the behavior of an
effects and multi-fuel options [86–92]. MG, optimal sizing is of particular interest in MG optimiza-
The prohibited operating zones represent the limitations tion for determining the minimum cost of the system. In an
on the power output of the unit that are caused by vibrations isolated MG, sizing is more difficult than in a grid-connected
in a shaft bearing or steam valve operation. Thus, operation is MG since it must operate continuously without any support
not allowed in such regions to avoid damage to the unit and to from the main grid. Economic analysis methods for optimal
realize the most economical operation [91]. A cost function sizing are proposed in [93, 94]. Economic indices include
with prohibited operating zones is plotted in Fig. 5.

Fuel j
Prohibited operang
zone ni
Fuel cost ($/hr)

Prohibited operang
Fuel 2
Fuel cost ($/hr)

zone k

Prohibited operang
zone 1 Fuel 1

Pi,min P i,1 Pi,1 Pi,k Pi,k Pi,ni Pi,ni Pi,max Pi,min Pi,1 Pi,2 Pi,max
Output power (kW) Output power (kW)

Fig. 5  Fuel cost curve with prohibited zones Fig. 6  Multi-fuel options with valve-point loading effects

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82 International Journal of Energy and Environmental Engineering (2020) 11:73–89

Table 4  Costs that are related to MG sizing

Cost Details

Levelized cost In [79], PSO seeks to determine the optimal size of an HRES that is composed of a WT, PV
arrays and battery energy storage. The objectives are to minimize the system cost based on the
levelized cost and to ensure the reliability of the system while satisfying technical constraints
Net present value The objective of [95] is to optimize the size of the MG component to maximize the economic
benefits, such as the net present value. The MG is composed of a WT, a PV and battery energy
storage
Systems costs: annualized cost of invest- PSO is used to design a hybrid wind/PV/fuel cell system in [96]. The objectives are to find the
ments, replacement, and maintenance, and lowest cost and to ensure the reliability of the system for a period of 20 years. The simulation is
loss of load costs conducted over a year with a 1-h time step
Net present costs (NPCs): capital, replace- The authors in [82] apply PSO to find a suitable size that minimizes the net present costs of the
ment and OM costs system. The objective function includes all NPCs from fuel cells, WT, electrolyzers, reformers,
anaerobic reactors, hydrogen tanks, and converters
Cost of energy and total net present cost In [97], PSO is used to find the optimal size of a PV/diesel/biogas generator/biomass generator/
micro hydro generator/battery for 25 years of operation. The cost of energy is the key param-
eter to be minimized under specified reliability criteria (expected energy not supplied) and
economic criteria (net present costs), renewable factor and emission of ­CO2. The objective is to
find a suitable combination of a hybrid system that ensures the lowest cost of energy
Maintenance costs, operating costs, invest- In [76], the authors propose MOPSO for determining the optimal location, size, and electricity
ment costs, cost of purchasing power from generation price of DG. The optimization objective is to maximize the benefit of DG while
the DG owner and cost of buying power minimizing the cost to the distribution company
from the substation
Present value of the total profit, present value In [98], the objective of the PSO is to identify optimal parameter values for PV module installa-
of the maintenance costs, capital costs. tion, including the number of PV modules, their tilt angles, the placement of the PV modules
and the distribution of the PV modules among the DC/AC converters. The optimization aims at
maximizing the net profit over the total operation lifetime
System costs: investment, maintenance, fuel, Reference [99] introduces PSO for sizing the HRES. The strategy is to solve an MOO via the
and replacement costs ɛ-constraint approach. The total system costs are represented as an objective function, and
LOLP and C ­ O2 emissions are regarded as constraints. The objective is to minimize the system
costs while minimizing the emissions and LOLP
Benefit: cost of electricity and heat sales and The authors in [100] seek to determine the optimal types, sizes, and placement of DERs with the
cost benefit of load reduction objective of maximizing the benefit-to-cost ratio of MG via the PSO technique. The MG system
includes microturbines, DUs, and heat combustion turbines
The costs include capital, replacement, The authors in [101] employ PSO to design an MG that includes various numbers of PVs, WTs,
operation, maintenance, and production and batteries. The objective was to find the lowest cost of MG construction based on the pool
costs for MG and DG. and bilateral–hybrid electricity markets
Depreciation cost of the battery Reference [102] presents an improved hybrid GA-PSO for the multi-objective optimization of the
siting and sizing of an MG in consideration of an EV. The objective is to minimize the power
losses, voltage fluctuation, EV charging demand, and battery depreciation cost

the generation and installation costs and the cost benefits Energy management
during the lifetime and the payback period. The costs of MG
sizing are summarized in Table 4. Depending on the study objectives, energy management
problems can cover the MG’s supply (energy generation)
or demand (energy consumption) side, or the whole sys-
Implementation of PSO for cost tem. Various optimization strategies for energy manage-
minimization in MG operations ment have been proposed in the literature. These optimiza-
tion strategies are mostly focused on cost minimization,
Many challenges are encountered in operating an MG with including maintenance, operating and fuel costs and
high economic benefits. However, many research studies energy purchases.
are being conducted to overcome these issues. Thus, it is The authors in [103] implement a PSO for real-time EMS
necessary to have an overview of the MG operations. In in an MG. The simulation is updated every 3 min. The objec-
this section, energy management optimization problems, tive is to minimize the total energy cost of the system. The
including ED, UC, and OPF, are outlined.

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International Journal of Energy and Environmental Engineering (2020) 11:73–89 83

authors have compared the performance of PSO with that of including the fuel and start-up costs and the power exchange
the sequential quadratic programming method. between the MG and the main grid. This study also exam-
The MOPSO is applied in [104] to determine the optimal ined a probabilistic framework that is based on the 2 m point
configuration and sizes of the MG components for ensur- estimate method, which depends on the uncertainty of the
ing the reliability and cost effectiveness of the system. The RES, the load forecast and the market characteristics.
study seeks to minimize the cost of electricity and the loss The authors in [112] describe an EMS-based PSO with
of power supply probability. three objective functions: to minimize ESS operating costs;
Reference [105] employs PSO to minimize the total oper- to maximize ESS efficiency; and to minimize the lifetime
ating costs of an MG. The optimization considers the bids degradation of the ESS. The simulation was conducted for
and market prices of power exchanges between the MG and three cases according to each objective function. The simula-
the main grid. tions are compared by focusing on three criteria: operating
PSO is developed for real-time multi-objective optimiza- costs, efficiency, and lifetime degradation.
tion in [106]. The process is updated every 30 s over a period Hybrid PSO and pattern search are applied to optimize
of 24 h. The objective is to reduce the gas emissions and the design and operation of an MG in [1]. To evaluate the
energy costs. The results demonstrate that the two objectives performance of this method, four parameters are consid-
are in conflict (if the cost is low, the emissions are high, ered as key performance indicators (KPIs): cost, reliability,
and vice versa). The simulation was conducted under two quality, and environmental impact. Each parameter is scaled
optimization techniques, namely, PSO and GA, using the from 1 to 10 based on the KPI grading. The cost function is
MATLAB tool. The results demonstrate that PSO outper- comprised of capital, OM and generation costs. The objec-
forms GA in terms of computation time. tive is to find the minimum generation cost with the lowest
In [107], the EMS is based on regrouping PSO (RegPSO) total sum of the overall KPIs.
with the scheduling of the day ahead. The study is conducted In [113], the authors use PSO to overcome a master–slave
under two scenarios of MG operation: isolated grid and grid- objective function, with the objective of determining the
connected. The objective is to minimize the fuel and OM optimal type, size and operation of a smart MG. The mas-
costs and the purchase cost from the utility while maximiz- ter–slave function is based on net present value.
ing the profits from selling energy to the utility. The result The combination of guaranteed-convergence PSO with
demonstrates that RegPSO yields a better and faster solution Gaussian mutation (GPSO-GM) is reported in [114] for
than the GA-based approach. identifying the optimal size and operation of MG systems.
A multi-objective PSO approach is presented for the sys- The objective is to minimize the capital investment and gen-
tem configuration and sizing of each location in [54]. The eration costs. The role of Gaussian mutation and guaranteed
EMS defines the optimal operation of an MG with three convergence is to ensure the accuracy of the results.
conflicting objectives, such as reliability, operating cost and
environmental impact.
The authors in [61] propose fuzzy self-adaptive PSO for Economic dispatch
minimizing the total operating cost and pollutant emissions.
To evaluate the performance of the proposed method, they ED determines the power output of each unit and uses it to
compare the results with those of classic PSO and GA under find the lowest operating cost while satisfying equality and
various scenarios of MG operation. inequality constraints. ED problems are typically nonlin-
A real-time EMS that is based on binary PSO is proposed ear. Since classical optimization techniques have difficultly
for both energy suppliers and users in [108]. The binary addressing this problem, the application of the AI technique
PSO defines the ON/OFF operation of home appliances to is inevitable. PSO is the most popular approach for solving
identify the lowest electricity tariff and to avoid a peak load. ED problems due to its fast convergence.
Reference [109] develops an improved PSO (IPSO) algo- The authors investigate the use of PSO to solve an ED for
rithm for home energy management systems in a smart grid. an MG in [115–117]. The optimization objective is to mini-
The proposed algorithm minimizes electricity payments and mize the cost function while considering the fuel, operation
peak loads. and maintenance costs. The optimization problem is defined
In [110], PSO is applied to an HRES for electricity and by a nonlinear function that includes equality and nonequal-
water supply in a small village in Nigeria. The optimization ity constraints.
aims at minimizing the energy cost of the system by sav- The ED within an MG is solved in [118] using PSO to
ing on fuel costs. The study is conducted in two operating find the lowest operating cost and emission levels. The
modes: using RES with diesel engines and using only RES. operating cost involves both the energy that is sold and the
EMS-based self-adaptive modified theta PSO is intro- energy that is purchased from the utility.
duced in [111] for the minimization of the operating costs,

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84 International Journal of Energy and Environmental Engineering (2020) 11:73–89

The authors in [119] study the cost minimization of mul- of other PSO forms, such as classic PSO and weighted
tiple MGs, including RESs. The modified ED is fixed by improved PSO. The use of this approach guarantees the
PSO. The combination of two or more MGs limits the use optimal solution and fast convergence speed.
of conventional generation and offers substantial economic In [125], the UC is solved via quantum-inspired BPSO
benefits from RESs. The optimization objective is to find the (QBPSO), and the primal–dual interior point method is used
lowest operating cost using the optimal schedule of a genera- to solve ED problems. The objective is to find a trade-off
tion unit. The simulation is conducted under two scenarios, between the operation costs and emissions. Satisfactory
namely, with and without multiple MGs, for comparison in accuracy of the solution and satisfactory calculation speed
terms of the cost effectiveness. have been realized using the proposed method. It is con-
A PSO is reported in [120] for minimizing the cost of cluded that this method is suitable for solving large-scale
the power that is produced by multiple MGs in the interac- wind energy generation problems.
tions with the main grid. The objective function considers Reference [126] analyzes the UC and ED problems of
the power generation, operation and maintenance costs and thermal generation units with RES. The unit start/stop selec-
the purchase and sale of energy. The study considers a sto- tion is performed using a priority list (PL), and PSO deter-
chastic and probabilistic model of RES and load data in the mines the optimal power flow, which is used to minimize
optimization process. the fuel costs of thermal units. PL–PSO is compared with
Reference [121] proposes a stochastic ED model that PL–GA and DP. PL–PSO is guaranteed to find the optimal
incorporates wind and pumped storage generators, in addi- solution in minimal computation time.
tion to the thermal generators. The objective of this paper In [72], the UC of thermal-unit-integrated wind and solar
is to address the proposed stochastic ED problem via the power is solved via GA-operated PSO. The combination of
modified PSO method. GA with PSO ensures the speedy convergence of the optimi-
zation solution. The solution to the cost minimization prob-
Unit commitment lem is guaranteed with the proposed method, in contrast to
GA, the integer coded genetic algorithm (ICGA), and the
The unit commitment (UC) determines the ON/OFF sched- Lagrangian relaxation and genetic algorithm (LRGA).
ule of generating units in a time frame over a scheduling The authors in [127] formulate the optimization problem
period. It is formulated as a nonlinear optimization problem in two stages: the first stage consists of UC and the second
with 0/1 variables that represent ON/OFF status. UC plays of OPF. The BPSO is applied to select an ON/OFF schedule
an important role in MG planning for cost minimization. for thermal units. The proposed technique aims at minimiz-
Frequent start-ups and shut-downs have a negative influ- ing the energy cost and identifying a secure optimal UC
ence on the lifetimes of components, thereby resulting in schedule for thermal units with a solar power plant in grid-
an increase of the MG operating costs. The committed units connected mode.
should satisfy the production and demand forecasts. In [128], the hybrid differential evolution/evolutionary
The authors in [122] focus on a probabilistic UC model programming/PSO algorithm is proposed for solving the
for MG operation, which includes the uncertainties of RESs UC problem of wind and thermal generation to obtain the
and electric vehicles. The PSO is used to maximize the minimum energy cost. The study analyzes the day-ahead
profit of UC in an MG. The results demonstrate the effects UC scheduling of thermal units via a stochastic approach
of plug-in electric vehicles on MG operating costs, and the for wind power generation. The results demonstrate that this
performances of the probabilistic and deterministic UCs are approach is more robust than a deterministic approach.
compared.
Reference [123] combines binary PSO with the Lagrange Optimal power flow
multiplier method to minimize the energy costs in UC with
consideration of electric vehicles and vehicle-to-grid (V2G). The OPF determines the optimal operation of MG, espe-
The constraint of UC with V2G is considered in the opti- cially for minimizing the operating cost. The optimization
mization problem. A comparison is conducted between two constraints may include voltage or power, or other variables
cases of UC: with and without V2G. that do not exceed the production capacity limits.
A combination method of weighted improved crazy PSO The OPF is typically a nonlinear and nonconvex opti-
with pseudo code is presented in [124] for solving a UC mization problem. The nonconvexity is due to the power
problem. The objective is to find a compromise between flow and the quadratic equality constraints [129]. Thus, it
energy costs and gas emissions. Using a weighted sum is not easy to solve this problem. A nonlinear optimization
method, the MOO is converted to a single-objective opti- technique is needed for solving a nonlinear problem. For a
mization to minimize the operating costs. The performance nonconvex problem, the relaxation method can be used to
result of this proposed approach is compared with those convert it to a convex problem. However, in some cases, the

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International Journal of Energy and Environmental Engineering (2020) 11:73–89 85

convex relaxation is not exact. The solution to the relaxed presented. Cost minimization approaches have been outlined
problem could differ from the solution to the original prob- according to the supply or demand side, such as EMS, ED,
lem [130]. UC, and ED. Thus, the features of sizing and operations for
The authors in [131] introduce a discrete PSO, namely, cost minimization are analyzed, and they include planning
jumping frog PSO (JFPSO), and OPF for overcoming the and scheduling problems, with the objective of minimizing
sitting and sizing problem of DG units. The study aims at the cost.
minimizing the operating cost by considering various tech-
nical constraints, such as voltage limits, thermal limits on Open Access This article is licensed under a Creative Commons Attri-
bution 4.0 International License, which permits use, sharing, adapta-
lines and transformers, operational and planning limits and tion, distribution and reproduction in any medium or format, as long
a maximum level of penetration of DG. JFPSO is used to as you give appropriate credit to the original author(s) and the source,
determine the locations of the DG units and OPF is used to provide a link to the Creative Commons licence, and indicate if changes
optimize the capacity of the DG units. were made. The images or other third party material in this article are
included in the article’s Creative Commons licence, unless indicated
In [132], PSO with a time-varying acceleration coefficient otherwise in a credit line to the material. If material is not included in
(PSO-TVAC) and backward forward sweep (BFS) is used to the article’s Creative Commons licence and your intended use is not
solve an online OPF by considering EV charging/discharg- permitted by statutory regulation or exceeds the permitted use, you will
ing, load curtailment and grid exchange. The objective of the need to obtain permission directly from the copyright holder. To view a
copy of this licence, visit http://creat​iveco​mmons​.org/licen​ses/by/4.0/.
first strategy is to minimize the operating cost, and that of
the second strategy is to maximize profits. These two strate-
gies are compared in terms of the total cost benefit, which is
calculated as the difference between revenue and expense. References
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