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Abstract
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In distribution networks with substantial penetrations of variable generation (VG), demand side management (DSM) schemes might be seen as an ideal replacement for delivering spatiotemporal energy
arbitrage. From a system viewpoint, it would be advantageous to include DSM into the microgrid (µG)
planning issue, but it may lead to profit scarcity for µG operators or end-users. To that purpose, the equilibrium issue in this work examines interactions between DSM and µG planning within a competitive
electricity market. Reliability requirements place restrictions on the issue in order to ensure that there
is adequate supply of µGs in the islanding mode. The scenarios are reduced to make the model more
obedient while taking into account the uncertainty brought on by VG. Finally, the suggested issue is
resolved on a test-bed with VG portfolio and various techno-economic characteristics of potential DSM
and µG cutting-edge technologies using the diagonalization approach. The case study demonstrates that
the availability of DSM schemes has a substantial impact on the optimum µG investment choices. As
a result, implementing DSM not only allows for a large delay in the investments but also improves the
system’s flexibility and dependability in times of crisis. Overall, the DSM programs have the potential to
positively impact on investment decisions in µG planning by reducing capital expenditure, optimizing
resource utilization, improving grid reliability, providing cost savings, and facilitating the integration of
renewable energy sources.
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