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In an autonomous microgrid where centralised management and communication links are not viable, droop control has been the preferred scheme for distributed generators (DGs). At present, although many droop variations have surfaced, they mainly focus on achieving proportional power sharing based on the DG kilovolts ampere (kVA) ratings. Other factors like generation costs, efficiencies and emission penalties at different load demands have not been considered. This omission might not be appropriate if different types of DGs are present in the microgrids. As an alternative, this study proposes a cost-based droop scheme, whose objective is to reduce a generation cost function realised with various DG operating characteristics taken into consideration. Where desired, proportional power sharing based on the DG kVA ratings can also be included, whose disadvantage is a slightly higher generation cost, which is still lower than that produced by the traditional droop schemes. The proposed droop scheme therefore retains all advantages of the traditional droop schemes, whereas at the same time, keeps its generation cost low. These findings have been validated in experiments. † Lower generation costs for the considered microgrid. † Simplicity of the droop scheme is retained, and hence more likely to attract interests from the industry. † kVA ratings, defined voltage and frequency ranges of the DGs are not violated. † Flexible autonomous operation of the DGs in an islanded mode is retained.

Decentralized economic operation schemes have several advantages when compared with the traditional centralized management system for microgrids. Specifically, decentralized schemes are more flexible, less computationally intensive, and easier to implement without relying on communication infrastructure. Economic operation of existing decentralized schemes is also usually achieved by either tuning the droop characteristics of distributed generators (DGs) or prioritizing their dispatch order. For the latter, an earlier scheme has tried to prioritize the DG dispatch based on their no-load generation costs. Although the prioritization works well with some generation costs saved, its reliance on only the DG no-load generation costs does not allow it to operate well under certain conditions. This paper thus presents a more comprehensive economic dispatch scheme, which considers the DG generation costs, their power ratings, and other necessary constraints, before deciding the DG dispatch priorities and droop characteristics. The proposed scheme also allows online power reserve to be set and regulated within the microgrid. This, together with the generation cost saved, has been verified experimentally under different reserve, load, and DG conditions.

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Microgrids are small reliable grids formed by clustering distributed sources and loads together. They can, in principle, operate at different voltages and frequencies like 50, 60, 400 Hz or even dc. Tying them together or to the mains grid for energy sharing would therefore require the insertion of interlinking power converters. Active and reactive power flows of these converters should preferably be managed autonomously without demanding for fast communication links. A scheme that can fulfill the objectives is now proposed, which upon realised, will result in more robustly integrated microgrids with higher efficiency and lower reserve requirement. The scheme presented has been tested in experiments with results captured and discussed in a later section.