**1. Introduction**

The exponential demand for energy has led to the depletion of fossil fuels such as petroleum, oil, and carbon. This, in turn, increases the greenhouse effect gases. Energy systems have incorporated small-scale and large-scale renewable sources such as solar, wind, biomass, and tidal energy to mitigate the aforementioned problems on a global scale [1]. Global energy demand will grow by more than a quarter to 2040, when renewable sources are expected to represent 40 percent of the global energy mix. The reliability of the renewable sources is a major challenge due mainly to mismatch between energy demand and supply [2]. Renewable energy resources, distributed generation (DG), energy storage systems, and microgrids (MG) are the common concepts discussed in several papers [3]. The increase in the demand for energy and the rethinking of power systems has led to energy being generated near the places of consumption. This energy is derived from renewable sources, which are becoming increasingly competitive due to a drop in prices, especially in the case of photovoltaic solar and wind energies [4].

Due to strong dependency on climatic and meteorological conditions, in many cases the optimal system is a hybrid renewable energy system (considering one or more renewable sources) with battery storage systems (and in some cases including diesel generator) [5]. The hybrid energy systems are typically used for electricity supply for several applications such as houses or farms in rural areas without grid extension, telecommunication antennas, and equipment, and many other stand-alone

systems [6,7]. In many cases these hybrid systems imply the highest reliability and lowest costs compared to systems with only one energy source [8,9].

A microgrid consists of a set of loads, energy storage equipment, and small-scale generation systems [10]. It can be defined in a broader sense as a medium or low distribution grid, which has distributed generation including renewable and conventional sources (hybrid systems) with storage units that supply electrical energy to the end users. The reliability of the microgrid is improved by the storage and it is used to complement the intermittency of the PV and wind output power [11–13]. These microgrids have communication systems that are necessary for real time managemen<sup>t</sup> [14]. Microgrids can also operate either in isolation or when connected to a grid [15]. Based on the type of source they manage, microgrids can be classified as direct current line (DC), alternating current line (AC), or hybrid (shown in Figure 1).

**Figure 1.** A hybrid isolated microgrid scheme.

In a microgrid, it is essential to maintain the power supply-demand balance for stability because the generation of the intermittent distributed sources such as photovoltaic and wind turbines is difficult to predict and their generation may fluctuate significantly depending on the availability of the primary sources (solar irradiation and wind). The supply-demand balancing problem becomes even more important when the microgrid is operating in stand-alone mode where only limited supply is available to balance the demand [16]. Energy managemen<sup>t</sup> optimization in microgrids is usually considered as an offline optimization problem [17].

Microgrids supported with renewable energies can be classified as smartgrids, which provide a set of technological solutions to allow information exchange between the consumers and the distributed generation. An energy managemen<sup>t</sup> system (EMS) is defined as an information system, which provides the necessary functionality when supported on a platform to ensure that generation, transmission, and distribution supply energy at minimal cost [18]. Energy managemen<sup>t</sup> in the microgrids involves a control software that permits the optimal operation of the system [19]. This is achieved by considering the minimal required cost and two microgrid operation modes (isolated and interconnected). The variability of resources such as solar irradiation and wind speed must be accounted for when considering microgrids with renewable energy sources [20].

A review on the studies related to the energy managemen<sup>t</sup> of microgrids can be found in [21]. A few authors have solved the problem of energy managemen<sup>t</sup> using different techniques to achieve

an optimal microgrid operation. However, these techniques must incorporate better solution strategies due to the integration of distributed generation, storage elements, and electric vehicles.

Other recent papers [22] have reviewed various integration methods for renewable energy systems based on storage and demand response. This covers two main areas, namely (1) the optimal usage of storage, and (2) improvement of user participation via demand response mechanisms and other collaborative methods. The authors in [23] reviewed energy managemen<sup>t</sup> strategies for hybrid renewable energies. The above review covered di fferent configurations of stand-alone and grid-connected hybrid systems. Other review papers [24] have shown the control objectives of the microgrid supervisory controllers (MGSC) and energy managemen<sup>t</sup> systems (EMS) for microgrids. Table 1 shows the contributions of the review papers related to the energy managemen<sup>t</sup> of microgrids. Unlike the cited papers, this paper focuses on the incorporation of better strategies for the control of energy (both heat and electrical) flow between the hybrid system sources and load. Furthermore methods of energy managemen<sup>t</sup> in stand-alone hybrid microgrid considering the battery degradation are also discussed.

> **Table 1.** Microgrids energy managemen<sup>t</sup> review papers.

