**Multi-Objective Optimal Capacity Planning for 100% Renewable Energy-Based Microgrid Incorporating Cost of Demand-Side Flexibility Management**

**Mark Kipngetich Kiptoo 1,\*, Oludamilare Bode Adewuyi 1, Mohammed Elsayed Lotfy 1,2, Tomonobu Senjyu 1, Paras Mandal 3 and Mamdouh Abdel-Akher 4**


Received: 16 August 2019 ; Accepted: 11 September 2019; Published: 13 September 2019

**Abstract:** The need for energy and environmental sustainability has spurred investments in renewable energy technologies worldwide. However, the flexibility needs of the power system have increased due to the intermittent nature of the energy sources. This paper investigates the prospects of interlinking short-term flexibility value into long-term capacity planning towards achieving a microgrid with a high renewable energy fraction. Demand Response Programs (DRP) based on critical peak and time-ahead dynamic pricing are compared for effective demand-side flexibility management. The system components include PV, wind, and energy storages (ESS), and several optimal component-sizing scenarios are evaluated and compared using two different ESSs without and with the inclusion of DRP. To achieve this, a multi-objective problem which involves the simultaneous minimization of the loss of power supply probability (LPSP) index and total life-cycle costs is solved under each scenario to investigate the most cost-effective microgrid planning approach. The time-ahead resource forecast for DRP was implemented using the scikit-learn package in Python, and the optimization problems are solved using the Multi-Objective Particle Swarm Optimization (MOPSO) algorithm in MATLAB-R . From the results, the inclusion of forecast-based DRP and PHES resulted in significant investment cost savings due to reduced system component sizing.

**Keywords:** demand response program (DRP); photovoltaic system (PV); pumped heat energy storage (PHES); critical peak pricing (CPP) DRP; time-ahead dynamic pricing (TADP) DRP; loss of power supply probability (LPSP); energy storage system (ESS); Multi-Objective Particle Swarm Optimization (MOPSO)
