Renewable Integration in Fossil-Fuel-Powered Microgrids Under Market Power Conditions

Abstract

Microgrids offer an alternative electricity supply in developing countries like Lebanon, where the public grid is unreliable. Privately owned microgrids often prioritize fossil fuel generation over integrating renewable energy from microgridowned units or prosumers. This study employs a mixed-integer linear programming model to optimize microgrid operation under fossil-fuel market power conditions, analyzing interactions between the microgrid owners, household consumers, and prosumers. Results indicate a shift from diesel generators to solar photovoltaic systems, yet most generation capacity remains microgrid-owned, limiting prosumer contributions. The unutilized rooftop PV generation capacity is reduced, yet the reduction remains limited. Profit-driven disconnections of unprofitable prosumers increase with increasing penalty on unsatisfied demand. The findings highlight that additional policy interventions are required to further reduce the unutilized PV generation potential on household rooftops and to ensure proper access for all customers.