Energy Management of Islanded Nanogrids through Nonlinear Optimization using Stochastic Dynamic Programming

Islanded nanogrids (NGs) are autonomous systems consisting of small-scale generation units including renewable energy sources and traditional fuel generators and energy storage systems (ESS) that typically serve few buildings or loads. This work aims at developing and validating a new optimal energy management (EM) algorithm for an islanded NG. To minimize the generator's operating cost and maximize battery availability at each operating cycle, dynamic programming (DP) framework is employed to solve the underlying optimization problem. The goal of the proposed approach is to ensure the use of maximum available solar power and to achieve optimal battery state of charge. To meet that goal, the management of the ESS is formulated as a stochastic optimal control problem, where nonlinearities in the battery discharging process are considered. A Markov model is constructed for predicting the probability distribution of the solar production used in the stochastic DP formulation. Simulation results are given to illustrate the efficacy of the proposed DP-based approach compared to a rule-based algorithm. Finally, a hardware-in-the-loop system is used to evaluate the real-time operation of the proposed EM algorithm.