Abstract:
This study investigates the capacity of incorporating renewable energy sources and backup generation into microgrid systems to reduce reliance on the main power grid and decrease carbon emissions. By employing demand side management, microgrid can effectively adjust consumption patterns in accordance with grid costs. The microgrid integrate many energy sources, including solar, wind, and diesel generators, to enable the sharing of energy and compensate for the variability of intermittent resources. This is accomplished by developing local energy market system that provide consumers with cheaper energy inside their specific microgrid, hence creating incentives for them. The analysis considers four distinct possibilities: a baseline scenario where the main grid is solely relied upon, and three progressive scenarios that integrate solar panels (PV), wind turbines, and diesel generators. This research study explores the vulnerabilities of a centralized electric power system, highlighting high costs and carbon emissions from conventional power generation. In the base scenario, daily power costs for a community of 50 houses reach approximately Rs. 45,540 for 1188 kWh with 567.864 kgs of CO2 emissions, underscoring the need for alternative energy sources. Case 1 shows that solar panel installations can cut energy costs by 52.13% (Rs. 23,740) and reduce carbon emissions by 257.78 kgs, paving the way for a sustainable energy future. Case 2 adds wind turbines to the mix, enhancing grid reliability and reducing grid import to 212.8 kWh at a cost of Rs. 8,895. However, high capital costs make this option financially unfeasible without subsidies, despite an 82.18% reduction in greenhouse gas emissions. Case 3 introduces a diesel generator alongside solar and wind, lowering grid-imported energy to 179.8 kWh for Rs. 7,527, and cutting CO2 emissions by 79.71%, though the high energy cost remains an issue. Case 4 demonstrates that demand-side management (DSM) can reduce grid dependence significantly, bringing grid reliance down to 72.23 kWh and resulting in a 93.7% reduction in energy bills and a 77.42% decrease in carbon emissions. Finally, Case 5 presents a Local Energy Management System (LEMS), The findings underscore the significant advantages of the LEMS method, which enhances energy self-sufficiency and reduces dependence on the grid. With only 12.8% of electricity costs attributed to capacity payments, the method achieves a remarkable 87.2% in savings. By enabling communities to trade energy within their own networks, energy savings reach 64.4%, and CO2 emissions are reduced by 70.72%. Keywords: Local energy market system, Microgrid, Capacity payments, Demand side management, Energy management system, Feed-in tariff, , Pakistan, Renewable energy resources.
