Microgrids can be used for securing power supply during network outages. Underground cabling of distribution networks is another effective, but conventional and expensive alternative to enhance reliability of power supply. This paper presents firstly an analysis method for the determination of microgrid power supply adequacy during islanded operation, and secondly, a comparison method for overall cost calculation of microgrids vs. underground cabling. The microgrid power adequacy during a rather long network outage is required in order to indicate high level of reliability of supply. The overall cost calculations consider the economic benefits and costs incurred combined for both the distribution network company and the consumer. Whereas the microgrid setup determines the islanded operation power adequacy and thus the reliability of supply, the economic feasibility results from the normal operations and services. The methods are illustrated by two typical, and even critical, case studies in rural distribution networks: an electric-heated detached house and a dairy farm. These case studies show that even in case of a single consumer, a microgrid option could be more economical than network renovation by underground cabling of a branch in order to increase reliability.

Micro-grids’ operations offer local reliability; in the event of faults or low voltage/frequency events on the utility side, micro-grids can disconnect from the main grid and operate autonomously while providing the continued supply of power to local customers. With the ever-increasing penetration of renewable generation, however, the operations of micro-grids become increasingly complicated because of the associated fluctuations of voltages. As a result, transformer taps are adjusted frequently, thereby leading to the fast degradation of expensive tap-changer transformers. In the islanding mode, the difficulties also come from the drop of voltage and frequency upon disconnecting from the main grid. To appropriately model the above, the nonlinear AC power flow constraints are necessary. Computationally, the discrete nature of tap-changer operations and the stochasticity caused by renewables add two layers of difficulty on top of a complicated AC-OPF problem. To resolve the above computational difficulties, the main principles of the recently-developed "l1-proximal" Surrogate Lagrangian Relaxation are extended. Testing results based on 9-bus system demonstrate the efficiency of the method to obtain the exact feasible solutions for micro-grid operations thereby avoiding approximations inherent to existing methods, while demonstrating that through the optimization, 1. the number of tap changes is drastically reduced, and 2. the method is capable of handling networks with meshed topologies.