Effects of Carbon Tax on Microgrid Combined Heat and Power Adoption

This paper describes the economically optimal adoption and operation of distributed energy resources (DER) by a hypothetical California microgrid (μGrid) consisting of a group of commercial buildings over an historical test year, 1999. The optimization is conducted using a customer adoption model developed at Berkeley Lab and implemented in the General Algebraic Modeling System. A μGrid is a semiautonomous grouping of electricity and heat loads interconnected with the existing utility grid (macrogrid) but able to island from it. The μGrid minimizes the cost of meeting its energy requirements (consisting of both electricity and heat loads) by optimizing the installation and operation of DER technologies while purchasing residual energy from the local combined natural gas and electricity utility. The available DER technologies are small-scale generators (