Evaluating LCOE in sustainable microgrids for smart city applications

A microgrid can be considered a profitable solution to be adopted in smart cities if it is marketable, i.e. more, or at least equally convenient than other traditional energy supply sources. Different economic parameters can be defined to determine its affordability. In particular, the LCOE (Levelized Cost of Electricity) is the most popular indicator adopted in the energy sector, widely used both for conventional and renewable power sources. However, the use of this metric still disregards important aspects that concerns microgrid applications. After providing a state-of-the-art of the use of LCOE, the present paper proposes a new methodology for sustainable microgrids in smart city, taking into account benefits due to cogeneration and trigeneration, integration costs as well as positive and negative side effects.