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Microgrid is a decentralized system in which electrical sources and loads are connected in a way that operates normally in connection with and in synchronous with conventional grid. This system has the ability to work autonomously by disconnecting from conventional grid in island mode. Microgrid offers large number of advantages in power system. Among them, integration of renewable energy sources, reliability, two-way power flow and cost effectiveness are the significant merits of microgrids. Besides its advantages, different challenges are associated with the planning, operation and protection of microgrid systems. Safe two-way power flow, reliable switching of renewable energy, optimal power flow, quick isolation of faulty part from healthy system and incorporation of energy mix modeling are the major challenges behind its real time implementation. In this research, comprehensive analysis is carried out on the planning, operation and protection of microgrid model. A test system is developed in Matlab/ Simulink in which solar power source, wind power source and diesel power source are modelled and connected to residential, commercial and industrial loads. Optimal power flow is achieved through Newton’s method. In addition to this, operation of microgrid test system is ensured by the observation of voltage, current and power under steady state and transient conditions of wind based power generation, DC and AC parameters for solar power generation and generation and demand of power in the case of diesel based power generation within acceptable limits. Circuit breakers are installed to ensure protection against faults. Priority is made on the basis of promotion of renewable energy sources. Moreover, realization of microgrid is depicted with its hardware prototype.
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