The value hierarchy of own generation as the basis for dispatching a higher education institution microgrid

Abstract

The appearance of own generation at a budgetary institution creates a class of managerial decisions that did not previously exist: a kilowatt hour produced on site can be used in at least eight different ways, each with its own economic value. In practice this decision is taken by the designer or the equipment supplier, and the objective function of the energy management system is set by a technical criterion, most often the minimization of withdrawal from the external grid, which tacitly assumes that all kilowatt hours are equivalent. The purpose of the article is to substantiate the objective function of the energy management system of a higher education institution as a matter of managerial rather than technical decision. The methodology combines valuation of each direction of use at its opportunity cost, the heat credit method for cogeneration, and analysis of operating regimes against actual metering data of Zaporizhzhia Polytechnic National University. A hierarchy of eight directions of use of one kilowatt hour of own generation is constructed, ranging from 10.59 UAH for direct substitution of consumption in academic buildings down to minus 5.96 UAH for charging the storage system from the grid, a spread of 16.55 UAH per kilowatt hour, which exceeds the retail price of the unit itself. It is established that direct substitution outperforms export to the grid by a factor of 1.82 at 2025 prices and 2.27 at the prices of February to July 2026, and that this advantage is structural rather than cyclical, since the institution buys at a retail price containing all regulated components and sells at a wholesale price. Two assumptions common in practice are refuted. Night arbitrage is loss making for a budgetary institution because the active consumer status grants no direct access to the day ahead market. Offsetting against different facilities of the same institution is not equivalent: the directions differ by a factor of 2.45 because dormitories are supplied at a substantially lower tariff, so offsetting against them is the worst of the directions with positive value. A seasonal inversion of the objective function is substantiated: application of the heat credit method reduces the net cost of cogenerated electricity from 7.94 to 1.67 through 2.39 UAH per kilowatt hour, while the fuel cost of own heat is 2.42 times lower than the price of purchased heat, so that during the heating season the regime must be set by thermal rather than electrical load. A set of ten dispatching rules is proposed for inclusion in the technical specification, in which each rule rests on a computed value and the resilience component is kept outside the economic criterion rather than assigned a notional monetary price. The practical significance lies in the applicability of the hierarchy to the formalization of the dispatching algorithm.

JEL: M11, I23, Q48.