Microgrid is an emerging form of power distribution system which is embedded with a combination of different kinds of power generation sources, like renewable energy sources, combined heat and power (CHP), and distributed energy resources (DER). The advantages of Microgrid configuration are low transmission and distribution cost, and, potentially, high reliability, high efficiency and low environmental impact. Microgrids are designed to operate in one of two modes, grid connected and islanded. Short circuit levels in islanded mode tend to be small compared to those in grid connected mode. Moreover, power flows in microgrids are not always unidirectional. For these reasons, it is difficult to protect microgrids using relaying strategies traditionally used in distribution systems. In this research, a new approach is developed which uses a state observer as a fault detector to identify faults that occur within the zone of protection. This system can be centralized or decentralized, and needs only one current measurement and two end-voltage measurements for each zone. An additional contribution of the research is a method of minimizing the required number of measurements, subject to observability requirements. Using suitable voltage sensors, and, where available, smart meters to measure voltages, it is possible to devise a low-cost protection system using the proposed approach. The performance of the proposed method is demonstrated on the IEEE 34 node test distribution feeder. The proposed approach is shown to be effective in both grid-connected and islanded modes.
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