The Kingdom of Saudi Arabia has an area of 1.69 million square kilometers. It is the biggest oil producers in the world, and the electricity industry relies heavily on oil. The annually growth request for electricity is around 5%. The price of electricity will be expensive in the next 30 years and there could be a shortage of electricity supply. It is better to use alternative forms of energy to prolong the life of the oil industry in Saudi Arabia. To reduce dependence on oil, the Kingdom of Saudi Arabia is considering using alternative sources of energy including solar energy and energy wind. Since the wind speed is around 10m/s and in the summer it is full of sunshine; therefore, the renewable energy should play a more important role in future electric power supply of the Kingdom of Saudi Arabia. A hybrid system is proposed in this thesis to study the possible power supply system in the remote areas. Wind information in Dhahran is used in simulations in order to make sure that the system is reliable and appropriate to be used in the remote areas of the country. Economic analysis is also conducted to compare the cost of the hybrid system with that of a 200 km transmission line connected from existing service area.

Some communities in remote locations with high wind velocities and an unreliable utility supply, will typically install small diesel powered generators and wind generators to form a microgrid. Over the past few years, microgrid projects have been developed in many parts of the world, and commercial solutions have started to appear. Such systems face specific design issues, especially when the wind penetration is high enough to affect the operation of the diesel plant. The dynamic behavior of a medium penetration hybrid microgrid is investigated. It consists of a diesel generator set, a wind-generator and several loads. The diesel engine drives a 62.5 kVA synchronous generator with excitation control. The fixed-speed wind turbine drives a 60 kW cage rotor induction generator. The microgrid can be connected to the utility grid but can also run as an isolated system. The total load of the microgrid is about 100 kVA which varies during the day, and consists of static and dynamic loads, including an induction motor. The excitation controller and speed controller for the diesel’s synchronous generator are designed, as well as the power control of the wind turbine, and the controller for capacitor banks and dump load. The system is modeled and simulated using PSCAD. The study evaluates how the power generation is shared between the diesel generator set and the wind generator, the voltage regulation during load connections, and discusses the need of battery energy storage, the system ride- through-fault capability and frequency control, particularly at times when the utility is disconnected and the microgrid is run as an independent isolated power system. The results of several case studies are presented.