  Quantifying the potential benefits of microgrids in the design phase can
support the transition of passive distribution networks into microgrids. At
current, reliability and resilience are the main drivers for this transition.
Therefore, this paper presents a mathematical optimization model to support the
retrofitting of distribution networks into microgrids integrating
techno-economic, resilience and reliability objectives. Storage and distributed
generation are optionally installed to complement renewable generation,
enabling the microgrid to supply priority demands during stochastic islanding
events with uncertain duration. For a comprehensive quantification and
optimization of microgrid resilience and reliability, islanding due to external
events is combined with a detailed model of internal faults. Minimizing the
interruption costs yields optimal capacities and placements of distributed
energy resources and new lines for reconfiguration. The proposed method
produces microgrid designs with up to 95% reliability and resilience gain and
moderate cost increase in two benchmark distribution networks using data from
the US Department of Energy. The developed methodology is scalable to large
networks owing to the tailored Column-and-Constraint-Generation approach.
