Microgrids are often referred to as “island grids”, since they operate independently from the main continental grids and can be used to power actual islands or “physical islands”, such as mining operations and remote communities. Microgrids are indeed used to electrify remote communities, but they can also provide stable power supply to hospitals, campuses, industrial and commercial complexes and critical infrastructure, such as airports. With all the attention they get these days, there’s really nothing “micro” about them.

What are microgrids anyway?

Microgrids are local power grids within well defined electrical and geographical boundaries consisting of interconnected loads and various distributed energy sources like solar and wind generation, conventional generators and energy storage. A sophisticated energy management system ensures the balance between energy demand and supply. They are not defined by size but by function – namely two features: whether they are locally controlled, independent systems and whether they can operate both connected to a main power grid and as a standalone “island.”

Why are microgrids important?

Well, there are a lot of reasons! Thanks to their ability to disconnect from the main grid and operate autonomously, microgrids are a reliable source of electricity during power outages. They can provide power to remote areas where there is no access to the grid or where the grid is weak. Reliability and power quality are very important not only for communities but also for commercial and industrial customers and processes. Additionally, since microgrids optimize self-generation and consumption of renewable energy through a sophisticated energy management system, they can be more cost-effective compared to the primary grid. Finally, since most microgrids rely on renewable energy for generation, they provide the “infrastructure” of a sustainable and environmental friendly energy system, shielding against fossil fuel volatility and cutting pollution.

Who can benefit from microgrids?

Microgrids can help many stakeholders in different use cases. Truly remote or off-grid sites such as islands, remote communities, mines or any other types of load that are not connected to a utility grid can enjoy the benefits of a reliable power supply. Microgrids can also enable large-scale commercial and industrial operations to be self-sufficient and unaffected by grid outages or bad power quality. Campus microgrids such as at universities, military bases and hospitals are usually interconnected with a main utility grid, but can also operate autonomously during power outages. Community microgrids are also typically integrated into utility networks and serve multiple customers or services within an area, usually to provide resiliency for critical community assets.

Microgrids vs smart grids

Many people confuse the two – and that’s understandable. Smart grids are modernized electrical grids that use digital information and communications technology to collect and automatically act on data, such as the usage patterns of suppliers and consumers. The ultimate goal of smart grids is to make electricity production and distribution more efficient, reliable, economical and sustainable by leveraging terabytes of data and the capabilities of communication technologies. Thus, any grid managed in this way can be considered a smart grid – independent of generation sources, size and geographical or electrical boundaries. A microgrid can be a smart grid, but not all smart grids are microgrids.

A real microgrid example

Peña Station NEXT is a 382-acre transit-oriented development near Denver (Colorado) International Airport. The public-private partnership came together through contributions from a variety of stakeholders, including Xcel, Panasonic, Younicos, and the city, county and airport of Denver. The development showcases a variety of smart city and energy technologies, including smart street lighting, EV charging stations, and the unique microgrid covered in this case study [link]. Xcel’s distribution feeder has approximately 30% solar penetration, and the microgrid helps the utility integrate that intermittent energy source while also providing services like peak demand reduction and frequency regulation. Panasonic’s facility, which needs uninterruptible power, can rely on power resiliency from the battery storage system. The project is both a technology showcase for the stakeholders and a test bed for future microgrid business models. Consider it a “microgrid of the future.”



What are the components of a microgrid?

Microgrids generally consist of renewable energy generation such as wind and solar power; conventional generation such as diesel power; battery storage; and loads. Sometimes microgrids integrate small-scale hydro and biomass plants, combined heat and power units (CHP) and fuel cells. An energy management system is responsible for dispatching the different power sources to fulfill energy demand at any time and make sure that microgrid power frequency is stable.”

If an electrical system cannot operate in island mode is it considered a microgrid?

If a system cannot operate independently from a main grid, then it is not a microgrid. Rather, it can be defined as grid-tied distributed generation.
If a system operates mostly as a back-up without balancing supply and demand is it considered a microgrid?
Backup systems that serve very specific, limited loads and don’t otherwise actively balance supply and demand are more properly considered uninterruptible power supply (UPS) and simple backup systems.

What are examples for microgrids?

Our Graciosa Island microgrid in Portugal consists of a 4 MW battery system combined with a 4.5 MW wind park and a 1 MW PV power plant. In the U.S., we’ve commissioned the Peña Station NEXT microgrid, which consists of a 1.6 MW carport solar PV system and a 259 kW rooftop solar PV array installed on the roof of a Panasonic building.

Are there already microgrids with 100% renewables?
Yes, there are microgrids that run on 100% renewables for periods of time. Although not technically a microgrid, Kodiak Island in Alaska is a self-contained island grid that runs on renewables approximately 99% of the time. Most microgrids with critical power needs also include a diesel genset as backup to cover extended periods with no sun or wind when the battery storage resources are depleted.

Is storage a crucial part of a microgrid?

Yes, energy storage serves as a supportive source of power for microgrids and provides other critical system functions including peak shaving, smoothing power flow, islanding and more.

What is a hybrid system?

A hybrid system incorporates more than one type of power source, such as renewables and battery-based energy storage, and typically includes a diesel genset.

What was the world’s first microgrid?

We found many examples of “world’s first microgrid”, depending on the component configuration. Enel Green Power commissioned a PV+ battery+hydrogen storage microgrid in Chile earlier in 2017 that was called the “world’s first”. Ameren commissioned the world’s first “utility-scale microgrid” in Illinois in May 2017. Duke Energy and partners launched the world’s first “modular microgrid” in North Carolina in 2016. Demand Energy/Enel commissioned New York City’s first urban microgrid with PV + batteries + fuel cell. And Carnegie Clean Energy in Australia has begun construction of the world’s first solar + battery + wave energy + desalination microgrid on Garden Island. There are a lot of “firsts” in the microgrid world!

What is the world’s largest microgrid?

The world’s largest microgrid was installed by Sungrow and is located in Shuanghu, China, according to Renewable Energy World.




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