7 benefits of microgrids

August 17, 2015

A Microgrid is a group of energy sources located in the same local area that is in turn connected into the national grid while also being able to disconnect from it and operate independently, for example in the event of an electricity outage. Microgrids usually consist of distributed generation sources, particularly renewable energy generators such as solar panels and wind turbines, usually accompanied by some form of energy storage device, invariably a battery or bank of batteries. While it can function by exporting energy into the national grid it is controlled locally by the community, for example by a local community energy group or cooperative.

Microgrids are usually established in one of two distinct forms. The first of these is a microgrid that is located entirely one specific site, probably controlled by a utility customer (hence the term customer microgrid) and the second type is a microgrid formed from a segment of the regulated grid, incorporating a number of technologies situated at different locations.

As the world moves towards renewable energy generation and acts to counter climate change, microgrids offer a range of benefits which can provide assistance both locally and nationally in terms of the environmental benefits, economic advantages and increased efficiency. In fact, some countries are helping this process by establishing organisations that act as an interface between communities and businesses interested in establishing microgrids and related government departments. Here are seven ways in which microgrids can help deliver the clean and reliable energy we need in the future.

Improving local energy delivery

Most microgrids are developed using an initial design or plan that sets out how local energy is going to be delivered to the community. The organisation developing the plan could be a city administration, an academic institution, a business park or a community energy group. The plan will set a number of objectives and identify which locations are best suited to realising those objectives. It will also set out how to assess the suitability of these locations and what may be needed in terms of financing and resources in order to construct and/or install the necessary infrastructure. Some academic institutions such as MIT are actively involved in researching microgrid design, for example by helping to produce and develop microgrid planning tools.

The microgrid acts as a way in which the local community or organisation becomes actively involved with energy generation and involves the installation of a particularly technology or set of technologies in a building or range of buildings. Very often these will be renewable energy technologies such as solar panels, perhaps a roof-mounted wind turbine, a biomass boiler, various energy efficiency devices or ground or air source heat pumps. This in turn brings economic and environmental benefits such as reduced carbon emissions or increased savings on energy bills.

Local control of the microgrid means that there is more choice with regard to what energy generating technologies are used. This means there is more opportunity to improve energy efficiency of buildings included in the microgrid, reducing carbon emissions and lowering costs.

rsz_power_outage_lisa_williams_flickrMicrogrids can help to guard against power outages [Image Source: Lisa Williams, Flickr]

Increasing reliability

According to the US Department of Energy (DOE), the US suffers more power outages than any other nation in the developed world. Microgrids can help a community to prepare for such situations by providing a source of backup power should the main grid go down. The details of how the microgrid can reliably achieve this should be set out in a reliability plan that details how the microgrid will be constructed in terms of the technologies involved, energy storage, system management (usually via a smart energy system) and other components. For example, the management system will often incorporate management system software and smart energy devices such as smart switches and sensors. These will help the system to operate independently of the national grid when necessary.

Another advantage of microgrids is that they help communities, businesses and nations to become more energy secure by reducing the need to import energy from abroad, particularly when the source of that energy may be in a country with some degree of political or social instability.

Saving money

The microgrid can help to achieve cost savings in a number of ways. One of these is limiting the amount of energy consumed, through a smart energy system which makes energy consumption far more efficient. It will also help to make the system more reliable, thereby preventing power outages. Currently, consumers and business in the US pay at least $150 billion per year in costs as a result of power outages. The initial plan may also identify alternative financing sources and modernisation opportunities that act in turn to reduce the costs usually associated with long-term infrastructure improvement. Finally, local generation improves energy generation by reducing the distance that energy has to travel from the generator to the point of need.

Generating revenue

Microgrids can generate revenue by helping communities and businesses to provide energy services to the wider grid. An example of this is the Feed-in Tariff that many countries have introduced in which a payment is paid for excess electricity exported to the national grid.

Aiding economic growth

The major advantage here is that microgrids are helping job creation, particularly at local level, as well as creating new business opportunities. More investment can be brought into the community and development of microgrids also stimulates innovation through research into more effective renewable energy technologies or smart power systems.


[Image Source: Toblas Vargas, Flickr]

Making the grid more resilient

Because microgrids are established using local, distributed, sources of generation, they also act to make communities and businesses more resilient to future, unforeseen, circumstances, which could include major storms or an interruption in the supply of power imported from abroad. This is because the component energy generation technologies can supply power efficiently and quickly when it is needed rather than being sourced from a large centralised power station. This in turn means there is more price stability.

Helping to counter climate change

Given that microgrids often use renewable energy generation technologies, as well as energy storage, energy efficiency and smart grid technology, this in turn helps a community or business to cut its carbon emissions and therefore help to counter climate change.