What Is a Microgrid?
Microgrids are bespoke energy systems—each designed around the customer’s specific objectives considering both normal and islanded operations. Those objectives can be motivated by several factors, including increased electric reliability and resilience, enhanced power quality, decreasing electricity costs, integrating clean energy resources and powering remote communities.
Feasibility studies, along with engineering, design and business planning, are all common steps in the planning process. Ultimately, a high degree of specialized knowledge is required to justify these investments and support a microgrid’s development, which is why some states have worked to provide access to technical assistance for potential developers.
Although microgrids deliver electricity during outage events, they are much more sophisticated than back- up generators. While backup generators have grown in complexity and quality over the years, they remain exactly what their name implies: backup systems designed to run only during emergency situations.
By contrast, microgrids are designed to run continuously. During normal conditions, microgrids operate harmoniously while tied into the larger power grid, using distributed energy resources (DERs) to offset energy needs and reduce consumption from the local utility—not dissimilar conceptually from rooftop solar installations. Often microgrids will rely on “anchor” resources—in many cases, diesel- or natural gas-fired generators that can supply power on demand—which are complemented by a suite of other technologies, such as renewables and energy storage. The bulk of a microgrid’s operating life will take place as a supplement to normal grid operations.
However, when an outage does occur, the microgrid will disconnect from the larger grid to operate in “island-mode.” When islanded, the microgrid relies on its complement of DERs to supply various connected loads within the microgrid with electricity. The loads are often designated based on how critical they are, with the most important loads prioritized for uninterruptible service. Using this combination of generation and demand-side management, the microgrid can enable various degrees of redundancy and operational continuity on-site. When the outage ends, the microgrid will reconnect to the larger grid and resume harmonious operations.
Microgrid projects are designed to serve the needs of end customers, which can include businesses and organizations, government entities, utilities and residential customers. The exact design requirements can vary substantially between microgrids, depending on the loads, DERs and other motivating factors for developing a microgrid. For example, a microgrid developed to enhance operational resilience for emergency response services in a community will be driven primarily by public safety considerations. Meanwhile, a commercial or industrial microgrid will often have economic drivers, such as avoided losses in productivity through operational continuity during outages and revenue derived from competitive energy services markets during normal operations.
Additionally, microgrids can vary by scope and structure—from a single customer, single facility microgrid to one that covers the breadth of a college, medical or industrial campus, with multiple customers and multiple facilities. For the purposes of this issue brief, “microgrid developer” will be used broadly to include microgrid project development companies and microgrid owners and operators.
Components of a Microgrid
The devices and systems that require electricity within a microgrid’s footprint, usually divided into tiers to prioritize service from the highest priority to the lowest.
Distributed energy resources (DERs)
The power generation, energy storage and demand-side resources available to provide electric service to a microgrid.
The grid management system that controls the microgrid’s operations. These systems determine whether to disconnect or connect with the larger grid, maintain power balance while operating in island mode, and dispatch the available electricity to support load in order of priority.
Point of common coupling (PCC)
This is the point at which the microgrid connects and disconnects to the larger grid, also referred to as the point of interconnection.