Author:
Kandi Howell | Program Director | kandi.howell@pondco.com

 

The energy grid is more than just a network of physical infrastructure; it comprises a complex ecosystem of stakeholders and systems that work together. To keep this vast network running requires immense coordination. So too does the modernization needed to meet the new challenges posed by climate change, the rise of artificial intelligence, and increasing energy demands. Microgrids are helping to make this modernization possible.

What is a Microgrid? 

A microgrid is a small-scale power system that can operate independently or in connection with a larger power grid. Traditional utility grids and microgrids serve the same purpose: to provide electrical power to end-users. However, the components of a microgrid, in addition to being scaled down, are slightly different.

Like the larger power grid, microgrids rely on power generation resources. Currently, the primary fuel source of the grid is natural gas, with the rest coming from nuclear, renewables, and a diminishing level of coal. A diesel or gas generator can be thought of as a simple microgrid used to power a home or business. The internal combustion engine burns gasoline, which then converts the chemical energy of the fuel into mechanical energy, generating electricity through electromagnetic induction.

But advanced microgrids might have a more complex makeup of generation sources in addition to just natural gas, like interconnected solar panels or wind turbines. It’s also feasible for a microgrid to run completely on renewables or utilize battery energy storage systems (BESS). Universities, military bases, hospitals and other critical facilities may have a complex system of integrated resources to deliver power, even when the larger grid experiences interruptions. 

The term “islanding” refers to a microgrid’s ability to operate independently from the larger grid. In the case of a power outage, or in remote areas where a home or business cannot connect to the larger grid, microgrids can deliver continuous power completely without support from the main grid. 

How Microgrids are Filling the Gaps in Aging Infrastructure

Unlike the traditional power grid, which uses powerlines to transmit and distribute energy, microgrids can leverage power generation resources at or near the customer’s site to reduce the congestion and reliance on the transmission grid and meet local energy needs. BESS used to store energy for future use may also be included to support grid stability and intermittent power sources such as solar and wind. The grid’s existing infrastructure is also nearing the end of its life span and designed capacity, creating challenges for operators and end-users.

Energy demand is also not equal year-round. In the summer and winter months, which are considered “peak” energy seasons, the load on the energy grid increases as more homes and businesses rely on heating and cooling. This strain on the grid can lead to overloads, voltage fluctuations, or even system failures.

Increasingly extreme temperatures and weather events are the primary disruptors to grid reliability. In February 2021, the Texas power grid – called the Texas Interconnection – suffered a major failure due to sub-freezing temperatures that left millions of people without power for nearly a week. The lack of “winterization” prompted leaders to take a closer look at the steps needed to enhance resilience.

Microgrids help address this concern by reducing the reliance on the need for long-distance power transmission and providing more localized grid stability. Localized control of the grid also allows operators to better respond to power outages, improve power quality, and have greater flexibility in managing local energy sources.

For industries with high energy demands, such as factories and data centers, a microgrid can serve as an intermediary by smoothing peaks and mitigating its impact on the larger grid. An example of this is in Ravenswood, West Virginia, where Berkshire Hathaway Energy (BHE) Renewables is building what it says will be the world’s largest solar and storage microgrid. 

When complete, the microgrid will power a new titanium mill currently under construction and provide 70% of the facility’s estimated annual power load. The microgrid will also include a 50-MW long-duration BESS and is expected to come online later in 2025.

Having a localized energy solution enhances the reliability and resiliency of power on a larger scale. Where climate change and extreme weather events threaten critical entities, microgrids are filling in the gaps to keep systems up and running.

The Future of Microgrids in Grid Modernization

The role microgrids are expected to play in the larger energy grid is based on their role in a decentralized, flexible grid of the future. As a rapidly evolving technology, the future of microgrids is ripe for innovation, especially when traditional power upgrades are slow to come to fruition. 

Private enterprises are looking at microgrids to solve their energy needs, especially as the demand increases. Whether they serve as a primary energy source, or just as a backup in case of an outage, the benefits of microgrids are twofold.

Like any new technology, there is a perception that microgrids are not a sustainable economic solution. But the return on investment goes beyond just enhanced resilience. Systems with on-site solar panels can deliver zero-emission electricity at a lower cost than the grid, in many cases, translating into savings anytime the sun shines.

Load shifting to a microgrid during peak seasons also lowers costs for homes and businesses. With a battery storage system, the power generated during cheaper off-peak hours can be stored and used later during peak periods, with the potential to reduce peak demand charges from the utility.

Finally, microgrid technology and innovation continue to develop. Advanced energy storage, photovoltaic window panels, and automated systems are just a few of the emerging resources helping to deliver clean, resilient energy at scale. Investing in these developments is crucial for the future of sustainable, resilient and reliable energy.

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