Microgrids deliver distributed energy for smart buildings and cities

May 17, 2022
LEDs Magazine colleague and Microgrid Knowledge chief editor ELISA WOOD explains terms and briefs readers on benefits for nonresidential applications.

A microgrid is a self-sufficient energy system that serves a discrete geographic footprint, such as a college campus, hospital complex, business center or neighborhood. Within microgrids are one or more kinds of distributed energy that produce its power. Many newer microgrids contain energy storage, typically from batteries. Some also now have electric vehicle charging stations. Interconnected to nearby buildings, the microgrid provides electricity and possibly heat and cooling for its customers, delivered via software and control systems.

Some people use the term to describe a simple distributed energy system, such as rooftop solar panels. A key difference is that a microgrid will keep the power flowing when the central grid fails; a solar panel alone will not. Simple backup generators also are not microgrids. Such systems are only employed in emergencies; microgrids operate 24/7/365 managing and supplying energy to their customers.

Large centralized grids have provided most of our electricity for the last century, pushing electricity from power plants over long distances via transmission and distribution lines, which can lose as much as 8% to 15% of the electricity in transit. A microgrid utilizes power more efficiently by generating it close to those it serves.

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An intelligent microgrid relies upon a microgrid controller as the system’s central brain, which manages generators, batteries, and nearby building energy systems. The controller orchestrates multiple resources to meet energy goals established by the customers — such as lowest prices, cleanest energy, or greatest electric reliability — by increasing or decreasing the use of any combination of the microgrid’s resources.

One advanced capability example is tracking real-time changes in the power prices on the central grid. Wholesale electricity prices fluctuate based on electricity supply and demand. If energy prices are inexpensive at any point, the system may choose to buy power from the central grid to serve its customers, rather than use energy from, say, its own solar panels. The solar panels could instead charge battery systems. Later in the day, when grid power becomes expensive, the microgrid may discharge its batteries rather than use grid power.

Microgrids may contain other energy resources — combined heat and power, wind power, reciprocating engine generators, fuel cells — that add even greater complexity and nuance to these permutations. Working together via complex algorithms, the microgrid’s resources create a whole that is greater than the sum of its parts, managed in a near-instantaneous fashion and autonomously.

The total number of microgrids is relatively small but growing. Market research firm Guidehouse forecasts that the market will near $39.4 billion by 2028. Areas of growth include hospitals, government facilities, military bases, stores/gas stations, commercial buildings, educational campuses, and municipal sector application in residential areas as well as smart cities. Increasingly, utilities see microgrids not as an adversary but as a solution. In 2016 alone, utilities put up at least $1.2 billion to pursue microgrids and related distributed energy.

Visit our partner publication Microgrid Knowledge to view the original content that forms the basis of this piece (bit.ly/393OW25 and bit.ly/3M5RriX).

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Get to know our expert

ELISA WOOD is an award-winning writer and editor who specializes in the energy industry. She is chief editor and co-founder of Microgrid Knowledge  part of Endeavor Business Media and serves as co-host of the publication’s popular conference series. She also co-founded RealEnergyWriters.com, where she continues to lead a team of energy writers who produce content for energy companies and advocacy organizations.

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