Technology Highlight– Microgrids

As localized sources of renewable energy and energy storage become more prevalent, the spotlight is increasingly being shined on microgrids. But what exactly are microgrids, where did they come from, and why should we care? In this technology highlight, I answer those questions are more to make sure you’re up to speed on everything to do with microgrids.

What is a microgrid?

The Department of Energy (DOE) defines a microgrid as “a group of interconnected loads and distributed energy resources within clearly defined electrical boundaries that acts as a single controllable entity with respect to the grid. A microgrid can connect and disconnect from the grid to enable it to opertae in both grid-connected or island-mode.”

Similarly, the Counseil international des grands reseaux electriques (CIGRE) defines microgrids as “electricity distribution systems containing loads and distributed energy resources (such as distributed generators, storage devices, or controllable loads) that can be operated in a controlled, coordinated way either while connected to the main power network or while islanded.”

As expressed by each of these definitions, the representative characteristics of microgrids are that they are made up of electricity sources that can operate separately from the traditional power grid (macrogrid) and operate autonomously, though they can also (in fact, they more often than not do) synchronize and operate with the macrogrid.

Microgrids utilize localized, distributed energy sources (including demand management, storage, and generation) to ensure the customers connected to the microgrid get energy that meets their cost, reliability, and sourcing requirements. While microgrids are normally connected to and operate in synchronization with the macrogrid the same as any other part of the traditional grid, what sets them apart is the ability to disconnect and operate autonomously if the conditions dictate.

How microgrids work

The traditional grid system works by connecting all buildings to a central power source through an extensive web of transmission and distribution infrastructure. The basic principles and equipment in a microgrid work the same way and typically operate within this traditional grid, but the key difference is the ability of the microgrid to break off and operate independently, referred to as ‘islanding.’ While the traditional grid always connects buildings to the main power source (i.e., whatever power plant or company provides the area’s electricity), a microgrid might source its power from distributed generators, batteries or other energy storage, or a source of localized renewable energy (e.g., small-scale solar or wind power).

Source: Department of Energy

Microgrids operate with a few main components– 1) the local generation, 2) the distribution, 3) the elements of consumption, 4) the storage, and 5) the point of common coupling.

Local generation

When communities utilize a microgrid system, one of the main reasons is the opportunity they present to take advantage of local generation. These generation sources are separate from the large power plants that power the traditional grid and typically take the form of generators or renewable energy sources, the use of which present a host of advantages to the community (which will be discussed soon).


As with the traditional grid, the generated energy must be sent from the source of generation to where it will ultimately be used. The technology that is used to transmit electricity across the microgrid is more or less identical to the similar technology in the traditional grid, with the key difference that there is typically much shorter of a distance to traverse (which also comes with its unique advantages, to be discussed later in this article).

Elements of consumption

The point of consumption is simply the part of the electricity transmission and distribution process where the generated power enters its ultimate destination—buildings, street lights, electric car charging stations, etc. As with the distribution, the consumption in a microgrid system operates pretty much the same as it does in the traditional grid.


Because microgrids are so often coupled with renewable energy generation as at least one of the major energy generators, storage becomes a key component to the microgrid system. Storage often takes the form of a battery or system of batteries, but microgrids can also utilize alternative forms of storage, such as pumped hydro storage. The key point of this storage is to allow for the use of extra electricity that is generated during peak generation (such as during the middle of the day when solar capture is at its highest but residential power use is at its lowest) to be used when it is most needed (in the evening when residential power is at its peak). Microgrids can, however, also pump that extra generated electricity to be used by the traditional grid.

Point of common coupling

The point of common coupling, or the PCC, is the intersection where the microgrid meets up with the traditional grid. At the PCC, the microgrid remains connected to the main grid at the same voltage of the main grid but disconnects when there is reason to do so. If a microgrid does not have a PCC, it is completely isolated from the main grid and always operates autonomously. These type of microgrids are less common, but they do exist in certain remote locations.

Microgrids of the past

Microgrids have been around for quite some time. In fact it could be argued that microgrids actually pre-date the traditional grid system. Thomas Edison’s Manhattan Pearl Street Station (the world’s first commercial power plant) was essentially a microgrid, and when it was constructed in 1882 there wasn’t a centralized electrical grid to which it could hook up. Within four years, Edison had installed almost sixty of these early microgrids to create a customer base for his direct current generators.

These separate microgrids, each with their own generator sources and autonomous distribution systems, did not last long. The government stepped in to determine that, in order to protect consumers and guarantee them power, the electric services industry was to become a state-regulated monopoly. In doing so, the incentives for vast grid systems to transmit power were greater than the incentives to develop microgrids. The next century served to further entrench this traditional grid system. Microgrids found some niche applications, in remote locations or already self-contained systems like college campuses. But recently, the ideas behind grid security, smart grids and, subsequently, microgrids, have started to sneak into the public consciousness and change that conversation.

Advantages of microgrids

The ability of microgrids to disconnect from the traditional grid and operate autonomously comes with a number of inherent advantages, and these advantages are the reason for the recent focus on microgrids in certain energy industry circles.


In the operation of the traditional main grid, reliability can become an issue due to the widespread effects that a small disruption can cause as it makes its way through the system. In contrast, when there are interruptions or other issues to the main grid, users connected to microgrids can operate independently.

This difference is analogous to the difference between Christmas lights that are electrically connected in parallel compared with connected in series. When lights are connected in series, the burnout of one bulb means the entire strand will not work—but if the bulbs are connected in parallel, the burnout of one bulb will not affect the connection of the other bulbs. Similarly, you can think of microgrids as being connected to the traditional grid ‘in parallel.’ When an issue interrupts the traditional grid, microgrids can disconnect and operate independently.

Source: Department of Energy

A common example is when a severe weather event or even an intentional attack might bring widespread outages to the traditional grid. In these instances, microgrids can island and its customers will not be affected by the outages. Depending on the fuel source and energy requirements, microgrids can theoretically operate in island mode indefinitely outside of the traditional grid. Not only that, but because microgrids operate in parallel with the traditional grid, they are capable of feeding excess power back into the main grid during outages.

The usefulness of microgrids during emergencies was highlighted during the devastating hurricane season of 2017. Examples of microgrids taking over were found in grocery stores in Houston during Hurricane Harvey and hospitals in Antigua during Hurricane Irma, and the devastation to the electrical system in Puerto Rico from Hurricane Maria has many pointing to microgrids as integral to the future resilience of a rebuilt energy system for the island.

Note that in certain grid systems, protocol dictates that all distributed generation must be shut off during a power outage. This fact can be confusing because it is during these outages that the microgrids could be the most useful, but for the safety of the workers fixing the broken power lines it is vital that no power is unintentionally being sent from a microgrid back into the traditional grid. However, inverter technologies that would prevent this are becoming more common and allow microgrid customers to continue their generation during traditional grid outages. During Hurricane Irma, a rumor circulated that utility lobbyists had made it illegal to use any solar panels during the power outages, but in reality this was just a misunderstanding of the safety protocol and customers who have purchased the necessary inverter technology can always lawfully use their power generation sources.

Efficiency and reliability of transmission

Several of the weak points of the traditional electric grid are tied to the massive web that is the transmission and distribution system, and microgrids can help address some of these weaknesses in ways that benefit both the power companies and the end customers.

In general, the transmission and distribution system of microgrids use the same technology as the traditional grid. However, microgrids are often smaller networks and thus the end destination of power is closer to the point of generation. This proximity allows for a significant reduction in the characteristic transmission and distribution losses associated with sending power over a long distance, meaning the overall energy efficiency of the energy system is improved when using microgrids.

In addition to the benefits of increased efficiency, microgrids improve the reliability of the whole traditional grid system. When a certain portion of customers can operate independently, the opportunity opens up for relieving congestion of the main grid during peak load times. Not only that, but the storage within microgrids allow for regulation of the power quality and distribution of power during these times of peak load.

Energy choice

Outside of the previous reasons for switching to microgrids, communities could also choose to develop microgrid systems to gain control over their energy choices. Because microgrids are connected to their own localized generating sources, customers can choose that source based on its costs, its desire to establish a degree of energy independence, or to opt for an energy source that is clean and/or renewable. When connected to the main grid, customers are for the most part restricted to whatever the electricity companies choose to pump through the power lines. But microgrids allow for customers to take that control back.

Where microgrids are used

Microgrids can be utilized by communities, both rural and urban. These communities are bound by shared geography, and thus proximity to the energy source. In addition, microgrids are commonly installed and used by large consuming entities on their own (i.e., commercial, industrial, or government consumers). The most common types of entities are college campuses, large institutions (like hospitals), and military bases. Each of these applications share the advantages that they are typically owned by a single entity and benefit from a secure and reliable power supply outside of the traditional grid.

Some examples of microgrids in use and being developed across the world include the following:

  • The Santa Rita jail in Dublin, California has its own microgrid, connected to 1.5 MW of solar power capacity, 1.0 MW of molten carbonate fuel cell capacity, and a system of backup diesel generators, allowing the jail to island or reconnect to the main grid at its discretion.
  • The Fort Collins Microgrid in Colorado, on the other hand, connects a brewery, laboratory, city government facilities, country government facilities, a college campus, and more to a microgrid, demonstrating an example of a larger community system that is microgrid-capable.
  • In the wake of an earthquake and tsunami that wiped out the Fukushima nuclear power plant in Japan, the city of Higashi Matsushima is working to rebuild with microgrids and create a system of decentralized renewable power sources to ensure reliability in the case of future disasters.
  • The Department of Energy (DOE) has made the proliferation of safe and reliable microgrids a focus, with a portfolio of activities intended to advance the research and development of new microgrid technologies and more implementation across communities around the world that can benefit from the improved reliability and resilience of their grid system.

Future of microgrids

Microgrids are becoming a major focus in the building of “smart grids,” improving the resilience of the existing grid system, and overall investment in energy systems. GTM forecasts that the capacity of microgrids in the United States will grow from 1.6 gigawatts (GW) in 2016 to 4.3 GW in 2020, while Navigant Research projects the worldwide microgrid capacity to grow from 1.4 GW in 2015 to 7.6 GW in 2024.

The future of microgrids will evolve in the coming years, as research and development dollars continue to pour in and debate continues on issues such as the legality of utilities as microgrid owners, the role of generators and regulators, and the economics of net metering. Regardless of the path microgrids take, they are sure to be a disruptive and revolutionary technology that continues to change the longstanding model of power generation and distribution.

Sources and Additional Reading

About Microgrids: Microgrids at Berkeley Lab

DOE Microgrid Workshop Report: Department of Energy

Fort Collins: Microgrids  at Berkeley Lab

How Do Holiday Lights Work? Department of Energy

How Microgrids Work: Department of Energy

Microgirds: the self-healing solution– General MicroGrids

Microgrids: PikeResearch

Santa Rita Jail: Microgrids at Berkeley Lab

The Role of Microgrids in Helping Advance the Nation’s Energy System: Department of Energy

Think Microgrid: How the Technology Has Changed its Stars– Microgrid Knowledge



About the author: Matt Chester is an energy analyst in Washington DC, studied engineering and science & technology policy at the University of Virginia, and operates this blog and website to share news, insights, and advice in the fields of energy policy, energy technology, and more. For more quick hits in addition to posts on this blog, follow him on Twitter @ChesterEnergy.