You’ve likely heard of the electrical grid: the large-scale local electricity provider that keeps your lights on and appliances humming in your home or business. But have you heard of a microgrid system?
Imagine a compact and self-sustaining energy solution designed to cater specifically to a particular location. That's precisely what microgrids are all about. Instead of delivering electricity over long distances, microgrids are a different way to distribute energy just where it’s needed. And as its name suggests, a microgrid provides a smaller amount of power to a smaller local area, often powering up a college campus, hospital complex, or even a single neighborhood.
Learn all about microgrid power generation, how it works, and the uses of microgrids in today’s modern energy market.
What Is a Microgrid?
A microgrid power system consists of a group of interconnected energy resources that act as a single entity, providing power to a small group of local buildings. Microgrids generate power in the same place where it’s consumed, providing consistent and reliable electricity.
A microgrid is extremely localized, generating power for customers that are near the microgrid itself. Instead of delivering power over long distances like a large, centralized grid does, a microgrid provides electricity by generating power as close as possible to its consumers, using one or more kinds of distributed energy, such as solar panels, wind turbines, or generators, or even battery storage systems. Oftentimes, these electricity-generating systems are located within or near the building that needs power, such as solar panels on a rooftop.
While a microgrid generally remains connected to the larger electrical grid, it can also disconnect from the grid and operate independently. This means that a microgrid can provide power to its customers even in the event of a larger grid outage.
Related: Learn about the differences between on-grid vs. off-grid solar.
How Does a Microgrid Work?
A microgrid generates electricity in the same place where that energy will be used, unlike the central grid, which generates electricity in a power plant and then distributes it via transmission lines over vast distances. Microgrids often use a combination of generators and on-site renewable sources to produce electricity and can even use battery systems to store electricity for later use.
A microgrid is run by a controller, advanced software, which serves as the brain of the system. The controller works to manage the batteries, generators, and building power systems, all to meet its customers’ electricity needs and goals. The controller monitors prices on the larger electric grid, as well as all its local sources of energy, like solar panels, batteries, and generators.
By taking advantage of a variety of power sources, microgrid technology can create a more powerful electricity source than any one solar system or generator could on its own.
Related: Learn all about virtual power plants.
Uses of Microgrids
Microgrids are not a particularly new concept. In fact, microgrid electricity has been used by the military and college campuses for decades. Today, there are a limited number of microgrids in the U.S., but that number continues to grow, and experts believe that the microgrid market could be worth almost $79 billion by 2028.
Microgrids can also be used to provide consistent power to hospitals or even to neighborhoods, schools, or other small groups of buildings.
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Benefits of Microgrids
Microgrids can help maintain power for customers regardless of disturbances or outages on the centralized grid, improving reliability. By enabling local sources to work together, a microgrid can help reduce electricity costs and help power supplies last longer and stretch farther.
In some cases, the loss of electricity can have dangerous consequences. That’s why many hospitals use microgrids to ensure they always have power when they need it to provide life-saving care to patients. A microgrid system’s ability to operate autonomously and independently from the central grid can help limit disturbances to electricity availability.
Other benefits of microgrids include:
- Strengthening the resilience of the power grid
- Creating a more flexible and efficient grid by employing renewable sources
- Increasing the efficiency of electricity delivery to consumers
- Integrating on-site renewable resources like solar power and wind energy into the larger electrical grid
The Cost of Microgrids
Microgrids vary widely in their cost to build, depending on the size and complexity of the system. For example, a microgrid designed to provide power to a small neighborhood may be less expensive to construct than one designed to provide electricity to an entire college campus.
Similarly, the number and types of energy sources connected to the microgrid can also impact the overall cost of establishing a microgrid and creating microgrid energy.
Microgrid Misconceptions
Microgrids are commonly mistaken for any small source of electricity, such as rooftop solar panels. However, a residential solar system cannot maintain power in the event of an outage on its own, while a microgrid can keep power running even if the central grid temporarily fails.
While a solar power system may have backup battery storage, this is still not a microgrid system, as the solar system’s backup power is only used in emergency situations. Microgrids operate constantly, working to manage electricity and supply it to those who need it.
Key Takeaways
A microgrid system is a local, intelligent group of interconnected resources designed to generate power right where it’s consumed. Microgrid technology has grown more advanced over the years, resulting in a fully autonomous system that works instantaneously to ensure its consumers have the power they need, even in the event of a larger power grid outage or disturbance.
Gexa Energy provides Texas with flexible options when searching for a retail electricity plan. We purchase renewable energy credits (RECs), making all our plans 100% renewable. Learn more about Gexa Energy and find the right electricity plan for your home.
