What is a microgrid? Benefits, Types, and Applications

What is a microgrid? Benefits, Types, and Applications

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Today, with the penetration of renewable energy sources and the global need to reduce CO2 emissions, microgrids are becoming increasingly popular. Why is this? We will try to unveil all the secrets of a microgrid.


Definition of a microgrid

Microgrid is a generic term that can correspond to a lot of systems, but here is our definition:

A microgrid is a localised and self-contained energy system that can operate independently from the main power grid (we call this off-grid mode) or as a controllable entity with respect to the main power grid (on-grid mode). It consists of distributed energy resources (DERs), such as solar PV plant, wind turbines, storage systems such as batteries and conventional generators, all integrated and controlled by advanced software tools and communication technologies. Microgrids can serve a small energy community, a building complex or even a single home, and can operate in islanded mode or in parallel with the main power grid. They are often designed to improve , increase resilience and reduce carbon emissions.


What is a microgrid controller?

A microgrid controller is defined as a device capable of monitoring and managing the energy resources and loads connected to the microgrid, related to the assets into a controllable entity. It will maintain local grid stability while reducing operating costs through least-cost dispatch of assets. It should have a real-time power management system to adapt to all circumstances and can receive a predictive approach from an energy management system. In addition, a microgrid system should be able to analyse and make quick decisions in the event of an emergency, helping to balance energy production with load consumption and providing power even in the event of a blackout.


How to manage a microgrid system? 

In the context of a microgrid, where the operation of the local electrical network cannot depend on the external transmission network, a real-time control system is required. A PMS (Power Management System) has the ability to calculate and apply an optimal power dispatch for assets in order to ensure the grid stability, also to manage the black start (repowering the global system in case of a blackout system) and bring grid services as frequency and voltage support. The PMS can use input forecasts, such as weather, to take into account the upcoming operating hours. For more efficient optimisation, the local controller receives operational planning from an energy management system (EMS), which has the ability to collect multiple forecasts and simulate future asset behaviour for the following days.

The microgrid can also refer to a permanent or intermittent local grid connected to the main grid. When the microgrid is connected, control consists mainly of respecting the constraints and characteristics of the connection point and transformer while maximise financial incoming, but also to support the main grid in case of frequency or voltage deviation with ancillary services.


How microgrids work and what are the benefits?

Whoever says grid says electricity. Being connected to the main grid ensures a stable connection in most countries. However, there are some places where interconnection is not possible, either due to a lack of infrastructure or in the case of remote areas such as islands, far from the main grid. In this case, an isolated microgrid is a solution. It can operate while connected to the grid, but it can also disconnect and use its own local energy sources, especially in case of emergencies (storms, maintenance, breakdown of an asset…). Energy communities, for example, tend to be independent and use the energy produced locally, as it is increasingly common to install solar panels on the rooftop and a battery energy storage system to increase self-consumption and self-production ratio.


Reasons to building a microgrid:

Power reliability: A microgrid can provide a reliable source of electricity in areas with frequent power outages or unreliable grid infrastructure. With its own generation capacity and energy storage, a microgrid can ensure that critical loads are always powered.

Energy cost savings: A microgrid can help you to optimise energy costs by using a combination of renewable energy sources, such as solar or wind power, fuel cells and energy storage systems. By reducing reliance on traditional fossil fuel sources, a microgrid can help lower energy costs and improve your bottom line.

Environmental sustainability: A microgrid can reduce your carbon footprint by generating and storing renewable energy on-site. This can help you meet your sustainability goals and reduce your impact on the environment.

Energy independence: A microgrid can provide energy independence by allowing you to generate and store your own power. This can be particularly useful in remote or off-grid locations where access to grid power may be limited or non-existent.

Resilience: A microgrid can provide resilience in the face of natural disasters, extreme weather events or other grid disruptions. By having its own generation and storage capabilities, a microgrid can continue to provide power to critical loads even when the larger grid is down.

Electrification of isolated areas: currently 10% of the worldwide population do not have access to electricity, hence, an isolated microgrid system could bring a solution.


What are the differences between on-grid microgrid and off-grid microgrid (islanded)?

Off-grid microgrids (in island mode) are often used in remote areas or in situations where it is not technically feasible or cost-prohibitive to connect to the main electrical grid. They are also becoming increasingly popular as a way to provide power resilience and independence for communities especially in remote areas.

Unlike off-grid microgrids, which are designed to operate in island mode, on-grid microgrids are integrated with the grid and can be used to supplement or replace power from the grid. In some cases, they may also be used to generate excess power that can be sold back to the grid, providing a source of revenue for the microgrid owners.

One of the challenges of on-grid microgrids is ensuring that they are properly integrated with the existing grid infrastructure. This requires careful planning of the project and coordination with the local utility company to ensure that the microgrid does not cause disruptions to the larger grid system.

A perfect example of a microgrid connected to the grid, would be the case of our client in Morbihan – Aim of the project? To monitor, optimise the grid for maximum flexibility and to decarbonise the region.


What is a microgrid in simple words? 

In a nutshell, a microgrid is a small self-sufficient system able to operate autonomously if needed, the aim is to provide with energy at the local level. Microgrid are more and more designed to provide with green energy from distributed resources and all kinds of assets like solar, wind farms, hydrogen, fuel cells and batteries.


Is my home energy network system equivalent to a microgrid?

Your in-house power solution can be considered a type of microgrid, but it is not equivalent to a community microgrid in terms of scale, generation sources, management and resilience. A home power system is a smaller-scale, single-building energy solution, while a community microgrid is a larger scale, multi-building energy solution.

While both home and community microgrids are part of the broader microgrid network, their differences in scale, coverage and complexity make them distinct. Your in-house power solution is designed for a single building or small group of buildings, uses a limited set of energy sources, and primarily serves the building in which it is installed. On the other hand, a community microgrid serves a larger area with multiple buildings, integrates diverse generation sources, and requires more complex management and coordination.

In summary, while your in-house energy network project can be considered a type of microgrid, it is not equivalent to a community microgrid due to differences in scale, generation sources, network topology, management and resilience.


What is an example of a microgrid?

 One of the examples of a microgrid project operating in island mode in a remote area is our New Caledonian customer responsible for the power supply in several islands of New Caledonia. Energy Pool provides Energy Management System to manage and decarbonise the islands. Read the story here! 

A few words about Energy Pool’s microgrid technology 

Our solution includes a Power Management System (PMS) embedded in an Energy Management System (EMS) that enables local monitoring of customer assets and combines setpoints from the cloud with local data to optimise asset-level performance and make real-time dispatch decisions. The PMS also communicates operational and other critical information back to the EMS cloud. Its primary function is to coordinate asset behaviour to closely follow the forecast-based optimised operating schedules provided by the EMS, while making the necessary adjustments to adapt to real-time deviations. In addition, the PMS can manage the voltage/frequency stability of local systems or networks, particularly in microgrids or stand-alone power systems.

In the case of an on-grid microgrid, our EMS can provide ancillary services, which are additional services beyond energy delivery that help maintain grid reliability and stability. These services can include frequency regulation, voltage control and reactive power support. By participating in these services, our EMS can generate additional revenue for the microgrid community while helping to stabilise the grid. It will consequently help to lower energy bill – the system will decide (thanks to intelligent models developed by our specialists) what the best strategy in order to use cheaper energy.

The link between the predictive EMS and real-time PMS optimisation is a continuous cycle, thus, it provides constant control to minimise operating costs and CO2 emissions.


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