What are microgrids?
What are microgrids?
Microgrids are electricity networks that operate at a community scale, rather than at regional or national level. They allow interconnected households or organisations to collectively generate, store, and use electricity.
Microgrids typically rely on small-scale renewable energy technologies, such as solar panels and wind turbines. Because renewable generation depends on weather conditions, microgrids often include battery storage systems to store surplus energy for later use.
Some microgrids are located in populated urban areas and remain connected to the main electricity grid. These systems generate part of their own electricity while still drawing power from the grid when needed. They can also operate independently during power outages and sell surplus electricity back to the grid.
Other microgrids are installed in remote locations and operate entirely off-grid, generating all of the electricity required by the community.
How do microgrids work?
Microgrids are usually equipped with smart energy management software. This software performs several key functions:
- Monitoring electricity generation from solar panels or wind turbines
- Monitoring battery charge levels
- Tracking energy consumption by users within the microgrid
- Balancing electricity supply and demand for efficiency and cost
- Disconnecting from the main grid during power outages
- Managing the export of surplus electricity back to the grid
What benefits do microgrids bring?
1. Access to electricity
Microgrids have been implemented in a wide range of contexts, from remote villages in developing countries to progressive urban communities in developed economies.
In Kudagon Village in Odisha, India, a small-scale solar nanogrid has transformed daily life. Residents no longer rely on daylight to complete household tasks, children can study at night using electric lighting, and streetlights improve safety and allow social activity after dark.
In Germany, the Solarsiedlung am Schlierberg is a 59-home housing development that produces more electricity than it consumes using integrated photovoltaic systems. It was awarded “Germany’s Most Beautiful Housing Community” in 2006.
Microgrids are particularly valuable for electrifying remote communities that cannot connect to national power networks. One example is l’île de Sein, a French island off the coast of Brittany. In 2017, the island transitioned from a diesel-based power system to a renewable microgrid using solar, wind, battery storage, and smart energy management.
In the Himalayas, organisations such as the Global Himalayan Expedition have installed microgrids in villages at altitudes of around 14,000 feet, where access is cut off by snow for much of the year.
In the United States, there are now over 600 microgrids, many of which provide reliable backup power during outages of the main electricity grid.
2. Efficiency
Large centralised electricity systems are inefficient due to energy losses during long-distance transmission. Microgrids reduce or eliminate transmission losses by generating and consuming electricity locally.
Who is leading microgrid development?
The French multinational energy company ENGIE is widely regarded as a leader in microgrid services. Other major players include Schneider Electric, which has emphasised that standardising microgrid technologies can accelerate the global energy transition.
As interest in decentralised and renewable energy grows, an increasing number of companies and communities are entering the microgrid space, implementing systems in both developed and developing regions.