Microgrids, future of the grid


Microgrids represents a basic “building block” in the implementation of the next generation smart grid infrastructure and will become finals of the deregulation process and fundamental shift in the delivery and provision of the electric energy.

Microgrids are smaller version of electrical grids. As a fundamental concept, a microgrid is an integrated energy system network consisting of distributed energy resources (DER) and multiple electrical loads and/or meters operating as a single, autonomous grid either in parallel to or islanded from the existing utility power grid. In the most common configuration, a group of DER are tied together on their own feeder(s), which is then linked to the larger utility grid at a single point of common coupling. Described practically, a microgrid is really just a small-scale version of the traditional electricity utility grid. Like today’s power grid, microgrids include generation facilities, distribution lines, and voltage regulators. They can be networked with one another (and the central grid) to boost capacity, efficiency, and reliability – or they can function as autonomous islands of power during times of emergency or to respond to real-time market conditions. However, they differ from electrical grids by providing a closer proximity between power generation and power use, resulting in efficiency increases and transmission reductions.

In general microgrids can be divided in multiple groups: commercial, industrial, community, campus, military, remote microgrids etc. but from the control standpoint we have only two groups: utility controlled and 3rd party controlled.

Main drivers for microgrid implementation:

  1. Improvements to reliability

Improving reliability and energization of end users during extreme weather conditions is main driver for improvements in modern electric power industry. During hurricane Sandy 8,100,100 homes lost power, there were 1.3 million reported power outages and 25,000,000,000 is estimated dollar value of the lost business activity. During hurricane Catrina 2.6 million customers have reported outages. End users are striving for improved reliability, for example, 10,000 phone calls was received by True Value Hardware in Hackensack, New Jersey from people hoping to buy generators in the days before Sandy hit.

  1. Environmental drivers

Utilities are focusing higher pressure to minimize CO2 emission and gain carbon free production.

  1. Revenue opportunities

With local generation, renewables, storages and controllable load microgrids represents opportunity to leverage modern technologies to provide revenue to both utility and end users.

  1. Terrorism threats

Traditional grids represents target for terrorist attacks, both physical and cyber, and those attacks can jeopardize large portion of the grid and can leave large number of end user de-energized because of the small number of weak points that holds whole system stability.

  1. Leverage modern technologies

Cost of advanced energy technologies is continuously decreasing which traditional utilities lack to leverage. End users experience falling solar and storage costs as well as increased number of CHP installation against rising utility rates, without additional value delivered through the central grid. According to Navigant Research’s report, Microgrids, worldwide vendor revenue from microgrids is expected to grow from $4.3 billion in 2013 to nearly $20 billion in 2020.

  1. Increased autonomy

End users, especially critical users like military, hospitals, campuses, industry, expect higher autonomy in local DER management in front and behind the meter.

  1. Aging infrastructure and high capital investment costs

TSOs and DSOs are facing increased consumer demands, both for energy and reliability, coupled with aging infrastructure and high infrastructure investment costs.

Microgrids with local generation, storage and ability to work in island mode can significantly improve reliability, resiliency of the grid and energization of end users during extreme weather. This benefit is illustrated by the performance of the Sendai microgrid at Tohoku Fukushi University. While the overall electrical grid was compromised during the devastating 2011 earthquake and tsunami, the microgrid, using distributed generators and batteries, continued to provide power to a variety of facilities.

Microgrids are important to support sustainable energy which reflects in increased ability to connect and manage intermittent local renewable generation resources, such as solar or wind with energy storage.

Economy is important factor in microgrid implementation. Microgrids can leverage on site distributed generation which may have potential to reduce customer costs, boosts overall system efficiency and provide profit with energy sales during peak hours.

Microgrids can provide grid support which can provide additional profit to microgrid owners and end users and can provide increased reliability and resiliency of the grid. Services can be frequency, VAr and voltage support.

With the introduction of a price on carbon, renewable microgrid systems will become increasingly cost-effective in regions with carbon intensive generation fleets.

Overall system optimization can be improved with microgrids. This is ability to connect and optimize diverse distributed energy resources (DERs) as an integrated system with local control.

Another largely untapped application is the “offgrid” area of the world where one billion-plus people live without regular access to electricity. These “off-grid” areas are currently served (if at all) by diesel generators or similar small scale electricity generating equipment. It is expected that a strategic energy transformation in these communities could unlock broader socio-economic benefits, including access to affordable housing, resources for education and healthcare, and sustainable local employment. One can expect significant push and funding from the government side in these cases.

ADMS and microgrids

There are two types of microgrids from the control standpoint, utility controlled and 3rd party controlled:

  1. Utility controlled microgrids

For utility owned microgrids ADMS will need to provide complete management and control possibilities. It can be expected that this will be organized as 3 level control. In bottom level we will have local automation, in middle level Microgrid controller will exist while on the top ADMS with holistic knowledge of the grid will run. Microgrid controller will operate in three modes:

Grid connected mode: Keep the specified interchange power flow at PCC and the voltages within the desired technical limits while maximizing the revenue from generation units by optimizing their production/carbon emission and generation dispatch. The grid ensures frequency stability by providing enough spinning reserve and fast ramp-up and ramp-down of generation units.

Planned island mode: In this mode, separation of the microgrid from the main grid is performed in such a way that the interchange between the main and MG via tie-line is set to zero, and the tie switchgear is opened. The MGC has to provide the balance among the generation and load in the isolated mode. After planned islanding, the main goal of the MGC is to maintain the frequency stability and the voltage stability. This kind of control is also applied for fully isolated power system islands.

Emergency island mode: A common practice in microgrid operation is that the microgrid imports some supply power from the main grid. In emergency island operation mode, when the breaker at the PCC (tie-line breaker) is opened suddenly, the microgrid controller is required to provide the transition to the isolated mode because it faces significant power, frequency and voltage disturbances, which jeopardize the operation, stability and energization of the MG.

ADMS will run on top of the system managing whole distribution grid. In this case distribution grid can be seen as tissue where microgrids are cells. ADMS will holistically see whole network and will allow global optimization of multi-microgrid environment. This is significant opportunity for the ADMS, since all other vendors are only considering local microgrid controller which can only see downstream substation. But global optimum of the grid can be completely different from local microgrid optimums. For example, in case of incoming storm, ADMS can reconfigure distribution network in respect to microgrid possibilities and maximize resiliency and energization of the customers in case of grid failure. Other examples include global economic minimum, global emission minimum, voltage control of the grid with multi-microgrid support, frequency support, power flow optimization etc.

Multi-microgrid management can be organizes as direct standalone control or cloud as service control.

Another important benefit and opportunity from the microgrids is blackstart. Currently, after system blackout, blackstart is organized top-to-bottom, but with full microgrids implementation blackstart will be organized bottom-to-top. This will require new blackstart algorithms in ADMS.

  1. 3rd party controlled microgrids

In case of 3rd party controlled microgrids ADMS should provide integration services for complete inclusion of the microgrid in distribution tissue. This includes but not limits to power market, forecasts, and grid services requests support.

Although the technical immaturity, utility reluctance, and current cost structure of microgrids will limit their application to niche markets in the short term, the future for microgrids is promising. Power equipment companies now investing in pilot microgrid projects and currently available market opportunities will be well positioned for market leadership as the demand for microgrids increases over time. However, perhaps the largest benefactors of microgrids will be foresighted utilities, communities, industrial parks and the like, that will leverage microgrids to optimize their energy costs with the added bonus of generating revenue opportunities by selling energy back to the grid during periods of peak demand.

ADMS should invest effort in re-thinking of grid management which is currently wide open field.


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Aleksandar Selakov

Product manager @Schneider Electric DMS NS

Product manager in Schneider Electric DMS with main goal – create smart software aimed to manage electric grid of the future. Loves his organic garden and spending time with his family.

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