How a Microgrid Works

By: Robert Lamb  | 
Installing your own nuclear power plant in your backyard isn't an option, but imagine if even a portion of your electrical needs could be met locally.
Joe Sohm/Digital Vision/Getty Images

Once upon a time, there was a kingdom ruled by an all-powerful king. Each day, the king would visit the villages in his domain, bringing every household the wonders of daily life: cold meats and cheeses, artificial lighting, air conditioning, and a generous selection of streaming services to choose from. However, with each passing month, the king demanded a timely -- and costly -- tribute from his people, often raising the prices of this monetary token for seemingly no reason.

Then one day when the king came by, he brought none of the glorious gifts they'd grown to depend on. When the people asked the king what had happened, he told them that a tree had fallen over on a power line in a village on the far side of the kingdom. Now who would bring the people such fine electric gifts, if not the king? It wasn't as if they could make these things themselves.


This scenario resembles what has long been the relationship between the average U.S. resident and the power grid that supplies his or her electricity. For decades, we've depended on an outdated, centralized system that wastes power and occasionally fails to meet everyone's needs. The concept of microgrids is changing all of this, however. Let's explore the capabilities and benefits of microgrids.

Take Control of Your Energy Storage Needs

In 1996, a damaged power line in Oregon left 12 million customers in eight states without power. In 2003, overgrown trees in Ohio touched power lines, causing power outages across North America and impacting an estimated 50 million people. Despite these hiccups, there hasn't been a lot of choice in the matter for consumers. Electricity has remained the exclusive domain of wholesale power companies with virtually no retail competition for the customers' money.

So how can microgrids change this monopoly on energy supply and electricity prices? Let's just say the villagers in our example have concocted a scheme to produce their own power and build their own local seat of electrical clout!


The Independence of Localized Power Supply

This environmentally friendly housing community in the Dutch town Amersfoort demonstrates some of the solar technology that could power a microgrid.
AP Photo/Serge Ligtenberg

Fortunately for the American public, the move toward a more dependable and efficient power grid isn't a mere grassroots movement. The U.S. Department of Energy is currently pursuing a strategy to create a smart utility grid, an automated, cleaner, and less-centralized means for distributed energy resources across the nation.

The idea of a local grid or microgrid fits into this overall strategy in several key ways. First, the more power produced on a local level, the less a community will need to import from outside power plants or leech off the network. Many of the nation's energy woes are due to the electrical equivalency of a run on the bank. Temperatures suddenly skyrocket, so more people crank up the air conditioning -- which puts a huge drain on the main grid. If there's not enough power supply to go around, then not everyone gets power -- at least until sufficient energy solutions become available from elsewhere on the grid.


The Benefits of Off Grid Microgrids

Think of a home garden: The more produce you grow in your backyard, the less you're going to need to buy from the grocery store. And if you have enough tomatoes on hand or produce prices at the store become ridiculous, you could simply quit going to the grocery store. You might even be able to sell your excess crop to a local farmer's market. Now imagine doing all of this with your own renewable energy resource. With your own grid, you could better manage energy costs, control your energy security, and reduce carbon emissions.

Off grid microgrids revolt against the defined electrical boundaries that major power companies insist upon, offering renewable energy sources through a single controllable entity. These remote microgrids can also be customized to accommodate clean energy storage systems, such as solar panels. A grid connected to a power grid can bolster what's known as "grid resilience", whereas off grid microgrids can work autonomously on "island mode".


Another huge advantage to local power production is the optimization of heat energy. Large power plants also tend to create a great deal of unused heat. In fact, between 60 and 80 percent of a typical power plant's energy consumption never becomes electricity. On a local level, however, that energy could be used to heat water for regional use.

These Grids are Climate and Energy Solutions

Naturally, the key enabler to all of this is technology. Fuel cell, micro tube, reciprocating engine, solar cell and wind turbines have reached the point where a small network of assorted generators can provide power to neighborhoods, retail areas and even industrial facilities. In a microgrid-enabled future, you might not have to drive to the hydroelectric dam one state away to see where your electricity comes from. Instead, you might find the source in the refrigerator-sized micro turbine behind your house and in the wind farm on the outskirts of town.

One particularly interesting concept involves driving home in the evening and plugging your electric car into an outlet. Oh, but you wouldn't be using the microgrid to charge your car; you'd be using your car to charge the microgrid. This approach is called vehicle to grid technology.


Micromanaging Community Microgrids

While barely the size of a tractor-trailer, Los Angeles' John Ferraro Building Fuel Cell Power Plant provides enough energy for 250 homes. This technology plays a key role in many microgrid plans.
David McNew/Getty Images News/Getty Images

One of the key advantages to the microgrid approach is that it allows local users to make smarter choices regarding their use of power, turning them from cowering subjects under an all-powerful king to empowered consumers in a flexible energy economy. It's the difference, again, between growing a small plot of tomatoes for local use and running an industrialized farm. The phrase 'distributed energy resources' takes on a whole new meaning when you're the distributor!

As previously mentioned, microgrids don't necessarily exist apart from the larger, nationwide power grid. When it makes economic sense, a local community could purchase electricity from outside sources. If prices were to rise, it could all but completely cut itself off from the grid, only using the grid's overpriced juice in the event of local shortages. It's good to have that flexibility in the event of natural disasters.


Networked microgrids will not only allow for the optimization of power sources, but also power uses. For instance, a properly equipped microgrid could deal with an energy shortage not by cutting off all power, but selectively killing feeds to certain ends. For instance, the system might prioritize vital communications and healthcare-related energy expenditures, while cutting power to superfluous uses or to appliances such as refrigerators which can usually get by with occasional, short-term power outages.

Leave Grid Congestion in the Past

Already, cities and industries around the world are implementing microgrid technology. Meanwhile, military bases around the country are in various stages of microgrid deployment.

Instead of worshiping the standard utility grid, homeowners now have greater access to energy storage systems that can provide backup power, clean energy, and perform multiple functions that were previously unimaginable. Indeed, microgrids are one component of a more efficient and dependable energy future.


Explore the links on the next page to learn even more about the future of power production and consumption.

Frequently Answered Questions

What is the difference between grid and microgrid?
Grid is a large network of electrical power lines and generators that supplies power to homes and businesses. A microgrid is a small, localized network of electrical power lines and generators that supplies power to a specific area, such as a single building or a group of buildings.

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  • 2009. (Aug. 3, 2009)
  • Krotz, Dan. "Microgrids: reliable power in a small package." Berkeley Lab. Feb 28, 2003. (Aug. 10, 2009)
  • Merchant, Brian. "Good News: 8.3 Million US Homes Now Have Smart Meters." July 21, 09. (Aug. 3, 2009)
  • "The Smart Grid: An Introduction." U.S. Department of Energy. 2009. (July 29, 2009)
  • "Vehicle to Grid Technology." University of Delaware. 2009. (Aug. 10, 2009)