Microgrids are an innovative system of energy generation and storage that is growing in popularity around the world, and particularly throughout the state of California. They are an increasingly favorable alternative to the traditional local energy grid, offering advantages like more reliability, drastically reduced electricity bills, and increased independence to businesses, property owners, and even entire communities.

What is a Microgrid?

A microgrid is an energy grid that operates entirely separately from a local municipal energy grid. A small-scale power generation system, it is designed to use a combination of several energy sources to supply a specific location or facility with power. Microgrids are typically self-sufficient and self-sustaining, allowing the business connected to the microgrid to disconnect from the traditional network altogether.

What is a traditional grid?

The traditional grid is a network of power sources and connectors that allows businesses, homes, schools, hospitals, stop lights – pretty much everything that requires electricity to operate – to connect to electricity. Customers receive the energy generated by this network via a system of transmission and distribution lines and power transformers. The grid is created and maintained by the city to which it supplies power.

What are the downsides of a traditional grid?

The interconnectivity of a traditional grid is exactly what makes it a potential liability when it comes to maintaining continual, uninterrupted power. A traditional power grid is affected by many factors that can and do create temporary disruptions and fluctuations in power, including severe weather such as thunderstorms, snowstorms, or even hurricanes; as well as the growing number of defects in an infrastructure that is not only outdated in its technology, but also rapidly deteriorating because of its above-ground exposure.  Due to the centralized nature of the traditional grid, a failure in any part of the grid’s structure can mean a potential outage that might affect hundreds or even thousands of consumers.

Traditional grids are also more susceptible to cyber-attacks and natural disasters like earthquakes or, most prevalently in California, wildfires. For example, the recent connection of the PG&E power grid with California wildfires has led to widespread outages across the state that have lasted an average of two to five days. These preventative shut-downs have left over 800,000 customers without electricity, including medical facilities and critical public safety services.

Because of the massive costs associated with improving or updating the current grid system, California is predicted to face these same difficulties for at least another decade.

How does a microgrid work?

Microgrids, on the other hand, can operate connected to the traditional grid if needed, but they also have the functionality to move off of the traditional grid and run entirely on their own power, offering a much more reliable means of energy production.

A microgrid can be set up to sustain itself on a variety of different power sources. Typically, these include things like turbines, solar panels, batteries, generators, and even electric vehicles. Rather than utilizing just one of these sources, microgrids are designed to integrate several different technologies into one system that optimizes the collection, storage, and use of all of its energy resources, and that is customized to the location and specific needs of the facility it will power. Once the microgrid is operating, the only limiting factor to how long the power is sustainable is the availability of certain resources (such as wind or sunlight), or the capacity of the grid’s storage systems. Some microgrids are set up to run indefinitely, wholly separate from the main power grid.

How does a Microgrid connect?

There is typically a device known as a point of common coupling (PCC) – such as an inverter, circuit breaker, or electronic interface – which will attach a microgrid to the traditional grid, and that is capable of regulating the incoming voltage in order to match the level found in the main network. This, along with a customized monitoring system, gives the property owner the ability to manage and control the activity of the microgrid as well as their facility’s consumption of both microgrid and main grid energy. When the time comes for the microgrid to disconnect from the main grid, the owner needs only to flip a switch, and the microgrid functions as its own source of power.

Why would a business choose to connect to a Microgrid?

There are many reasons why microgrids are increasing in popularity for businesses; the most obvious of which is that they can drastically reduce or even completely eliminate the company’s bill from its local energy grid. However, this is only the first of the advantages that microgrids have to offer.

Having a reliable source of electricity is critical to a business’s success because it is necessary to keep almost every type of facility in safe, productive operation.  A loss of power means a loss of productivity, and a loss of productivity can mean a huge negative impact on a business by incurring massive and often unexpected costs. If a company is constructed in an area with an unreliable power grid, a microgrid – although more expensive initially – may save the business millions of dollars in expenses resulting from unforeseen down-time, such as extra labor, temporary power, wasted or damaged goods, and costly equipment repairs. The microgrid offers a reliable back-up power source in the event of an outage because it is unaffected by the failure of the traditional grid, enabling the business to avoid the negative effects of the outage and continue operating safely and efficiently.

Additionally, due to the increasingly well-manufactured structure of microgrids, they are also becoming more environmentally-friendly than traditional grids. Allowing for a more effective use of renewable energy sources such as solar and wind energy, microgrids are being pursued by developers for their ability to decrease the carbon footprint of the facilities they power, and subsequently, of the nation as a whole. They also provide a cleaner alternative to individual on-site power sources like fossil fuel gas generators.

Who uses Microgrids?

Microgrids are becoming more and more powerful almost as fast as they are becoming more affordable. They are starting to spring up in the most unusual places, and can be found powering facilities ranging in size from one or two buildings to much larger regions. Some entire cities, for example, are making the switch to microgrids to help generate and sustain power. From smart city initiatives, pharmaceutical companies, and hospitals to colleges and military installations, more and more businesses are choosing to convert to microgrids for their cost-effectiveness and reliability - and the number of businesses operating on microgrids is expected to increase exponentially over the next decade. As the benefits of the microgrid system continue to grow with advancing technologies, it is clear that microgrids are not only sticking around – their future is getting brighter.

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