A microgrid is a localized grouping of electricity sources and loads that normally operates connected to and synchronous with the traditional centralized grid (macrogrid), but can disconnect and function autonomously as physical and/or economic conditions dictate.
A formal definition from the Conseil international des grands réseaux électriques or (CIGRÉ) states:
Microgrids are electricity distribution systems containing loads and distributed energy resources, (such as distributed generators, storage devices, or controllable loads) that can be operated in a controlled, coordinated way either while connected to the main power network or while islanded.
Note there is no reference to the actual generation or other DER technologies involved, and in fact, many microgrids will involve a combination of resources, sometimes a quite complex one. Nor is there any guidance give on the size of microgrids. Rather the focus of the definition is on two features:
- It is a locally controlled system
- it can function both connected to the traditional grid (megagrid) or as an electrical island.
There are two major types of microgrids, those wholly on one site, akin to a traditional utility customer, which are usually called customer microgrids, true microgrids (µgrids), and ones that involve a segment of the legacy regulated grid, which are often called milligrids (mgrids).
The operation of microgrids offers distinct advantages to customers and utilities, i.e. improved energy efficiency, minimisation of overall energy consumption, reduced environmental impact, improvement of reliability of supply, network operational benefits such as loss reduction, congestion relief, voltage control, or security of supply and more cost efficient electricity infrastructure replacement. There is also a philosophical aspect, rooted in the belief that locally controlled systems are more likely to make wise balanced choices, such as between investments in efficiency and supply technologies. Microgrids can coordinate all these assets and present them to the megagrid in a manner and at a scale that is consistent with current grid operations, thereby avoiding major new investments that are needed to integrate emerging decentralized resources. Microgrids have been proposed as a novel distribution network architecture within the SmartGrids concept, capable to exploit the full benefits from the integration of large numbers of small scale distributed energy resources into low-voltage electricity distribution systems.
At the highest level, the SmartGrid has 3 components:
- improved operation of the legacy high voltage grid, e.g. through use of synchrophasers
- enhanced grid-customer interaction, e.g. by smart metering or real-time pricing
- new distributed entities that have not existed previously, e.g. microgrids and active distribution networks.