What Are Microgrids?

By Vernon Trollinger, May 11, 2017, Energy Efficiency, Green, Home Improvement, News

Welcome to Exploring Renewable Energy Technology from Bounce Energy! Because the ERCOT portion of Texas can be thought of as a “walled garden,” renewable energy sources in Texas now make up a significant portion of the energy supply mix. It’s also a dynamic technology with new innovations, discoveries, and issues arising every week. Each month, we will examine the latest news in the industry to better understand what (if any) changes might come to the Texas energy supply.

What Are Microgrids?

A microgrid is a locally controllable generation and distribution system that uses one or multiple generation methods to supply electricity to businesses, communities, or even individual homes. Most microgrids retain a grid-tie to the bulk power system. Microgrids use automatic or manual switches to disconnect from the main grid in the event of power failures or emergencies. In past decades, microgrids in the United States were set up as a means to augment low generation and distribution capacity. Some examples included universities and hospitals. Institutions like these needed a steady and reliable electricity supply to safeguard patients and research; many built their own physical plants and generation facilities to protect them when the local utility failed. Nowadays, microgrids are opening more opportunities for their owners.

What Are Microgrids? | Bounce Energy Blog

Why Set up a Microgrid?

While microgrids offer protection from power outages and blackouts, these small-scale power systems make more economic sense. Not only do they reduce electric bills but in most states, surplus power can be sold back to the local utility. Small scale microgrids (such as a single home) rely almost entirely on solar panels or small-scale wind. Larger microgrid systems (such as those used by business, industries, and communities) may use a combination of generating sources that include solar, wind, and combined heat and power (CHP) natural gas generators. An example is the Mueller Energy Center owned and operated by Austin Energy which powers the Dell Children’s Medical Center. It is a combined heat and power (CHP) plant that would not only provide power, but also capture waste heat from the combustion process to drive a steam turbine and produce chilled water for summer time cooling.

Because they’re smaller and locally designed to address local conditions, microgrids not only offer several advantages to their users but they also benefit the main grid as well.

  • Microgrids are flexible — they can be stand alone in a remote location or connected to the grid. They can also draw energy from the grid when it’s needed or send out surplus energy when it’s produced.
  • Better reliability for their users — storms and other types of outages can put millions of people in the dark. Microgrids are islandable and protect their users, keeping them in business.
  • Demand reduction — high demand cooling days can take grids to their melting point. Microgrids reduce load, which improves grid reliability and checks rising wholesale prices.
  • Output supports the main grid — Providing ancillary services like frequency control helps keep the main grid working and can provide a source of additional revenue for the microgrid.
  • Net Zero Carbon — Through careful planning and engineering the usage of renewable power sources with high efficiency CHP systems, microgrids can be designed to be net zero carbon producers.
  • Facilitate renewable energy development and deployment — Distributed renewable energy sources, such as solar and wind power, produce variable voltage and frequency which needs to be conditioned when it is sent into the main grid. Microgrids are better positioned to manage variations before that electricity enters the main grid. By adding this capability, microgrids smooth the deployment for more distributed renewable generation.

What Are Microgrids? | Bounce Energy Blog

How Do Microgrids Affect My Electricity Bill?

For the moment, it’s a few years down the road.

With Texas businesses like Toyota installing 8.79 MW of solar on its corporate headquarters in Plano and H-E-B Grocery building it’s own natural gas generator in Houston, it’s no wonder that Texas is second only to New York in terms of installed microgrid capacity. While growing number of microgrids in Texas is directly related to rising rates, inadequate transmission, and strained resources, what’s becoming more apparent is that with cheap solar and other alternative generation sources turning homes and businesses into distributed power plants and microgrids, the power industry must reassess the role of a central utility and the viability of “base load”.

To be sure, there’s going to be changes. Just how that all works raises lots of questions. One of the big questions raised at the 2nd Annual Grid Modernization Forum in Chicago was Who pays?

That all depends on how individual microgrids interact with the grid as well as who owns the grid and for what purpose. And those answers conjure up a whole host of questions over who passes on costs to other grid customers and who compensates. With users also being producers, future rule-making will be fraught with difficulty because ultimately the gird will provide more service than electricity. As one panelist quipped, “energy is becoming more like cable TV service, where you are paying for access rather than a physical quantity of material.”

Be Sociable, Share!

Related Posts


A native of Wyomissing Hills, PA, Vernon Trollinger studied writing and film at the University of Iowa, later earning his MA in writing there as well. Following a decade of digging in CRM archaeology, he now writes about green energy technology, home energy efficiency, DIY projects, the natural gas industry, and the electrical grid.

Tags: , , , , , ,

Comments are closed.