Microgrids operate by coordinating with the utility to improve customer service, but the infrastructure is controlled either in part (as with a community) or wholly (as with a university) by the local entity.
Microgrids are modern, small-scale versions of the centralized electricity system. They achieve specific local goals, such as reliability, carbon emission reduction, diversification of energy sources and cost reduction, established by the community being served. Like the bulk power grid, smart microgrid generate, distribute and regulate the flow of electricity to consumers, but do so locally. Smart microgrids leverage the bulk power system to take advantage of lower cost baseload power and remote renewable resources.
Smart microgrids connect with the larger grid and provide valuable services benefiting both utilities and their customers. They operate by coordinating with the utility to improve customer service, but the infrastructure is controlled either in part (as with a community) or wholly (as with a university) by the local entity.
Universities such as Harvard or Princeton own and operate their own microgrids, as do communities like Naperville, Ill. Controlling the infrastructure on the local level allows for private investment in the system and, makes microgrids hotbeds for entrepreneurial innovation.
With the increased focus on renewable energy, efficiency and the need to make the business case for the smart grid, a growing number of stakeholders are focusing on smart microgrids as a viable approach to grid modernization at the local level. Smart microgrids incorporate local distributed energy supplies that meet the exact needs of the constituents being served while networking with the larger grid.
The economic benefits to businesses from smart grid transformation provide local choice regarding the electricity generation source and supply, such as locally distributed renewable energy sources. Smart microgrids face policy and regulatory barriers that are being challenged.