Microgrid: What It Is, How It Works, and Its Features

In recent years, microgrids have gained increasing attention thanks to their ability to ensure an efficient, sustainable, and reliable energy supply. A microgrid is a local electrical network capable of producing, distributing, and storing energy to power a defined area, even independently of the main grid.

It is a small-scale electrical network that connects end-users to a local energy source. It is equipped with storage systems that allow for the energy produced to be stored and made available when needed.

Microgrids and energy communities are two different but related concepts. Thanks to these technologies, members of energy communities can monitor in real time energy consumption, production, and distribution. To carry out a feasibility study for a renewable energy community, you can use the photovoltaic software that allows you to enter various producers and consumers of the REC (Renewable Energy Communities) and calculate the incentives obtainable from the Community.

What is a microgrid?

A microgrid is an autonomous electrical network that enables electricity generation in a independent, localized manner and allows its usage when it is most needed. Its main characteristic is autonomy, as it can operate independently from the public grid both temporarily and continuously. Furthermore, it is designed to serve a defined area, such as a single building or a complex of structures, ensuring optimized energy management.

It is a local low-scale distribution system made up of generators and loads, which can operate in two modes: autonomous (isolated), meaning completely separated from the main distribution system, or non-autonomous, meaning connected to it.

What are the main components of a microgrid?

A microgrid system is composed of several key parts that work together to generate energy:

• energy generation sources (local generation): this is the source from which electricity comes in amounts sufficient to meet the needs of the served area. In many microgrids, the primary source of energy is solar panels, but other sources such as wind turbines, diesel generators, or small hydropower plants can also be used;
• energy storage system: without which a microgrid would not be reliable. It stores energy during periods of high production and releases it when demand is high or when production is low;
• distribution network: this represents the collection of cables, transformers, and switches that carry electricity from the source to consumers. In a microgrid, the distribution system is smaller and more localized, making it quicker and easier to manage;
• control system: allows for the management of energy flow, whether to use solar energy, to draw from batteries, or to switch to backup sources, depending on the situation;
• loads: represent the set of devices and/or locations that use electricity. In a solar microgrid, the loads can include homes, schools, hospitals, shops, or industries.

Components of a microgrid

How does a microgrid work?

Traditional electrical grids transport energy from power generation plants to homes and buildings through an infrastructure of underground cables or overhead lines over long distances. Microgrids operate on a similar principle but on a smaller and decentralized scale, connecting distributed energy sources, such as generators, renewable energy plants (for example, solar panels), and storage systems, directly to local users, which can include homes, communities, businesses, and industries located nearby.

A distinctive feature of microgrids is their ability to operate independently from the main electric grid, ensuring service continuity even in the event of a disconnection. The management of these systems is carried out through advanced technologies capable of dynamically adjusting the supply and production of energy based on demand. Furthermore, microgrids include all the necessary hardware infrastructure for the efficient distribution of self-produced energy, making them a versatile and resilient solution for local energy management.

The operational scheme of a microgrid is divided into 5 phases:

1. electricity generation: without electricity production, the system cannot function. This often occurs thanks to solar panels that capture sunlight hitting them to create electrical current; for example, one can think of grid-connected photovoltaic systems;
2. energy supply to users: once energy is produced, it must be safely distributed to all users. This is made possible through local distribution lines within the microgrid, which connect to homes, offices, hospitals, and other places, depending on where the microgrid is installed;
3. extra energy collection: surplus energy generated is not wasted but stored for later use to be available according to variations in energy demand. This is made possible by the presence of storage batteries;
4. utilization of stored energy: the energy stored in the storage batteries becomes a backup power source that can be used at any time;
5. system control: the management of a microgrid is always monitored by a device called a microgrid controller. It constantly monitors the production, storage, and use of electricity.

Control and energy management systems of microgrids

A microgrid consists of a series of devices such as photovoltaics, storage batteries, and other systems; thus, it is important that it possesses an adequate energy control and management system. This system aims to monitor the operational status and health conditions of photovoltaic systems, energy storage, and other microgrid systems, acting as a complete management system that integrates monitoring and energy management.

This system aims for economic optimization based on safety and stability, promoting:

• the use of renewable energies;
• the reduction of power peaks;
• load leveling;
• improvement of operational stability of the grid and operational efficiency of equipment;
• reduction of energy supply costs.

Benefits of microgrids for users and the grid

Microgrids offer numerous benefits to the electric system, improving the efficiency of supply and optimizing the use of energy resources. Thanks to their ability to power a group of users, they ensure a more reliable and customized supply based on consumer needs. Furthermore, they reduce energy procurement costs, as energy is purchased from the main grid only when local production is insufficient to meet demand.

A key aspect is the ability to redistribute excess energy, helping to reduce waste and improve the overall efficiency of the system.

The impact of microgrids is particularly relevant in areas with limited distribution infrastructure or where energy transmission costs are high. The creation of networks composed of multiple microgrids allows for the realization of energy systems independent from the central grid, increasing the self-sufficiency and resilience of the system, provided that a high level of operational reliability is ensured.

One of the most significant advantages is evident in the event of failures in the public grid: a microgrid, if equipped with adequate renewable energy resources and storage systems, can continue to provide power to users even in isolated mode, thus ensuring greater service continuity and improving the overall reliability of the electric system.

The benefits of microgrids extend not only to end-users but also to energy managers and distributors, creating new opportunities in the sector. Specifically:

• development of new markets for the design, implementation, and management of microgrids;
• improvement of voltage regulation, reducing the risk of anomalies in distribution;
• opening of new market opportunities in the supply of fuels and energy resources for distributed generation.

So, in summary, we can divide the benefits into:

• economic terms:
  • reduction of costs/rates for end consumers;
  • increase in revenue for micro-generation.
• technical terms:
  • reduction of energy losses;
  • reduction of voltage fluctuations;
  • reduction of power spikes on loads;
  • improvement of reliability.
• environmental and social terms:
  • trend towards the use of low-emission renewable fuels used by internal micro-generations within the microgrid;
  • adoption of more efficient energy technologies such as cogeneration;
  • raising citizens’ awareness to promote and incentivize energy saving and thus reduce emissions;
  • creation of new research and job opportunities;
  • providing a suitable paradigm for electrification of rural or underdeveloped areas.

Applications of microgrids: where and when to use them

Microgrids are widely used in areas characterized by low grid stability, where extreme weather events, outdated infrastructure, or overloads can cause frequent service interruptions. In addition, they serve many sectors, such as:

• industries, manufacturing plants such as industrial parks, mining operations, and remote oil fields rely on microgrids. These solutions provide constant and uninterrupted power supply. They can significantly reduce the costs associated with industrial power interruptions. They provide critical backup in challenging operational environments;
• healthcare, microgrids ensure zero energy interruptions in hospitals, protecting lifesaving medical equipment and patient care services, and ensuring that critical medical infrastructures remain operational during emergencies;
• data centers, leverage solar and storage solutions to reduce energy costs, improve sustainability, and adequately respond to their overall energy consumption, which is continuously increasing;
• remote areas, isolated communities without access to the traditional grid can obtain reliable electricity through microgrid technologies. Millions of people worldwide lack access to electricity, and microgrids offer a sustainable solution;
• electric vehicle charging stations, microgrids optimize energy distribution, creating efficient, optimized, and sustainable charging networks. With global sales of electric vehicles expected to increase, microgrids can support the rapid development of charging infrastructures.

Examples of microgrids in Italy

In Italy, microgrids are emerging as innovative solutions for the efficient and sustainable management of energy. Here are some examples:

• Savona university campus: at this campus, an advanced energy microgrid has been developed that integrates various technologies, including the Internet of Things, Big Data Analytics, machine learning, and automation. The goal is to develop and validate enabling technologies to ensure the resilience and reliability of energy systems;
• Lampedusa and Favignana islands: these islands are participating in the Blorin project, which utilizes a blockchain-based platform to create smart communities. The platform promotes the diffusion of renewable energies and manages energy exchanges among local prosumers, fostering the creation of smart solar communities;
• Serrenti, Sardinia: the municipality of Serrenti has initiated projects for the realization of a smart microgrid that distributes green energy from photovoltaic plants through microgrids among public buildings. This approach aims to improve energy efficiency and promote the use of renewable sources at the municipal level;
• Siemens headquarters in Milan: Siemens has implemented an integrated microgrid at its Milan headquarters, composed of photovoltaic generators, storage systems, HVAC systems, and electric vehicle charging stations. Everything is managed by advanced cloud-based software for smart building management, contributing to the company’s goal of reducing CO₂ emissions;
• Sardegna Ricerche: the regional agency is studying the production of biomethane and green hydrogen, managing the energy produced through microgrids. The goal is to create a replicable model for small and medium-sized enterprises and municipalities, promoting sustainable energy transition.

These examples highlight Italy’s commitment to the development and implementation of microgrids to improve energy efficiency, promote the use of renewable sources, and ensure greater resilience of local electric grids.

Microgrid and smart grid: differences

The smart grid is an advanced system of electrical networks and technologies that allows for the efficient and secure monitoring and management of electrical power distribution, connecting production sources with users of energy communities.

Smart grids are designed to optimize efficiency, increase security and the reliability of the electrical system, reduce costs and the environmental impact, thus supporting the transition towards a more sustainable and resilient energy future.

Microgrids, on the other hand, are local networks dedicated to energy production and distribution, capable of operating autonomously if isolated from the main power grid, such as in the case of a blackout. These small networks can function both in island mode and connected to the national electrical system, providing energy to groups of local users, such as hospitals, residential complexes, businesses, or homes, through renewable energy sources like photovoltaic systems.

Often, microgrids are equipped with storage systems, such as batteries, that allow for the storage of produced energy and make it available to members of the energy community. This storage capacity clearly distinguishes microgrids from smart grids.

Solar-powered microgrids: integration with renewable energies

A solar-powered microgrid uses photovoltaic panels to convert solar radiation into electrical energy, which can be distributed to local users or stored in storage systems for later use. This integration allows for optimizing self-consumption and improving the overall efficiency of the energy system.

A concrete example is represented by ABB, a multinational company in electrical engineering with several plants also in Italy. At the sites in Santa Palomba (Rome) and Frosinone, the adoption of microgrid-based solutions has effectively allowed for integrating solar power generation, reducing overall energy consumption.

Thanks to these solutions, the facilities have reported a reduction in consumption of 25%, enhancing solar energy as a primary source and improving the efficiency and sustainability of the energy system.

Challenges of microgrids and future prospects

Today, the implementation of a microgrid still poses several challenges:

• initial investment costs, which include the purchase of generation equipment, storage systems, and intelligent control systems. The initial cost can represent a significant financial burden for some communities or businesses, although long-term operation can generate benefits;
• integration and technological standardization issues, as microgrids combine various solutions, such as solar, wind energy, storage systems, and intelligent management platforms; ensuring full compatibility and interoperability among these technologies presents a technical challenge, also due to the lack of shared standards and protocols;
• evolving regulatory framework, as energy regulation has been developed primarily for traditional electrical grids and is only recently adapting to decentralized models like microgrids. Consequently, some aspects related to their implementation, management, and integration are not yet fully defined.

Microgrids are transforming the energy supply landscape. They not only improve energy efficiency and reduce costs, but also significantly increase the reliability and resilience of power systems.

Although they are generally designed for small areas or specific user groups, this small-scale electricity supply model may not meet the needs of larger regions or communities, and therefore, the scalability and sustainability of microgrids remain issues that require further investigation.

FAQ Microgrid

What is a microgrid?

A microgrid is a small-scale local electric network that allows for the production, distribution, and management of energy to power a specific area, even independently from the main power grid.

How does a microgrid work?

A microgrid generates energy through local sources (such as photovoltaic systems), distributes it to users through an internal network, and, if available, stores it in energy storage systems for use when needed. All of this is managed by a control system that regulates production, consumption, and distribution.

What are the main components of a microgrid?

A microgrid consists of:

• energy generation sources (e.g., photovoltaic or wind plants);
• storage systems (such as batteries);
• local distribution network;
• control system;
• loads, which are the end users consuming energy.

Can a microgrid operate without being connected to the power grid?

Yes, a microgrid can operate in isolated mode, continuing to supply energy even during disconnection from the main grid, such as during a blackout.

What advantages do microgrids offer?

Microgrids allow for:

• improving the reliability of energy supply;
• reducing procurement costs;
• optimizing the use of energy resources;
• increasing self-sufficiency and resilience of the system;
• encouraging the use of renewable sources.

Where are microgrids used?

Microgrids are applied in various contexts, including:

• industries and production plants;
• hospitals and healthcare facilities;
• data centers;
• remote areas not connected to the traditional grid;
• infrastructure for electric vehicle charging.

What is the difference between microgrid and smart grid?

Microgrids are local networks that produce and distribute energy at a limited level and can operate autonomously. Smart grids, on the other hand, are broader systems that use advanced technologies to monitor and efficiently manage the entire electric grid.

What are the main challenges of microgrids?

The main challenges include:

• initial investment costs;
• the complexity of integrating various technologies;
• the lack of specific standards and regulatory references.

Are microgrids a sustainable solution?

Yes, microgrids promote the use of renewable energy, improve energy efficiency, and contribute to the reduction of emissions, supporting the transition to more sustainable energy systems.