Tying a microgrid to the smart grid

Building owners frequently integrate the utility's smart grid into their buildings to reduce electricity use and increase energy efficiency. Microgrids can further lower costs and raise reliability for owners and the surrounding communities.


This article is peer-reviewed.Learning objectives

  • Learn about smart grids, microgrids, and related concepts.
  • Identify key considerations for integrating smart grids and microgrids into nonresidential buildings.
  • Recognize key considerations for facility owners, engineers, and contractors looking to integrate smart grids and microgrids into nonresidential building projects.

The need to transform the nation's aging electrical grid to enhance reliability and sustainability is increasingly imperative as the existing grid becomes outdated and unable to support or withstand current needs and risks. The fundamental concepts behind microgrids do not vary much from typical campus-scale power-production models that proliferated throughout the mid-20th century, which include paralleled local and utility generation with the ability for local generation to sustain a portion of a campus. However, the drivers for their application and the smart technologies available to support them continue to evolve.

Smart grid and microgrid defined

The terms "smart grid" and "microgrid" often become interchanged, inviting a variety of different understandings. Defining these systems by scale and function will help navigate their interrelation and set a basis for how to apply them.

A smart grid is an intelligent and integrated system of interregionally connected electric utilities, consumers, and distributed-energy resources (DERs). This evolving form of electrical transmission uses advanced metering, monitoring, management, automation, and communication technologies to provide reliable two-way delivery and consumption of electric power. Real-time flow of essential information among grid components assures effective, efficient operation for generators, distribution system operators, and end users. A smart grid optimizes two-way traffic on the grid.

A "microgrid" is a localized electrical network that allows campuses and other similar-sized districts to generate and store power from various DERs including renewable electrical generation sources, such as wind and solar, providing the ability for end users to function in isolation from the grid. Balancing supply-and-demand resources-including thermal and electrical loads-within its defined boundaries, a microgrid system provides resiliency (see Figure 1). A microgrid can operate as an "island" or independently from the larger utility grid as required, for example, during extreme weather events or at times when self-generation is more cost-effective (see Figure 2). With the design of distributed generation on many campuses dating back decades, microgrids have existed before the term was coined. However, what has changed is that now there is a smarter interface that makes the supply and draw of power to and from the grid more efficient, resilient, flexible, and sustainable.

The purpose of electrical transmissions systems in the U.S. traditionally has been to distribute electricity from large utility-scale generation plants to loads, i.e., consumers. Comparing it to the transportation network of vehicular traffic, the transmission system is the interstate system while local distribution consists of
roads and streets. The safety systems are traffic controls. The variability of Figure 1: A microgrid is a localized electrical network that allows campuses and other similar-sized districts to generate and store power from various distributed energy resources (DERs) including renewables, such as wind and solar. Balancing captive supeconomic market forces, an increase in climate change, and natural and human-
made disasters demand the grid to support large-scale and local generation and distribution. Effectively, every lane of the grid superhighway now must go in both directions, subject to instant reassignment and change. A smarter electrical transmission system supports the technical, financial, and regulatory requirements for microgrid development.

Experience with microgrid projects has shown the areas essential to successful analysis, planning, and implementation to include:

  • Identifying needs and drivers
  • Developing functional requirements
  • Developing system topology and operation
  • Considering technical, regulatory, and financial outlooks
  • Proper commissioning, start-up, and operation.

Identifying microgrid needs, drivers, and functional requirements

Campuses, municipalities, and other similarly sized regional areas choose to develop a microgrid for a variety of reasons, including resiliency, economics, flexibility, sustainability, and reputation. At the beginning of each project, it is important to discuss and determine the drivers that influence implementing a microgrid in a specific region.

With the increasing occurrence of natural disasters, such as Hurricanes Sandy and Ike, as well as the potential threat of human-made disasters and impact from population growth in susceptible areas, institutional leaders and private enterprises are seeking ways to make the electrical grid capable of withstanding these types of events. Resiliency to maintain operations during such crises, and to have greater control throughout, is a driving requirement for microgrid implementation. Mission critical functions likely to be supported by a microgrid include health care, research, financial operations, data centers, or providing refuge. A robust and flexible electrical generation and distribution network must allow for these operations to continue functioning 24/7 throughout the year to maintain life or prevent loss of critical data. The system equipment and design must be self-healing and support recovery efforts to get facilities and campuses back up and running following such tragedies.

Many cities and regions see microgrids as a possibility to create economic growth or better maintain financial stability. As part of a microgrid analysis, it is important to evaluate the mix of varying energy strategies, generation sources, and fuel types and to develop concepts that will provide clean, efficient, economic, highly reliable, and locally controlled power and thermal energy. With this type of infrastructure in place, cities and regions can increase the recruitment and development of high-technology businesses, research and development centers, data centers, and similar enterprises key to job creation and economic growth. The recent advantageous price of natural gas as well as advances in renewable energy integration and controls are making microgrids more economically feasible to construct and operate, thus increasing their rate of implementation. Microgrid planning must include investigation of potential power purchase agreements and credits that can generate additional revenue or provide more options for campuses and municipalities to buy power, so they can balance a power portfolio and allow a microgrid to maximize its use and timing of resources for greatest efficiency and economy.

Advances in renewable energy integration allow broader deployment of renewable energy sources and storage technologies as part of a microgrid strategy. Proper analysis and inclusion of these in microgrid planning efforts allow campuses and municipalities to meet stated carbon reduction or neutrality goals as well as to reduce greenhouse gases resulting from traditional energy-generation processes.

Figure 2: A microgrid is capable of islanding itself as needed from the larger utility grid, for example, during extreme weather events or at times when self-generation is more cost-effective. A smart interface allows power to be supplied to and/or receivThe U.S. Department of Energy (DOE) is at the forefront of energy-integration research. At the National Renewable Energy Laboratory in Golden, Colo., the Energy Systems Integration Facility (ESIF) uses a megawatt-scale research electrical distribution bus and smart hardware-in-the-loop prototyping to validate technologies and techniques that advance the interconnection of distributed energy systems and the seamless integration of renewable energy technologies into the grid. Affiliated Engineers Inc. planned, designed, and engineered ESIF's primary research areas and laboratory systems, focusing on the research electrical distribution bus interconnecting plug-and-play testing components, hydrogen research exploring simpler and more scalable energy storage, and fuel cell and cell component development. A safety- and data-integrity-driven supervisory control and data acquisition system deploys hardware-independent software to govern the array of function-specific control systems and disseminate real-time data to principal investigators collaborating worldwide. The knowledge gained from this research, as well as other ongoing research and development of new microgrid technologies, informs design professionals of the capabilities of microgrid advances and the planning and development necessary for their success.

While developing microgrids, initial feasibility analysis of the potential energy sources and distribution systems that may meet the specific needs of a given project should be completed. Basic steps include identification of equipment types, equipment sizes, technical challenges, and basic system approach. Analysis typically includes a simple financial analysis of initial installation costs, potential operational costs savings, and payback durations on investment. The purpose of the initial analysis, often spreadsheet-based or using specialized software-such as the Distributed Energy Resources Customer Adoption Model (DER-CAM) as developed by DOE's Lawrence Berkeley National Laboratory-is to rule out nonviable options and set the stage for solutions that will be technically and financially viable to support the intended performance goals for the microgrid.

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