Microgrid Benefits

Expanding electrification and providing grid support

Microgrids can help provide electricity even in the most inaccessible areas, supporting the grid during peak load and emergency situations, lowering transmission and distribution (T&D) losses, and meeting additional load in areas that have major right-of-way (RoW) issues, among other things. Further, microgrids operating on renewable energy sources and supported with energy storage systems (ESS) help in addressing the intermittency associated with renewable energy sources and in maintaining reliable power supply. Besides this, microgrids help in assessing the outcomes of smart grid projects in a cost-effective manner with the roll-out on a much smaller scale.

Microgrid basics

A microgrid is a group of interconnected loads and distributed energy resources within clearly defined electrical boundaries that acts as a single controllable entity. In contrast to the conventional grid, microgrids are more efficient and located closer to the load centre, and do not entail a large quantum of heat generation for producing electricity. Microgrids have two basic modes of operation: grid-connected mode and island mode. They operate in grid-connected mode more frequently than in island mode. However, the benefits of microgrids operating in island mode are more impressive. A microgrid moves into island mode when there is an outage in the main grid or if the system has been intentionally disconnected from the grid.

One of the key benefits of the microgrid is providing electricity in otherwise inaccessible and far-flung areas. In these areas, often setting up a microgrid is much faster and easier than providing grid connectivity. Owing to the falling costs of off-grid solar power, distributed alternatives to grid extension have become more popular. An example of the use of microgrids for providing electricity in difficult terrain is the Sunderbans in West Bengal, where electrification is being done using a solar-based microgrid. In fact, the concept of solar-powered minigrids was pioneered back in the 1990s, when a 25 kWp solar PV plant was installed in 1996 by the West Bengal Renewable Energy Development Agency in Kamalpur village (Sagar Island) in the Sunderbans, which continues to power the village to this day.

With the advancement of LED technology and the reduction in PV panel costs, direct current (DC) microgrids seem to be coming up in a major way to enhance energy access. Many initiatives, both in the private and public sectors, are now taking the DC microgrid route to provide energy for basic lighting and mobile charging. Microgrid operator “Mera Gao Power” (MGP) has built 1,700 solar DC mini-grid systems in Uttar Pradesh for lighting and phone charging purposes. MGP field operators survey a village and make an agreement with 10 to 50 households to offer mini-grid services. They then identify a suitable, centrally located private rooftop on which they install two to four 120 watt peak solar panels, feeding into a simple DC system connected to each customer.

Another advantage of microgrids is ensuring reliable power supply in a cost-effective manner. Microgrids help in tackling power outages and blackouts in case of a utility grid disturbance. Besides, during peak load, a microgrid prevents utility grid failure by reducing the load on the grid. Microgrids also play a crucial role in meeting the growing power demand. While centralised grids have been able to cater to the growth in demand over the years, future grid expansion in already populated areas is difficult in view of right-of-way issues and public resistance. In this respect, microgrids can be installed in industrial complexes, commercial hubs, residential societies and even individual buildings to provide local energy supply and also supply surplus power, if any, to the grid. Apart from this, microgrids help in reducing T&D losses as the power does not have to be wheeled over long distances. A reduction in T&D losses through distributed generation of solar energy near the load centres has been seen in Telangana, which has recorded a significant improvement in T&D losses through the expansion of solar power generation in this mode.

Microgrids can also be deployed for reaping the benefits of power generation from a small–scale plant operating on a raw material that is localised in nature. Bihar-based Husk Power Systems, a leading microgrid operator, was the first company to use 100 per cent biomass gasification from rice husk to generate electricity for households and small businesses. Husk Power Systems has since evolved its business model and launched the world’s first hybrid-powered, mini-grid system that provides grid-compatible 24×7, highly reliable power to customers. The systems are scalable, grid compatible, and secured against theft, from power generation to delivery. It offers customers a flexible “pay-as-you-go” energy service, using a mobile-enabled smart metering system.

Energy storage in microgrids

Energy storage systems help in realising the full benefits of microgrids. In the case of a microgrid equipped with an ESS, the generation of electricity is decoupled from electricity demand. An ESS-equipped microgrid is more important in case the microgrid is based on renewable energy. The surplus power generated can be stored and used later when demand is greater. It ensures that none of the energy generated in the microgrid is wasted and helps in smoothening out any intermittency in power supply.

EES-equipped microgrids offer cost-effective solutions to lower the overall energy costs and improve the grid’s resilience. Microgrids help in lowering demand charges through peak shaving. Peak shaving refers to the ability to control electricity costs during periods of heavy electricity use. For grid-connected commercial and industrial customers, the demand charges associated with peaks in consumption during high-use periods can be substantial — up to 70 per cent of the customer’s utility bill. In such scenarios, peak shaving is a great option to reduce costs.

Moreover, energy storage makes it possible for utilities to earn additional revenue from ancillary services such as supporting frequency regulation, energy arbitrage, spinning reserve, black-start processes and demand response. These services are easy solutions to increase revenue and lower the total cost of a grid-connected microgrid.

Role of microgrids in developing smart grids

Microgrids offer an alternative path to smart grid development. A microgrid comprises almost all the components of a larger grid – power generation, power storage and distribution to user loads.  However, it is operated on a much smaller scale and is usually locally owned and operated. Adopting smart technologies in a microgrid is much simpler and less costly than a smart grid. Since microgrids are designed to meet specific load requirements, new technologies can be selected to meet the specific needs of a much smaller target area of consumers. Therefore, microgrids could, in a way, serve as the incubator and operational test bed for innovative smart grid solutions. Microgrids provide the option to develop smart and small distribution systems that can be interconnected to one another to form a much larger distribution entity and, in turn, behave like a smart grid in terms of efficiency and reliability.

Although smart grids hold the promise of improving power quality and reliability, reducing the cost of power and carbon emissions, incorporating alternative energy sources and ensuring that the future energy demand is met in an effective and efficient manner, their development has been restrained. This is owing to several reasons such as high costs, uncertainty of outcome, regulatory approvals, the need to ensure compliance with smart grid specifications and the use of unproven new technologies.

An example of smart microgrid deployment in India is by Gram Power India, a start-up focusing on expanding rural electrification, which has set up a smart microgrid at Todaraisingh Mandal in Rajasthan. The customised smart microgrid generates, stores and distributes renewable energy on-site, instead of relying on electricity supply from the national grid. Besides this, under the smart microgrid model, consumers are provided services such as innovative metering and monitoring devices that allow them to purchase power under prepaid schemes and store the energy generated from renewable sources such as biomass, solar and wind.

To conclude, microgrids hold the potential to significantly transform the power distribution segment by making it more resilient and aiding in expanding electrification coverage, among other things. However, it is necessary to ensure that microgrid installations are cost effective and that they operate within the desired voltage and frequency levels.


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