Energy's Latest Buzzword: Microgrid

If you’re new to the energy world, the term microgrid may not have crossed your mind recently, if ever.  But within the industry, it’s becoming a very popular buzzword of late.

Your Energy Blog first addressed the microgrid back in February, speaking of the growing level of popularity within the college and hospital industries, among others.  But before going any further, it’s important to all get on the same page about what a microgrid is and why it’s becoming such a popular entity.

So what’s a microgrid?

A microgrid essentially exists as a miniature utility company; often varying in size from a small satellite college campus to a large military base or an entire city.  Microgrids are unique from utility companies in that a microgrid can function either autonomously (entirely on their own) or in coordination with the main grid, or macrogrid.  The handlers of the microgrid, often comprised of large businesses or other private sector organizations, are able to summon local sources of energy to generate electricity, regulate the amount of electricity being used and make repairs when needed.

There are several attractions for microgrids.  The concept of complete grid control is a big plus; allocating energy wherever and whenever it’s needed, in addition to the option to perform autonomously is very beneficial.  Quick grid repairs are also advantageous because sending out their own technicians rather than utility employees to fix an issue often saves time and increases efficiency.  As people grow more impatient of untimely utility repairs, or more fearful of natural disasters like Hurricanes’ Sandy and Katrina, the concept of a microgrid has become more appealing.

Pike Research released a study at the end of last year predicting that the desire for microgrid implementation will result in genuine growth, generating a $12.7 billion industry in the next five years.  Pike senior research analyst Peter Asmus elaborated on the importance of microgrid development, saying, “Microgrids represent a fundamental building block of the ultimate smart grid, designed to serve the needs of energy producers, consumers, and distribution utilities… [and] perhaps most importantly, microgrids are an important accelerator for various kinds of distributed power generation, particularly from renewable sources.”

For the time being, renewable forms of energy like wind turbines and photovoltaic panels are benefitting from their relationship with microgrids.  Pairing the two entities becomes a natural fit since they share the common purpose of calculated short term growth.

Yes, there undoubtedly are barriers to constructing microgrids.  There is a lofty price tag associated with these projects and renewable energies currently have limited potential.  This will certainly hinder efforts for interested parties on a limited budget, especially for small-to-mid scale companies and municipalities, in the immediate future.

But with efforts like the SPIDERS Microgrid Project in place, and considering how microgrid efforts are still in a development stage nationwide, the potential for progress with microgrids is favorable.  Secretary of the Navy Ray Mabus concurs, “There is clear and compelling evidence that the efforts the Navy is making to use energy more efficiently will improve national security, will save money and save lives.”