Components of Microgrids

Microgrids are technology marvels. Check out the different components that come together under a microgrid.

Utility grids and microgrids have a lot in common. Both serve the same function—to provide electrical power to consumers. Both are subject to the same constraints—ensuring that electrical generation and electric load are equal at all times. Their components, however, are different. 

Microgrids are at a much smaller scale than utility grids and as a result include components that are accordingly scaled down. 

Here are the main components of a microgrid:

Electricity generation resources within microgrids

The beating heart of a microgrid consists of a set of electricity generation resources. Typical generation resources found in microgrids include diesel and/or natural gas generators, solar arrays and wind turbines.

The most basic microgrids are usually built around one or more diesel generators. When natural gas is available, gas generators are also among the options available. Older island microgrids, for example, are based on a small power plant consisting of a few diesel engines coupled to alternators. Generators are the default choice to power a microgrid because they can cover a wide range of loads and because they can be used as backup power. They start quickly, are responsive to changes in load, and can operate on a variety of fuels. 

Fuel cell technology is emerging as a valid option to provide on-demand power on microgrids. Fuel cells can run on natural gas, hydrogen and other less common fuels. Although their cost remains too high to be widely used, hydrogen fuel cells are seen as a potential source of small-scale CO2-free electricity.

Typical components of an island microgrid
Click the image to take a closer look at microgrid components

Intermittent energy resources within microgrids

The cost of solar panels has become so low that, in some regions, their installation on homes and businesses is a no-brainer. University campuses, industrial facilities and others equipped with a microgrid can install solar arrays in large numbers, thus achieving significant savings on their energy bills. In fact, many build a microgrid specifically to be able to better integrate and take advantage of their solar resources. 

Energy storage within microgrids

Many homeowners sometimes choose to supplement their home photovoltaic installation with a battery pack. Likewise, many microgrid owners incorporate battery energy storage in their system. With the price of lithium-ion batteries at an all-time low, the benefits of adding an energy storage resource often justify the additional cost. 

For one, battery energy storage systems provide a service known as “time-shifting”. Time-shifting batteries collect extra electricity from an oversized solar system during the day, and then discharge the battery after the sun has set to meet overnight load demands. Similarly, batteries can be discharged at times when the solar array output does not match the load requirements such as short periods of peak demand. This allows the owner to maximize the use of intermittent resources.

Another benefit of battery systems is their ability to instantly respond to changes in electricity demand on the microgrid. Having a battery serve as standby capacity is often much more cost-effective than idling an extra generator 24/7 in case demand increases unexpectedly. Think of energy storage as the fat on the microgrid where energy is stored.

Load management within microgrids

Some microgrid owners have the option to actively manage electricity demand in the same way that they manage electricity generation. 

By default, when a large electric machine starts up somewhere on the microgrid, the generators supplying the microgrid need to quickly ramp up to meet the additional demand. Microgrids that actively manage demand have another option. They can decrease demand somewhere else on the microgrid, for example by switching off a building’s AC temporarily. The result is that demand and generation are again balanced out without increasing generation.

Control and communications within microgrids

Microgrids need a brain and a nervous system to operate safely and effectively, thus needing to possess sophisticated microgrid control systems

Wide-area utility grids serve millions of consumers and have a considerable amount of inertia, limiting the potential for fast, uncontrolled changes. Microgrids, in contrast, include fewer loads and resources and are more sensitive to variations in load and generation. Starting up several large electrical machines without the assurance that an equivalent amount of generation is available is a sure way to crash the microgrid. 

A microgrid’s control system typically includes multiple controllers and sensors distributed over its territory. A Supervisory Control and Data Acquisition (SCADA) system is also required to collect data and distribute instructions. 

If the SCADA system is the nervous system of the microgrid, then the energy management software is the brain; that software can be highly sophisticated. Artificial Intelligence (AI) and machine-learning features allow modern energy management software to learn to better anticipate load from the consumers on the microgrid and generation from renewable assets, to optimize the system to run in the most cost-effective way. Maximizing the use of renewable resources, minimizing fossil fuel costs and maintaining the reliability of the equipment and the microgrid, all while dispatching the load, is all taken care of by the energy management software, within the parameters specified by the owner of the microgrid.

Switchgears, inverters and other equipment

Finally, microgrids include other critical components such as electrical cables, circuit breakers, transformers and more. These components are the bones, muscles and blood vessels of a microgrid. They connect generation resources to consumers, and allow the microgrid’s control system to effect changes to the state of the microgrid.

Automatic transfer switches, for instance, isolate different generation assets to ensure that, for example, the AC inverter associated with a solar array does not feed electricity to a diesel generator. Inverters convert the DC power supplied by batteries or by solar panels to AC power that is adequately synchronized to other AC resources on the microgrid. 

Interested in more on microgrids? You might also like: 

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Aytek Yuksel - Cummins Inc

Aytek Yuksel

Aytek Yuksel is the Content Marketing Leader for Cummins Inc., with a focus on Power Systems markets. Aytek joined the Company in 2008. Since then, he has worked in several marketing roles and now brings you the learnings from our key markets ranging from industrial to residential markets. Aytek lives in Minneapolis, Minnesota with his wife and two kids.

Types of microgrids, with examples

Types of microgrids

No two microgrids are the same. Check out types of microgrids with real life case studies.

Microgrids are not fundamentally different from wide-area grids. They support smaller loads, serve fewer consumers, and are deployed over smaller areas. But microgrids and wide-area grids have the same job within the power generation eco-system, distributing electricity, and the same constraints, perfectly matching generation and load at all times. 

Microgrids existed before anybody used the word microgrid. For example, smaller islands have electric grids which usually qualify as microgrids. Likewise, in the early days of electricity, the individual systems of private utilities were microgrids. Over time, almost all of those individual systems were linked, resulting in continent-wide interconnections. 

Microgrids, however, are making a comeback. They are seen as a practical, cost-effective way to integrate local renewable energy resources, and to provide redundancy and resilience. There are two categories of microgrids, off-grid and grid-connected and each encompass many different setups. 

Off-grid microgrids

Off-grid microgrids are constructed where there is a significant need for electricity but no access to a wide-area electrical grid. 

Islands that are too far from the mainland are typically served by their own microgrid. In the past, island microgrids were usually built around diesel or heavy fuel oil generators. While easy to transport and easy to store, these fuels could prove to be expensive. However, in the absence of a suitable alternative, many islands continue to rely heavily on such generators. 

Why were suitable alternatives absent? Islands have more than enough wind and plenty of sun. Yes, but integrating large quantities of solar arrays and wind turbines on the electrical system of an island can be very difficult. Diesel generators can be switched on and off, on-demand. They have the capability to closely match the electrical demand of the island as it increases and decreases. Wind turbines, in contrast, produce electricity when there is wind. Solar panels work when the sun is shining. If the wind abates or if clouds obscure the sun for moments, another source of electricity needs to be available to pick up the slack and meet the electrical load demand. This type of dynamic management of generation and demand requires sophisticated supervisory controls and advanced power electronics. In the past neither were a practical option for small-scale island systems. 

Today, modern microgrid features allow island utilities to integrate larger quantities of intermittent renewable resources such as solar and wind. Stationary energy storage, in particular, is extremely helpful in managing transitions between intermittent resources and traditional generators. 

Island utilities find that investing in a modern microgrid grants multiple benefits. Generating more electricity from renewable resources allows islands to reduce both their fuel costs and the local environmental impact associated with the use of those fossil fuels. Using their generators in a more optimized way allows island utilities to reduce maintenance costs, increase efficiency, and, in many cases, reduce the number of generators needed on the island. The reliability of the electrical system is also improved, leading to better service quality and less frequent outages. 

You can find a real life example at Calvert Island in British Columbia, Canada, where Cummins Inc. was involved in a project to upgrade the island’s microgrid.

Off-grid microgrids also exist in remote areas. Many settlements in Siberia and in Northern Canada, for example, are not connected to any outside electrical system. Remote industrial operations also possess a self-sufficient electrical system. Mines, in particular, require large and robust electrical installations. 

These remote electrical systems are required to ship diesel, fuel oil or other liquid fuels over long distances. Unsurprisingly, this can quickly become very expensive. Imagine trucking fuel across hundreds of miles of frozen terrain or on a dirt road. As a result, the owners of these remote industrial operations are eager to deploy as much renewable power as possible, along with sophisticated microgrids to effectively integrate and distribute that power. Some mines also seek to synthesize their own fuel on site using renewable electricity.

Grid-connected microgrids

You don’t need to be on an island or in the middle of the desert to benefit from a microgrid. 

In fact, many microgrid users are located in urban or industrial areas that are fully served by an electric utility. Why do businesses and institutions go through the trouble of investing in a microgrid when they can simply receive electricity from the utility? There are two main reasons. 

One reason is that they want to avoid power outages

Homeowners invest in a home generator for the same reason. The difference between a home with a generator and, for example, a military base with a microgrid is complexity and scale. A home has one, maybe two electrical panels. All it takes to integrate a home generator to a residential electricity system is a transfer switch. 

A military base includes dozens of buildings, several generators and a variety of critical electrical equipment such as radars and air traffic control systems, often spread over hundreds of acres. Integrating these components requires a sophisticated electrical infrastructure—in other words, a microgrid. 

Civilian facilities with complex electrical systems incorporate microgrids to ensure the reliability of their electrical service as well. Hospitals, airports, university campuses and large industrial plants all utilize microgrid components to effectively integrate backup power generation into their electrical system.

The other reason that motivates grid-connected facilities to invest in a microgrid is cost: A microgrid encapsulates all of a facility’s electrical equipment. 

Example of a microgrid delayed at a port
Click on the image to take a closer look at an example of a microgrid deployed at a port.

From the perspective of the utility, only one electrical meter is seen. This allows the microgrid owner to deploy solar arrays, wind turbines, backup or prime power generators and other electrical equipment without direct connection to the utility grid. 

Many port operators, for example, own a type of shipping container crane known as regenerative cranes. Regenerative cranes consume electricity when they lift a container, and generate electricity when they lower a container. Few utilities would allow this type of electrical equipment to be directly connected to their grid—at least not with the regenerative mode enabled. Port operators therefore create microgrids connecting their cranes (as well as backup generators). This allows the cranes that are lowering containers to provide electricity to the cranes that are lifting containers. This results in a dramatic reduction in the net electrical consumption supported by the utility, and, thus, in savings for the port operator.

Microgrid options are driven by the global imperative to move quickly to renewable energy for power generation. They also allow facility owners to meet immediate practical needs. Improvements in microgrid technology mean that the possibilities for both large and small, connected, or remote microgrids are increasing. Modern microgrids are making innovations in electricity generation possible in all corners of the globe.

Interested in more on microgrids? You might also like: 

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Aytek Yuksel - Cummins Inc

Aytek Yuksel

Aytek Yuksel is the Content Marketing Leader for Cummins Inc., with a focus on Power Systems markets. Aytek joined the Company in 2008. Since then, he has worked in several marketing roles and now brings you the learnings from our key markets ranging from industrial to residential markets. Aytek lives in Minneapolis, Minnesota with his wife and two kids.

Examples on where microgrids are used

Examples on where microgrids are used

Microgrids have many different application cases. Check out the real-life examples on where microgrids are used.

Microgrids are small-scale electricity networks. They are power systems which both generate and distribute electricity. Some microgrids are connected to the main electricity grid; others are not connected by choice or because there is no main electricity grid to connect to. 

Modern wide-area electricity grids are vast interconnected systems consisting of millions of electricity consumers and thousands of electricity generators. In Canada and in the United States, for example, the Western Interconnection covers most of the territory west of the Great Plains. It includes about 136,000 miles of high voltage transmission lines, in addition to medium and low voltage distribution lines. A complex patchwork of dozens of utilities, system operators and other entities maintain, operate and regulate it.

Microgrids, in contrast, cover a local area, don’t normally include high voltage transmission lines, and connect far fewer consumers and providers. Typically, private microgrids are owned and operated by the same entity that also owns the load served by the microgrid. Public microgrids serving, for example, an island, are typically owned and operated by a local municipal utility.

Simple microgrids have existed for as long as public electricity service has been available. However, in recent years, the explosive rise in renewable electricity has led to more microgrids being deployed. These modern microgrids incorporate more sophisticated technology. They typically connect a variety of assets including solar arrays, wind turbines, gas or diesel generators, and battery energy storage.

Microgrids used in island grids 

Islands that are too small or too distant to warrant building an electric connection to the mainland are required to operate their own microgrids. Traditionally, island microgrids have relied on diesel generators to provide all or most of their electricity. Generators are perfect for island applications because of their flexible operation. Generators can start up quickly, and a power plant inclusive of multiple generators can effectively cover a very wide load range. Liquid fuels are also the traditional fuels of choice for island power plants because they are easy to transport and store. 

Microgrid components
Click the image to take a closer look at microgrid components

Many islands have seen their residents increasingly dissatisfied with this setup however. Older generators can impact the air quality locally, which can be particularly undesirable for islands that rely on tourism. For islands with few economic resources, the cost of shipping liquid fuel can also be a major burden.

Such islands are turning towards solar and wind generation as ways to reduce their dependence on fossil fuels. A smart microgrid integrating a mix of renewable resources, generators and battery energy storage systems can effectively make electricity more affordable and more reliable, while also reducing the environmental impact of the electricity production.

Modern control systems can be programmed with all the parameters of the various distributed energy resources to run the microgrid in order to maximize the use of renewables and minimize imported fuel use. An important benefit is extra resiliency for the grid, avoiding blackouts and brownouts across the network.  

An example would be Calvert Island in British Columbia, Canada, where Cummins Inc. was involved in a project to upgrade the island’s microgrid. The island needed more power but was reliant solely on diesel generation. The island upgraded to a microgrid with solar arrays, battery energy storage and new Cummins diesel generators. The upgrade resulted in fossil fuel consumption being reduced by 83%.

Microgrids used in remote locations

Industrial facilities and settlements located in remote locations with no access to utility service face the same difficulties as islands. These facilities have historically used diesel generators. Fuel needs to be transported, sometimes via truck over long distances in challenging terrains. For mines located in Northern Canada or in remote parts of Australia, for example, the cost of transporting the fuel can easily exceed the cost of the fuel itself. In some regions of the world, such as remote regions of Alaska and northern Canada, transportation of fuel must also take into consideration the changing seasons when road and water ways will allow for transportation vehicles and vessels.

Industrial operations, in addition, need robust systems to guarantee electricity supply. If a mine’s ventilation system comes to a halt because of a power failure, for example, conditions may quickly degrade for workers underground.

Such operations are keen to take advantage of locally available renewable resources to reduce costs and ensure safety. Reducing fuel costs by even a small percentage at a large-scale mining operation can rapidly result in substantial savings.

An example of a mining microgrid is the Agnew gold mine in Western Australia, where Cummins took part in the project to construct a power complex to supply the mine. The site decided on an off-grid 23 MWe power plant made up of 16 MWe gas, 4 MWe solar and 3 MWe diesel power generation. A further 2 MWe of gas-powered generation was added, followed by 18 MWe of wind generation and a 13 MWe energy storage battery and advanced control system. Over half of the 56 MWe capacity hybrid plant is from renewable resources.

Cummins also took part in a project to upgrade the power supply at Fisherman’s Landing marina off of Vancouver Island in British Columbia, Canada. During summer, the marina accommodates large yachts where the yachts are provided with electrical service. As a result, the marina’s electrical consumption would experience significant seasonal changes. The marina installed a microgrid incorporating solar power for the low season and diesel generation for the high season. Thanks to the new microgrid, yacht owners can now connect to the marina’s electrical service, and switch off their on-board engines and generators to enjoy the quiet and calm of Desolation Sound. 

Microgrids used for onsite generation 

Microgrids are not exclusive to remote areas. Any facility seeking to integrate multiple loads and multiple on-site generation resources should consider building a microgrid, whether a connection to the main utility service is available or not. 

Military bases often utilize microgrids on their premises for security reasons despite being connected to a utility grid. In Hawaii, for example, the U.S. Navy is in the process of building an extensive microgrid to cover Joint Base Pearl Harbor-Hickams. The Navy’s project includes several hundred megawatts of solar generation, energy storage, as well as an extensive electrical backbone connecting dozens of buildings and facilities. Outside of emergencies, the Navy’s generation assets will provide power to the local utility.

Other facilities may decide to build a microgrid to simply reduce electricity and energy costs. With intelligent controls, microgrid consumers can switch between grid service and self-generation depending on what is most economical. 

A network of microgrids comprised of various distributed energy resources attached to the main grid also adds resiliency to the whole electrical system, as the grid operator can arrange to utilize these resources as and when necessary. As extra generation is produced and consumed on site, this alleviates pressure on the main grid and translates into less need for investment for upgrades to the distribution network. 

However and wherever microgrids are used, the intelligent systems and technologies now available to integrate renewable resources into local electricity schemes mean that, in economic and societal terms, owners have the opportunity to go renewable while benefitting from cost-effective electricity.

Interested in more on microgrids? You might also like: 

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Aytek Yuksel - Cummins Inc

Aytek Yuksel

Aytek Yuksel is the Content Marketing Leader for Cummins Inc., with a focus on Power Systems markets. Aytek joined the Company in 2008. Since then, he has worked in several marketing roles and now brings you the learnings from our key markets ranging from industrial to residential markets. Aytek lives in Minneapolis, Minnesota with his wife and two kids.

Benefits of microgrids, and why do businesses need them?

Economic benefits of microgrids

From sustainability to economics, microgrids offer benefits for many businesses.

A microgrid is a small electricity grid where electricity is produced, distributed and consumed. Microgrids can be independent from the main grid or connected to it. They can be large enough to serve an entire island, but small scale microgrids serving a single campus or industrial facility also exist.

Three factors have made microgrids an increasingly popular option within the power generation eco-system.

First, the trend of deregulation that energy markets have experienced in many countries has resulted in options and opportunities for electricity consumers. In the past, the owners of local generation resources may have faced steep administrative requirements. In many cases, interconnecting these resources to the main grid would not have been allowed at all. Or, the electricity tariff structure was such that there was no incentive for consumers to invest in such resources. Today’s regulatory environment is far more favorable to owning and operating non-utility assets. In the United States, for example, the Federal Energy Regulatory Commission now requires transmission grid operators to open their markets to the owners of energy storage resources located on microgrids.

The significant decrease in the price of solar panels has led to a solar boom.
Click the image to take a closer look at how the decrease in the price of solar panels has led to a solar boom

Second, wind turbines, solar panels and energy storage systems have become far more affordable than they were in the past. In the case of solar panels, their price has dropped off a cliff, decreasing by a factor of almost 10 in the past 15 years.

Finally, advances in intelligent grid management software, controls systems, power electronics and other electrical components have made it possible to build, operate and maintain a small-scale grid without a large staff, and with a degree of flexibility not possible on a large-scale grid.

As a result, microgrids are within reach of many companies and institutions who want to benefit economically from operating their own generation, or to be more sustainable by using renewable resources, or have a more reliable and resilient system than grid-only supply.

Sustainability oriented benefits of microgrids

Many organizations install a microgrid in order to enable the integration of solar and wind power to their energy mix.

In the era of looming climate change, sustainability and corporate social responsibility are driving factors. With each year that passes, more and more organizations seek to embrace renewables in greater quantities. Often this is not possible without a microgrid.

On their own, solar arrays and wind turbines help to cut down emissions from electrical generation. Their intermittency, however, limits their effectiveness. At times they may provide more power than needed. At other times, not enough or none at all. Integrating intermittent resources in a microgrid along with energy storage and a firm generation resources is often the easiest way to maximize the usefulness of solar and wind assets. The other way is to interconnect solar and wind assets to the main grid and receive a payment in return for the excess power. This simply shifts the problem of balancing intermittent resources onto the main grid operator. The abundance of solar systems in many parts of the world however has resulted in grid operators being reluctant to accept excess power. The alternative, building a microgrid, does not require the authorization of the main grid operator.

Economic benefits of microgrids

Microgrids grant their owner a great deal of flexibility in optimizing their energy costs.

At any given time, multiple resources may be available on a microgrid to meet the electric demand coming from the microgrid’s consumers. These resources may include solar and wind resources, diesel fired generators, natural gas fired generators, energy storage, an interconnection to the main power grid, and maybe even demand response resources or fuel cells. (Demand respond resources are electric loads that can be turned off on demand. If your utility pays you to turn off your AC when asked to do so, then you are part of a demand response resource). Using the cheapest resource at any time and actively anticipating future load and generation inevitably leads to significant savings. Microgrids can ensure their owner spends the least amount possible on electricity, while ensuring continuity of supply.

Additionally, smart microgrids can also reduce the amount of investment needed in generation assets as well as reduce the cost of maintaining them. For example, an island microgrid might require a set of six generators to be online or available at all times, although only five usually operate. The sixth generator is simply present in case of demand peaks. The presence of an energy storage system effectively connected to the same microgrid can eliminate the need for this sixth generator. The energy storage takes care of the demand peaks.

Resiliency benefits of microgrids

No main grid is immune from power outages or shortages. For critical facilities such as military bases and hospital campuses, operating a microgrid is an insurance against grid outages. This is also the case for industrial facilities which may not be critical, but stand to lose economically from a temporary interruption or loss of electric power.

In some cases, microgrids actually improve the resiliency of the local grid as well. One way microgrids can do this is by providing black-start service to the main grid in the event of a main grid collapse—basically, generators located on the microgrid provide electricity to help restart large nearby power plants. Microgrids also support the main grid in an indirect way. If extra load is catered for locally on a microgrid, the main grid is less likely to require upgrades to cope with an area’s overall increased load.

Cummins' involvement in microgrids

Cummins is a leading provider of diesel and natural gas power generators, digital solutions and control systems; and has partnered with businesses ranging from greenhouses to healthcare facilities in their efforts to build microgrids. Recently, Cummins’ investments in energy storage and advanced microgrid control technologies has boosted its capability to provide critical microgrid components, and deliver complete microgrids tailored for each business’ unique needs.

Sign up below for Energy IQ to receive energy focused insights in markets ranging from data centers and healthcare facilities, to schools and manufacturing facilities, and everything beyond.

Interested in more on microgrids? You might also like: 

Raise Your Energy IQ

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Aytek Yuksel - Cummins Inc

Aytek Yuksel

Aytek Yuksel is the Content Marketing Leader for Cummins Inc., with a focus on Power Systems markets. Aytek joined the Company in 2008. Since then, he has worked in several marketing roles and now brings you the learnings from our key markets ranging from industrial to residential markets. Aytek lives in Minneapolis, Minnesota with his wife and two kids.

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