As more residential communities experience extended periods of power outages, increasing numbers of communities, as well as new housing developers, are investigating microgrid technology as a means to safeguard their neighborhoods from both rising, unpredictable energy costs, as well as sporadic service.

This article is a helpful primer for homeowners on microgrid technology to understand current trends and latest developments, as well as opportunities and challenges.

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What’s a Microgrid?

A microgrids is a localized energy grid that can operate autonomously when disconnected from a traditional utility power grid. The main purpose is to distribute electricity to nearby users by integrating various Distributed Energy Resources (DERs), such as solar panels, wind turbines, and diesel/gas generators, with an energy battery system, that is controlled and optimized by a smart management system.

BlockEnergy simple diagram of a residential microgrid neighborhood

A simple diagram of BlockEnergy’s residential microgrid system
Image courtesy of BlockEnergy

Microgrids also can also enhance the performance of local power utilities by lowering demand on the grid during peak hours, which can reduce the occurrence of brownouts and blackouts in the community.

Microgrids are well-suited for:

  • Community Microgrids: Neighborhoods or small towns, who need more reliable, resilient or cost-effective energy service
  • Critical Societal Entities: Hospitals, emergency response services, military bases, and commerce/industrial centers where 24/7 reliability is paramount.
  • Remote Locations: Rural areas where connection to the central grid is impractical or uneconomical
BlockEnergy Simple System Diagram of Residential Microgrid Power Solution

More details on BlockEnergy’s Residential Microgrid Power Solution
Image courtesy of BlockEnergy

 

Key Benefits of Microgrids

Microgrids are becoming increasingly popular in residential communities for two primary reasons:

 

Resilience (AKA Energy Independence)

Microgrids provide a reliable power source even during grid outages, ensuring that essential appliances and devices continue to operate. This is particularly important in regions prone to natural disasters or frequent blackouts.

Since Microgrids allow communities to generate, store, and manage their own energy, this reduces the reliance on the traditional power grids which can have unpredictable pricing and service.  Microgrids are also well-suited for remote communities, as well as critical facilities such as hospitals, emergency response services, military bases, and commerce centers.

 

Cost Savings

By generating and using local renewable energy, communities using microgrids can reduce their reliance on more costly electricity from traditional grids, leading to significant savings on energy bills.

Additionally, battery storage allows for the use of stored energy during peak demand times (AKA peak shaving), further cutting costs. Microgrids also have the potential to sell excess power back to the main grid.

 

Key Components

Microgrids typically consist of the following components:

 

Distributed Energy Resources (DERs)

The most common types of Distributed Energy Resources (DERs) used in residential microgrids are:

  • Solar Photovoltaic (PV) Systems: These are the most popular DERs for residential microgrids. They convert sunlight into electricity and can be installed on rooftops.
  • Diesel or Gas Generators: These are often used as backup power sources to provide electricity during outages or when renewable sources are not generating enough power or are unavailable.
  • Wind Turbines: Small-scale wind turbines can be used in residential microgrids to generate electricity from wind power.

These DERs can work together by complementing each other to create a reliable and sustainable energy system for residential communities.

 

Energy Storage

Batteries (often lithium-ion) are crucial for storing excess energy for later use. Battery storage make it possible to provide a steady supply of power during high demand, or when renewable generation is low or unavailable. Also referred to as Battery Energy Storage Systems (BESS), these devices store excess energy that is generated from other sources, such as solar panels.

Solar battery symbol of microgrid energy storage

 

Control Systems

Control systems manage the balance between supply and demand, ensuring stability whether connected to or isolated from the main grid. These highly advanced systems — also referred to as Smart Energy Management Systems — optimize for efficient operation that pertains to cost, emissions, reliability, and waste reduction.

 

Point of Common Coupling (PCC)

A Point of Common Coupling (PCC) is where the microgrid connects to the main grid, allowing for the management of power flow between the two power systems.

 

Operational Modes

Microgrids operate in two modes:

  1. Grid-Connected Mode: When a microgrid operates while connected to a traditional main grid, allowing for energy exchange based on economic or environmental considerations.
  2. Island Mode: When a microgrid disconnects from the main grid to operate independently during outages or for testing purposes, enhancing reliability and resilience.

 

Where are Microgrids Being Adopted?

Certain regions in the United States are seeing increased interest and adoption of microgrids.

Drone view of SDGE San Diego Gas and Electric Paradise Microgrid launched in February, 2024.

Drone view of SDGE’s (San Diego Gas and Electric) Paradise microgrid launched in February, 2024.

Here are a few notable areas:

  • California: California leads the way in microgrid adoption, driven by its ambitious renewable energy goals and frequent power outages due to aging, inadequate infrastructure and natural disasters. The state has numerous microgrid locations and projects, including several by San Diego Gas & Electric (SDG&E) and Sumitomo Electric.
  • Florida: Hurricane resilience is a key need of Florida as severe weather events can cause widespread, extended power outages on an annual basis. Not surprisingly, Florida has launched several innovative microgrid projects, such as the BlockEnergy community in Wimauma, with plans for many more, such as and the upcoming Myrtlebrook community in Lakeland.
  • Texas: Texas has a significant microgrid penetration capacity, with projects aimed at enhancing grid resilience and supporting its growing renewable energy sector. The state’s energy market structure and supportive policies have encouraged and incentivized microgrid development.
  • New York: New York has invested heavily in microgrids to improve energy resilience, especially after events like Hurricane Sandy. The state has several projects focused on critical infrastructure and community resilience.
  • Hawaii: Hawaii’s isolated grid and high energy costs make microgrids an attractive solution. The state has implemented several microgrid projects to integrate renewable energy sources and reduce reliance on imported combustible fuels.
  • Colorado: Colorado has seen growth in microgrid projects due to supportive state policies and a focus on renewable energy integration. The state’s diverse geography and challenging energy needs have driven interest in microgrid solutions.
KB Homes model home at Durango at Shadow Mountain, California, new community with microgrid

KB Homes model home at Durango at Shadow Mountain, California, a microgrid community launched in 2023

 

Recent Developments & Advances

Advances within microgrid technology continue to be made in several areas:

  • Efficiency & Affordability: Advances in battery technology and smart energy management systems are making microgrids more efficient and affordable.
  • Advanced Safety and Fire Prevention Features: Using lithium iron phosphate (LFP) battery cells, which are thermally stable and stay cool in high temperatures.
  • Integration with Electric Vehicles (EVs): Microgrids are starting to use EVs as mobile storage units, which can both charge from and supply energy back to the grid.
  • Hybrid Systems: Combining different energy sources (like solar with natural gas) to ensure continuous supply and optimize for different conditions.
  • Community and Rural Electrification: Projects aimed at providing affordable, reliable power to underserved or remote areas are increasing, often leveraging local renewable resources.
  • Cybersecurity: With increased digitalization, microgrids require robust cybersecurity measures to protect against attacks that could compromise grid operation.
  • AI and Machine Learning: These technologies are being incorporated for predictive maintenance, demand forecasting, and real-time optimization of energy use and generation.
  • Interoperability: Standards are evolving to ensure different microgrid components can work together seamlessly, facilitating easier integration and operation.
BlockEnergy 3D rendered residential utility-owned power BlockBox

BlockEnergy 3D-rendered residential utility-owned power BlockBox, a key part of their residential microgrid system

 

Challenges of Microgrids

Though microgrids present many benefits, their implementations involve several risks largely due to the maturity of the underlying technology, high up-front costs, as well as unique project-by-project complexities:

  • Cost: Although costs are decreasing, initial setup and integration can be very costly.
  • Regulatory: Rules and regulations for multi-customer microgrids also are evolving. Many regions lack clear regulations or incentives for microgrid deployment, which can hinder and delay development efforts.
  • Technical Complexity: Managing multiple energy sources and storage systems requires sophisticated control systems.
  • Organizational Complexity: Successful microgrid requires collaboration across many diverse stakeholders, including: local government; local regulators; utility providers; technology vendors; consultants; end-customers; and community advocates.

Microgrids represent a significant evolution in how electricity is generated, distributed, and consumed, offering a path towards more sustainable, reliable, and resilient energy systems.

 

Microgrid Resources

 

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