As part of the OATI USA Microgrid sales team, one question I often hear is what is a microgrid and how does it relate to Distributed Energy Resources. They both fit well into the new and emerging electric utility landscape, and this blog explores these topics and what unites them.

The acronym “DER” stands for Distributed Energy Resource. Simply put, DERs are decentralized forms of electrical energy — generation and storage — performed by a variety of small, grid-connected devices such as PV solar panels, hydro storage, wind turbines, natural gas turbines, generators, etc. Often they are installed on the distribution network for the benefit of the asset owner, rooftop solar on a home, or in a community (5 MW community-shared solar farm) that can be used to supply energy to the grid. These examples are called Behind-the-Meter or BTM resources. Similarly, a utility can deploy larger scale DERs in Front-of-the-Meter or FTM resources. A grid-connected device for electricity storage can also be classified as a DER system as well.

A microgrid is defined by the U.S. Department of Energy Microgrid Exchange Group as:

“A group of interconnected loads and distributed energy resources… that acts as a single controllable entity with respect to the grid. A microgrid can connect and disconnect from the grid to enable it to operate in both grid-connected or island mode.”

 A frequently asked question is — if someone has a standby generator (a distributed energy resource) at their facility and it automatically starts up in the event of a loss of power from the central grid, does the facility qualify as a microgrid?

Technically, the answer is no. While it is true that there are a group of resources (in this instance a backup generator and the central grid), the generator cannot operate in conjunction with the grid when grid-connected. In most situations, a microgrid asset does not sit idle when the central grid is operating. However, a generator can be a critical part of a microgrid strategy, but it is not the only part.

How about if the facility is a radio tower on top of a mountain in a national park, and is powered by a small group DERs — solar PV arrays and a bank of batteries — rather than running power lines from the central grid to the site? Is that a microgrid?

Many may consider this to be a microgrid, but once again the answer is no. According to the definition provided by the U.S. Department of Energy Microgrid Exchange Group, to qualify as a microgrid the site must be grid-connected. Since there is no connection to the central grid in this scenario, we would consider this to be a Non-Wire Alternative (NWA), not a microgrid.

In most cases, facilities who are thinking about developing microgrids are concerned about reliability and resiliency, and will have a connection to the central grid; in fact, they may have more than one. In addition, they may already have a generator in place, and this can be added to a microgrid as a generation asset. But to make it a true microgrid, and to add resiliency, facilities will need to incorporate other on-site DERs such as; PV, batteries, and in some instances, perhaps a microturbine, or a Combined Heat and Power (CHP) plant. All these additional DERs help augment the security and resiliency offered by the generator while allowing the use of PV, batteries, and a CHP plant as generation assets when connected to the central grid.

These assets may allow you to:

  • provide higher reliability and resiliency
  • lower peak demand during a peak alert
  • provide better power quality
  • reduce monthly energy bills
  • reduce greenhouse gases

Microgrids can also be used to bring resiliency to critical city infrastructure and buildings. Imagine a storm causing wide spread power outages, but a small section of critical city or county facilities continue to operate as normal. These might include fresh water and waste water treatment facilities, police and fire stations, hospitals, community centers, and the like. In a case like this, on-site DERs deployed in the area and coordinated with a microgrid controller act in concert with the critical infrastructure load, to power a designated section of the community in the event of a brown or blackout. This arrangement would be accomplished through a collaboration between the local community and the electric utility. The DERs can and will be optimized during grid connected conditions and add value to the city and or the utility.

A key element to a microgrid is a microgrid controller. It’s job is to orchestrate the on-site generation in conjunction with the facility, or community load, and facilitate the interaction with the grid. When the DERs are fully coordinated and the microgrid controller is connected to the central grid, it can be used by an electric utility as an asset that can support the grid’s effort, much like a DER.

Also — a microgrid, if designed properly, can be considered a DER and can be a dispatchable asset by the local interconnected utility.

For utilities, a group of DERs, including a microgrid, or a fleet of microgrids, can be controlled by a Distributed Energy Resource Management System (DERMS). As an example, on an extremely hot afternoon with a heavy load, a microgrid located within the utilities service territory can help lighten the load on the distribution network during a peak alert by requesting the microgrid to generate more energy and export the excess to the grid.

To summarize, a DER is a decentralized source of generation deployed within a distribution grid network. A microgrid is an orchestrated collection of DERs, that when needed can separate from the utility grid (island) and power the facility. Microgrids can offer added resiliency to those facilities that cannot be without power. At the same time, microgrids commonly incorporate renewable resources and help us reduce our carbon footprint.

To learn more about how microgrids can help your company improve resiliency, reduce your carbon footprint, and enhance energy savings, contact us.

About the Author

Mr. Steve Sendele is an Account Executive for OATI and USA Microgrids, Inc. (an OATI company). He has extensive sales experience in wireless data solutions and over 15 years of experience selling Smart Grid solutions to utilities.