A microgrid is a localised energy system that can generate, store, and distribute electricity to a defined group of consumers. What distinguishes a microgrid from a simple on-site generation system is its ability to operate in two modes: connected to the main electricity grid, or independently ("islanded") when the grid is unavailable. This dual-mode capability makes microgrids a critical technology for energy resilience, renewable integration, and cost optimisation.
Components of a Microgrid
A functional microgrid consists of several interconnected components:
Distributed Generation
The microgrid's power sources. These may include:
- Solar photovoltaic arrays: The most common renewable source in microgrids, providing zero-marginal-cost generation during daylight hours.
- Wind turbines: Particularly relevant for microgrids in locations with good wind resources.
- Combined heat and power (CHP): Gas-fired generators that produce both electricity and useful heat, achieving total efficiencies of 80-90%.
- Diesel or gas generators: Provide dispatchable backup generation when renewable output is insufficient and battery storage is depleted.
- Fuel cells: Electrochemical generators that convert hydrogen or natural gas to electricity with high efficiency and low emissions.
Energy Storage
Battery energy storage systems (BESS) are the enabling technology for most modern microgrids. They provide:
- Time-shifting of renewable generation (store solar energy during the day, use it at night)
- Peak shaving to reduce demand charges
- Fast frequency response during islanded operation
- Bridge power during the transition from grid-connected to islanded mode
- Power quality support (voltage and frequency regulation)
Lithium-ion batteries dominate current microgrid deployments due to their energy density, efficiency, and declining costs. Flow batteries and other chemistries are emerging for longer-duration storage applications.
Loads
The consumers within the microgrid. In many implementations, loads are categorised by priority:
- Critical loads: Must be powered at all times (life safety systems, data centres, medical equipment, essential lighting).
- Priority loads: Important but can tolerate brief interruptions (HVAC, production equipment).
- Deferrable loads: Can be temporarily curtailed or shifted (EV charging, water heating, non-essential equipment).
This load prioritisation is essential for islanded operation, where generation and storage capacity may be limited.
Point of Common Coupling (PCC)
The PCC is the point where the microgrid connects to the main grid. It includes switchgear that can disconnect the microgrid from the grid (for islanding) and reconnect it (for resynchronisation). The transition between grid-connected and islanded modes must be managed carefully to avoid power quality disturbances.
Microgrid Controller
The microgrid controller is the intelligence layer that coordinates all components. It performs:
- Economic optimisation: Dispatching generation and storage to minimise cost based on electricity tariffs, generation forecasts, and load forecasts.
- Islanding management: Detecting grid outages, transitioning to islanded mode, managing load shedding if necessary, and resynchronising with the grid when it returns.
- Power quality management: Maintaining voltage and frequency within acceptable limits, particularly during islanded operation.
- Protection coordination: Adjusting protection relay settings for grid-connected versus islanded operation (fault current levels are very different in each mode).
Operating Modes
Grid-Connected Mode
In grid-connected mode, the microgrid operates in parallel with the main grid. The grid provides frequency and voltage reference, and the microgrid can import or export power as needed. The microgrid controller optimises local generation, storage, and consumption to minimise cost:
- Generate from solar/wind when available
- Charge batteries during low-tariff periods
- Discharge batteries and reduce grid import during peak-tariff periods
- Export surplus generation to the grid when it is economically favourable
- Participate in grid services (demand response, frequency response) for additional revenue
Islanded Mode
When the main grid fails (due to a fault, planned maintenance, or natural disaster), the microgrid disconnects at the PCC and operates independently. In islanded mode:
- The microgrid controller must actively manage frequency and voltage, functions normally provided by the main grid.
- Generation and storage must precisely match load at all times. There is no grid to absorb surplus or supply shortfalls.
- If total generation and storage capacity is insufficient for all loads, lower-priority loads are shed to protect critical loads.
- When the main grid is restored, the microgrid must resynchronise (matching frequency, voltage, and phase angle) before reconnecting.
Benefits of Microgrids
Resilience
The primary driver for many microgrid projects is resilience. Facilities that cannot tolerate grid outages, including hospitals, military bases, data centres, water treatment plants, and manufacturing facilities, use microgrids to ensure continuous power supply regardless of main grid conditions. As extreme weather events become more frequent, resilience is increasingly valued across all facility types.
Cost Reduction
Microgrids reduce energy costs through:
- Peak demand reduction: Battery storage and load management reduce peak demand charges, which can represent 30-50% of commercial electricity bills.
- Renewable self-consumption: On-site solar generation consumed locally is typically cheaper than grid electricity.
- Tariff optimisation: Batteries charge during low-tariff periods and discharge during high-tariff periods (energy arbitrage).
- Grid services revenue: Participation in demand response and frequency response markets generates additional income.
Sustainability
Microgrids enable higher penetration of renewable energy by providing the local storage and control needed to manage intermittent generation. They support corporate sustainability commitments by maximising the use of on-site clean energy and reducing reliance on grid electricity (which may be generated from fossil fuels).
Grid Support
Well-designed microgrids benefit the wider grid by reducing peak demand, providing ancillary services, and deferring investment in grid reinforcement. They transform consumers from passive grid users into active participants in the energy system.
The Role of IoT Monitoring
IoT monitoring is essential for microgrid operation. The microgrid controller relies on real-time data from sensors across all components:
- Generation monitoring: Real-time output from solar arrays, wind turbines, and generators.
- Battery state: State of charge, state of health, cell temperatures, and charge/discharge rates.
- Load monitoring: Real-time consumption of each load category (critical, priority, deferrable) for load management decisions.
- Grid interface: Import/export power, voltage, frequency, and power quality at the PCC.
- Environmental data: Solar irradiance, wind speed, and temperature for generation forecasting.
Without comprehensive, real-time monitoring, the microgrid controller cannot make effective dispatch decisions, and islanded operation becomes unreliable.
EpiSensor in Microgrid Deployments
EpiSensor provides the energy monitoring infrastructure for microgrid projects. The Gateway and wireless sensors monitor generation, storage, and loads at circuit level. The Edge platform provides local processing for real-time control integration. Core delivers cloud-based visualisation, historical analysis, and reporting. The system's ZigBee mesh network enables comprehensive monitoring without the cost and disruption of running new cables, making it well-suited for both new microgrid installations and retrofitting existing facilities with microgrid capabilities.