The Power of Microgrids in the Global Energy Transition

Electricity grids are the largest machines in human history, comprised of diverse equipment used to generate and transmit the power that enables our modern lifestyle. Behind the equipment and vast network of connections are the system operators, the people who ensure that our electricity needs are met at every second. In nations big and small, a reliable electricity supply underpins the economy and is central to daily life in today’s world. And while a temporary loss of electricity at home is an inconvenience, in critical facilities such as hospitals and military bases, it can be life threatening—causing disruption to essential services or military readiness. One way to address this risk is to develop microgrids—small networks that generate electricity for local consumption.

Hundreds of microgrids are in operation today, and they are growing in number around the world. They also present an opportunity to glean insights across various microgrid configurations, namely connected or isolated hybrid systems that integrate a high amount of variable, renewable energy resources.

In recent years, the costs of solar and wind energy have fallen significantly. The journey down the cost curve now means that solar and wind are cost competitive with traditional fossil fuel technologies. This enables microgrids to meet clean energy goals economically, while also achieving their primary purpose of providing adequate redundancy to ensure electricity supply reliability.

Microgrids can be connected to the larger electricity grid; however, in the event of a widespread outage, microgrids will disconnect from the main grid and continue to operate independently to maintain electricity supply to the homes and businesses that are connected to the microgrid’s electricity network. The same incentives leading to an increased uptake of connected microgrids—improved reliability, greater sustainability, and lower costs—are also driving the transformation of isolated microgrids, such as island grids. Island electricity systems are isolated from a larger electricity network, so they must supply their own electricity at all times without depending on a larger grid system for reliability and power quality management.

Caribbean islands, including those that partner with the Clinton Climate Initiative and the Islands Energy Program of Rocky Mountain Institute—often recognized as Rocky Mountain Institute-Carbon War Room (RMI-CWR)—exemplify isolated microgrids. For years, these grids have relied on diesel-based, centralized generation to supply electricity to residents and businesses. This is changing. Now, many isolated microgrids are leading the way in energy transitions to utilize energy efficiency and renewable energy at both utility and distributed scale.

The Transformation of Island Microgrids

Small island developing states demonstrated inspiring leadership during the 2016 Conference of the Parties in Paris, and are now taking steps to transform their electricity systems to utilize more locally available and sustainable resources. Solar photovoltaics (PV) and wind turbines for example, along with energy storage options, allow these isolated microgrids to meet international climate commitments, increase energy independence, and reduce emissions. For example, Saint Lucia’s first utility-scale renewable energy project is underway; once fully constructed and operational, the 3 megawatt (MW) solar PV system could reduce CO2 emissions by 4,000 tons per year while having the capacity to provide electricity to the equivalent of 3,000 homes in Saint Lucia.

As the proportion of variable renewables increases within a microgrid, so does the need for more sophisticated controls to ensure stable operation. In the case of islands, the entire nation (and economy) is dependent on a single grid. Grid engineers and operators have the important job of maintaining the stability of their isolated microgrid, which in this case affects the entire island nation. Charmaine Gill-Evans, generation engineer with the Barbados Light & Power Company Limited, explains that “for island grids, most economic sectors rely on a stable and steady electricity supply for the efficient production of goods and the timely provision of services. Increased penetration of variable renewable energy technologies introduces complexities in grid management, but these are not insurmountable, and can be mitigated by careful study and implementation.”

Common Challenges and Opportunities

Despite the major difference between connected and isolated microgrids (the option to connect to a larger grid), there are in fact many similarities. These common characteristics allow key lessons to be shared, which accelerate the rise up the learning curve for various types of microgrids. Connected microgrids have the benefit of back-up from the larger grid during normal operations; at the same time, they use similar technologies and face similar challenges as isolated microgrids in providing reliable, sustainable, and low-cost electricity. In designing connected and isolated microgrids, ensuring the right balance between variable and firm energy sources is a significant challenge. Adding to this complexity is the economic tension between lower costs and the reliability offered by having plenty of backup power.

Like island grids, connected microgrids have traditionally depended on various fossil fuel generators, typically diesel. Back-up systems also tend to be natural gas turbines, fuel cells, and combined heat and power (CHP) applications. As the cost of renewable technologies has steadily declined, and the value of distributed energy resources (DERs) are better recognized, regulated, and understood, connected microgrids are becoming increasingly lower carbon while operating a myriad of different resources. An additional challenge for a connected microgrid is designing control systems for the two main modes of operation. For example, the University of California San Diego microgrid has successfully demonstrated operation both in connection with and in isolation from the larger electricity grid. 

An Opportunity for Grids of All Sizes

There is a clear opportunity for designers and operators of both isolated and connected microgrids to learn best practices from one another given their similarities in objectives, technologies, and challenges. As a result of the dire consequences of a blackout on connected or isolated microgrids alike, care and consideration for the optimal design, selection, integration, and control of microgrids is paramount. Additionally, grid operators seek innovative, yet proven solutions, and are beginning to implement new approaches, including closer coordination with their customers. Given the wide range of considerations grid owners and operators must assess and the resulting opportunities that microgrids offer, it is fair to say that microgrids can play a key role in leading the transition of electricity systems globally. In order to accelerate the transition towards cheaper, more reliable, and sustainable microgrids, there is a need to actively share solutions. The CARILEC Renewable Energy Community (CAREC) is one place where energy professionals in the Caribbean can connect, collaborate, and innovate together.

Islands in particular can lead both energy transition and knowledge sharing throughout the process. Large, developed countries have historically led innovation, technological advancements, and operational best practices. Acknowledging that the health of the grid and thus the national economy is rooted in a robust electricity supply, coupled with the disadvantages of energy dependence, governments and electric utilities on islands now have the unique opportunity to lead and advance renewable microgrids.

Siana Teelucksingh is a Project Manager with Clinton Climate Initiative’s Islands Energy Program.

RMI-CWR’s Islands Energy Program is made possible by the support of the Global Environment Facility in partnership with the United Nations Development Program. CCI’s work is supported through government aid funding from Norway.