Microgrids are multiple generation points and loads under one control system that is optimising the generation and the power distribution to the users. Microgrid refers to distributed energy resources and loads that can be operated in a controlled, coordinated way, optimizing the use of the grid resources.
The main features of microgrids are:
- they can be connected to the main power grid, operate in “islanded” mode or be completely off-grid;
- they can be supported by storage systems and grid-regulation systems
- compared to centralised generation systems connected with multiple-voltage grids, they account for more reliable and better quality power supply, grid resiliency, source independence almost no grid losses;
- can be tailored to each customer’s requirements;
- microgrids are scalable and there is no cap as to size; can power remote mines, industrial and commercial sites, villages, communities, clusters of farming facilities.
Microgrids can deliver energy at a lower cost compared with the energy supplied from far-away generation points, since they are optimized for the the local conditions. Microgrids work at best when exploiting local sources of fuel – typically renewable sources – and geografically concentrated loads.
The trade-off between a centralised system and a microgrid is based essentially on the assesment of transmission costs and generation costs.
An interesting post about how India is planning to develope microgrids can be found here: http://forbesindia.com/article/special/microgrids-can-reduce-40-of-power-cost/41471/1#ixzz3qW3FmDhL
A new frontier for the development of microgrids is the financial sustainability of a business model in which there is not a major off-taker signing a PPA to grant the power purchase for the time required to pay back the investment.