What is a microgrid?

A microgrid is a small electricity system that can operate independently from the main electricity system. To operate independently for any length of time a microgrid must generate and distribute its own electricity.The microgrid needs enough local generation and storage to supply the local electricity demands every minute. It also needs to be able to control loads and generation so that they match perfectly.

For microgrids to be successful, they need:

• adequate local generation to produce electricity
• adequate storage to provide a balance between supply and demand.
• adequate control over loads, storage and generation to match electricity flows perfectly.

The diagram below shows how a microgrid will need to control the storage, the generation and some of the electricity uses.

Benefits of a setting up a microgrid in your community

• Reliability and resilience: Community microgrids can provide a reliable source of power to the community, and a backup when the main grid goes down. This is especially important during natural disasters or other emergencies, or if you are in an area with very poor reliability.
• Energy independence: Community microgrids promote energy independence by allowing communities to produce and consume their own power, reducing dependence on fossil fuels and other traditional sources of power.
• Cost: Community microgrids may (in specific circumstances ) help the current owner of the electrical supply save money, particularly if the community is currently served by a diesel generator.
• Environmental benefits: Community microgrids can reduce greenhouse gas emissions by increasing the use of renewable energy sources and reducing dependence on fossil fuels.
• Community engagement: Community microgrids can foster a sense of community ownership and engagement by involving residents in the planning and operation of the energy system.
• Economic development: Community microgrids can support local economic development by creating jobs and business opportunities in the renewable energy sector, in the installation and operation of energy equipment and in providing energy security for all local businesses.

Some challenges of setting up a microgrid in your community

• Takes a lot of effort. Setting up a community microgrid is a mammoth task! It puts significant responsibility in the hands of the community. You will have to navigate through the complexity of the Australian energy system, which requires some expert knowledge and experience with regards to technology, the grid, regulations, business models and community engagement. The regulatory position is very complex except in situations where small microgrids are specifically catered for (such as a caravan park). It is likely to entail years of work and the extent to which communities are even allowed to operate their own microgrid is unclear.
• Involves a lot of red tape. Since community microgrids are subject to various regulations and policies, you need backing and support from your network provider for implementation.
• Comes with a big price tag. Unless the microgrid will solve pressing problems with your electricity network, it is likely to cost a lot more than the current situation. This is because switching from the current network to one that can be controlled locally is likely to require significant amounts of investment.
• Is an ongoing commitment. Electricity is an essential service, so operating a community microgrid is a long term and highly regulated commitment.

When is creating a community microgrid a good choice?

To work out whether a microgrid is a good choice for your community, you’ll want to consider:

• Your position within the grid. A local microgrid may be a good option if your community is remote or fringe of grid, with limited or unreliable electricity supply, and frequent outages, and especially where the alternative to constructing a microgrid is spending millions of dollars on poles and wires.

• Your priorities and values. If your community has a strong drive for self-sufficiency, autonomy, ownership and control, a microgrid serves these values.

Project Examples

Mallacoota - this project has been developed by the network provider with grant funding from the Victorian Government because Mallacoota is at the end of a very long, difficult to maintain line, and has experienced significant problems with maintaining power supply.

Heyfield - a three year feasibility project found that a microgrid was high risk and was very likely to increase electricity bills. It also found that other local energy options could deliver community priorities such as reducing bills and reducing greenhouse emissions. The community website has up to date information about the project and the Institute for Sustainable Futures at UTS has published all the project reports.

Venus Bay - Venus Bay’s microgrid investigation asks about the smallest sized microgrid that will serve the most important needs. It will consider powering up individual buildings, small or larger clusters within the community in order to identify the most cost-effective investments.

Other guides and resources

Monash University has produced a microgrid toolbox to help in the development of microgrids. Their own campus microgrid reduces complexity by being on a single site with a single owner.

Homer is one of many modelling tools used by designers to identify the best combination of renewable energy, backup generation and storage assets for a microgrid investment. It is widely used and modestly priced but has a fairly steep learning curve for new users.

REopt is a free online tool from the US government which allows you to conduct simple modelling of solar, battery, wind and generation options.