Benefits and Challenges of Microgrids

The electric utilities are expected to undergo rapid progress due to fast integration of large shares of various RE sources. The optimal way to achieve this is by developing microgrids, as the microgrids can manage the power variability of RE locally, leaving the operation and stability of the regional grids unchallenged. Such utility transitions certainly bring encouraging benefits to both the utility company as well as the consumer. For the consumers, it can provide utility services of high standard, reliable electricity supply, attractive tariff rates, etc. The future utilities give way to consumer participation in grid management through concepts like demand response, demand dispatch and power purchase from prosumers, etc. The utility benefits are far more than those felt by the consumers, viz., reduced network congestion, effective peak load management, reduced line losses, optimum generation mix with energy storage, less generation capacity addition than the increased demand, higher plant load factor on all generators, possible deferral of infrastructure investment, ease in ancillary service provision, and above all, clean energy integration.


Reliable and Resilient Electricity Supply

The most important benefit of microgrids is the reliability it provides to the electric utility and its customers. When the main grid begins to fail, the microgrids can still remain active to support their customers by disconnecting or islanding from the central grid. Microgrids being independent entities in terms of local generation and storage, they can serve the customers until the main grid supply is restored. Energy resiliency is a term closely related to reliability, and often confused with it too. Reliability is the ability of the utility to keep the power on for its customers, and resilience is the ability to circumvent power outages and/or to revive quickly on loss of generation under any such unforeseen circumstances like accidents or natural calamities. The microgrids are designed and automated to restore essential services rapidly, even under sudden disruptive circumstances.

Reduced Transmission Losses

The benchmark of average utility line loss is in the range of 6%—10%, but in several countries these losses are at alarmingly high levels due to the geographic and economic constraints. Heavy line loading being the prime reason for high transmission and distribution (T&D) losses, the line losses can be reduced to a great extent by restricting peak hour demand. As microgrids have local generation to cater to the local loads, the demand on the main grid and the related T&D losses can be substantially reduced. Local compensation of reactive power on the microgrid can reduce the line loading further. Additionally, the distributed generation reduces the need for long transmission lines to some extent and thus helps in the reduction of T&D losses too.

There are various non-technical losses in the electric power supply system like theft, pilferage and losses due to poor metering, ineffective billing, absence of energy auditing procedures, and sporadic maintenance of equipment. Nearly all of these non-tech- nical losses can be eliminated through the determinative solution of a smart microgrid as it includes distribution automation with smart meters, dynamic electricity pricing, demand response programs and ICT enabled billing, collection and accounting.

Reduction in System Capacity

Rapid growth in demand forces several pieces of equipment and feeders in the utility system to operate at rated capacity. This calls for upgrade of transmission lines, transformers and other equipment which involve high investment cost besides right of way and other legal concerns. However, if the utility is to meet the peak load, then large capacity has to be built yet it must be maintained at lower plant load factor which is economically not attractive. Often, such feeder extensions are through remote locations and are time consuming and far more difficult to maintain. Allowing microgrids penetration in the distribution system, any peak demand can be locally catered to. This relieves the stress on both the transmission and distribution lines. Thus, neither the central generation capacity, nor the distribution feeder capacities need to be supplemented, as the microgrid solution is part of the load centers. Microgrid as an alternative is more economical than the traditional solutions because it defers the cost of capacity addition w'ith attractive complimentary benefits like improved reliability, peak demand reduction and easy and low cost maintenance.

Integration of RE

Increased awareness of clean energy and its economic benefits promoted large investments in RE development in the recent past. But, large scale integration of RE may disturb the normal operation and management of the synchronous grid owing to the intermittency and variance in such power generation. Frequency and voltage fluctuations are some of the serious concerns on the part of the utilities regarding large scale RE penetration. On the contrary, if large numbers of small scale RE generators are allowed to penetrate at the distribution level, then the dual advantage of high RE share and less risk in energy management can be achieved. One or more small RE generators with reliable power management strategy and energy storage forms a microgrid. Microgrids can thus be instrumental in achieving the goal of 100% RE penetration into the electric utility.

Cost of Reliability

The cost of reliability is the cost that would be involved in transforming the present- day utility electric networks to accomplish reliability levels on par with these future smart microgrids. It refers to an attribute workable only if the legacy grid is appended with fast communication infrastructure, sophisticated controls, sensors, automatic black start capability after a fault and system health monitoring which are not part of it today. Similarly, provision for receiving weather forecast data and utilizing it in planning and scheduling the ramp rates of other generators are inherent features in microgrids that are not available in legacy grids. Infrastructure required to achieve these features in legacy grids is massive, and cost is formidable, due to the geographic spread of conventional systems, w'hereas the cost of reliability in microgrids is much lower as the generator controls and the load management systems are present locally.


Balancing out the widespread benefits of microgrids, there are multifaceted challenges - ranging from technical to economic, from policy matters to social concerns. The non-technical challenges include issues related to policy and ownership and lack of regulatory suggestions and business models. However, the technical issues are of primary consideration, as their resolution is key to accelerated diffusion of microgrids into current electric networks.

The technical challenges are associated mainly with the planning and modeling, control characteristics and response of protection units. These challenges are imposed on the same microgrid components that operate in the grid-connected as well as in the islanded mode. But the system behavior and the control demands are not the same under these two modes of operation. For example, islanding detection and resynchronization are the main capabilities when working in the grid-tied mode, whereas frequency regulation and power management are vital in the autonomous operation. Another major challenge is the microgrid protection system that has to respond to the main grid as well as the microgrid faults with two different levels of fault currents. A few technical challenges are discussed in detail in the following sections:

Stability of Microgrids

The microgrid stability is to be dealt with differently for grid-connected and islanded conditions. The grid-connected condition poses very little challenge to microgrid stability as the grid extends the power support for instantaneous balance. But, the autonomous mode with variable generation by wind and solar combined with varying load can create instability. Microgrids in autonomous mode with high RE penetration require reliable power management strategy including definitive storage system, highly interconnected controls, precise load sharing, flexible generation dispatch and demand side management to sustain stable operation. Reactive power compensation and fault voltage ride through capability are essential in autonomous mode in order to ensure voltage stability. Further, microgrids should be designed for optimum generation mix, which can give a higher degree of flexibility required for enhanced stability management.

Microgrid Control

Every microgrid requires a master control system with multi-layered software compartments to embed the entire control, monitoring and data acquisition tasks. There are various tasks including generation and demand control, resource and load forecasting, sensor data acquisition and decision-making algorithms, grid monitoring and market tariffs, power balance and frequency regulation, effective utilization of RE resources, battery management systems, GUIs and many more. Identifying such a system remains a challenge as it has to have massive storage and computing capabilities with different response times for different tasks and modes of operation. Another major concern is selection of the type of microgrid control - centralized control, distributed control, hierarchical control or coordinated control. There is no consensus at this time which control system will optimize system behavior.

Protection in Microgrid

An appropriate protection system for microgrid should be provided such that it responds for the faults within the microgrid and faults on the feeder where it is connected. When the faults are within, then the respective fault has to be isolated which may be result in several sub-micro islands. Then it will be necessary to take care of the reliability of supply within these sub-micro islands. When the fault is on the feeder, then the protection system has to isolate the microgrid from the utility within a short response time to protect the components of the microgrid. The sensitivity of the protection system has to ensure that there are no undetected faults or delayed trips. The selectivity of the protection system should be designed in such a way that no false tripping happens under any operating condition. Even under the circumstances where the fault current magnitudes are at par with the load currents of the microgrids, the protection system should isolate it from the feeder. Also, with low magnitudes of internal fault currents, the protection system should respond and isolate that small portion of the microgrid. An adaptive microgrid protection system with proper communication to dynamically vary relay settings is still a challenge.

Island Detection in Microgrids

Islanding is a condition during which the electric utility to which the microgrid is connected is absent for whatever reason. Islanding can be of two types - unintentional islanding and intentional islanding. The first is primarily due to the electric utility shutting down for maintenance, load shedding or fault clearing. Intentional islanding is executed by the microgrid management in order to provide higher power quality and efficiency for local customers/loads.

The earlier grid protocols (IEEE 929-2000, IEC 62116, and IEEE 1547) recommend that any type of distributed generation must shut dowrn during times of absence of mains. But the protocols have now changed as microgrids can still operate in the autonomous mode even without the utility. Islanding detection is one of the challenges in microgrid implementation, as faster and accurate detection methods are necessary to avoid pow'er outage within the microgrids and to ensure continuity and stability of service. Islanding detection methods are broadly categorized as passive and active methods. The former uses transient behaviour of voltage, current and frequency to detect mains failure, while the latter periodically injects a non-characteristic signal and detects the absence of mains by analyzing its response using various signal processing techniques. Selecting a suitable islanding algorithm is based on the response time, impact on power quality and the presence of non-detection zones (NDZ). The active methods have proven to have small NDZ, but they suffer from large response time due to laborious computations and power quality issues resulting from signal injections. In spite of quick response and no harmonic footprints, passive methods suffer from large NDZ which is far more hazardous for the microgrid equipment than feeder faults. Islanding detection is still an open-ended challenge for microgrid implementation.

Besides these, there are several additional challenges such as control for seamless mode transfer, location, size and type of generation and storage equipment in microgrids, logic for power sharing, microgrid planning, energy management under different modes, metering and tariff, load management and demand response, coordination of interconnected microgrids, cyber security, regulatory policy framework, etc. Rigorous research efforts are ongoing in terms of demonstration units and scalable prototypes in all these domains envisaging enhanced and optimized microgrid performance and evolving the smart microgrid.

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