• 14.1 Overview
  • 14.2 Potential Benefits
  • 14.3 Developers and Building Owners
  • 14.4 Macro versus Micro
  • 14.5 Generating Revenue from Microgrids

Centralized power plants have been around since around the 1880s. A hundred and thirty-five years later we're starting to see some growth in distributed generation of power at individual buildings, primarily through renewable sources such as solar panels and wind turbines. Between the distinct approaches of centralized power plants and energy generation at individual buildings is emerging something called microgrids. With microgrids the real estate developers, building owners, or the local community build the power grid for their large development, industrial park, campus or even an entire neighborhood. Microgrids are not new and are no longer just a concept. They are out of the experimental phase and are now commercialized with roughly around 300 microgrids operational worldwide.


Compared to a utility grid, microgrids are small or modest sized power generators which may include traditional fossil fuel generators, photovoltaic, wind, or fuel cells. Increased diversity of power generation improves the microgrid's reliability. The microgrid may be able to operate independently (remote villages or military

Figure 14.1

bases), or it could be connected to a larger utility power grid so that the microgrid appears as one customer or a provider to the larger grid. The organization and management of the microgrid could be a cooperative arrangement for a community, coordinated by developers, or may be a large campus with one owner.

Microgrids improve the reliability of the old grid and the overall power system. Locally generated power also lessens the burden on existing transmission lines and reduces energy loss in the transmission process. Typical microgrid transmission and distribution lines are short and generally any losses are negligible.

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