Project Drawdown defines microgrids as: localized groupings of electricity sources and loads that normally operate connected to and synchronously with the traditional centralized power grid, but can disconnect and function autonomously as physical and/or economic conditions dictate. This solution replaces the conventional practice of powering buildings and communities with electricity from the centralized grid.
The defining characteristics of a microgrid are its semi-autonomous capability and the ability to control its loads and supply locally. A typical microgrid could be constituted by distributed generation technologies such as wind, solar, hydropower, or biomass, together with energy storage units or backup generation and load management tools. By enabling the integration of renewable energy sources into the grid, along with storage and demand management, microgrids can play a critical role in the advancement of a flexible and efficient electrical grid. In addition, the use of local sources of energy to serve local loads helps reduce energy loss in transmission and distribution, further increasing the efficiency of the electricity delivery system.
More than one billion people—around 17 percent of the global population—still lack access to a centralized power grid (Greenpeace, 2015). In 2013, more than 95 percent of the people living without electricity were in sub-Saharan Africa and developing Asia countries, mainly living in rural areas (around 80 percent of the world total). At present, population growth is outpacing the efforts of electrification. The International Energy Agency (IEA) anticipates that more than 50 percent of the rural and remote population currently without electricity would be best supplied by mini or microgrids (2014). Providing energy access to these people using low-carbon energy technologies is expected to bring many additional benefits such as improved health, education, and employment. Microgrids also make economic sense in remote and island locations that have historically depended on imported diesel for electricity, in regions with an unreliable conventional grid, and for cell phone towers that rely extensively on expensive diesel-based power.
For roughly 300 million un-electrified households globally, kerosene has been the dominant fuel source for lighting. Several studies indicate that the price paid by microgrid customers for electric lighting is far less than the price for lighting using kerosene and candles (Barefoot Power, 2009).
Because the growth and emissions impacts for this solution are accounted for in the models of renewable energy sources and accompanying enabling technologies, including small hydropower, micro wind, distributed solar photovoltaics, and biomass, power paired with distributed energy storage, we do not directly model the growth and impact of microgrids. For higher-income countries, the benefits of microgrid systems fall under the grid flexibility solution, and also under the impacts of increased adoption of decentralized variable renewable energy sources.
Equitable access to energy is a crucial prerequisite for sustainable development. Increasing demand for electricity globally is bound to test the limits of a centralized power system in the near future. Adopting an optimal combination of centralized and decentralized systems can capture both the strength of the central grid and the agility of state-of-the-art technological advancements in a decentralized infrastructure. Microgrids can help bridge this gap while making use of locally available energy resources.
Microgrid infrastructure enables a transition to a decentralized power system that is more reliable, affordable, and sustainable. Investing in microgrids for emission reduction is already profitable in many parts of the world that have historically depended on imported diesel for electricity. But there are also additional benefits, such as improved health due to reduced kerosene consumption in rural communities.
Microgrid installations in grid-connected regions also offer several key advantages, including: optimized energy consumption through better matching of supply with demand; reduced environmental impact through integration of renewable energy sources; increased security of energy supply; provision of cost-efficient electricity infrastructure; and the ability to locally rank power supply for high-priority needs during times of disruption.
In a world that is increasingly dependent on electricity for its very existence, losing access to the power supply due to outages or blackouts is a critical risk that cannot be overlooked. Microgrids, by virtue of being locally managed systems, are resilient against such disruptions in supply and have more control over the local demand.