Microgrids are autonomous, small-scale electricity networks that utilize renewable energy sources and are particularly useful in rural areas lacking traditional energy infrastructure. These decentralized systems offer reliability during extreme weather events when conventional power grids may fail. While they are gaining traction and receiving investments and support, microgrids face challenges in densely populated areas due to land use concerns and potential environmental impacts.
For decades, many countries have relied on the exact electricity transmission mechanisms. While some nations have upgraded their equipment, others still rely on outdated power lines for electricity distribution. As the world’s population grows in an industrialized and increasingly digitalized era, the demand for electricity is also rising. Governments worldwide are exploring innovative approaches to upgrade their grid systems and meet this growing demand. While it is clear that many countries need to improve their primary electricity systems, many are also investing in microgrids, particularly in rural areas where renewable energy is being generated instead of traditional energy hubs. These microgrids show great potential.
As the renewable energy capacity of various countries continues to increase, governments must ensure that these new energy sources can reach consumers. Many green energy projects, such as wind and solar power, are being developed in rural areas that were not traditionally associated with energy production. As a result, these regions lack the necessary infrastructure to distribute the energy being generated to consumers. Additionally, connecting these projects to the primary grid can be expensive and complex.
In response to the rise of rural renewable energy projects, governments are developing microgrid systems to facilitate the practical sharing of energy. This trend is particularly evident in North America, which has vast expanses of sparsely populated land. Microgrids are small-scale grid systems that utilize one or more distributed energy sources to supply power independently of regional or national grids. In 2022, North America accounted for approximately 35 percent of the world’s microgrid revenue share.
The capacity of microgrids in the United States has increased by around 11 percent since 2020, with over 460 operational systems across the country delivering approximately 3.1 GW of electricity. This helps provide reliable electricity to rural populations by utilizing clean energy sources. In addition to serving hard-to-reach areas, microgrids also prove valuable during extreme weather events, ensuring that populations do not experience power outages during critical moments.
In recent years, there have been numerous instances in which large populations lost power due to extreme weather events. For example, in the U.S., this occurred during the Californian wildfires and the severe winter storm in Texas in 2021. Similar situations have been observed elsewhere, such as in New Zealand, where a cyclone caused power outages in certain regions, leading the national grid operator Transpower to declare a grid emergency in 2023. Experts now suggest that microgrids could prevent massive power outages during extreme weather events.
Centralized power systems rely on large power plants and transmission grids, making them vulnerable to single points of failure and susceptible to severe weather conditions. In contrast, microgrids are self-sufficient and operate independently or alongside the main grid, utilizing renewable energy sources. This makes them well-suited for regions prone to extreme weather events, as individuals and communities can generate, share, and trade energy through a decentralized energy market.
However, implementing microgrids in densely populated areas can be more challenging due to the need for significant land for renewable energy projects that power the microgrid. Concerns about land use, visual impact, and potential disruption to wildlife habitats are among the considerations citizens have regarding these projects. The “not in my backyard” (NIMBY) sentiment has played a significant role in blocking new energy projects in recent years and would likely be a significant concern in highly populated areas.
Nevertheless, the popularity of the microgrid approach is increasing, with several companies investing in developing such projects. For instance, New Jersey-based company Scale Microgrids recently signed an agreement to acquire a 500MW portfolio of distributed solar and storage projects from Dutch renewable energy developer Gutami. This acquisition includes sites across multiple locations in the U.S., ranging from California to New York, and is expected to provide electricity for approximately 80,000 homes and small businesses.
Ryan Goodman, CEO of Scale Microgrids, emphasized the importance of community solar as a priority for their company due to its inclusivity and ability to offer more options to microgrid customers. Community solar is an excellent alternative for those who cannot install rooftop solar due to renting, affordability constraints, or unsuitable properties.
While governments must invest heavily in upgrading their national energy infrastructure to meet the growing electricity demand, microgrids could play a significant role in future energy distribution. Microgrids are gaining popularity as countries globally expand their renewable energy capacity and establish projects in non-traditional energy regions that are well-suited for these systems. Furthermore, microgrids could help ensure a stable electricity supply for people in the aftermath of extreme weather events when the main grid system may be damaged.
Based on “The Rise of Microgrids: Bridging the Rural Energy Gap” by Felicity Bradstock
Leave a Reply