Why Build a Microgrid Energy?

Author:BSLBATT    Publish Time: 2021-09-29

what is a microgrid?

In order to solve the problem of the integration of distributed power sources and large power grids, the concept of microgrid energy came into being. The microgrid energy management system, as an independent controllable system containing loads and a variety of distributed power sources, can be flexibly connected and off-grid. Switch between modes, thereby greatly improving the reliability and safety of power supply. If it is possible to choose the cogeneration method in the microgrid system, it will improve the comprehensive utilization efficiency of energy and provide high-reliability power supply for end users with extremely sensitive equipment. In short, the economy of microgrid energy determines the configuration and operation of the microgrid.

microgrid knowledge

The American Electrical Reliability Technology Association (CERTS, Consortium for Electric Reliability Technology Solutions) first gave the microgrid definition: microgrid energy is composed of loads and distributed power sources to provide users with electrical and thermal energy; it uses advanced power electronic devices to achieve Energy conversion and system control; microgrid energy is externally controllable, and internally can better meet the various power requirements of users.

Why build a microgrid energy?

Microgrid energy solves the problem of large-scale access of multiple distributed power sources to the grid, realizes the complementation of the advantages of different distributed power sources, and optimizes the use of various distributed power sources; 

Its operation mode is flexible, generally using a common connection point ( pcc) is connected to the large power grid and can be switched to island operation mode through static switches, ensuring the reliability of local power supply; 

Distributed power supplies supply power to the load nearby, which can greatly reduce line loss, save investment in transmission and distribution construction, and shorten the load The distance between them reduces the transmission loss.

"In many places, reducing emissions that lead to climate change is as important as supporting local grids to respond to emergencies and climate damage. From the overall perspective, countries all over the world want to integrate as much clean energy as possible in the best way, and microgrid energy is Tools to help us move away from fossil fuel systems to clean systems." said Eric, CEO of BSLBATT ESS Battery.

How does microgrid energy work?

To understand the working principle of microgrid energy, you must first understand the working principle of the power grid.

The power grid connects homes, businesses, and other buildings to a central power source, which allows us to use electrical appliances, heating/cooling systems, and electronics. But this interconnectivity means that when parts of the grid need to be repaired, everyone will be affected.

This is where microgrid energy can help. Microgrid energy usually operates when connected to the grid, but it is important that it can use local energy to generate electricity interrupted and operate on its own during crisis periods such as storms or blackouts or for other reasons.

Microgrid energy can be powered by renewable resources such as distributed generators, batteries and/or solar panels. Microgrid energy may operate indefinitely, depending on its fuel method and demand management method.

microgrid and distributed generation

Economic analysis of microgrid energy

The early-stage investment in the construction of microgrid energy is large, and the distributed power generation is uncertain. Therefore, the income of microgrid energy is greatly affected by location, environment, and weather. In this way, if there is no proper investment income analysis, it will add challenges to the construction of microgrid energy. 

Whether the microgrid energy is economical depends on whether the income can exceed the investment during the operation time of the microgrid energy. The economic analysis of microgrid energy and evaluation of its comprehensive benefits can provide a reasonable basis for investors of microgrid energy, which is of great significance to the future development of microgrid energy.

Microgrid power is usually designed and put into operation by a group of customers who are concerned about reducing environmental impact. However, the main goal of microgrid power is to minimize the total heat and electricity costs of participating users. Microgrid energy can optimize the use of waste heat energy to provide energy supply at a lower cost.

In addition, unlike traditional power systems, microgrid power does not incur any costs associated with transmission and distribution losses, customer service, power congestion, and others. Compared with traditional power systems, microgrid energy has many advantages to reduce energy costs.

The user-side power generation method is more competitive with the traditional power generation method, especially compared with the reciprocating engine. The emerging distributed energy (DER) technology has broad prospects in the production of low-cost clean energy.

Compared with the main grid, the economy of microgrid energy is mainly reflected in:

>> Joint optimization of heat and power supply

In some countries, combined heat and power (CHP) systems are only partially used to generate electricity.

However, the main goal of the CHP system is to use waste heat to heat users, and to generate electricity through combined heat and power optimization. For the economics of centralized power generation systems, the use of thermal energy will never be the main goal. The main reason for considering the use of the CHP system here is that it can significantly reduce carbon emissions and improve overall power generation efficiency.

Through the use of the CHP system, the overall power generation efficiency can be increased from 33% of traditional thermal power technology or 50% of combined cycle gas turbine (CCGT) to more than 80%. CHP is the core of microgrid energy economy. It maximizes energy utilization efficiency by reducing the heat transmission loss between the generator set and the load as much as possible.

Therefore, the generator set based on CHP should be located near the place of thermal load.

>> Joint optimization of supply and demand

Joint optimization of supply and demand is the second priority of microgrid energy economy. The traditional power economy needs to be extended to microgrid energy. In the economies of scale of the main grid, load control is solved by means of demand-side management, load shedding, and interruptible charges|contracts in the analysis and planning stage.

For microgrid energy, the most important criterion for measuring this joint optimization is the marginal cost of self-generation at any point in time. In the power generation economy, investment cost recovery, cross subsidies, imprecise metering and billing are not considered.

In the economies of scale of the main grid, cost and environmental factors are not well reflected. For microgrid energy, process optimization is relatively easier to achieve, because the producer and the consumer belong to the same decision maker.

Small-scale local grid: scale microgrid solutions

Local power grids can be divided into two types: modern and traditional.

The modern local power grid is the product of the energy revolution. It has two forms: active distribution network and microgrid energy.

The energy revolution will turn most or even all of the stock and incremental distribution networks into active distribution networks. In the future distribution networks, there will be many distributed natural gas, wind, solar, and biomass clean and renewable energy sources. They are consumed locally, participate in the balance of supply and demand and transactions within the distribution network, and are coordinated and operated by the distribution network. Therefore, it is necessary for the active distribution network to implement an integrated operation mode.

Microgrid energy is a clear and typical local grid operated by a single entity, but it is only small in scale.

Grid-connected microgrid projects are actually a small incremental power distribution network. Its main characteristics are small in scale and can be regarded as an interruptible system after being connected to the grid. The most important thing is that it is a market entity that implements integrated operation and management.

The operating mechanism of the microgrid provides a model that can be used for reference, and can even be basically replicated, for the operation of active distribution networks in the future.

From the perspective of the power industry and government regulatory agencies, we can see that microgrid energy has multiple advantages in integrating small-scale generator sets near power users.


The economic analysis of microgrid energy based on the existing regulatory and economic framework of distributed generation points out that microgrid energy may have a variety of economic benefits in terms of considerable energy demand. The short-term benefits of microgrid energy also have more possibilities for long-term development. Microgrid battery storage can directly promote the implementation of other energy-saving and emission-reduction measures, reduce household and office electricity demand, and bring more benefits to society.

A microgrid solutions

As a microgrid company, BSLBATT can provide customers with solutions such as hybrid microgrids and microgrid islanding to minimize power generation costs and provide reliable power in remote areas or reduce electricity bills for businesses and industries, get microgrid energy solutions!

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