Market Insights

Understanding the Role of Microgrids in the Energy Transition

September 06, 2022 by Stephanie Leonida

What is a microgrid, and why does the world need them as we move away from using fossil-fuel based to renewable energy resources?

In this article, we will explore the nature and importance of microgrids in today’s increasingly electrified world. We will also introduce the challenges facing the modern distributed energy network and software solutions catering to microgrid design and optimization.


A microgrid is comprised of an interconnected network of load clusters and DERs. These nodes within the network have defined electrical boundaries. The microgrid can be connected to the grid or operate independently in island mode. Image used courtesy of Michael Stadler and Adib Naslé


What is a Microgrid?

A microgrid is a small-scale energy system that can operate independently from the main grid. The system draws in energy from onsite DERs such as photovoltaic (PV) systems/ or solar panels, hydrogen storage, or wind turbines. Other DERs can include natural gas turbines or combined heat and power (CHP) generators which can operate independently of or with the electrical grid.

In a conversation with EE Power, the Chief Technology Officer (CTO) and Co-founder of  Xendee Corporation (Xendee), Michael Stadler, explained that a corroborated microgrid-DER power supply can benefit customers in time-critical, emergency environments—particularly those that cannot afford to have a disrupted power supply (e.g. hospitals, military bases, or emergency service centers).


Why Are Microgrid Systems Important?

Microgrids are important because they allow us to generate and store energy locally, which can help with efficiency, reliability, and resiliency. A more locally sourced power supply will also negate the need to undertake costly upgrades to substations and power lines.

“The remote nature of these technologies also allows operators to offer resiliency as a service to their customers, who are now less dependent on or independent of the power grid. This can also offer unique sustainability opportunities as companies seek to reduce their impact on the planet and show scope 1 and 2 emission reduction reports to investors,” Stadler said.

Microgrids are a crucial means of integrating renewable energy into power provision systems. Having a balance of renewable and fossil-fuel-based power will enable society to continue with its green energy transition with the hope of achieving net zero carbon emissions and a truly green economy globally in future years to come.


Xendee’s CTO and Co-Founder, Michael Stadler, Ph.D. Image used courtesy of Xendee


For power grid operators, microgrids can be a welcome buffer against peaks in energy demand. They can alleviate pressure on the power grid by releasing localized energy to where it is needed during such peaks. This helps to minimize otherwise unmanageable energy loads and reduce power outages. Microgrids can also provide energy in times of natural disasters that can lay low main grid operations.

Stadler added, “Finally, as electric vehicles explode in popularity, microgrids and DERs can help meet the needs of remote fast charging stations without overburdening the utility and local customers with high-cost upgrades.”


Challenges Facing Microgrid Projects

According to Stadler, the “old way” of setting up and implementing microgrid and DER installations involved the archaic use of spreadsheets that did not incorporate important site-specific data, standardized approaches to design, and other unique features of energy system projects.

“In addition, the process was usually extremely time-consuming, tedious, and as a result, error-prone,” Stadler said.

Individual project-specific variables concerning microgrid and DER installation can include site location, different building materials, and technologies.

“Because of the unique nature of these designs, soft costs can be extremely high, and project viability and return on investment can be hard to assess quickly,” Stadler added.


Enhancing Microgrid Design and Operation

Xendee is a developer of support software for designing and operating resilient distributed energy resources (DERs), electric vehicle (EV) charging networks, and microgrids. The company was founded in 2018 by the current Chief Executive Officer (CEO), Adib Naslé, Stadler, and the present Chief Software Architect (CSA), Scott Mitchell.

Xendee realized the need for a comprehensive and supportive software solution that could accommodate all variables associated with the microgrid project site location, as well as be able to provide informative insights to advance investment and decision-making.

Another energy system-focused software company, Homer Energy LLC—acquired by UL Solutions as of 2019—also believes in providing a software-based approach to microgrid design.

Energy modeling software tools are typically employed to define the best microgrid design based on whether the microgrid owner is constructing a new building or retrofitting an existing building. Simulations are used to define costs and technological requirements in line with desired project objectives.

So, what exactly is involved in the cloud-based, automated, software approach to microgrid design? To find out, look out for our next article concerning the design and optimization of microgrids.


Feature image used courtesy of Unsplash