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Microgrids are becoming an increasingly attractive means of supplying rural areas with energy, particularly as renewable energy sources can be used to power small grids in unconventional energy-producing regions. These small grids can be developed alongside a comprehensive transmission network or in parts of the world where electricity access is limited, to boost access. A microgrid is a group of interconnected loads and distributed energy resources within clearly defined electrical boundaries that acts as a single controllable entity with respect to the grid. It can operate in connection to a broader electricity grid or independently. Microgrids vary significantly in size, from small applications, such as rooftop solar power, to wide-scale (often renewable) energy projects. Some incorporate battery storage to ensure a stable energy supply, while others may rely entirely on the energy source, such as solar panels that only work when the sun is shining.
Microgrids can be beneficial as they can operate independently from the main grid, meaning that they can be used to connect hard-to-reach areas, such as rural regions, to electricity sources. They can also be used independently in the case of a power outage on the main supply. This can make them useful to critical infrastructure, such as medical facilities and grocery stores, to ensure they do not lose power during a blackout.
More companies are now exploring the potential of developing microgrids as higher investment is being seen in renewable energy projects worldwide, signalling a new era of energy infrastructure development. In addition, many now view microgrids as useful for supplying energy in unserved or underserved areas, particularly in developing countries.
In regions of Yemen that have long experienced regular blackouts, leading them to rely on diesel-fuelled generators, the UNDP has invested in “Renewable Energy to Improve Access to Health Services and Livelihood Opportunities” (HEAL) Project across five governorates, with funding from the Kuwait Fund for Arab Economic Development. The agency has developed solar microgrids to “provide energy to low-income youth and marginalized individuals who are the primary breadwinners for their families” to encourage economic empowerment. Beneficiaries are expected to reach around 205,000 individuals.
In the Democratic Republic of Congo (DRC), most electricity comes from hydropower, and despite government efforts to expand the national grid, it has not kept pace with population growth. In 2020, around 1.6 million of the DRC’s 10 million households had access to electricity. The Multilateral Investment Guarantee Agency (MIGA), the International Finance Corporation, and the International Development Association have partnered with the private sector to develop Africa’s largest mini-grid project to accelerate access to electricity. MIGA has provided a guarantee of $50.3 million to Congo Energy Solutions Limited, which is expected to expand its operations to provide energy to up to five million people by 2025.
In the United States, some companies are developing microgrids to decrease risks associated with energy delivery. For example, the U.S. utility Pacific Gas and Electric Company (PG&E) is increasingly developing remote grids in wildfire-prone regions to reduce the risk of fire associated with main transmission lines. As the price of solar panels, batteries, and backup generators declines, microgrids are becoming more accessible. To date, the utility has installed just around a dozen systems in the Sierra Nevada high country, however this could provide the blueprint for future development in certain regions of the U.S. PG&E aims to develop over 30 remote grids by the end of 2027.
The region’s energy regulator approved the development of remote grids by the utility in 2023, which could potentially spur a new era of microgrid development. However, at present, the cost of installing and operating the solar panels and batteries and maintaining and fuelling the generators must be lower than what the firm would have spent on conventional power lines for PG&E to consider installing a microgrid.
The move follows the forced bankruptcy of the utility in 2019, after its transmission lines were linked to the starting of California’s deadliest-ever wildfire, as the state has mandated PG&E to prevent future disasters. California’s utilities have spent billions on burying key power lines, clearing trees and underbrush, and protecting overhead lines to prevent wildfires. However, this investment has forced utilities to increase consumer costs. This has led several utilities to seek out alternative ways to deliver clean, safe power to consumers, such as through the rollout of microgrids.
The new generation of technology is expected to improve microgrid efficiency. For example, artificial intelligence (AI) can help manage the balance between different energy sources, such as solar, battery storage and generators. AI can be used to analyse current and projected energy production and demand to optimise energy flows and ensure efficient energy distribution. This is expected to reduce waste and ensure a stable supply of energy. It can also be used to improve microgrid sustainability to optimise the use of renewable energy sources.
