Another Smart Grid Application: Harnessing the Benefits of a Microgrid

By Bob Shively, Enerdynamics President

So far we have discussed Smart Grid applications that improve the way energy companies currently deliver services as well as applications that may offer consumers the opportunity to become directly involved in dynamic electric markets.  A third Smart Grid application – and perhaps the least discussed and least understood opportunity – is the possibility of creating microgrids by using communications, monitoring and control technologies. Microgrids are small localized grids that can run in isolation but can also be interconnected into the wider grid.


A local microgrid in Sendai, Japan

Why would anyone want to build a microgrid when they can simply be part of the traditional utility distribution system?  One reason is the potential for higher reliability – microgrids can be built to deliver the level of reliability required by customers on the microgrid rather than the level of reliability applicable to generic utility customers.  A second reason is that micogrids may provide economic benefits by allowing multiple facilities to interact with utilities and wholesale markets as an aggregated entity and to self-provide energy when economical.  In this case, opportunities unavailable or uneconomical for smaller customers may become available when loads and distributed generation are aggregated.

Let’s look at an example: the U.C. San Diego (UCSD) microgrid project in California.  The 450-building, 1,200-acre campus is connected to the San Diego Gas and Electric utility grid at a single 69 kv substation.  The microgrid begins on the university side of the substation and includes all distribution facilities, two 13.5 MW gas turbines and a 3 MW steam turbine unit, cogeneration systems that use the waste heat from the three turbines to drive compressors for building cooling, a 1.2 MW photovoltaic solar installation, thermal energy storage, a centralized energy management system connected to the 60 largest buildings, and extensive metering and monitoring of loads.

Planned additions include a 2.8 MW fuel cell that will burn waste methane collected from the waste-water treatment plant; electricity storage; a master control system that will control and monitor all generation, loads, and storage; plus a software system that will utilize dynamic energy price signals, weather conditions,  and other key factors to calculate optimal utilization of the system.   

The microgrid supplies about 80% of the campus’s annual power needs at a cost lower than the utility or retail market price.  And with aggregation, the campus can purchase additional power required at a low wholesale price. With the microgrid, UCSD plans to get the best of all worlds: When they can supply their own power most cheaply they will do so; if market prices are better they can buy from the market via the SDG&E system; and if they have excess power cheaper than market value they can sell it back into the grid and obtain some extra revenue. For a more detailed description of this project see

About Enerdynamics

Enerdynamics was formed in 1995 to meet the growing demand for timely, dynamic and effective business training in the gas and electric industries. Our comprehensive education programs are focused on teaching you and your employees the business of energy. And because we have a firm grasp of what's happening in our industry on both a national and international scale, we can help you make sense of a world that often makes no sense at all.
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