Chapter 2

Introduction to Microgrids
Professor Mohammad Shahidehpour
Galvin Center for Electricity Innovation
Illinois Institute of Technology

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Power Grid Modernization

• Electric power system is the cornerstone of every industrialized nation in

the world.
• The U.S. utility industry is in the midst of grid modernization efforts that
ramped up in large part following the Northeast Blackout of 2003.
• The smart grid concept has been developed to cope with the penetration
of distributed energy resources (DERs) which can be realistic if the final
user is able to generate, storage, control, and manage part of the energy
that will consume.
• The smart grid, will deliver electricity from suppliers to consumers using
digital technology to control appliances at consumer's home to save energy,
reduce cost and increase reliability and transparency.
• This change of paradigm allows the final user to be not only a consumer but
also a part of the grid.
• In this sense, the whole energy system will be more interactive, intelligent,
and distributed.

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Smart Grid Transformation
• Energy efficiency in generation, transmission and distribution.
• Greater integration of renewable energy resources.
• Reduce CO2 emissions resulting from energy consumption.
• Enhanced reliability and resilience of energy system operations.
• More efficient citizens’ decision making in energy consumption.
Vulnerable Energy Service

• Energy consumers have very high expectations for reliable, high quality
electricity but they don’t expect to pay a lot for it.
• They need the lights to stay on, production lines to keep running, and energy
costs to be low.
• As the utility grid ages and the demand for electricity grows, the impact of
major interruptions of the electricity infrastructure will be more intense.
• Energy supply is especially vulnerable to cyber attacks, natural disasters and
other risks.
• Costly power outages throughout the world caused by natural disasters such
as floods and hurricanes have highlighted the importance of reinforcing the
electricity infrastructure.
• A recent study conducted for the U.S. Department of Energy indicated that
sustained power interruptions (those lasting more than 5 min) in the United
States incur costs of more than $26 billion annually.

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Weather-Related issues

• A more intense climate change has increased the frequency and the
severity of weather-related power outages throughout the world.

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2012 Hurricane Sandy

• Hurricane Sandy struck a large portion of the eastern U.S. in October 2012.
• Nearly 7.5 million electricity consumers lost power across 15 states.
• Even after a few days’ efforts on power restoration, there were still more than
3.7 million consumers who remained without power.

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Vision of Microgrids

• The disastrous blackouts have spurred the power industry to aggressively

pursue a more intelligent power grid, when energy consumers have
become more concerned about their local power quality.
• The microgrid vision is to integrate these technologies into automated
microgrids that connect seamlessly with the main grid and may be grid
independent when needed.
• Benefits that extend to utilities and the community at large include lower
greenhouse gas emissions and lower stress on the utility grid.
• Microgrid development as the paradigm for the massive integration of
distributed generation will allow technical problems to be solved in a
decentralized fashion, reducing the need for an extremely ramified and
complex central coordination and facilitating the realization of smart grid.
• The result is a solution that enhances reliability, efficiency, security, quality
and sustainability for energy consumers and producers alike.

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Definition of Microgrids
• Microgrids are small-scale self-controllable power systems clustering
DERs and loads within clearly-defined electrical boundaries.
• Microgrids interact with the main grid through the points of common
coupling (PCC) at their own boundaries.
• Microgrids can be operated in two modes with the capability of a
seamless transition between the two modes.
• Grid-connected mode:
functioning in coordination
with main grid
• Island mode:
functioning independently
from the main grid

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Evolution of Microgrids

• The first microgrid was built by Edison in 1881 in New York. His microgrid
offered to distinct features: It was islanded and it was DC.
• Microgrids have existed for many decades in remote communities where
the interconnection with the main power grid is not feasible due to
technical and/or economical reasons.
• The difference now is that investments in energy efficiency, renewable
generation and power monitoring and control systems have increased
significantly, resulting in a diverse and disparate array of installed
technologies in smart microgrids.

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Boundaries of Microgrids

• There exist “islands” of various sizes on a distribution system, all of which

could be potential microgrids.

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Locations of Microgrids

• Microgrids are not for every type of end-users. The investment can be
significant. The simple payback will likely be more than 15 years, but for
certain organizations it is well worth the cost.
• Hospitals, universities, airports, refineries, pharmaceutical manufacturing
and data centers depend on having a continuous, uninterrupted supply of
power.
• These organizations maintain on-site generators for emergencies because
even a modest loss of power can have negative consequences.
• Automated controls in a microgrid will better balance the demand with a
supply of energy from backup generation, the main grid and local storage.
• Some federal installations, particularly military and security agencies,
place a high value on physical and electronic security.
• Hacking sponsored by governments or online activists adds an additional
degree of risk and the need for an advanced, secure power system solution.

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Types of Microgrids

• Individual microgrids vary in design by considering the characteristics of

the local power supply and demand.
• Individual microgrids can be AC microgrids, DC microgrids, or hybrid AC/DC
microgrids that merge technical benefits of AC and DC microgrids.

AC Microgrid

DC Microgrid Hybrid AC/DC Microgrid 12

Typical Microgrid Configuration

• The implementation of microgrids also necessitates investments in

comprehensive communication, control and automation systems.
• It incorporates an intelligent core composed of integrated networking,
computing, control, and communication infrastructures, which appears to
users in the form of energy management applications that allow command
and control on all nodes of the network.
• It incorporates smart meters and
sensors capable of measuring a
multitude of consumption
parameters (e.g., active power,
reactive power, voltage, current) with
acceptable precision and accuracy.
• It incorporates a communication
infrastructure that enables system
components to exchange information
and commands securely and reliably.

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Microgrid Deployments in the U.S.

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Microgrid at IIT Main Campus
The 12 MW islandable IIT Microgrid is
located 2.5 miles south of downtown of
Chicago and is bounded by major
streets, highways, and railroads.

• Funded by the Department of Energy

• Involves the entire IIT main campus
• Hybrid AC/DC microgrid
• Networked with ComEd microgrid

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IIT Microgrid Overview

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AC/DC Nanogrid at IIT

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Microgrid Operation and Control

• Microgrids require a wide range of controls to ensure a seamless transfer

from one operating mode to the other without violating distribution
system constraints and requirements.
• Flexible operation -- A microgrid should be operated as an island when the
utility supply is not available or in grid-connected mode within a larger utility
distribution network for economic, security, and reliability, reasons.
• Economic operation is through generation scheduling, economic load dispatch
and optimal power flow operations.
• System security must be maintained through contingency analyses and
emergency operations (like demand side management, load shedding,
islanding or shutdown of any unit).
• Reliability must be maintained within a microgrid on a short-term basis by
active and reactive power balance. Generation supply and storage must be
suitably planned with respect to long-term load demand and energy balance.

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Strategic Islanding of Microgrids

• After islanding from a disrupted utility grid, microgrids sustain local power
services by utilizing on-site generation resources, especially renewable
energy-based distributed energy resources (e.g., wind, solar, biomass).
• Islanding the microgrids
strategically can also curb the
progression of failures and
prevent the deterioration of
Without Microgrids
utility grid operating conditions.
Normal state Microgrid state Contingency state
• The islanded microgrids will be
reconnected to the utility grid
1
seamlessly once the effects of
disruptions are completely 0 t1 t2 t3 t4 t
eliminated at the utility grid side. With Microgrids

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Microgrid Controller
• A master controller (MC) is deployed for managing each microgrid
strategically under various operating conditions.
• A number of local controllers (LCs) supervised by the MC are implemented
for realizing finer-grained monitoring, control, and management functions.

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Master Controller (MC)
• MC executes the overall control of microgrid operation and protection
through LCs.
• MC allows microgrids to be islanded in extreme circumstances and be
synchronized with the grid in grid-connected mode.
• MC performs protection
coordination and Asset Energy
Communication with DSO
provides the optimal Management Management

power dispatch and

voltage set points for all Master Controller
LCs.
• MC is designed to Islanding &
Synchronization
Supervisory Control
& Data Acquisition
Real-time
Visualization
operate in automatic
mode with provision for
manual intervention as Switches
& Relays
Monitors
& Meters
Energy
Storage
Controllable
Loads
Distributed
Generation
and when necessary.
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Functionality of Master Controller
• In the grid-connected mode:
• Monitor system diagnostics by collecting information from micro-sources
and loads.
• Perform state estimation, security assessment evaluation, economic
generation scheduling, active and reactive power control of micro-sources,
and demand side management functions by using collected information.
• Ensure synchronized operation with the main grid maintaining the power
exchange at priori contract points.
• In the island mode:
• Perform active and reactive power control of micro-sources in order to
maintain stable voltage and frequency at load ends.
• Adopt load shedding strategies using demand side management with storage
device support for maintaining power balance and bus voltage.
• Initiate a local black start to ensure improved reliability of service.
• Switch over the microgrid to grid-connected mode after main grid supply is
restored without hampering the stability of either grid.
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Local Controllers (LCs)
• The most significant aspect of LCs is their quickness in responding to the
locally monitored voltages and currents irrespective of the data from the
neighboring LCs.
• This control feature enables micro-sources to act as plug-and-play devices
and facilitates the addition of new micro-sources at any point of microgrid
without affecting the control and protection of the existing units.
• Other features of LCs include:
• LCs will not interact independently with other LCs in the microgrid (i.e., works
with MC when communicating with other LCs), but will override the MC
directives that may seem dangerous for their micro-sources.
• LCs not only coordinate the protection scheme for the entire microgrid, but
also provide the power dispatch and voltage setpoints for LCs to meet the
customer needs.
• LCs ensure energy optimization for the microgrid and maintain the specified
frequency and voltage profile for the electrical loads.

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Microgrid Operations
• Benefits of microgrid operations:
• Each microgrid is treated as an aggregated controllable entity (i.e.,
either load or generator) for a flexible power system operation.
• Microgrids have a much smaller capacity with respect to the large
generators in conventional power plants.
• DER power generated at distribution voltage can be directly fed to the
utility distribution network.
• Micro-sources in microgrids are normally installed close to customer
premises so that electrical/heat loads can be efficiently supplied with
satisfactory voltage and frequency profile and negligible line losses.
• Microgrid operations make it suitable for supplying power to remote
areas of a country where supply from the national grid system is either
difficult to avail due to the topology or frequently disrupted due to
severe climatic conditions or man-made disturbances.
• Microgrids allow fast expansion of the energy infrastructure in
developing parts of the world due to short lead time for using off-the-
shelf commercial generation products. 24
Microgrid Operations
• Operation and investment aspects:
• Reduction of physical and electrical distance between micro-sources and
loads can contribute to:
• Improvement of reactive support of the whole system, thus
enhancing the voltage profile.
• Reduction of congestion in both transmission and distribution feeders.
• Reduction of losses along both transmission and distribution feeders.
• Reduction/postponement of investments in the expansion of
transmission and generation systems by proper asset management.

• Participation in Electricity market

• Microgrid elasticity (controllable load) would be of significant value in a
day-ahead market.
• Hourly operation of microgrid will regulate electricity and heat generation
according to the price signals from the market.
• The microgrid flexibility is ensured by coordinating its generation with
storage and offering control on loads for demand response.
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Microgrid Operations
• Power Quality:
• Electrical loads are vulnerable to transients, voltage sags, harmonics,
momentary interruptions, etc.
• The utility grid provides a uniform level of quality and service to all customers
within a given area and does not easily differentiate among their needs.
• Voltage sags lasting for only one or two cycles were ignored in the past, but
these are now treated as outages by power utilities.

• Energy Efficiency:
• Electricity generated at
customer end by
combined heat and
power (CHP) units and
the waste heat used
locally would lead to very
high system efficiency
and significant reduction
in emissions.
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 Microgrid Operations
• Environmental aspects:
• Optimal microgrids operations could reduce
energy wastes and thermal losses as
compared with that of large conventional
thermal power systems.
• Reduction in gaseous and particulate
emissions due to renewable energy
integration in microgrids may ultimately help
combat global warming.
• Physical proximity of customers with micro-
sources may help to increase the awareness
of customers towards judicious energy usage.

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Comparison with Traditional Grids

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Microgrid Challenges

• Several technical, regulatory and economic issues have to be resolved for

enabling seamless deployment of microgrids before microgrids can
become a commonplace.
• High installation cost for microgrids is a great disadvantage. This can be
reduced by arranging some form of subsidies from government bodies to
encourage investments which should be done at least for a transitory period
for meeting up environmental and carbon capture goals.
• Lack of technical experience in controlling a large number of micro-sources in
microgrids. This aspect requires extensive real-time and off line research on
management, protection and control aspects of microgrids and also on the
choice, sizing and placement of micro-sources.
• Lack of proper communication infrastructure in rural areas is a potential
drawback in the implementation of rural microgrids.
• Existing regulatory issues for managing network microgrids in a local
distribution system as well as issues with the unbundling of the electricity
industry do not allow distribution companies to own small generators (to
establish a microgrid).
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Issues with Local Grid

• The positive impact of microgrids on a distribution system is enormous due

to its dynamic responses to a wide range of local needs.
• However, the interconnection of microgrids with multiple sources to
distribution networks converts a single-fed radial network into a
complicated one.
• Conventional overcurrent protection is designed for radial distribution systems
with unidirectional fault current flow. The integration of microgrids changes
the flow of fault currents from unidirectional to bidirectional.
• Technical impacts of microgrids on existing distribution network protection
include low inertia and increase or decrease of fault currents, blinding of
protection and false tripping of feeders, and prevention of automatic reclosing.

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Networked Microgrids

• Geographically-close microgrids can be networked to broaden the merits

of microgrids and eventually refine electricity service provisions across the
power distribution system.
• Networked microgrids are inherently more reliable than individual microgrids,
since each networked microgrid acts as a backup power supply to their peers
for reducing the implications of power outages in the utility network.
• Networked microgrids contribute to the system-wide efficiency and security in
a power distribution system as they respond more efficiently to dynamic
operating conditions caused by the variability of DER outputs.
• Networked microgrids are more likely to survive extreme event disruptions
(e.g., natural disasters, massive cyber or physical attacks) since it would be
more practical for microgrid operators to identify deficient spots and consider
remedial actions to save critical microgrid components.
• Networking microgrids can fundamentally challenge the way electric energy is
generated, delivered, and consumed in a power distribution system as a
power distribution system is progressively becoming a network of
autonomous microgrids that are capable of handling two-way flows of
electricity and information. 31
Formation of Networked Microgrids
• Once networked, individual microgrids must execute their control and
energy management in close coordination with peer microgrids.
• Dynamic interactions between networked microgrids and the main grid
will be a key issue in the power system operation and management.
• Networked microgrids need to be configured and operated properly to
take care of their dynamic impacts on main grid such that overall stability,
efficiency and reliability of the whole system is significantly improved.

Upstream Grid (AC, 60Hz)

Coupling Point Interconnection Circuits

IC #1 IC #2 IC #3

Microgrid #1 Microgrid #2 Microgrid #3

(Hybrid AC/DC) (AC, 50HZ) (DC)
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Multi-Microgrid In Chicago

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Peer-to-Peer Power Transactions

• Networked microgrids may often feature diversified profiles of renewable

energy generation and power demand.
• Microgrids should be allowed to trade energy directly with their peers
(especially when the utility grid is disrupted) in addition to exchanging
energy at pre-specified rates with the utility grid.
• With non-discriminatory peer-
to-peer energy transactions,
microgrids would not only gain
an additional degree of
flexibility in their operations
but also maintain a dynamic
power balance in their service
territories with reduced
dependency on the utility grid.

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Dynamic Islanding Schemes

• In each aggregated island, interconnected microgrids are enabled to

transact energy directly and flexibly for surviving utility grid disruptions.
• The islanding scheme could be adjusted on an on-going basis according to
temporal operation characteristics of individual microgrids and the
progression of failures in the utility grid.

X X
X X
Upstream Upstream
Network Network

Microgrid 1 Microgrid 2 Microgrid 1 Microgrid 2

Island 1

Microgrid 3 Microgrid 4 Microgrid 3 Microgrid 4

Single Island Island 2

Islanding Scheme A Islanding Scheme B 35

Optimal Islanding Calculation

• Transactive energy facilitates the formation of aggregated islands of

multiple microgrids, boosting the flexibility of the islanding process.
• DSO determines and triggers the islanding of networked microgrids in a
holistic manner by considering the role of transactive energy, instead of
forcing islanded microgrids to rely solely on themselves.

Upper-Level Problem (DSO)

X
X
Upstream Determine: Optimal Islanding Scheme
Network
Constrained by: Security of Distribution System Operations
Island 1 Island 2

Distribution System Total

Microgrid 1 Microgrid 2
Configuration Operation Costs

Island 3 Island 4 Lower-Level Problem (Networked Microgrids)

Determine: Minimized Generation and Load Shedding Costs
Microgrid 3 Microgrid 4
Constrained by: Transactive Energy Principles

Flexible Energy Trading Two-Layer Decision-Making Scheme 36

Emergency of Energy Hubs

• Microgrids can integrate a multitude of local energy carriers (electricity,

steam, natural gas, hot water, etc.) in an energy hub, which intertwines the
generation, conversion, storage and consumption of diverse energy
resources.
• When a strong coupling between the operation of different energy carrier
systems exists, microgrid controllers can integrate and operate all these
energy carriers in coordination.
• Synergies among various forms of energy are realized for optimizing the use
of onsite resources and improving the social welfare.

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Networked Energy Hubs

• Networked microgrids are evolving into a network of energy hubs that

allows multi-energy to flow more efficiently and more reliably across the
underlying infrastructures.

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Conclusions

• The organic evolution of a smart grid is expected to come through the

plug-and-play integration of certain basic structures (i.e., microgrids).
• A microgrid is an autonomous group of controllable plug-and-play micro-
sources and energy storage devices that are optimally placed and
operated for the welfare of the end user, utility and the public overall.
• Microgrids are normally connected to the main grid but are capable of
isolating themselves in case of any disturbance in the main grid.
• Microgrids can potentially provide a large number of benefits by increasing
its efficiency of operation and improving reliability and quality of service to
the customer satisfaction.
• A large number of technical and regulatory issues need to be addressed
carefully before the widespread implementation of microgrids, requiring a
considerable amount of research and government intervention.

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 Thanks

Dr. Mohammad Shahidehpour

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