TERMPAPER ON MICROGRID: DISCUSSION OF ISSUES INVOLVED, APRIL 2014 1

Microgrid: Discussion of issues involvedAmrit Paudel, M.Sc student, IOE

Abstract—Micro grids are small-scale, LV CHP supply net-works designed to supply electrical and heat loads for a smallcommunity, such as a housing estate or a suburban locality,or an academic or public community such as a university orschool, a commercial area, an industrial site, a trading estate ora municipal region. Micro-grid is essentially an active distributionnetwork because it is the conglomerate of DG systems and differ-ent loads at distribution voltage level. The generators or microsources employed in a Micro grid are usually renewable/non-conventional DERs integrated together to generate power atdistribution voltage. From operational point of view, the microsources must be equipped with power electronic interfaces (PEIs)and controls to provide the required flexibility to ensure operationas a single aggregated system and to maintain the specified powerquality and energy output. This control flexibility would allow theMicro grid to present itself to the main utility power system as asingle controlled unit that meets local energy needs for reliabilityand security

Index Terms—Microgrid, Distributed Generation, Grid Con-nection, Standalone mode, Power Quality

I. INTRODUCTION

M Icro grids are small-scale, LV combined heat and power(CHP) supply networks designed to supply electrical

and heat loads for a small community, such as a housing estateor a suburban locality, or an academic or public communitysuch as a university or school, a commercial area, an industrialsite, a trading estate or a municipal region. The technicalfeatures of a Micro grid make it suitable for supplying powerto remote areas of a country where supply from the nationalgrid system is either difficult to avail due to the topologyor frequently disrupted due to severe climatic conditions orman-made disturbances. From grid point of view, the mainadvantage of a Micro grid is that it is treated as a controlledentity within the power system. It can be operated as a singleaggregated load. This ascertains its easy controllability andcompliance with grid rules and regulations without hamperingthe reliability and security of the power utility. From cus-tomers point of view, Micro grids are beneficial for locallymeeting their electrical/heat requirements. They can supplyuninterpretable power, improve local reliability, reduce feederlosses and provide local voltage support. From environmentalpoint of view, Micro grids reduce environmental pollution andglobal warming through utilization of low-carbon technology.However, to achieve a stable and secure operation, a number oftechnical, regulatory and economic issues have to be resolvedbefore Microgrids can become commonplace. Some problemareas that would require due attention are the intermittentand climate-dependent nature of generation of the distributed

Mr. Paudel is with the Department of Electrical Engineering, IOE CentralCampus,Pulchowk Lalitpur e-mail: (amritpaudel403@gmail.com).

This paper was assigned by Mr. Jeevan Kumar Mallik in the course DigitalSimulation and Analysis of Power System , submitted April 28, 2014.

energy resources (DERs), low energy content of the fuels andlack of standards and regulations for operating the Microgridsin synchronism with the power utility. The study of suchissues would require extensive real-time and off line research,which can be taken up by the leading engineering and researchinstitutes across the globe.

II. A TYPICAL MICRO GRID CONFIGURATION

A typical Micro grid configuration is shown in Figure 1. Itconsists of electrical/heat loads and micro sources connectedthrough an LV distribution network. The loads (especially theheat loads) and the sources are placed close together to mini-mize heat loss during heat transmission. The micro sourceshave plug-and-play features. They are provided with PEIsto implement the control, metering and protection functionsduring stand-alone and grid-connected modes of operation.These features also help seamless transition of Micro grid fromone mode to another.

Micro grid consists of three radial feeders (A, B and C)to supply the electrical and heat loads. It also has two CHPand two non-CHP micro sources and storage devices. Microsources and storage devices are connected to feeders A andC through micro source controllers (MCs). Some loads onfeeders A and C are assumed to be priority loads (i.e. requiringuninterrupted power supply), while others are non-priorityloads. Feeder B, however, contains only non-priority electricalloads. The Micro grid is operated in two modes:

• Grid-connected and• StandaloneIn grid-connected mode, the Micro grid remains connected

to the main grid either totally or partially, and imports orexports power from or to the main grid. In case of anydisturbance in the main grid, the Micro grid switches overto stand-alone mode while still feeding power to the priorityloads. This can be achieved by either (i) disconnecting theentire Micro grid by opening CB4 or (ii) disconnecting feedersA and C by opening CB1 and CB3. For option (i), the Microgrid will operate as an autonomous system with all the microsources feeding all the loads in feeders A, B and C, whereas foroption (ii), feeders A and C will supply only the priority loadswhile feeder B will be left to ride through the disturbance.

III. INTERCONNECTION OF MICROGRIDS

Since Micro grids are designed to generate power at distri-bution voltage level along with utilization of waste heat, theyhave restricted energy handling capability. Therefore, theirmaximum capacity is normally restricted to approximately 10MVA as per IEEE recommendations. Hence, it is possible tosupply a large load pocket from several Micro grids througha common distribution network, by splitting the load pocket

TERMPAPER ON MICROGRID: DISCUSSION OF ISSUES INVOLVED, APRIL 2014 2

Fig. 1. A typical Microgrid configuration

into several controllable load units, with each unit beingsupplied by one Micro grid. In this way, Micro grids can beinterconnected to form much larger power pools for meetingbulk power demands. For interconnected Micro grids, eachcentral controller (CC) must execute its control in close co-ordination with the neighboring CCs. Thus, an interconnectedMicro grid would achieve greater stability and controllabilitywith a distributed control structure. It would also have moreredundancy to ensure better supply reliability.

IV. TECHNICAL AND ECONOMIC ADVANTAGESOF MICROGRID

The development of Microgrid is very promising for theelectric energy industry because of the following advantages:

1) Environmental issues: It is needless to say that Micro-grids would have much lesser environmental impact than thelarge conventional thermal power stations. However, it mustbe mentioned that the successful implementation of carboncapture and storage (CCS) schemes for thermal power plantswill drastically reduce the environmental impacts. Neverthe-less, some of the benefits of Microgrid in this regard are asfollows: (i) Reduction in gaseous and particulate emissions dueto close control of the combustion process may ultimately helpcombat global warming. (ii) Physical proximity of customerswith micro sources may help to increase the awareness ofcustomers towards judicious energy usage.

2) Operation and investment issues: Reduction of physicaland electrical distance between micro source and loads cancontribute to:

• Improvement of reactive support of the whole system,thus enhancing the voltage profile.

• Reduction of T and D feeder congestion.• Reduction of T and D losses to about 3

• Reduction/ postponement of investments in the expansionof transmission and generation systems by proper assetmanagement.

3) Power quality : Improvement in power quality andreliability is achieved due to:

• Decentralization of supply.• Better match of supply and demand.• Reduction of the impact of large-scale transmission and

generation outages.• Minimization of downtimes and enhancement of the

restoration process through black start operations of mi-cro sources.

4) Cost saving: The following cost savings are achieved inMicro grid:

• A significant saving comes from utilization of waste heatin CHP mode of operation. Moreover, as the CHP sourcesare located close to the customer loads, no substantialinfrastructure is required for heat transmission. This givesa total energy efficiency of more than 80

• Cost saving is also effected through integration of severalmicro sources. As they are locally placed in plug-and-play mode, the T and D costs are drastically reducedor eliminated. When combined into a Micro grid, thegenerated electricity can be shared locally among thecustomers, which again reduces the need to import/exportpower to/from the main grid over longer feeders.

5) Market issues: The following advantages are attained incase of market participation:

• The development of market-driven operation proceduresof the Micro grids will lead to a significant reductionof market power exerted by the established generationcompanies.

• The Micro grids may be used to provide ancillary ser-vices.

• Widespread application of modular plug-and-play microsources may contribute to a reduction in energy price inthe power market.

• The appropriate economic balance between network in-vestment and DG utilization is likely to reduce the long-term electricity customer prices by about 10

V. CHALLENGES AND DISADVANTAGES OFMICRO GRID DEVELOPMENT

In spite of potential benefits, development of Micro gridssuffers from several challenges and potential drawbacks asexplained.

A. High costs of distributed energy resources

The high installation cost for Micro grids is a great dis-advantage. This can be reduced by arranging some form ofsubsidies from government bodies to encourage investments.This should be done at least for a transitory period for meetingup environmental and carbon capture goals. There is a globaltarget set to enhance renewable green power generation to 20

TERMPAPER ON MICROGRID: DISCUSSION OF ISSUES INVOLVED, APRIL 2014 3

B. Technical difficulties

These are related to the lack of technical experience incontrolling a large number of plug-and-play micro sources.This aspect requires extensive real-time and off line researchon management, protection and control aspects of Micro gridsand also on the choice, sizing and placement of Micro sources.Specific telecommunication infrastructures and communica-tion protocols must be developed in this area. Research isgoing on for the implementation and roll-out of IEC 61850in communication for Micro grid and active distribution net-works. However, lack of proper communication infrastructurein rural areas is a potential drawback in the implementationof rural Micro grids. Besides, economic implementation ofseamless switching between operating modes is still a majorchallenge since the available solutions for reclosing adaptiveprotection with synchronism check are quite expensive.

C. Absence of standards

Since Micro grid is a comparatively new area; standardsare not yet available for addressing operation and protectionissues. Power quality data for different types of sources, stan-dards and protocols for integration of micro sources and theirparticipation in conventional and deregulated power markets,safety and protection guidelines, etc., should be laid down.Standards like G59/1 and IEEE 1547 should be reassessedand restructured for the successful implementation of Microgrid and active distribution networks.

D. Administrative and legal barriers

In most countries, no standard legislation and regulationsare available to regulate the operation of Micro grids. Gov-ernments of some countries are encouraging the establishmentof green power Micro grids, but standard regulations are yetto be framed for implementation in future.

E. Market monopoly

If the Micro grids are allowed to supply energy au-tonomously to priority loads during any main grid contingency,the main question that arises is who will then control energysupply prices during the period over which main grid is notavailable. Since the main grid will be disconnected and the cur-rent electricity market will lose its control on the energy price,Micro grids might retail energy at a very high price exploitingmarket monopoly. Thus, suitable market infrastructure needsto be designed and implemented for sustaining developmentof Micro grids.

VI. MANAGEMENT AND OPERATIONAL ISSUESOF A MICRO GRID

Major management and operational issues related to a Microgrid are as follows:

• For maintaining power quality, active and reactive powerbalance must be maintained within the Micro grid on ashort-term basis.

• A Micro grid should operate stand-alone in regions whereutility supply is not available or in grid-connected modewithin a larger utility distribution network.

• Micro grid operator should be able to choose the modeof operation within proper regulatory framework.

• Generation, supply and storage of energy must be suitablyplanned with respect to load demand on the Micro gridand long-term energy balance.

• Supervisory control and data acquisition (SCADA) basedmetering, control and protection functions should beincorporated in the Micro grid CCs and MCs. Provisionsmust be made for system diagnostics through state esti-mation functions.

• Economic operation should be ensured through gener-ation scheduling, economic load dispatch and optimalpower flow operations.

• System security must be maintained through contingencyanalysis and emergency operations (like demand sidemanagement, load shedding, islanding or shutdown of anyunit). Under contingency conditions, economic reschedul-ing of generation should be done to take care of systemloading and load-end voltage/frequency.

• Temporary mismatch between generation and load shouldbe alleviated through proper load forecasting and demandside management. The shifting of loads might help toflatten the demand curve and hence to reduce storagecapacity.

• Suitable telecommunication infrastructures and commu-nication protocols must be employed for overall energymanagement, protection and control. Carrier communi-cation and IEC 61850 communication infrastructures aremost likely to be employed.

VII. DYNAMIC INTERACTIONS OF MICRO GRIDWITH MAIN GRID

The capacity of Micro grid being sufficiently small, thestability of main grid is not affected when it is connectedto the main grid. However, in future, when Micro grids willbecome more commonplace with higher penetration of DERs,the stability and security of the main grid will be influencedsignificantly. In such case, the dynamic interactions betweenMicro grid and the main grid will be a key issue in theoperation and management of both the grids. However, as ofnow, since the DERs in Micro grids are mainly meant to ensureonly local energy balance within a small load pocket, theeffects of DER penetration are likely to have a low impact onthe main grid. Nevertheless, Micro grids need to be designedproperly to take care of their dynamic impacts on main gridsuch that overall stability and reliability of the whole systemis significantly improved.

VIII. CONCLUSION

The Micro grid is an alternative approach of distributionlevel energy supply by integrating small-scale DERs into LVas well as MV distribution networks. This facilitates simul-taneous generation of electricity and heat to locally supplythe electrical and heat loads of the customers. Traditional

TERMPAPER ON MICROGRID: DISCUSSION OF ISSUES INVOLVED, APRIL 2014 4

connection of separate stand-alone DER units to the existingdistribution network in fit-and-forget strategy has considerabledynamic impacts on main utility grid behavior. On the otherhand, integrating them as Micro grids (with intelligent con-trollers) is more likely to enhance overall distribution systemstability and safety. Micro grids can operate independentlyas autonomous islands in synchronism with the main grid.They are normally connected to main utility grid but arecapable of isolating themselves from the latter in case of anydisturbance in the main grid. This ensures economic and stableperformance to customer satisfaction. Technically, a Microgrid is an autonomous group of controllable plug-and playMicro sources and energy storage devices that are optimallyplaced and operated for the benefit of the customers. The microsources are basically renewable DERs driven by a diverse setof controllable prime movers. Storage devices are incorporatedthrough demand side management to enable flexible operationof the micro sources using their own MCs. Power electronic-based MC controllers are helpful to maintain energy balanceand power quality in the system by executing necessary localcontrols of the micro sources and energy storage devices.They are also capable of working both with and without theintervention of the CC. They facilitate seamless connection,disconnection and reconnection of devices without the neces-sity of reconfiguring existing or new equipments. A significantfeature of the Micro grid is its presentation to the main utilitygrid as a single controlled unit of electric and heat loadswith local generation. Advanced PEI provides the necessaryflexibility, security and reliability of operation between microsources and the surrounding AC distribution system to cus-tomer satisfaction. The Micro grid structure ensures minimumdynamic impacts on the main utility. A Micro grid alsobenefits the main grid by decreasing congestion, alleviatingthe immediate needs for generation augmentation, increasingsystem stability, responding to rapid changes in loads andmaintaining quality of supply to customer satisfaction. Microgrids, as active LV and MV networks, can potentially providea large number of benefits to the main power utility byincreasing its efficiency of operation and improving reliabilityand quality of service to the customer satisfaction. However,a large number of technical and regulatory issues need tobe addressed carefully, requiring a considerable amount ofresearch and government intervention across the world.

ACKNOWLEDGMENT

The author would like to thank Mr. Jiwan Kumar Mallikfor inspiring and motivating to write the review paper in IEEEtransaction format using LATEX.

REFERENCES

[1] R.H Lasseter and P. Paigi, Microgrid: A Conceptual Solution, Proc. OfPower Electronics Specialists Conference (PESC), Aachen, Germany, Vol.6,pp. 42854290, June 2004.

[2] J.A. Pecas Lopes, N. Hatziargyriou, J. Mutale, P. Djapic and N. Jenk-ins,Integrating Distributed Generation into Electric Power Systems: AReview of Drivers, Challenges and Opportunities, Electric Power SystemResearch,Vol. 77, Issue No. 9, pp. 11891203, 2007.

[3] R. Firestone and C. Marnay, Energy Manager Design for Microgrids,Berkeley Laboratory Report in Draft, Berkeley, CA, Ernest OrlandoLawrence Berkeley National Laboratory, 2004.

[4] G. Venkataramanan, Integration of Distributed TechnologiesStandardPower Electronic Interfaces, Report for California Energy Commission,Prepared by Power System Engineering Research Center-Wisconsin(PSERC), Wisconsin Power Electronics Research Center (WisPERC),September 2001.