Microgrid in Power Systems: Architecture, Components, Operation and Applications

1. Introduction

In one of our earlier articles, we deep-dived into the concept of the Smart Grid, which represents the modernisation of the conventional power system using digital communication, automation, and advanced control.

A microgrid can be considered a localised and self-sufficient version of the smart grid, designed to supply power to a defined geographical or electrical area such as an industrial plant, campus, hospital, data centre, or remote community.

Unlike the traditional grid, which relies heavily on centralised generation, a microgrid integrates distributed energy resources (DERs) and intelligent controls to enhance reliability, resilience, power quality, and sustainability.

2. What is a Microgrid?

It 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 main grid.

The key distinguishing feature of a microgrid is its ability to:

• Operate in grid-connected mode
• Seamlessly transition to islanded (standalone) mode
• Reconnect to the grid without disrupting loads

3. Key Components of a Microgrid

3.1 Distributed Generation Sources

These are localised small-scale power generation and storage technologies, typically under 10MW units, situated close to the consumer. These systems reduce reliance on centralised power plants, enhance grid resilience, and facilitate the transition to renewable energy. Typically, it includes:

• Roof Top Solar PV plants
• Wind turbines
• Small hydro
• Gas or diesel generators
• Biomass or CHP systems

Renewable sources (solar, wind & hydro) reduce carbon footprint but introduce intermittency, which is managed through storage and control systems.

3.2 Energy Storage System (ESS)

Energy storage is the backbone of a stable microgrid. Common technologies include:

• Lithium-ion battery systems
• Flow batteries
• Supercapacitors (for fast response)

Functions of ESS:

• Frequency regulation
• Voltage support
• Peak shaving
• Black start capability

3.3 Loads

Loads may be:

• Critical (hospitals, data centres)
• Non-critical or flexible (HVAC, EV charging, Home)

Load prioritisation is essential during islanded operation.

3.4 Key Power Electronics Interface

Includes the following interfaces:

• Inverters: Convert DC output from PV Solar, batteries and fuel sales into AC
• DC/DC Converters: Manages voltage levels for DC sources (e.g., boosting PV voltage) and battery charge/discharge cycles
• AC/DC Converters: Convert AC voltage to DC for storage or DC load requirements
• Static switches: Theyfacilitate seamless, high-speed transition between grid-connected and island modes at the point of common coupling (PCC) and provide rapid fault detection, isolating sensitive loads or the entire microgrid from grid disturbances

These interface devices enable seamless power flow control, synchronisation, and protection.

3.5 Controller

These controllers are the brain of the microgrid system, responsible for:

• Economy & Energy optimisation: Dispatches assets for peak shaving, load shifting, and maximising renewable energy use
• Energy management & load balancing: Real-time balancing of energy supply and demand, including active and reactive power control to maintain voltage and frequency
• Grid synchronisation: Synchronises the grid with the microgrid when they are connected in grid mode
• Islanding and Grid connection: Manages connection/disconnection from the main grid, ensuring smooth mode transitions (grid-connected ↔ islanded)
• Battery and System management: Controls state-of-charge for battery, manages generator start/stop sequences, and curtails excess renewable generation if necessary.
• Protection and Safety: Control operations breakers, detect blackouts, manage black starts (re-energising the system without the main grid), and ensure safety of the personnel and equipment

4. Operating Modes

4.1 Grid-Connected Mode

In normal conditions, the microgrid operates connected to the utility grid:

• Imports or exports power from the grid
• Optimises energy cost by maximising the use of renewable energy
• Supports grid services like reactive power support

4.2 Islanded Mode

During grid disturbances or outages:

• Microgrid isolates itself using fast switching
• Maintains supply to critical loads
• ESS and local generation maintain frequency and voltage

5. Control Architecture

Microgrid control is typically hierarchical:

Primary Control

• Fast response
• Maintains voltage and frequency
• Operates locally without communication

Secondary Control

• Restores voltage and frequency deviations
• Coordinates multiple DERs

Tertiary Control

• Optimises power flow
• Manages grid interaction and economics

This layered control ensures stability, scalability, and reliability.

6. Protection Challenges

Protection in microgrids is more complex than conventional grids due to:

• Bidirectional power flow allows power to flow in both directions, rendering conventional overcurrent protection schemes ineffective
• Variable fault current levels due to drastic changes in fault current between grid-connected (high fault current) and islanded (low fault current) modes, making it difficult to set fixed protection thresholds
• Inverter-based sources have limited fault current contribution (typically 1.2−2 times the rated current), which is often too low to trigger conventional protective devices
• Re-Synchronising can generate high-magnitude currents that can damage equipment, while reconnecting the microgrid to the utility grid
• Dynamic Topology and Mode Changes require protection that can adapt in real-time to new network configurations and impedance levels while transitioning between operating modes (grid-connected to islanded)

Common protection strategies:

• Adaptive protection schemes by using relays that change settings based on the operating mode.
• Communication-assisted relays with fast communication channels for differential protection and centralised monitoring.
• Differential protection
• Static transfer switches isolate the microgrid from the utility in the event of a fault

7. Emerging Modern Developments

• AI and Machine Learning: Utilising Artificial Neural Networks (ANN) and decision trees for faster fault classification and location in complex, dynamic networks
• Cybersecurity Risks: Increased reliance on communication networks (e.g., IEC 61850) for adaptive protection makes microgrids vulnerable to cyberattacks like false data injection, which can trigger widespread power outages

8. Applications

Microgrids are increasingly deployed in:

• Industrial facilities – Improved power quality and reduced downtime
• Commercial campuses – Energy cost optimisation
• Hospitals and data centres – High reliability and resilience
• Remote and rural electrification – Grid-independent power
• Military and defence installations – Energy security

9. Benefits

• Enhanced power reliability and resilience
• Improved integration of renewable energy
• Reduced carbon emissions
• Better power quality
• Energy cost optimisation
• Support to the main grid during peak demand

9. Microgrid vs Smart Grid

A microgrid is not a replacement for the smart grid but a building block within it.

Aspect	Smart Grid	Microgrid
Scope	Wide area (utility level)	Localized
Control	Centralized & distributed	Mostly local
Islanding	Not applicable	Core feature
DER Integration	Large scale	Local scale
Objective	Grid modernization	Reliability & resilience

10. Conclusion

Microgrids represent a significant shift in power system architecture—from centralised, one-directional systems to localised, intelligent, and resilient networks. With increasing penetration of renewable energy and growing demand for reliable power, microgrids are becoming an essential element of modern power distribution.

As technology matures and costs decline, microgrids will play a crucial role in shaping the future decentralised energy ecosystem, especially in renewable-rich and reliability-sensitive environments.