IEEE Electrification Magazine - March 2014 - 28

social capital creation. given that microgrids provide access
to modern power, there is an increase in the economic capital, including the gross domestic product, fDi, and gnp, of
the region. When these systems use clean forms of energy,
the natural capital of the regions is protected and improved.
from all of these perspectives, it can be said that microgrids
are value-enriching systems that have to be supported by
all stakeholders.
in addition to improving pQr, microgrids for developing countries like
india provide flexibility, increased
energy security, and access to modern energy in remote areas. according to a market research report
published by markets and markets,
the total market for microgrids is
expected to reach a total installed
capacity of 15.4 gW by 2022, growing
at an estimated compounded annual
growth rate (cagr) of 17% from 2012
to 2022. the expected worth of the
market is about us$27 billion. this
study, however, only considers renewable power generation, solar pvs,
wind microturbines, battery, energy
storage, and control systems from the traditional use of
microgrids. once we consider the other potential types of
microgrids as explained earlier, the size of the market
will be much larger.

of the whole electricity supply system, and deliver
enhanced levels of reliability and security of supply at the
local level.
currently, the centralized grids interact with individual consumers. this makes demand response and consumer inclusion in decision making a difficult
proposition. the future architecture of a power system
can actually consist of a centralized grids interacting
with a cluster of community-level
microgrids. these microgrids with
built-in intelligence, local generation
facilities, and control mechanisms
would be a better option to optimally
operate the power system.

A significant gap
exists between the
energy supplied by
the utilities and the
energy demanded
by consumers in
most of the
developing countries

Future of Microgrids
microgrids are not just a stopgap solution for matching
demand and supply in emerging economies and enabling
access to modern energy. in the case of off-grid and remote
areas, it is not to be assumed that microgrids will give way
to centralized grids if technologies make it possible.
microgrids have to be seen as value-based entities that
coexist with the centralized grid. they are potent entities
that can operate essential services even in the case of
emergencies such as natural calamities, as demonstrated
by the sendai microgrid when the 9.0-magnitude earthquake struck off the northeastern coast of Japan and triggered one of the deadliest tsunamis recorded (http://
spectrum.ieee.org/energy/the-smarter-grid/a-microgridthat-wouldnt-quit) and the san Diego gas and electric's
Borrego springs microgrid during the intense thunderstorms on 6 september 2013 (http://www.utsandiego.com/
sponsored/2013/nov/10/sgde-repair-crews-storm/). they
can be designed to be smart to incorporate innovative products and services together with intelligent monitoring, control, communication, and self-healing technologies.
microgrids can better facilitate the connection and operation of generators of all sizes and technologies, allow consumers to play a part in optimal operation of the system,
provide consumers with greater information and choice
of supply, significantly reduce the environmental impact

I E E E E l e c t r i f i c ati o n M agaz ine / MARCH 2014

Potential Drivers and Barriers

not everything is perfect in the
microgrid space. several challenges
and barriers exist for the creation of
microgrids. these can be classified
into operational, financial, social, technological, governance, sustainability,
and business-related issues. these are
formulated in figure 5.
the operational barriers include a
lack of standards and options for the different microgrid
technologies; acceptability by the industry and public; and
operations, maintenance, and upkeep of systems. some of
the technological issues are the availability and maturity
of tested and proven microgrid technology for different
regions, technical issues such as connection issues (with
the central grid), islanding, voltage regulation, and
harmonics.
the financial barriers are affordability (consumers'
capacity to pay), cost and pricing models for microgrids,
application procedures, exit fees, feed-in tariffs and
metering, financing, load retention rates, interconnection,
insurance, rate-based return on investment, siting and
permitting, skilled labor, and standby fees. the sustainability issues are access, affordability, security, and environmental sustainability-related issues. there is also no
clarity on the appropriate business models for the diffusion of microgrid technologies.
the social issues are the ignorance of stakeholders, the
lack of education of consumers, cultural dimensions in
terms of usage of energy technologies, the growing rich-
poor divide, and a lack of interest. governance-related
barriers include stakeholder commitment, lack of harmony and trust among the different stakeholders, lack of
coordinated efforts by the different stakeholders, lack of
accountability, political interference, and lack of regulatory
and policy frameworks for implementing microgrids.
presently, microgrids have only been showcased in test
beds and pilot implementations. models for the largescale diffusion of technologies do not yet exist. there is no
agreement of who does what and how. all of these

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Table of Contents for the Digital Edition of IEEE Electrification Magazine - March 2014