IEEE Electrification Magazine - March 2015 - 22

[Figure 5(a)]. The large, interconnected
system needs to be designed and
operated to meet the diverse and
sometimes conflicting needs of each
local area, and in many cases, the system has to compromise to a nonoptimal design. With the microgrid, each
local area is its own BA and is independent of the others. Therefore, the system design can be optimized to the
particular energy consumption profile
for each local area [Figure 5(b)].

Transmission
Distribution
Full Substation Microgrid

Community Microgrid

DG
DG

ES
ES

DG ES

Neighborhood
Neighborhood
Microgrid
Microgrid

Single
Prosumer
Microgrid

Local Business Models

The existing electricity markets
and utility business models have
become barriers to the deployment of
ES
ES
new technologies, whether it is wind
and solar renewable generation, energy efficiency, or the smart grid. They
also hinder the investment in the traFigure 4. The rural electric model system and various microgrid configurations. ES: energy storage.
ditional way because of the huge upfront costs, market complexity (regulated versus deregulated, federal vereach level, the individual network nodes can operate as
sus state jurisdiction), and cost allocation issues. As a result,
automatons. For the system components to work seamlessly
investment decisions on electric infrastructure tend to be
together, the intelligence has to be distributed and the integravery conservative and take a long time, leaving the existing
tion interfaces have to be well defined.
grid quickly aging, less reliable, and less resilient.
The microgrids can also be viewed from the balance area
Technology advancements have leveled the playing field
(BA) perspective. In today's centralized ac system, a large balwhere smaller, local, and nonutility entities can safely and
ancing area (such as the California Independent System
efficiently generate and deliver electricity and become elecOperator service territory) usually consists of smaller local
tricity service providers, breaking open the natural monopoly
regions having distinct energy consumption profiles
of the utility industry. The ubiquitous communication and
DG
DG

Per Capita Energy
Consumption-Generation Resources

1,000

Energy Consumption (kWh/d/p)

Energy Consumption (kWh/d/p)

1,000

2

100
1
BA0

4
10

1

3

1

10
100
Population Density (People/km2)
(a)

0.001 W/m2

Per Capita Energy
Consumption-Generation Resources

BA1
BA4
10
BA3

1

1,000

0.01 W/m2

BA2

100

0.1 W/m2

1

10
100
Population Density (People/km2)
(b)

1 W/m2

1,000

PV-10W/m2

Figure 5. (a) A large BA typically consists of smaller regions with varying energy density profiles. (b) A large BA can be broken down into smaller
BAs for better operation.

22

I E E E E l e c t r i f i c ati o n M agaz ine / marCh 2015



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