Our electrical grid is a magnificent machine, but it is an aging infrastructure that is expected to deliver more electricity to more consumers, creating capacity stresses to equipment.  Transmission lines are constructed to safely deliver high voltages of electricity from generation plants to substations for distribution to residential and C&I (commercial and industrial) consumers.  Like water pipes, these assets have limits to the amounts of voltage that can be safely and efficiently transported.  When more voltage is required to meet consumption needs, transmission companies and utilities can upgrade existing facilities, or build new transmission lines.  In some cases, the siting of renewables like wind farms or utility-scale solar power plants will require construction of new lines to connect to existing transmission or distribution networks. 

Transmission planning has a number of challenges that include NIMBY (Not In My Backyard) concerns, environmental issues, and economic challenges.  For instance, a community near a wind farm may object to building transmission lines that cross scenic vistas or wilderness areas, particularly when they receive no economic benefits to compensate for these view degradations.  Construction may impact sensitive habitat for threatened or endangered plant or animal species.  And transmission construction is not cheap.  One utility estimates that it costs $1M/mile to build a transmission line.

There’s another, “hidden” cost of transporting electricity over long distances.  Transmission lines lose some electricity, and these line losses usually average around 9%.  Given the costs to produce electricity and the greenhouse gases that fossil-fuel generation plants produce, opportunities to eliminate these losses should receive first and foremost attention to save ratepayers money and reduce harmful emissions. 

Microgrids avoid transmission construction challenges and line losses.  Co-locating power generation with its end use eliminates the need for transmission lines, and transports electricity on the local distribution network.  Yes, the distribution network will need upgrades to accommodate microgrids, but the distribution network needs to be upgraded anyway to handle increased electrification of our transportation systems; support feed-in tariff arrangements (in which utilities buy back electricity generated from residential and commercial solar facilities); and add new distribution automation technologies for operational efficiencies.           

Sourcing generation close to end use has another benefit as well.  Many generation plants create heat along with electricity, but this heat is wasted.  Many microgrids can take advantage of that heat and in essence squeeze every possible benefit out of the fuel source using CHP (Combined Heat and Power) or co-generation technologies.  For example, a university campus may have a natural gas generation plant as its main electricity source.  The heat created in electricity production can be captured and applied to heat water for dorm use and campus swimming pools, lab equipment sterilization, and other applications. 

Microgrids are strategic components in the future Smart Grid.  Microgrids add distributed generation resources to the grid without the need for transmission lines, and extend the life of the existing transmission infrastructure by reducing the voltage loads placed on these aging assets.  Microgrids can integrate home-grown renewable energy sources into the grid, making it easier for states with Renewable Portfolio Standards (RPS) to meet their goals.  They also help their owners put predictability to variable energy costs, create local jobs, and offer opportunities to sell back excess generation capacity to local utilities.  These are compelling reasons why microgrids should be considered for educational and business campuses, commercial buildings, and homeowner associations.  And because microgrids can improve overall grid reliability and stability, taxpayers, ratepayers, and consumers should encourage legislation and regulations that promote their deployment.