Microgrids: The Ultimate Distributed Energy Resource


The future of the bulk electrical system, featuring increasingly dispersed renewable energy sources linked to specific users, will likely see microgrids playing a valuable role in maintaining a reliable power supply, both locally and throughout the larger grid.

Compared to a large-scale power grid that can serve multiple states and tens of millions of people, such as the one PJM manages, microgrids are small clusters of energy assets and demand centers that can be controlled to achieve benefits for the operator, including higher reliability and improved resilience during storm outages or other disturbances.  

Now more than ever, PJM works with utilities, industry partners, universities and states to better understand how microgrids operate, how they can access the wholesale electricity markets, and how they can serve the mission of providing secure, reliable and resilient power to customers within the context of the macro power grid that PJM operates.

What Makes a Microgrid?

Microgrids have the potential to help customers endure extreme weather events or worst-case scenarios, like blackouts and cyberattacks. As small, independent clusters of energy assets and loads, microgrids are basically their own electrical ecosystems.

During outages to the wider power system, operators of a microgrid can tap their own power sources – including solar panels, gas-fired turbines, lithium-ion batteries or other distributed energy resources (DER) – to keep the lights on, the heat on, or to power other essential devices during an emergency. By disconnecting, or “islanding” itself from the larger system, the microgrid can take load off of the larger system, while protecting its users from outside disruptions. Still evolving are the software and controls solutions required to integrate multiple energy sources to respond to demand, weather and interaction with the bulk electric system.

Since more and more microgrids rely on renewable energy sources, while also providing security during extreme events, they are often mentioned in the growing conversation about the development of a clean and energy-resilient future. Whether they reduce energy cost, increase renewables utilization or just keep power flowing in case of an emergency, hybrid microgrid-DER systems remain relatively small, targeted opportunities – often made possible through public-private partnerships (compared to more traditional private-only capital deployed for new generators in PJM’s bulk electric system). The decreasing cost and ever-improving technical capabilities of battery energy storage technology will only further the advancement of microgrid-DER systems that utilize renewables. Still, microgrid-DER systems offer an opportunity to place more generation closer to consumers, and that is a significant factor that contributes to resilience, because the user is less dependent on transmission.

Tiny Microgrids, Big Local Benefits

Hopewell Valley Central High School's microgrid in Pennington, New Jersey, which includes a large solar array and large lithium-ion batteries, can separate itself from the larger power grid during extreme conditions. Source: PSE&G
Hopewell Valley Central High School’s microgrid in Pennington, New Jersey, which includes a large solar array and large lithium-ion batteries, can separate itself from the larger power grid during extreme conditions. Source: PSE&G

With increasing frequency, hybrid microgrid-DER systems are feeding power back to the bulk electric system.

When Superstorm Sandy knocked out parts of the grid on the Atlantic seaboard for up to a week in the fall of 2012, it ripped through Mercer County, New Jersey, leaving 90,000 homes without power. To create refuge for future major storm events, a school district teamed up with PSE&G to create a hybrid microgrid-DER system equipped with solar panels and a powerful battery system to provide community relief during natural disasters.

By 2016, solar panels, capable of generating up to 885 kW, blanketed the roof of Hopewell Valley Central High School and its parking lot. The solar system connects to the PJM grid and charges a lithium-ion battery system. During a power outage, those renewable energy sources provide power to select circuits in the high school. That juice can power up the building as a community relief center for Hopewell Township residents seeking a place to charge cell phones, bathe, or escape darkened homes, school district Superintendent Tom Smith told a local newspaper

Throughout the agreement, PSE&G will study how this hybrid microgrid-DER combination interacts with the bulk electric system.  Whether large or small, microgrids combined with DER can provide critical resilience to important infrastructure, while serving up clean energy solutions increasingly sought by PJM states and stakeholders. PJM expects to see more innovation from industrial facilities, hospitals, data centers and institutions as they seek ways to use local energy to improve efficiency, manage cost and boost sustainability.