Microgrid Meaning, Principle, Comparison, Benefits Explained

Microgrid is a small-scale power distribution system with well-defined limits, which could be isolated or part of an integrated network. This article discusses microgrid meaning, principle, comparison and benefits, as outlined below;


-Microgrid Meaning: 6 Ways to Define a Microgrid

-Microgrid Working Principle

-Microgrid Vs Grid Comparison

-5 Major Microgrid Benefits



Microgrid Meaning: 6 Ways to Define a Microgrid

A microgrid is a singular, electricity metering and distribution system with definite boundaries and controllable operational conditions.

The above definition portrays microgrids based on their most essential characteristics, in relation to their function. Below is an alternative microgrid meaning that highlights some typical working conditions of these systems;

Microgrid is a relatively-small electricity distribution system which operates either as an isolated (or ‘islanded’) entity, in collaboration with other power systems, or as a grid-connected unit [3].

Possible uses of microgrids can also be used to outline the microgrid meaning, as shown below;

A microgrid is a power distribution unit which has well-defined supply boundaries, and can be used as a backup system for electricity generation facilities like power plants and electric generators, as well as for distribution of power from renewable energy outlets like wind farms, wave power converters, solar energy systems, geothermal, hydroelectricity and nuclear power plants [2].

Links with the theme of sustainability are highlighted in the following, alternative microgrid meaning;

Microgrid is an electricity distribution system that is designed and operated in line with the goals of sustainable development, to facilitate rural and renewable power supply, save cost, mitigate energy waste, resource depletion and environmental degradation, support circular economy development, and work with energy management systems for energy conservation and efficiency.

Below is yet another microgrid meaning, which clarifies issues of scale with respect to the system and its operation;

Microgrid is a small-scale electricity distribution system which is used in remote areas or by private entities for controlled power supply, but which could also be integrated with other smart grids and multiple electricity-generation systems to increase its operational reach.

Lastly, some components of the system are mentioned in the microgrid meaning below;

A microgrid is a power distribution system that is comprised of circuit breakers, cables, transformers, interconnected power loads and other components, which work together to achieve small-scale electricity distribution.

Microgrid Meaning: Cables, Transformers, Loads, as Components of a Microgrid (Credit: Idaho National Laboratory 2016 .CC BY 2.0.)
Microgrid Meaning: Cables, Transformers, Loads, as Components of a Microgrid (Credit: Idaho National Laboratory 2016 .CC BY 2.0.)


Microgrid Working Principle

A microgrid works by power reception, storage, transmission and supply. Each of these factors is discusses below;

1). Power Reception (as part of the Working Principle of a Microgrid)

Microgrids do not generate electricity. On the contrary, their role is that of power distribution.

In line with this role, microgrids work with power plants and other electricity generation systems, as a receptor and distributor of electricity.

Power which is generated by such systems is ‘received’ by the microgrid as streams of electric charges through electric cables.

The sources of power for microgrids are not usually large-scale facilities. Rather, it is more common for microgrids to receive power from small power plants and renewable energy facilities. They are therefore ideal for utilizing alternative energy sources like biofuel.

2). Power Storage

Power received from the point of generation, by a microgrid, may be stored temporarily in deep cycle batteries or any other reliable power storage system [1].

Power storage is important to prevent wastage of energy especially in cases where the demand for power is not immediate or equivalent to the available power.

3). Transmission and Supply (as part of the Working Principle of a Microgrid)

Transmission and supply are similar and simultaneous processes in the operation of a microgrid.

These processes involve the conveyance of available power to the point(s) of need, by the system.

Equipment/components which play roles in transmission and supply include smart meters, power inverters, electric cables, and transformers.


Microgrid Vs Grid Comparison

The main difference between a grid and microgrid is scale; where a microgrid is used for small-scale, local distribution, while conventional grid is used for large-scale, regional distribution.

Microgrids are less-sophisticated, smaller in size and span, more isolated, and less susceptible to retrofitting, than conventional utility grids.

Smart grids can also be differentiated from microgrids. The main difference between a smart grid and a microgrid is in their functionality; where a microgrid is usually equipped for basic distribution, while a smart grid has analytical and self-regulating capabilities based on artificial intelligence and data management.


5 Major Microgrid Benefits

Some major microgrid benefits are;

1). Remote usage

2). Energy Conservation

3). Resilience Enhancement

4). Simplified Power Supply

5). Cost Reduction

6). Operational Flexibility



Microgrid is a system used for small-scale electricity distribution, either as an isolated entity, or in connection with other electricity systems.

A microgrid works by;

1. Power Reception

2. Power Storage

3. Transmission and Supply

Microgrid benefits include; energy conservation, remote usage, resilience enhancement, simplified power supply, cost reduction, and operational flexibility.



1). Attou, N.; Ahmed, Z. S.; Hadjeri, S.; Khatir, M. (2020). “Grid Connected Battery Energy Storage System in Microgrid.” International Journal of Electronics and Electrical Engineering Volume 3(Issue 1):2602-7437. Available at: https://www.researchgate.net/publication/349862769_Grid_Connected_Battery_Energy_Storage_System_in_Microgrid. (Accessed 21 October 2022).

2). Kumar, N. M.; Chopra, S. S.; Chand, A. A.; Elavarasan, R. M.; Shafiullah, G. (2020). “Hybrid Renewable Energy Microgrid for a Residential Community: A Techno-Economic and Environmental Perspective in the Context of the SDG7.” Sustainability 12(10):3944. Available at: https://doi.org/10.3390/su12103944. (Accessed 21 October 2022).

3). Tran, Q.; Davies, K. L.; Sepasi, S. (2021). “Isolation Microgrid Design for Remote Areas with the Integration of Renewable Energy: A Case Study of Con Dao Island in Vietnam.” Clean Technologies 3(4):804-820. Available at: https://doi.org/10.3390/cleantechnol3040047. (Accessed 21 October 2022).

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