# Microgrids 101

[This page](https://lf-energy.atlassian.net/wiki/spaces/HYP/pages/260341781/Microgrid+introduction) and [Wikipedia](https://en.wikipedia.org/wiki/Microgrid#:~:text=Electropedia%20defines%20a%20microgrid%20as,voltage%20up%20to%2035%20kV.) go into great detail to describe the concept of a microgrid. I would like to expand on that. During one of the weekly LF Energy Hyphae community checkin calls. When I explained that the initial phase for NFE's pilot microgrid will only include sub-metering a handful of homes. My colleague commented that "Oh, so it won't really be a microgrid yet". That statement stuck with me because I infant think it would be a microgrid. Which brings us to the question I would like to address in this article. What do I mean when I say "microgrid".

### Why definitions matter

Definitions generally matter because they help us communicate more clearly about the problem and how we are solving it. If we can agree on what we when when we say "microgrid" or "battery" then it makes it simpler to have conversations about which use-cases make sense for Hyphae's autonomous microgrid idea to address.

### First principles 

The term *microgrid* is a compound term. It consists of two terms *micro* and *grid*. I will start with the assertion that a microgrid is first a *grid*. If we are agreed there (pun not intended), then let's move on to define what we mean by *grid*.

A grid, in it's most primitive form, is really a set of at least two energy assets, connected, usually by physical energy conducting medium like a wire for a purpose. Let's look at the picture below.

<div drawio-diagram="12"><img src="https://bookstack.nearlyfreeenergy.com/uploads/images/drawio/2025-05/drawing-4-1747946609.png" alt=""/></div>

The energy asset on the left (battery) is producing energy and the asset to the right is consuming energy. The two assets have been connected for a purpose and I think that's actually an a very simple example of a grid. Now this grid can include more than 2 assets and in the real world, there's often 100s of assets connected to a grid but for the sake of defining the term, I think this example will serve us well.

If you are still with me, let's move on to the preceding term, the *micro* term. This term adds a layer of meaning to the Grid term. I propose that the distiction between Micro and Macro is really about scope of monitoring and steering for the "owner(s)" of the grid. If the scope is considered small by the owner and exists within the context of a larger grid, then we have ourselves a *microgrid*.

### Energy Assets 

These exist in various forms but here's an oversimplified list [Energy\_Asset\_Taxonomy.csv](https://bookstack.nearlyfreeenergy.com/attachments/4). I share it here to example one's imagination on the kind of things that can exist on a microgrid.

##### **Supply-Side Assets (Energy Producers)**

These generate or inject energy into the system.

<table id="bkmrk-subtype-example-asse"><thead><tr><th>**Subtype**

</th><th>**Example Assets**

</th><th>**Notes**

</th></tr></thead><tbody><tr><td>Renewable Generators

</td><td>Solar panels, wind turbines

</td><td>Often variable in output

</td></tr><tr><td>Non-renewable Generators

</td><td>Diesel gensets, gas turbines

</td><td>Firm or dispatchable supply

</td></tr><tr><td>Co-generation Units

</td><td>CHP systems

</td><td>Produce electricity + heat

</td></tr></tbody></table>

##### **Demand-Side Assets (Energy Consumers)**

These draw energy from the system.

<table id="bkmrk-subtype-example-asse-1"><thead><tr><th>**Subtype**

</th><th>**Example Assets**

</th><th>**Notes**

</th></tr></thead><tbody><tr><td>Residential Loads

</td><td>Lighting, HVAC, appliances

</td><td>Often flexible for DR programs

</td></tr><tr><td>Industrial Loads

</td><td>Motors, manufacturing equipment

</td><td>Usually larger and more steady

</td></tr><tr><td>Electric Vehicles

</td><td>While charging

</td><td>Can also act as supply (see V2G)

</td></tr></tbody></table>

##### **Storage Assets (Bidirectional)**

These can both store (consume) and release (supply) energy.

<table id="bkmrk-subtype-example-asse-2"><thead><tr><th>**Subtype**

</th><th>**Example Assets**

</th><th>**Notes**

</th></tr></thead><tbody><tr><td>Battery Storage

</td><td>Lithium-ion, lead-acid

</td><td>Fast response, scalable

</td></tr><tr><td>Mechanical Storage

</td><td>Flywheels, pumped hydro

</td><td>Used in larger systems

</td></tr><tr><td>Thermal Storage

</td><td>Ice storage, molten salt

</td><td>Stores heat, not electricity

</td></tr></tbody></table>

##### **Hybrid/Prosumer Assets**

Assets that both consume and produce energy as part of normal operation.

<table id="bkmrk-subtype-example-asse-3"><thead><tr><th>**Subtype**

</th><th>**Example Assets**

</th><th>**Notes**

</th></tr></thead><tbody><tr><td>Solar + Battery Systems

</td><td>Rooftop PV with integrated battery

</td><td>Common in homes &amp; businesses

</td></tr><tr><td>EVs with V2G

</td><td>Electric Vehicles (bi-directional)

</td><td>Vehicle-to-grid capable

</td></tr><tr><td>Smart Appliances

</td><td>Can adjust operation dynamically

</td><td>May support DR/load shifting

</td></tr></tbody></table>

##### **Monitoring &amp; Steering Assets (Support Infrastructure)**

These don’t directly consume or produce energy, but enable management.

<table id="bkmrk-subtype-example-asse-4" style="width: 76.9126%;"><thead><tr><th style="width: 21.5302%;">**Subtype**

</th><th style="width: 43.4164%;">**Example Assets**

</th><th style="width: 35.0534%;">**Notes**

</th></tr></thead><tbody><tr><td style="width: 21.5302%;">Smart Meters

</td><td style="width: 43.4164%;">Energy meters with comms

</td><td style="width: 35.0534%;">Enable billing, monitoring

</td></tr><tr><td style="width: 21.5302%;">IoT Sensors

</td><td style="width: 43.4164%;">Voltage, temperature, fault sensors

</td><td style="width: 35.0534%;">Support system diagnostics

</td></tr><tr><td style="width: 21.5302%;">Controllers/EMS

</td><td style="width: 43.4164%;">Inverters, EMS, SCADA systems

</td><td style="width: 35.0534%;">Coordinate and control flow

</td></tr></tbody></table>

### Monitoring and Steering the microgrid

This capabilities represent what the purpose for a microgrid can be. In the example of NFE's first phase of microgrid deployment. The purpose can be thought of as 3 part;

- for the owner (of the microgrid) to monitor energy consumptions patterns to inform additions of supply side assets like batteries in future so that energy can be more reliable for the community
- for the owner and consumers to bulk purchase electricity there by making it more affordable.
- for the owner and consumers to evolve the their experience of transacting on the grid. Prepaid vs postpaid vs credits to consumers.

The point here being that these capabilities of monitoring and steering (the assets) on the grid are a means to achieve a variety of purposes for the grid owner and other grid stakeholders.

### The Autonomous Microgrid 

This is what I think can be the vision for project [Hyphae](https://lfenergy.org/projects/hyphae/), to be able to simply define a start and end state for grid attributes we care about and have Hyphae monitor and steer the grid to the end state. For example, the end state could be 90% reliability for all demand side assets on the grid. Hyphae can then make sure that energy is being drawn or stored or cut off from some assets so that we can maintain a reliability of 90%.

That's what I imagine an autonomous microgrid should be capable of doing. There may be aspects of grid operations that will require manual human intervention like replacing a malfunctioning asset or making a payment for a bill but the more you think about it, the more you recorgnize that almost every aspect has potential to be automated to make the grid completely autonomous.

### Levels of Microgrid Autonomy 

I am thinking about how we can borrow from [the 6 levels for Self driving cars ](https://www.sae.org/standards/content/j3016_201806/)to define levels for Microgrids..

TBD