Are We Missing the True Worth of Microgrids?

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Microgrids are catching on quickly as way to avert power outages, spur local energy, and green the grid. But the true worth of microgrids has yet to be exploited — the microgrid as a computer.

That’s the word from John Jung, CEO of Greensmith, a company that has landed several high profile contracts for its energy storage software and analytics and was named a 2015 New Energy Pioneer by Bloomberg New Energy Finance.

“People really need to be thinking bigger about what’s possible,” said Jung in a recent interview.  “Microgrid is a phenomenal opportunity to flex a lot of computing muscle.”

Microgrids tend to be developed as a source of generation or perhaps as a way to manage energy for buildings.  But there is a broader set of value streams waiting to be captured and used by grid-connected microgrids.

The value would come from information about the tremendous change, activity and conditions occurring at any given time on the local grid. Unfortunately, microgrids don’t yet have the necessary computing power to gather and use this level of data, according to Jung.

“The one piece I really see missing is some kind of layer of optimization or control presiding over the microgrid that says, ‘What does the polynomial definition of a good-day look like for that microgrid,’” he said.

In seeking out that “good day,” the microgrid-as-computer would look at the way electricity is used in a particular location, where it is coming from, what it cost, how much is available, the way it’s delivered, and potential scenarios that make the system feeder vulnerable.

This kind of localized look at frequency, voltage, cost, and capacity opens up the possibility of a new set of efficiencies in energy management and resource choice.

Some of this local grid information is available now, but it is not necessarily being modeled and used, Jung said.

true worth of microgrids

John Jung, Greensmith CEO

But it’s coming…

As an example of what the future holds, Jung pointed to a Greensmith project in California that supports an EV charging carport, solar canopy and battery storage.

The system’s true promise lies in its intelligence. “It is not just thinking about where to charge and discharge, but what are the cheapest sources of electrons to charge up the car,” he said. “Does it come from the localized grid connect? Does it come from the battery? Does it come from the PV canopy?”

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Ideally, a future microgrid-as-computer would function in a similar way. It would use localized information to calculate which of its resources offer the cheapest source of electricity at any given time and then schedule them in advance.

Jung’s not aware of a microgrid controller that can accomplish all of this. But he believes it is coming. After all, today’s computer industry is all about maximizing resources and reducing cost. Just consider the cheap supercomputers we now hold in our hands on a daily basis.

But for now, the microgrid as a computer has a way to go.

“People will declare a victory about having some semblance of control over a building’s electricity for heating or cooling. That’s just scratching the surface in terms of what you can do if you look at the microgrid as a distributed computer with an array of solar, efficiency, batteries and other sources of generation and control,” he said.

What do you see ahead for microgrids as their computing power grows? Post in the comments below or on our Linkedin Group, Community Microgrids and Local Energy.

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About Elisa Wood

Elisa Wood is the chief editor of She has been writing about energy for more than three decades for top industry publications. Her work also has been picked up by CNN, the New York Times, Reuters, the Wall Street Journal Online and the Washington Post.


  1. Grid operators are unlikely to be seeking the set-up of genuine independently owned micro-grids as the (narrowly defined) interests of the grid operator and micro-grid owner are likely to be significantly different. Distributed energy could take some of the weight off the grid, but from the perspective of the grid operator this is probably best achieved if that distributed energy is directly controlled by the grid, or is specifically set up to operate in the interests of the grid.

    John Jung correctly makes the point that a micro-grid with sophisticated computer control could seek to maximise the interests of those within the micro-grid. In simple terms, the microgrid could seek to maximise the use of locally produced energy, to sell electricity when prices are high, and to buy when prices are low. The extent to which stored energy would be used, either within the microgrid or on-sold to the grid, would depend in the first instance upon the priority allocated to preserving a reserve in case of grid failure, and overall would depend on the best interests of the micro-grid owner taking account of both risk and financial factors. That is, of course, if the micro-grid and grid are operating in an arm’s length relationship.

    The benefit to the grid operator in having distributed energy systems communicating with the grid is that the grid operator will be able to call on these energy sources to balance demands upon the grid. A mutually beneficial way to do this could be to have a ‘hot’ pricing system which reflects demand and effectively influences the extent to which electricity feeds onto the grid, or is drawn from it.

    However, a smart, independent microgrid may not be that dumb. If the grid is struggling and wants to call on electricity from microgrids or other distributed energy storage, it may be the result of broader problems. There may be circumstances where a smart microgrid would refuse to supply electricity, or could even operate counter to the requirements of the grid by buying additional electricity to charge up its own batteries just when the grid wants to draw down on that storage. For example, in a region with extensive solar supply where there has been days of heavy cloud and forecasts of continuing bad weather. The trouble with smart and independent is that it can be strategic and forward thinking, and that’s certainly not what grid operators seem want to see in the market.

    Most utilities grew up in heavily protected environments as monopolies or oligopolies, participating in highly synthetic markets, and in close and unhealthy relationships with Government agencies as (non)regulators. They are big, and slow, thoroughly spoiled. Their response to the prospect of distributed energy systems and microgrids that are smart, nimble and operating in the interests of their owners is already clear. Grid operators are campaigning through their Government (non)regulators to keep control of anyone connected to the grid, pricing strategies are designed to limit competition, and operators and retailers are seeking to lock customers to agreements where the grid operator or retailer retains control of feed to and from the grid.

    As much as Jung’s optimism about the technology is appealing, his idealized description of a microgrid operating in the interests of its owners may need to be tempered by the reality that, while we are tied to a larger grid, the interests of the owners and operators of that grid may continue to dominate the interests of the consumer.


  1. […] storage software and analytics company Greensmith has raised $18.3 million in Series C growth funding, with investors including European […]