The Value of Energy Storage in Microgrids

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In this week’s Industry Perspectives, Chris Evanich, application director of microgrids at S&C Electric Company, highlights the value of energy storage in microgrids. 

Electric utilities as well as commercial and industrial users are reevaluating the way they produce, distribute, and consume power, straying away from the traditional and instead turning to innovative technologies that increase reliability and grid efficiency. Advanced systems, like microgrids provide resiliency, security, and cost savings.

energy storage in microgrids

Chris Evanich, application director of microgrids at S&C Electric Company

Microgrids can be built to support two operations: grid-connected mode and island mode. Most microgrids will be in grid-connected mode more frequently than in island mode. A microgrid would move into island mode when there is an outage on the main grid or if the system was intentionally disconnected from the grid.

Regardless of the grid’s operation mode in which a microgrid is operating, energy storage plays a key role in the success of the system. A microgrid is made up of four parts: 1) distribution automation, 2) a microgrid control system, 3) alternative generation, and 4) energy storage. While all of these individual components are important, energy storage truly serves as the backbone of the system.

The unstoppable power of energy storage: stabilizing the grid

When a microgrid is connected to the grid in normal operation and has a renewable energy source, energy storage is necessary to ensure none of the energy generated goes to waste. For example, if a solar panel is connected to the grid without energy storage, no excess power produced will be used locally. Only through the help of a dynamic energy storage system can utilities or system owners ensure they can store that power for future use.

Energy storage is also essential to smooth out intermittent alternative generation sources. If the sun moves behind a cloud or the wind stops blowing, a microgrid can engage its stored energy while waiting for the alternative generation source to come back online, keeping the lights on.

Only through the help of a dynamic energy storage system can utilities or system owners ensure they can store that power for future use.

When a microgrid is in grid-connected mode, and connected to an energy storage system, it has the ability to assist with demand charges through peak shaving. When end-users receive their monthly utility bills, demand charges make up a large portion of what is due, which are based on the maximum amount of power the customer used in a month. The Santa Rita Jail in California, for example, reduced its peak demand by 95 percent and strengthened its energy supply after it installed a microgrid.

At the same time, a utility substation has a certain capacity it can support. If the customer load starts to heavily increase, the utility may need to install a new substation or make upgrades to the distribution system. These upgrades can be very expensive. By connecting energy storage to a microgrid, the utility can efficiently use stored energy at peak consumption times to help meet grid demands, while improving the lifespan of an installed distribution system. San Diego Gas and Electric installed a microgrid in Borrego Springs, CA to help with solar smoothing and energy shifting, and it has the capabilities to fully support its community during a power outage.

Energy storage makes it possible for utilities and system owners to earn additional revenue from ancillary services – i.e.  supporting frequency regulation, energy arbitrage, spinning reserve, black start processes, and demand response. These services are easy solutions to increase revenue and lower the total cost of a grid-connected microgrid.

[clickToTweet tweet=”Energy storage makes it possible for utilities and system owners to earn additional revenue from ancillary services. ” quote=”Energy storage makes it possible for utilities and system owners to earn additional revenue from ancillary services. “]

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Independent grid operation: The benefits of islanding

While the benefits a grid-connected microgrid are clear, the more impressive side of this system is when a microgrid is operating in island mode, independent of the grid. When an outage shuts down the main utility lines, a microgrid is capable of supporting the loads seamlessly. This would not be possible without an energy storage system.

Many large campuses, such as a military base, hospital, or university, have large onsite generators to help keep their buildings operational if the main grid goes down. Historically, these types of generators take ample time to come back online because they are rarely running in tandem with the grid – not ideal for critical applications. With battery energy storage in place, the microgrid can use stored power to carry the campus from the time the grid goes down to when any additional generation can go online.

Power users around the world have seen the benefits that microgrids and battery energy storage can provide to their energy use. The Illinois Institute of Technology microgrid in Chicago also provides the campus with the electrical security it needs in critical testing labs, where even a minute-long power outage could be detrimental to the school’s research. BC Hydro in British Columbia, Canada can successfully power the community of Field during multi-hour-long power outages. Microgrids not only build up reliability for the utilities that install them, but also increase customer engagement within communities that are impacted by the system. The citizens of Field are even able to follow their microgrid on Twitter to see the state of the battery and system updates, making the system a big part of the community.

Microgrids with energy storage are cost effective solutions to lower overall energy costs and improve the grid’s resiliency. I would not be surprised if in the years to come our traditional grid begins to transform into many connected microgrids. This innovating technology has changed the investment and design strategies of electric utilities and commercial users to change the way they design and operate their electrical systems and keep the lights on for end users.

Chris Evanich is application director of microgrids at S&C Electric Company.

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  1. Thanks for this very informative article on the relationship between energy storage and microgrid. Energy storage is necessary for sustainability as, without it, no excess power or energy produced can be stored for future use. Since I plan on having solar panels soon, I’ll definitely consider getting an energy storage too for a renewable energy source.


  1. […] The Value of Energy Storage in Microgrids Chris Evanich, manager of microgrids, S&C Electric […]