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Building Blocks of a Community Microgrid

Microgrid illustration

This explainer is the first part of a new series by Sara Harari and Nate Grady on how microgrids are being used to transform the electrical grid. 

When Hurricane Sandy made landfall in 2012, communities across the eastern seaboard were flooded, windswept and disconnected. In New York City and Long Island, large parts of the electrical grid went out, forcing residents to seek shelter to get warm, find food, and charge phones. Much of Manhattan went dark after a Con Ed substation flooded and failed.

Outages caused by Hurricane Sandy and other severe weather events have begun to drive research and investment into resilient energy systems.

Officials in New York are looking into potential upgrades including burying power lines so they aren’t disrupted by falling branches, adding switches and line networks so that power can be routed along different pathways to minimize outage effects, and raising substations and other critical infrastructure to avoid flooding.

Unfortunately, these interventions are expensive, especially if implemented at grid scale. Regulators must consider how electric rates will be impacted and how these investments align with other modernization and service upgrades. As with any expensive investment, these upgrades take time to implement.

For that reason, community and institutional leaders are increasingly looking into developing microgrids. In this explainer, we’ll take a close look at the infrastructure of microgrids – more specifically, community microgrids. We will show how they can play an essential role in local resiliency while delivering system-wide benefits.

Microgrids employ some of the same resiliency strategies as statewide initiatives, but for just a small portion of the grid such as an individual town or campus. For example, many support just the most important facilities in a town.

Microgrids of all types have a few defining characteristics:

  • They provide electric and/or thermal energy to connected buildings within a constrained geographic area.
  • They can disconnect from the grid when required. This is called ‘island mode.’ They can also seamlessly reconnect to the grid without first taking the microgrid generation sources offline. This allows microgrids to continue to provide power during a grid outage without any gap in service on either end of the outage.
  • Their generation resources are co-located with and interconnected to the buildings they serve. They are set up this way rather than relying on a distribution utility to transmit power (although some may partner with the local utility).

Though microgrids are not a new concept – they have existed in different forms since the beginning of the electricity industry – the use of microgrids to improve local grid resilience has been gaining traction in recent years. Interest in this topic continues to grow.

Interest in microgrids over time as shown by Google search results
These numbers represent search interest. Scores range from 0 to 100. (Data Source: Google Trends)


As interest has grown, bringing new players to the microgrid space, a slew of new projects with increasingly diverse functions has been proposed. These functions largely dictate microgrid design, project sizing, and resource mix.

For example, some microgrids exist to provide electricity to remote, unconnected areas. These are completely separate from the larger grid and are designed to serve all customers within their areas.

Others have been developed to gain economic synergies for local power. These include microgrids for industrial facilities that require large amounts of process heat. Developing a plant that not only provides the required heat but also produces electric power can help reduce the cost of production and ensure a steady, reliable power source.

Microgrids may also be sited on campuses that have huge space heating needs and own numerous, interconnected buildings. This arrangement is the most common in the United States. Indeed, ownership by a single entity with large electric and thermal needs such as a university or military base was long considered a prerequisite for microgrid development.

However, in the years since Hurricane Sandy, a new ownership model has begun to emerge. This is termed a community microgrid. These microgrids are unique in that they seek to serve many different customers yet are not in place to enable electric access but rather to provide power for short periods of time when grid service has failed.

Typically designed to serve just the most critical facilities in a town, such as hospitals and emergency shelters, these microgrids can ensure communities are resilient in the short term while bridging the time lag until large-scale upgrades to vulnerable grid infrastructure can be implemented.

Microgrids and the Energy Transition

Fortunately, these microgrids can piggyback on the radical changes that have occurred in the United States grid over the course of the past decade. Historically, the grid had unidirectional power service. Power was generated at high-capacity power plants and transmitted to consumers. 

Grid schematic
Graphic designed by Sara Harari


Today, energy generation is increasingly distributed, with resources such as rooftop solar enabling customers of all types to generate their own power and sell it back to the broader power pool.

Additional technological innovations such as smart devices and energy storage can even enable consumers to shift their demand to different times of day. This reduces the instantaneous demand that power plants experience. It also creates many new opportunities for energy management at a local or regional scale.

Together, these changes make the flow of power more networked and provide a better supporting structure for microgrid development.

These changes can also enable the microgrid to provide valuable services to the grid at large even during normal operations. By siting community-scale microgrids strategically in areas of high grid congestion - such as areas where the transmission and distribution resources may need an upgrade or expansion to effectively transport enough energy to local customers - the microgrid can help reduce investment and operational costs for the entire system. This in turn helps keep energy bills low and the social benefits of energy investments as high as possible.

Exploring the potential for community microgrids to supply broader grid benefits such as these was a key motivation for policymakers in New York to launch the NY Prize competition and kickstart community microgrid development in the state. More information on NY Prize is included at the end of this article.

Technical Components of a Microgrid

Microgrids can be supplied by any type of generation source, but most commonly are served by combined-cycle generators.

In a later piece, we’ll explore in depth how the motivation to develop a microgrid dictates the type of resources that can best serve the community members.

Of course, energy demand for a microgrid is just as important as supply. Indeed, the amount of local generation community microgrids need to incorporate is dependent on the main offtakers they hope to serve.

In the United States, microgrids are typically anchored by a few priority customers – such as hospital buildings, school grounds, or town halls – that could provide valuable services during a grid outage. Hospitals can continue to provide high-quality care, schools can serve as a refuge for those who have lost power or heat at home, and town halls can serve as a base of operations for various entities that are working to restore municipal services.

These anchor offtakers serve an important role in defining the type of grid that will best serve the community’s needs. Communities with excess generation may extend service beyond the anchor customers to serve other valuable facilities or even assist residential customers.

However, one of the main constraints for such extensions is the network of local lines the microgrid controls. Along with the generators, the development and maintenance of this line network is one of the most essential and expensive components of a community microgrid.

The control center, while often overlooked, is another critical element of microgrids. This software-based communications backbone connects the various generators, consumers and residents to automatically disconnect from the larger electric grid in the event of an outage, and bring online the generators within the microgrid itself.

It also helps regulate the frequency of current in the wires and enables the microgrid to resynchronize with the broader grid once service is returned.

Schematic of the smart grid
Image from iStock


The NY Prize Projects

Recognizing the national interest in community microgrids, Yale Center for Business and the Environment (CBEY) has undertaken a new research initiative to understand, quantify and minimize the soft costs of microgrid adoption.

Most of the findings that we discuss in this series will be derived from analysis and interviews with participants in NY Prize, a New York State Energy Research & Development Agency (NYSERDA) initiative that has provided grant funding to communities across New York to develop community microgrids.

The NY Prize, currently in Stage 2 of 3, has funded 11 community microgrids across New York to develop preliminary engineering designs and business models. Throughout this series, we’ll pull from our conversations with project participants to help explain how and why communities are developing microgrids.

NY Prize
NY Prize Program Stages


Unlike installing a solar PV system or upgrading lighting, microgrid adoption requires an intimate understanding of energy technology and carries high upfront costs.

The NY Prize projects, which have public documentation of critical decisions, can offer lessons for future projects on the most effective way to deploy microgrids.

As the United States becomes more interested in microgrids, it’s important to consider how we can best use limited municipal resources to meet our resiliency, reliability and sustainability goals.

Note: This explainer was funded by the State of New York. It was reviewed by experts at Yale University and the State of New York. The authors have collected data from a variety of stakeholders.

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