According to the Lawrence Berkeley National Laboratory, the differentiating microgrids from the traditional grid are that microgrids are locally controlled and that they can operate either connected to the traditional or disconnected from it as an electrical island.
The microgrid concept comes from a . They proposed that ever-increasing levels of distributed generation could cause problems with the traditional electric grid and that a solution lay in a new approach that views localized generation and associated loads as a subsystem or “microgrid.”i
Because they are downstream of a single point of common coupling (PCC) and because customers typically have a great degree of control over everything on their side of the meter, these microgrids are self-governed. Their more numerous, smaller generation sources provide higher local reliability than the traditional grid’s large, centralized power plants. With generation sources close by, they could also provide higher efficiency with less transmission loss. (The fuel-to-electricity efficiency of existing power plants, including transmission, is only around 28-32%.)
Lasseter and Piagi envisioned that with a plug-and-play architecture provided by inverters, these systems could be installed with little site-specific engineering required. Modern battery energy storage systems like Tesla’s Powerwall and Powerpack provide both the control to be plug-and-play and the required voltage regulation to integrate multiple generation sources into a microgrid.