10. Microgrids


A microgrid is a group of interconnected loads and distributed energy resources with defined electrical boundaries forming a local electric power system at distribution voltage levels, that acts as a single controllable entity and is capable of operating in island mode, no matter if it is standalone or grid-connected (IEC 62898). When operating in islanded mode, microgrids can manage and optimise supply and demand (energy management system) and regulate demand locally. When operating in connected mode they may also aim to offer new services (provision of flexibilities, congestion management, reactive power management, etc.). The main objectives of microgrids are to improve resilience and decarbonize production.


During periods when they are disconnected from the grid, microgrids operate in the same way as islands and isolated sites, which always had to produce their own electricity. Today, the strong development of renewable energy represents an opportunity to make these installations less costly and more respectful of the environment. The global microgrid market is expected to grow at a high annual rate (estimated at 10% in Europe over the period 2022-2030). Market growth is driven by the need to incorporate renewable energy and the rapid adoption of electric vehicles as well as high energy prices. Furthermore, the threat of cyber-attacks, climate hazards and geopolitical developments are stimulating the desire for energy independence.

Challenges and opportunities for DSOs

  • Operating microgrids requires local energy management systems to deal with supply/demand equilibrium.
  • Protection systems have to be updated to enable safe operations in islanded mode.
  • Appropriate technical provisions are required to enable black start.
  • Connection and disconnection of microgrids to the grid can generate local instabilities.
  • The potential benefits of microgrids are technical (peak shaving, reduced energy losses, voltage regulation, etc.), environmental and economic (for participants, etc.), but the technical and contractual conditions for making these benefits effective have yet to be clarified.

EDSO Considerations

  • Microgrids are still complex and expensive solutions to implement and they are not cost-effective if the grid is of good quality.
  • The technical and economic competitiveness of the electricity network is therefore not called into question.
  • However, in some cases, microgrids are an interesting resilience solution.

Last update: 28 September 2023