David Rimmer, Microgrid Business Leader UK&I at Schneider Electric
Despite global attempts to reduce power use, the IEA predicts that energy demand will rise by 3.4% a year until 2026, with data centres and artificial intelligence (AI) consumption likely to triple. With this increased use comes a need to secure independence, so that if something goes wrong, it doesn’t take everything down with it. This is being achieved through microgrids, which can decentralise electricity and prevent mass issues.
Microgrids are being utilised to save costs and change energy strategy in a variety of sectors. They offer a solution by enabling the transition to renewable energy sources to satisfy sustainability goals, by avoiding existing grid connection delays and congestion challenges seen in the UK and Europe.
For those less familiar with microgrids, let me run you through what they are and how they’re helping businesses and the grid today
What are microgrids and how do they help businesses?
A microgrid is a self-contained electrical network that lets businesses generate their own power on-site. It connects, monitors, and controls distributed energy resources (DERs), improving energy performance, resilience, and sustainability.
The three key benefits of microgrids are sustainability, cost savings, and resilience. They support clean energy goals by integrating renewables and reducing fossil fuel reliance. Financially, they lower energy costs, enable peak demand management, and create revenue by selling excess energy. Microgrids also increase reliability by allowing businesses to have more control over their energy consumption.
Microgrids also give organisations more control over energy costs to optimise demand, reduce use at peak times, and store electricity. They can reduce outage risks, preventing productivity loss, and enhance resilience by ensuring power during grid failures. Their distributed design also strengthens cybersecurity and energy security.
Relieving the pressure on existing infrastructure.
By reducing the strain on conventional networks, microgrids and energy storage give companies energy independence. Microgrids co-locate generation and consumption, producing electricity locally as opposed to centralised networks that depend on distant power plants.
By converting households and businesses into energy producers, this decentralised strategy helps alleviate grid congestion and growing energy demands. Microgrids can enable new energy uses like EV charging, smart industries, and agriculture and can be deployed more quickly and affordably than grid upgrades.
Infrastructure development must go beyond energy supply if microgrids are to become a reality. Existing grids need to be more spread out, independent from each other, and resilient to external factors to reduce building pressure. These improvements are necessary to increase microgrid capacity and storage, and industry needs to be encouraged to become grid-active and profit from local energy output.
Because microgrid integration is governed by regular networks, which frequently slow approval, connecting to the grid might be difficult. Once operational, weather-related fluctuations in microgrid supply can be avoided by on-site battery storage, which stores energy for usage when needed.
Although improvements have been gradual, infrastructure needs to advance to keep up with decentralised solutions, EV charging, and renewable energy sources. Digital twins can guarantee a successful microgrid integration and optimise current infrastructure.
The future of microgrids is now
Careful planning is essential in ensuring microgrids are a worthwhile investment. Returns on spending can be increased by working with knowledgeable partners who assess energy capacity, comprehend business factors, and provide asset recommendations.
Finland’s Citycon Lippulaiva complex is a perfect example, incorporating a microgrid backed by sophisticated digital monitoring tools and intelligent management systems. Resilience, sustainability, and operational efficiency have all been maximised in this sustainable urban development, which includes a bus terminal, metro station, shopping mall, and flats. Within five years, the microgrid is expected to return on its €3 million investment, having cut yearly energy expenses by 14%.
In order to manage the reliable, but intermittent, potential of renewable energy sources like solar and wind, microgrids must be integrated into conventional energy infrastructure in order to reach their full potential. This shift makes switching to a smart grid essential; a sophisticated, digital network that maximises power supply through automation, control systems, and two-way communication. These technologies will improve the energy grid’s efficiency, dependability, security, and sustainability as we move towards smart grids, fostering the expansion of microgrids and the integration of renewable energy sources.
This article appeared in the April 2025 issue of Energy Manager magazine. Subscribe here.