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How Microgrids Help Businesses Avoid Crisis

Friday Evening, 9 August: Britain’s most serious blackout in more than a decade left almost a million homes across the country without power, caused rush hour travel disruption across train stations, railways, roads and airports and affected thousands of public institutions, hospitals or industrial sites.  We sat down with our UK Microgrid team from Schneider Electric’s Energy & Sustainability Services to understand what happened and reflect on measures to improve resilience for affected businesses.

Dr. Duncan Child, NWE & Nordics Microgrid Offer Lead

Duncan has been working in the decentralized energy sector for over 20 years and has successfully delivered numerous microgrid, energy efficiency, energy performance contracting and resource efficiency assignments across both public and private sector organizations.


Andrew McKenzie, Microgrid Business Development Lead UK

Andrew is responsible for Microgrid business development in UK and Ireland has a deep understanding of the various microgrid business cases, based on his experience from managing and supervising microgrid feasibility case studies for various clients.

What caused the blackout of Friday 9 August? 

National Grid is talking about a “rare and unusual event” that has caused a severe drop in the grid’s frequency. As far as we know, two large power generation units were almost simultaneously disconnected from the power system - the Little Barford gas-fired power plant and the Hornsea offshore wind farm. Consequently, the frequency dropped from 50Hz to below the grid’s safety limits – but detailed analysis of Friday’s incident is still ongoing and National Grid is working with the regulator, the generators and other stakeholders to “understand the lessons learned” from Friday’s blackout.

Does this indicate problems with resilience in UK’s grid that businesses should be aware of?

Historically, the UK electricity system has had a very high level of resilience and this has provided a high degree of confidence in the reliability of the electricity supply to businesses and consumers. However, with the Friday blackout event, questions are now being raised as to whether National Grid has done enough to adapt to the rapid change that intermittent renewable energy is bringing to the UK electricity distribution system.

As an example, renewables such as wind and solar are non-synchronous sources of electricity, which means that they don’t contribute in the same way to frequency stability at 50Hz as conventional fossil-fuel power station generators – that might indicate some further problems as in the last 12 weeks the grid’s frequency has fallen dangerously low on three separate occasions.

Does that mean UK cannot increase its use of renewable energy sources and needs more conventional generation capacity?

No — The blackout wasn’t a case of insufficient generation capacity. At the time of the blackout, there was over 5GW of power available in the Balancing Market. This part of the market design, the Capacity Market, seemed to work quite well. However, other parts of operational reserve and frequency balancing services will require reconsideration. This is feasible without any fossil-fueled power plant, such as through greater utilization of battery energy storage for frequency balancing services. Another crucial element is to increase resilience and flexibility of the demand side.

Let’s look at the demand side. The disconnections caused significant disruption at the railways, for example. What could help to prevent this in the future?

The power outage lasted less than an hour, but travel disruption across the country caused major delays for railways into Friday night. This highlights the increasing responsibility on organizations to ensure reliability of their services in case of a major electrical supply disruption by being able to quickly bring back their systems to normal operation.

Organizations with smart demand response systems or microgrids will be able to provide a much more managed response ideally with no loss of power to critical systems. We believe this development must happen in the same pace as the adoption on the grid’s side and we actively help to upgrade systems at our clients.

How are microgrids helping to increase resilience on the demand side?

Resilience is increased through the microgrid’s ability to island itself from the main grid and to be self-sufficient. When the main grid encounters an unexpected problem such as a major grid failure or even a predictable incident such as a heavy storm, the microgrid decouples and can continue delivering energy from local sources. There are limits to this autonomous supply due to local production, storage capacity and instantaneous status. However, with the microgrid’s local management system, priority loads can be optimally managed and non-vital loads can be reduced.

On the grid level, the existence of microgrids can help to reinforce and stabilize the network. For example, in times of peak energy demand or reduced grid functionality, a local microgrid can relieve stress on the grid by serving its own load. In many markets, this ability to provide active demand response can create additional revenues in form of paid grid stabilization services.

What benefits besides resilience can a microgrid bring to an organization?

Gaining resilience to keep operations running is only a part of a potential microgrid business case. Microgrids offer advantages that can address a range of facility goals e.g. reducing carbon footprint by greater utilization of onsite renewable energy. With the right combination of onsite distributed energy resources (DERs) and controls, an organization can reduce the risk of rising energy costs or even gain extra revenues with active demand response. They can also increase sustainability with sophisticated integration of renewables. To make the most of a microgrid investment, you must understand the various bottom-line impacts and create a comprehensive business case.

How can an organization get these insights into potential bottom-line impacts?

At Schneider Electric, we take perform complex cost-benefit analyses for every microgrid feasibility study. Our experts consider the facility’s operational needs, criticality of various loads and local utility interconnection requirements. By analyzing alternate utility rate structures or incentives, we can also estimate potential savings or revenues to gain by installing a microgrid. We also check suitable distributed energy resources for the location with our cross-country market knowledge. Understanding your company’s financial, sustainability and resilience goals and constraints is key to building a business case that fulfills this profile best. Through this analysis, we often find existing assets that may be underutilized or existing emergency backup systems that can be optimized within the microgrid.

So, no more blackouts with microgrids?

Smarter electricity grids are vital for the transition of the changing energy landscape and to maintain electric power continuity as our grid mix evolves to incorporate more intermittent and renewable sources. Microgrids that manage distributed generation assets, energy storage and controllable loads are rapidly becoming key to this new landscape.

Microgrids now provide organizations the opportunity to have greater resilience of electricity supply and increased assurance that they are protected against any future grid failure events.


If you are wondering whether a microgrid is the right solution for your facility, discover how a microgrid feasibility study can help you understand your options