07 Feb 2020

Why Microgrids and Decentralization Might be the Future of the Energy Industry

City at night with decentralized energy representation

We’re currently in the throes of what’s been dubbed an “energy transition.” 

If you’re creasing your brows trying to understand what this even means, let us explain. As we move towards a more environmentally friendly world and a digitized landscape for pretty much everything, the energy industry is becoming increasingly focused on decentralization. This is where energy is produced close to where it will be used rather than at a large plant that sends it through the grid, and it makes use of innovative energy technology such as micro-grids. 

But what does this mean for you? Or perhaps, more importantly, what does it mean for your business and the future of energy production and consumption? 

In a report from last year, Schneider Electric put forward the notion that we have come a long way in the centralization of electricity production over the last 100 years. But, despite the leaps and bounds in this arena, we might just be placing our energy (excuse the pun) in the wrong place. 

Instead, the report claims we should be looking into decentralizing the process as this could potentially tackle the challenges we’re facing in the present day. 

The Role of Micro-grids in Decentralization 

The report continues on to say that combining micro-grids with this new, shiny idea of decentralization could accomplish all of the things the energy industry has failed to do so far - mainly, creating an optimized way for accessing reliable, green, and resilient energy. 

So why decentralization? 

A key reason for this new exploration into decentralization is the predicted increase in the demand for energy all around the globe. Combine this with the need to drastically cut CO2 emissions thanks to new environmental regulations, and you end up with a dilemma that’s not going to get solved by itself. 

This is where micro-grids come into play. Referred to as a “new energy ecosystem” in the Schneider report, micro-grids are basically a way for businesses to control their production in a smarter way. Energy reliability is the name of the game with this new technology and, thanks to their resilience, they are actually able to cut off from the main grid and run via self-sufficient means. 

How Micro-grids Work

Micro-grids work by decoupling and disconnecting themselves from the main grid, in some cases only when the main grid enters a period of disruption or downtime. From there, they connect up to local energy sources to continue to deliver energy. 

But not all disruption is unplanned, and micro-grids have predicted downtime covered too. Imagine, for a moment, that there’s a storm on the horizon. Micro-grids can be prepared and pre-programmed to adopt a precautionary strategy which almost eliminates potential outages entirely. 

We’ve seen a ton of new predictions crop up in the energy world in recent years, some of which are already proving to be true. Because of this, we can expect a boom in demand that might be a struggle to keep up with - particularly when you take strict emissions regulations into account. This is precisely why we might see micro-grids come into their own and play a major role in the constantly evolving future of the energy industry. 

Don’t let unplanned downtime creep up on you. Get prepared with our free guide, Contingency Planning 101. 

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