Get ready for a modern energy era: Distributed energy resources and microgrids

The future belongs to renewable distributed energy resources (DERs) interconnected into microgrids. But what exactly are those technologies and how do they work?

  • Published: 29. 11. 2019
  • Written by: Fuergy

When you grow up in a world of centralized energy, you can hardly imagine it otherwise. It’s something that has been strictly organized for decades and your power to affect the ongoing processes, in such a world, can seem almost null and void. The electricity is produced in big power plants and then transmitted to our households through the grid. However, this might change sooner than you think.

Decentralized future

Decentralization is today’s hot topic in multiple industries. Especially in the field of energy. In a nutshell, we talk about geographically dispersed energy sources. You can imagine it as replacing big power plants with a large number of small ones.

Such disintegration of energy production wouldn’t make much sense if it wasn’t for increased deployment of renewables in the past few years. Big coal and nuclear power plants are extremely efficient and ensure economies of scale. Large hydropower plants can also be very reliable if they have enough water supply. So why switch to decentralization?

The everywhere energy supply

There are certain technological and physical boundaries when it comes to large-scale renewable energy sources. That’s true. If they are concentrated in one place, they won’t reach the expected synergies. But! If we use them as distributed energy resources they have a lot to offer.

The most widespread amongst the DER are solar panels. For multiple reasons: they are easy to install, require very little maintenance and they can cover the unused places such as rooftops of walls. Besides, as we previously mentioned, the price of solar panels as well as its best companion – batteries – has dropped significantly and keeps falling even more.

You might be surprised, but the batteries are also DER. In fact, anything that can supply energy to the grid is considered as DER:

Distributed energy resources. Source:

Full of potential

We can see that energy production grows along with the ever-increasing energy consumption. This is where DER can play a major role. Instead of building new centralized power plants, consumers can cover their demand themselves by installing renewable energy sources and becoming prosumers.

Producing energy close to its consumption location will help to reduce the pressure on the power grid and minimize the transmission losses. In turn, saving money by lessening energy expenses for everyone in the microgrid. These are just a few of the many reasons why some cities or even whole countries want DER to be an integral part of all new buildings.

For example, beginning in 2020, every newly constructed home in California must have solar panels. The EU, on the other hand, wants all new buildings to be nearly zero-energy buildings (NZEB) from 2021. How could this be achieved? Simply by starting to produce green energy locally.

Local energy communities and microgrids

It is estimated that by 2050 almost half of the EU households will generate energy through renewables, of which more than a third will be participating in a local energy community. Such a community is formed when multiple local prosumers are interconnected in order to save on energy costs or become more energy self-sufficient. Each prosumer has its own smart meter which allows redistributing the jointly achieved savings within the community.

An even higher level of energy self-sufficiency can be achieved by interconnecting prosumers into so-called microgrids. A microgrid is, unlike the local energy community, separated from the power grid by its own smart meter, meaning that it can work independently of the power grid. So in the event of a power outage, members of the local energy community are unable to use the power grid (i.e. they rely solely on their own energy sources), whereas microgrid members can.

FUERGY - Physical microgrid

A microgrid is, therefore, something like a “subgrid” which can be instantly disconnected from the main power grid, allowing its members to keep sharing the surplus energy for the mutual benefit.

Neighbors stick together

As we said, the possibility to interconnect different DER offers huge potential. Despite many of today’s administrative and legislative obstacles that hinder the emergence of energy communities, some studies have already proved its effectiveness.

One of them is the case study on an EcoVillage in the Netherlands. Apart from the cost savings, the researchers were trying to reach maximum energy independence of households by creating a microgrid. Thanks to the well-combined and complementary technologies, they achieved an energy self-sufficiency of 89% for a community of 23 households.

Aardehuizen EcoVillage. Source:

They even overcame the biggest challenge imposed by the geographical location of the village – the changing of the seasons. They installed a heat pump in each of the households. In the middle of everything was the central heating based on wood pellets combustion. It was something like a heating plant, which was not only producing the heat but also electricity.

Researchers also calculated with a greater increase in electromobility. They were counting with 15 EVs and they achieved an annual savings of 440 EUR per EV. In the study, only 20% of the electricity from the grid was necessary for their charging. Even though electromobility poses a significant threat of burden on the power grid, the EVs in the EcoVillage, on the contrary, were helping to keep it balanced.

Virtual energy as a solution

At FUERGY, we pursue the vision of energy decentralization. That is why our solution comprises not only physical microgrids but also an option called a virtual microgrid. In the virtual microgrid, you can share energy with others not only locally, but also regardless of your distance. So, contrary to energy communities, with FUERGY you don’t need to be afraid of power outages anymore.

What about interconnecting DER into the so-called virtual power plant (VPP)? A VPP cumulates the small capacities of distributed sources which makes it a viable replacement, for example, for hydro-pumped electricity storage. A VPP is an extremely interesting way of using DER, therefore we will devote it special attention in a separate article.

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