Microgrids are regional, self-contained intelligent power supply networks. Functionally, they correspond to the smart grids to which they can be connected. Local power generators, energy storage systems and power consumers are directly connected to the microgrids.
Electricity generators are smaller municipal utilities and Distributed Energy Resources( DER) such as biogas plants, geothermal plants and photovoltaic plants, whose energy is used directly by consumers or stored in neighborhood or home storage facilities.
Microgrids are self-sufficient and decentralized. The energy they generate is close to consumption and reaches the consumer over short distances. They are coupled with the smart grids into which they feed surplus energy, but from which they can also take missing energy. This ensures a constant energy balance, which stabilizes the supply. By connecting and disconnecting from the smart grid, the microgrid can then draw power from the smart grid when it is offered at a favorable price. The components of microgrids include the smart meters installed at the consumer, the load management and the distribution management system( DMS).