Overview of Microgrids in a Market Environment

This paper is an analysis of micro grids and their dynamics with energy markets, as well as an examination of the challenges and opportunities to an increase in micro grid penetration to serve electricity consumers. Micro grid functions are analyzed with respect to management, interfacing with electricity and reserves markets. Challenges are considered including the incumbent industry, renewable penetration, and issues related to market and policy structure. Opportunities are also considered including cost and reliability advantages, energy storage, natural gas generation, consumer clustering, and virtual power plants.