Microgrids: Local power grids offer the vitamins future energy needs

The global need for microgrids powered by green energy is higher than ever and primarily driven by build out particularly of data- and AI centres.  The data centre construction market is estimated at 55 billion USD in Europe and 289 billion USD in the US towards 2028.

However, the data centres face significant delays getting online due to long queues getting connected to the national grids. Typical waiting times are 3-5 years in Europe, and between 5-10 years in the US. (source: Data Center Market Size, Growth, Global Investment Forecast (arizton.com) 

Creating safe and stable power supplies to the consumers 

The green transition has entered a new phase. Installing more wind turbines and PV systems is no longer the top priority. Now, it is also a matter of transporting power to the consumer – safely and stably and within a foreseeable time horizon.  

In that connection, the concept of 'microgrids' has been a hot topic among the project developers who invest in and construct wind farms and PV systems in Europe and in the US. 

A microgrid connects local production based on solar and wind power to major power consumers, such as data centres, large-scale charging parks for electric lorries or Power-to-X facilities. Combined with a battery and intelligent control, these ultra-local power grids can either operate independently or be connected to the overall power grid and, in either case, make a most welcome contribution to an infrastructure that is under increasing pressure.  

Indeed, many planned green energy projects are currently waiting years to be connected to our overall power grid. The bottlenecks in our power grid slow down developments within several key sectors at a time when we aim for the opposite: US and Europe's positions within AI depend on a rapid expansion of the data centre capacity, which presumes the existence of a robust power supply – often in areas where the existing grid is weak.  

If microgrids are truly to boost the green transition, initiatives are required across both public and private sectors.  

 As an example from Europe, global logistics and freight companies are ready to make significant investments in Danish facilities designed to supply sustainable fuel and green power to whole fleets of lorries and container ships. Critical elements of our societies, such as hospitals, ports and military facilities, also aim for decarbonisation in a manner that does not jeopardise their operations.  

And this exact combination of renewable power and high security of supply is what microgrids offer – and faster and at less costs than our current model for grid expansion permits.

Public and private action is needed to speed up microgrid deployment 

An uninterrupted power supply is a basic necessity in any society, and recent major outages demonstrated the urgency of increasing system resilience. In April 2025, a major outage left all of Spain and Portugal without any power for a day, and back in 2021, an outage crippled Texas, USA, for a week. Microgrids can start up very rapidly following a power outage and, using the associated battery storage, continue to supply power uninterruptedly.  

Australia is a prime example of a society that has already recognised the necessity of microgrids, having established microgrids across the continent over the past five years. Today, battery sizes range from 10 MW to a whopping 1 GW, which is enough to meet the power needs of more than half a million households on a continuous basis using 24 hours dispatch battery technology and combined with Solar PV and onshore wind. 

In other words, the current market offers very significant battery storage capacities. Today, batteries can typically fully cover the power supply for around four to six hours when using lithium battery technology. Newer battery technologies can supply power to a microgrid continuously for more than 24 hours.  

With power supply periods of this scale, a microgrid would be able to run continuously for months or years since the combination of a power supply based on sun, wind and batteries makes up a complete power system with a continuous, uninterruptible power supply.  

Streamlined permitting to overcome slow pace 

Despite this potential there is a major obstacle: microgrids are not being established at a fast enough pace. Developers often have to tackle unclear rules on grid connection, slow turnaround times with authorities, and doubts about how they can get paid for the flexibility and stability they offer to the overall grid system. This increases risks for investors, translating into hesitation in the market.  

Also, permitting needs to be streamlined and optimised to ensure that new microgrids do not suffer from year-long case processing. This can be done within the framework of the EU's new political initiatives.  

Moreover, a clearer political framework for grid connection is needed, as well as a fair compensation mechanism for microgrids that provide flexibility and stability to the overall grid system. Last but not least, we should increase our efforts in digitalisation: Advanced control systems and AI can ensure real-time optimum utilisation of microgrids.  

Project developers, system operators, and large power consumers must work more closely together to agree on incentives and the allocation of roles when it comes to expanding the future power infrastructure.