DC microgrid and nanogrid: the next big thing in the energy sector

The following entry is a guest post from Rajendra Singh, the D. Houser Banks Professor at the Holcombe Department of Electrical and Computer Engineering and Director Center for Silicon Nanoelectronics at Clemson University in Clemson, South Carolina. He can be contacted at [email protected].

Because of the growing costs of global energy consumption, the costs of generating, transmitting, and utilizing energy must be decreased to ensure sustainability. For any energy technology to be truly sustainable it must be environmentally friendly, be affordable and sustainable [1]. As shown in Figure 1 [2], only solar and wind energies are truly renewable and can provide the ultimate in sustainable energy to meet the global energy needs of the 21st century [1]. With the advent of solar panels and windmills, and our ability to generate and use electrical energy locally without the need for long-range transmission, the world is about to witness transformational changes in energy infrastructure systems.


Figure 1: Importance of Solar and Wind Energy in Global context [2]

What is DC Microgrid?

The concept of the DC microgrid closely parallels Thomas Edison’s original concept of local DC power generation [3]. In the context of 21st century power generation and utilization, Edison’s concept can be extended in to two directions. Although the distance between electricity generation sources and loads must be at a minimum, cost-effective solar and wind farms at a particular site also meet the requirements of the DC microgrid. Minimum conversion from DC to AC and or AC to DC must take place.

According to US Energy Information Administration (EIA), local power generation is defined as electricity that is (i) self-generated, (ii) produced by either the same entity that consumes the power or an affiliate, and (iii) used in the direct support of a service or industrial process located within the same facility or group of facilities that house the generating equipment.

Because of the novelty of direct use electricity, which is local and not re-routed through a station, local electricity generation is on the rise in the United States. This increase is partly due to the compatibility of local DC electricity infrastructures, which co-exist with existing electrical infrastructures that are based upon alternating current (AC).

Regarding power storage, DC storage devices such as batteries, capacitors, and fuel cells also meet the requirements of local DC electricity. In essence, the self-sufficient power network of energy generation and energy storage sources, known as the microgrid, is basically a smaller version of the larger power grid. In the absence of no external connectivity of the microgrid with the main grid, this self-sufficient PV-based “Nanogrid” can generate, store and distribute its own power,  which is ideally suited for rural electrification. Figure 2 shows the structure of this proposed PV-based nanogrid. This concept is innovative in that it uses both a DC micro and DC nanogrid to take maximum advantage of local DC electrical sources, for the next generation power generation system of the 21st century.


Figure 2: PV-based Nanogrid for rural electrification.

Why Local DC Electricity?

Though there are many components driving the growth of local DC electricity, we list the key points below:

  • The traditional model of large base-load AC centralized electrical power generation and long haul distribution via high-voltage transmission and low-voltage lines causes huge losses of energy and costs required to operate such systems. As clearly shown in Table I, approximately 70% of electricity produced is lost in generation, transmission, and distribution. Assuming that the cost of electricity is $0.1/kWh, the annual energy loss amounts to about $40 trillion dollars.

Table I: 2008 World Energy Consumption by Sector [Source: US Energy Information Administration (EIA)]

Energy End-Use includes end-use of electricity but excludes losses (quadrillion Btu) Electricity Losses includes generation, transmission, and distribution losses (quadrillion Btu) Total Energy Use includes electricity losses(quadrillion Btu) Share of Total Energy Use(quadrillion Btu)
End-Use Sectors




















Total End-Use Sectors


Electric Power Sector



Total Electricity losses


Total Energy Use


Direct Current (DC) electricity locally generated by renewable energy sources such as solar panels and windmills and used with a minimum conversion (DC to AC or AC to DC) and minimum transmission can reduce energy losses by as much as 30% or more, energy that is typically lost in AC generation, transmission, and distribution infrastructures.

  • Unlike 20th century technologies, the cost of generating local power generated from solar PV and wind systems is decreasing daily, with the substitution of DC for AC power further reducing that cost. Since 2008, solar PV panel prices have fallen well over 70 percent, with the cost of wind turbines decreasing by 40 percent during that same time. The cost of centralized AC power generation, however, has either increased or remained unchanged during that time. Wind and solar generated power is cheaper than coal-fired power plants when factoring the social costs of carbon. Some utilities are now using more PV as it has become more cost-competitive with natural gas. US companies are increasingly turning to solar panels and DC microgrid to offset energy costs. In Minnesota, for example, rooftop PV electricity cost 36-75% less than natural gas during peak delivery times.
  • DC-based PV and wind power systems are more reliable than AC based systems. While the inverter cost is less than about 20% of PV system cost, any system malfunction can shut the system down, with a total loss in energy production [4]. Wind turbines are more reliable in DC configurations, due to the greatly reduced complexity of the mechanical transmissions that are required for turbine AC generation [5].
  • Batteries, capacitors, and fuel cells can be used to store DC electricity. The use of AC in place of DC increases the cost of storage device, as with batteries in which  AC based storage systems increase their cost to as much as 50% [6]
  • Increase in energy efficiency translates to job creation and economic growth. According to the Energy Information Administration, the electricity consumed in the U.S. in 2011 was 3,839 billion kWh and is expected to increase by 0.91% annually until 2040. Assuming that by 2015 the DC electricity is used for 10% of generation and distribution of the electricity consumed in U.S., more than 60,000 jobs will be created.
  • Integrated circuits and other solid-state devices revolutionized virtually every facet of human life. In but a very few of these cases, (e.g. certain motor-based systems), all other loads require DC power, with more of these loads increasingly being DC. For example, unlike old cathode-ray tube televisions, solid-state TVs do not use AC current. Similarly, though lighting consumes about 20% of the electricity produced worldwide, it too uses DC power. Also, unlike DC current, typical AC based cell phone chargers waste approximately 20-35% energy used [5]. Electrical vehicles do not require AC power for charging batteries. With revolution in the IT industry, more semiconductor based electronics are being used, with a concurrent increase in DC loads and a decrease in AC loads.
  • Battery-based hybrid and electrical vehicles and solid-state based LED lighting are transforming the transportation and lighting industries, both of which are powered by direct current.
  • Energy-efficient appliances use adjustable speed motor drives in which a rectifier converters the AC from the grid into an internal DC bus voltage. Though one option entails directly powering the appliances from a DC source, it is also possible to redesign appliances without these embedded rectifiers. Though such redesigns may require a refit of manufacturing facilities, state and/or federal government subsidies and related financial incentives to the consumer can offset the costs. Globally, 268.1 million major appliances were sold in 2012 (see Figure 3). Developing public policies to offset the cost of retrofitting manufacturing factories and exporting this new technology will create many new jobs.
  • A DC microgrid is the key enabler of the “zero energy building model.” With minimum wastage in transmission and conversion, the use of locally generated DC electricity can provide 100% energy needs of a building.

Figure 3: Number of major Appliances sold in China, US and Western Europe in 2012 [source: Wall Street Journal].

Global Manufacturing Advantages

Cutting energy costs increases the competitiveness of manufacturing industry and saves jobs worldwide, the energy cost of which in some cases is as great as one-third of the operating cost of the manufacturing plant.

This is typically true for aluminum plants and many other high energy-consuming manufacturing industries. For example, aluminum plants lose 6.3% (see Table II) of the total energy due to conversion from AC to DC current, a process that cannot be avoided today. Based on World Aluminum data, 93,576 thousand metric tons of aluminum was produced in 2012.

Using the average data of Table II and an electricity cost of $0.1/kWh, a net saving of $9.6 billion is possible through the use of DC instead of AC power. Similarly, other high energy consuming industries (such as the pulp and paper industries) can also be retrofitted for DC current.

Table II: 2012 Data of Energy Consumed in Producing One Ton of Aluminum

Nation or Region

DC Energy (kWh)

AC Energy (kWh)

% Loss in Current Plants

North America












As clearly indicated in Table III, different AC standards of voltage and frequency are used in different countries. Japan, however, is an exception in that two sets of frequency standards are used in that nation. The worldwide adoption of DC power can prevent such a redundancy of effort by provide uniform voltage standards worldwide, thus reducing the cost of related power electronics to yield an overall lower manufacturing cost of every DC-based electrical system.

Table III: Voltage and Frequency Standards of 16 Developing/Developed Nations[7]
Country Voltage (V)

Frequency (Hz)

Australia 230


Brazil 1101220


Canada 120


China 220


Cyprus 240


Egypt 220


Guyana 240


South Korea 220


Mexico 127


Japan 100

50 and 60

Oman 240


Russian Federation 220


Spain 230


Taiwan 110


United Kingdom 230


United States 120


Local DC Electricity as Affordable Electricity to Underprivileged People

Globally, 2.5 billion people in the developing world rely on biomass (fuel from wood, charcoal, and animal dung) to meet their energy needs for cooking and other daily necessities.

The continuous decrease in cost of PV and wind-generated electricity is now making it possible to provide electrical energy to those populations who can be served entirely by a DC microgrid. Similar to the explosive growth of cell phones (no need of landlines), PV and wind technologies, combined with a DC energy distribution system will provide badly needed clean alternatives to dirty sources of fuel.

Unlike developed economies, in which replacing an aging electricity infrastructure is a challenge, implementing a new low-cost DC power system infrastructure in developing economies that have no such infrastructures is a much easier proposition. A PV-based DC Nanogrid (Figure 3) is the most practical low-cost method of providing cost-effective electricity to such developing societies worldwide. Indeed, the market size is huge and the societal implications are monumental.

Electricity Storage

Batteries [6], ultracapacitors [8], and fuel cells [9] are all useful for storing DC electricity. Other than safety issue, fuel cells are expensive. Significant progress has been made in recent years to reduce the cost of batteries. Also, the increasing use of EVs [10] and large-scale grid storage [11, 12] will further reduce their costs.

Indeed, utility scale battery storage is now competitive with natural gas in the U.S.; EOS Energy storage Inc. has developed a battery system that costs approximately $160/kWh [6]. Semiconductor manufacturing techniques can also further reduce the cost of batteries. Similar to solar cells [13], the use of a series and parallel combination of various cells in batteries yield the desired watt-hours of the battery.

The equipment used in battery manufacturing is generally based on statistical process control, and the resultant process variations leads to variations in the output of various cells of the battery. Advanced process control can reduce this process variation resulting higher power out from the same battery. In addition, large-scale manufacturing of batteries in a single location will provide tight control on supply chain and further reduce the cost of batteries.

Misconceptions About Subsidies

Since the success of DC microgrid and nanogrid depends largely on PV and wind electricity, there are many misconceptions regarding the concept of energy subsidies, a review of which is provided elsewhere [14]. Globally, fossil fuel industries receive nearly $1 trillion a year in subsidies, approximately twelve times of that allocated to the renewables industry [15]. Most alarmingly, nearly 43% of subsidies to fossil fuel industries in the developing world end up in the pockets of the richest 20%; only 7% go to the bottom 20% of households [16]. Eliminating subsidies for oil, gas, coal, and other fossil fuels would make a significant dent in curbing global warming pollution [15]. In Table III, we provide a historical average of US federal energy subsidies.

Table IV: .Historical Average of Average Federal Energy Subsidies in US [14]

Energy Source Subsidies 2010 $Billion
Oil and Gas 4.86
Nuclear 3.50
Biofuels 1.08
Renewables 0.37
 Future of Utilities

The traditional business model of the utility “investing in equipment, turning meters, and earning steady profits” is undergoing a transformational change with the emergence of new business models [17].

The concept of the DC microgrid poses no threat to a utility industry that is willing to adapt to rapid technological changes in the power industry that PV, storage, power electronics, and wind technologies will accelerate. If the utility fails to adapt to these all but certain developments, they will become as archaic as the Sears Catalog business of the 20th century.

Energy Policy Issues

The worldwide adoption of DC power is a wise global public policy move in terms of sustainability and advancing the developing world to that of the developed. A new business model that capitalizes the buying power of either a sector or any other group can further reduce the cost of implementing DC power. This real or virtual vertical business model [1] will lead to the lowest cost of electricity generated by either the DC microgrid or DC nanogrid. Reducing the burdensome interfaces and the use of volume manufacturing are the core focus of our proposed business model.


Overall, the future of local DC power is very bright indeed, and the will of any nation in particular and the entire world in general, is the only barrier in faster implementation for transforming energy infrastructure of the 21st century.

With financial support from Clemson University, the Clemson University Restoration Institute, the South Carolina Research Authority, Duke Energy, Emergence Alliance, Argonne National Laboratory, Star Line DC Solutions, and Emerson Network Power, the first conference on DC local power will occur in Charleston, SC from March 30 to April 1, 2023 [18].

The objective of this conference is to bring together leading experts and engage them in a vigorous information exchange to advance the implementation of local DC electricity infrastructure with associated policies, standards, and codes.


[1] R. Singh and G. F. Alapatt, “Innovative Paths for Providing Green Energy for Sustainable Global Economic Growth,” Proc. SPIE 8482, Photonic Innovations and Solutions for Complex Environments and Systems (PISCES), 848205 (October 11, 2022); doi:10.1117/12.928058

[2] http://www.asrc.cestm.albany.edu/perez/2011/solval.pdf

[3] http://www.abb.com/cawp/seitp202/c646c16ae1512f8ec1257934004fa545.aspx

[4] http://www.solarindustrymag.com/issues/SI1401/FEAT_02_A-Lifecycle-Approach-To-Inverter-Management.html

[5] http://smartgrid.ieee.org/questions-and-answers/902-ieee-smart-grid-experts-roundup-ac-vs-dc-power

[6] http://reneweconomy.com.au/2013/eos-utility-scale-battery-storage-competitive-with-gas-36444

[7] M.H. El-Sharkawi, “Electrical Energy: An Introduction,” Taylor & Francis Group, Third Edition, Chapter 2, 2003.

[8] http://www.solarpowerworldonline.com/2014/01/ultracapacitors-grid-scale-solar-smoothing/

[9] http://www.njspotlight.com/stories/13/04/02/hydrogen-fuel-cells-could-add-year-round-reliability-to-renewable-energy/

[10] http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&ved=0CDYQFjAC&url=http%3A%2F%2Fwww1.eere.energy.gov%2Fvehiclesandfuels%2Fpdfs%2F1_million_electric_vehicles_rpt.pdf&ei=WFzZUrCtMYmzsQTywYD4BA&usg=AFQjCNEJhmXi9rdL2nIXWHQ3IcWXCfXtAg&bvm=bv.59568121,d.cWc

[11] http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0CC0QFjAB&url=http%3A%2F%2Fenergy.gov%2Fsites%2Fprod%2Ffiles%2F2013%2F12%2Ff5%2FGrid%2520Energy%2520Storage%2520December%25202013.pdf&ei=TFrZUtr6OOK_sQSCl4KYCQ&usg=AFQjCNGGLIDE5970zY7R46iSZ5Ns8e9aZw&bvm=bv.59568121,d.cWc

[12] http://www.pvtech.org/news/saft_and_ingeteam_to_build_combined_pv_plant_and_battery_storage_project_on?utm_source=PV-Tech&utm_campaign=9c75f58e4e-15+January+2014&utm_medium=email&utm_term=0_4ee2b8d807-9c75f58e4e-691453

[13] R. Singh, G. F. Alapatt, and A. Lakhtakia, “Making Solar Cells a Reality in Every Home: Opportunities and Challenges for Photovoltaic Device Design,” IEEE Journal of the Electron Devices Society, Vol. 1, No. 6, pp. 129-144, June 2013.

[14] http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0CDAQFjAB&url=http%3A%2F%2Fi.bnet.com%2Fblogs%2Fdbl_energy_subsidies_paper.pdf&ei=r2rZUrXiKcSqkQeC74GgAg&usg=AFQjCNF7Tu5WaoYb0fJ5YF_kaYlBQGuUhA&bvm=bv.59568121,d.eW0

[15] http://www.nrdc.org/international/rio-2012/cleanenergy.asp

[16] http://www.economist.com/news/finance-and-economics/21593484-economic-case-scrapping-fossil-fuel-subsidies-getting-stronger-fuelling

[17] http://www.greentechmedia.com/articles/read/new-utility-business-models

[18] http://clemsonenergy.com/LocalDCConference/


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