For most of its history, the electric grid has relied mainly on large, central power stations, using resources like coal, hydropower and nuclear power. These stations make enormous amounts of electricity—often enough to supply millions of homes. Far-flung networks of substations and transmission lines connect these stations to consumers, so that just a few power plants can supply wide regions with cheap electricity. 

But as the world builds new forms of energy, including small generators and sources that don’t contribute to climate change, this model is changing. Today, the focus is on clean energy technologies such as solar panels and wind turbines. These can easily be built at a very small scale, down to a few solar panels on a rooftop. And because large tracts of land are needed to make solar and wind farms that produce as much energy as central power plants, it is often more practical to build them as smaller, “distributed” resources.

This, in turn, makes it easier to build microgrids. Not every community can host a large power station, but it is relatively easy to build enough solar and wind energy to meet local needs. Emerging forms of energy storage, like advanced batteries, can also be built on a small, local scale, providing another source of backup power that can unhook from the grid.

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https://climate.mit.edu/explainers/microgrids?utm_source=MIT+Energy+Initiative