Just when you understood the role of microgrids in providing energy services, along comes another fast-evolving approach to power distribution, nanogrids. What's more, you probably already use nanogrid-designed systems every day, without realizing it or thinking about it.

Technically speaking, "nano" means super-small, but nothing's miniscule about the market that appears to be coalescing around this concept. By 2023, revenue related to installations could reach almost $60 billion, compared with $37.8 billion by the end of 2014, according to projections by market forecaster Navigant Research.

"Though smaller in size than microgrids, nanogrids represent a larger market opportunity because they are, generally speaking, less challenging to the status quo and less subject to the technological challenges facing larger distribution networks that assimilate diverse distributed energy resources," wrote Peter Asmus, a Navigant analyst, in a recent report about the technology. "While North America is the leading region for microgrids, the largest and fastest growing nanogrid markets today are remote systems operating in the developing countries of Asia Pacific, the Middle East and Africa."

Some manufacturers seeking to leverage this interest with technologies that make use of nanogrid design principles include Bosch, Eaton, Emerson Network Power, Johnson Controls and NRG Energy, according to Navigant.

What is a nanogrid?

Nanogrid power distribution approaches are actually more common than you probably realize, in the form of solutions and system designs that let electronics devices draw a charge via the USB ports on a personal computer or, in the case of communications gadgets, via Power over Ethernet.

When it comes to the future of electricity, nanogrids share several characteristics. Many use direct current (DC) components to cut down on efficiency losses associated with conversions (although alternating current, or AC, isn't out of the question), and the loads they support generally are discrete. They often are restricted to a single building or load, but they can be interconnected and there's no official threshold on generation capacity. For the purposes of its market sizing analysis, Navigant sets the limit at 100 kilowatts for a grid-tied system or 5 kW for standalone systems.

[Learn more about distributed energy systems, and catch Peter Asmus in person, at VERGE SF 2014, Oct. 27-30.]

Bruce Nordman, a researcher with the Environmental Technologies Division at Lawrence Berkeley National Laboratory, said a "key feature" of nanogrids is their ability to be interconnected with each other or with larger grid distribution systems.

"A nanogrid is a single domain for voltage, reliability, and administration," Nordman wrote in his recent paper about the topic, "Nanogrids: Evolving our electricity systems from the bottom up" (PDF). "It must have one load (sink of power, which could be storage) and at least one gateway to the outside. Electricity storage may or may not be present."

What's the difference between a microgrid and a nanogrid?

In a word, simplicity. Unlike microgrids, nanogrid distribution systems generally provide only a single voltage and level of quality/reliability. Because they are so small, installations usually can proceed pretty quickly, without being caught up with utility regulations of public right-of-way questions.

That's one reason nanogrids are growing so fast both in established economies, such as the United States, where they are being tested as part of smart home solutions, and in emerging nations, where they are being connected with renewable generation sources, especially solar, to bring electricity to remote areas.

"Microgrids are a superset of nanogrids, and so some current implementations serve as examples of nanogrids, either in entirety, or in some components," Nordman notes in his white paper about the topic.

What nanogrid applications have the most potential?

Aside from the basic electronics charging scenarios already referenced, nanogrid systems can be found in sophisticated automobiles, where they are used within the electrical systems to power radios or lights; and in aircraft or ships, where they help keep systems up and running.

One highly visible category of emerging applications for nanogrid distribution systems centers on smart home or building solutions that integrate a source of on-site power generation — such as rooftop solar photovoltaic panels — with an energy control center linking building systems, appliances, lighting and heating, and ventilation and air-conditioning equipment. The technology also could play a role in managing energy stored in electric vehicle batteries.

In emerging nations or rural areas where power isn't available reliable, nanogrids could have a more profound impact, especially where no "macro" model exists today for distributing electricity. Although you could debate whether it's a microgrid or a nanogrid, the ZubaBox Solar Internet Hub — used by Dell as part of its solar-powered classroom initiative — offers an example of what's possible.

Configured within a shipping container, the solar-powered system is pitched as a solution for setting up portable educational facilities but during other periods the power and connectivity it supplies can be used for other purposes. "Now consider villages with dozens of nanogrids (and perhaps a few microgrids), interconnected in some haphazard fashion," noted Nordman. "In principle, there could be a net flow across many 'links' of the grid, with many nanogrids simultaneously buying and selling power on different 'ports.'"

Reality check: What's holding back nanogrid investments?

With so many factors coming together in nanogrid's favor, what's holding back this concept? The biggest single reason is probably awareness.

Because many people tend to lump nanogrids together with microgrids, they automatically may assume they are subject to the same regulatory challenges and complexity. In actuality, they may open the door to distributed energy distribution — enabling businesses and individuals to start small with investments in solar, wind or other renewable generation technologies, with the promise of scaling and interconnecting those resources at a later date.

Top image of electricity by Lane V. Erickson via Shutterstock.