Possibilities, Challenges, and Future Opportunities of Microgrids: A Review

Abstract

Microgrids are an emerging technology that offers many benefits compared with traditional power grids, including increased reliability, reduced energy costs, improved energy security, environmental benefits, and increased flexibility. However, several challenges are associated with microgrid technology, including high capital costs, technical complexity, regulatory challenges, interconnection issues, maintenance, and operation requirements. Through an in-depth analysis of various research areas and technical aspects of microgrid development, this study aims to provide valuable insights into the strategies and technologies required to overcome these challenges. By assessing the current state of microgrid development in Pakistan and drawing lessons from international best practices, our research highlights the unique opportunities microgrids present for tackling energy poverty, reducing greenhouse gas emissions, and promoting sustainable economic growth. Ultimately, this research article contributes to the growing knowledge of microgrids and their role in addressing global sustainability issues. It offers practical recommendations for policymakers, industry stakeholders, and local communities in Pakistan and beyond.

1. Introduction

Microgrids are autonomous electrical systems that generate, store, and distribute electricity to meet the needs of localized communities. They are an alternative to traditional power grids in unreliable or expensive electricity supply areas. They can supplement the main grid during peak demand. Microgrids are an emerging technology that is becoming increasingly popular in developed and developing countries. The microgrid can operate in grid-connected, islanded, and hybrid modes [1]. In grid-connected mode, the microgrid is connected to the main power grid and can either import or export electricity as needed. In islanded mode, the microgrid operates independently of the main grid, using the distributed energy resources—DERs—to generate, store, and distribute electricity locally [2]. In hybrid mode, the microgrid operates in grid-connected and islanded modes, depending on the availability and reliability of the main grid. In this article, we will explore the concept of microgrids, their benefits and challenges, and the current state of the technology. Section 2 provides a literature review of microgrid technology, Section 3 lists the challenges faced in microgrid implementation, Section 4 lists the technical aspects of microgrid implementation, Section 5 is a case study of microgrids in Pakistan, Section 6 is the discussion, and Section 7 concludes the paper.

2. Literature Review

Microgrids can be particularly useful in remote areas where the main power grid may be non-existent or unreliable. In developing countries, microgrids can provide an affordable and sustainable source of electricity to communities that may not have had access to electricity before. In addition, microgrids can provide energy independence and resilience, which is particularly important in areas prone to natural disasters such as hurricanes or earthquakes. Microgrids are an emerging technology still in the early stages of development. However, there are several examples of successful microgrid implementations around the world. For example, the Brooklyn Microgrid project in New York City is a community-based microgrid that uses solar panels, battery storage, and backup generators to provide reliable and affordable electricity to residents [3]. Similarly, the Alamosa Solar Generating Project in Colorado is a hybrid microgrid that combines a large-scale solar power plant with battery storage and natural gas backup generators to provide reliable and cost-effective electricity to the local grid [4]. In addition to these examples, many ongoing research and development efforts aim to improve microgrids’ performance and cost-effectiveness. For example, researchers are exploring new battery chemistries and storage technologies that could improve microgrid batteries’ energy density and longevity. They are also developing new control and monitoring systems that can improve the reliability and efficiency of microgrids, as well as exploring the potential of new renewable energy sources such as wave energy and geothermal power. The structure of a microgrid reproduced from [5] is shown in Figure 1.

Implementing microgrids can disrupt the traditional centralized energy system and shift power to local communities. In a microgrid, local actors own and control power generation and distribution rather than large, centralized utilities [6]. Microgrids can create opportunities for new business models and community-based ownership structures that economically benefit local communities. For example, in some microgrid projects, local communities are allowed to own and operate the microgrid, which can provide a source of income and employment for residents. In addition, microgrids’ increased energy independence and security can help reduce local communities’ vulnerability to energy-related disruptions, providing a foundation for broader economic development [7].

2.1. Microgrids’ Potential Benefits

Microgrids offer several benefits compared with traditional power grids, as shown in Figure 2 [8].

• Increased reliability: Microgrids operate independently, so they can continue to provide power even if the main grid fails.
• Reduced energy costs: Microgrids can combine renewable energy sources and energy storage to reduce energy costs and improve energy efficiency.
• Improved energy security: Microgrids can provide a secure power source in areas where the main grid is unreliable or expensive.
• Environmental benefits: Microgrids can reduce carbon emissions by using renewable energy sources, which can help to mitigate climate change.
• Increased flexibility: Microgrids can be configured to meet the specific needs of the local community and expanded or reconfigured as needed.

2.2. Microgrids’ Potential Areas for Growth and Research

The potential microgrid areas for research and growth are in Figure 3. One possible area of growth for microgrids is the transportation sector. With the rise of electric vehicles, there is a growing need for reliable and efficient charging infrastructure. Microgrids can provide a local power source for EV charging stations, reducing the strain on the main power grid and providing a more resilient and flexible energy system [9]. Another potential application of microgrids is in the military sector. Microgrids can provide a secure and reliable power source for military bases and other critical infrastructure, reducing the vulnerability of these facilities to energy-related disruptions. In addition, microgrids can help to reduce the military’s dependence on fossil fuels, providing a more sustainable and resilient energy system [10].

One exciting area of research in microgrids is the development of community-based microgrids. These microgrids are owned and operated by local communities rather than large utilities or private companies. By giving local communities control over their energy systems, community-based microgrids can promote more significant social equity and empower communities to actively manage their energy needs [10]. It is essential to develop new financing mechanisms and business models to provide the necessary funding to get these projects off the ground. Local financing may involve community ownership models, where local communities pool resources to finance microgrid development [11]. By involving community members in the development process, it is possible to create microgrid systems tailored to the community’s specific needs. Promoting the development of community-based microgrids may create a more decentralized and democratized energy system. A decentralized microgrid can promote greater energy security and reduce the risk of power outages or other disruptions in centralized energy systems.

One crucial development area for microgrids is disaster response and recovery. The primary power grid is often severely impacted during natural disasters such as hurricanes, earthquakes, and floods. These disturbances lead to prolonged power outages and significant damage to critical infrastructure. In these situations, microgrids can provide a reliable and flexible source of power that can help to support disaster response efforts and facilitate recovery [11]. For example, microgrids can power critical infrastructure such as hospitals, emergency shelters, and communication systems, ensuring these services can operate even after a disaster. In addition, microgrids can power temporary housing units or other infrastructure necessary for recovery efforts. Standardized designs may involve using pre-fabricated microgrid systems that can be quickly transported and installed in disaster-impacted areas. Another potential growth area for microgrids is in the context of sustainable urban development. As urban populations continue to grow, there is a growing need for sustainable and resilient energy systems that can meet the energy needs of these communities [12]. Microgrids can provide a localized and community-based approach to energy management that is well-suited to urban environments. For example, microgrids can power individual buildings or neighborhoods, reducing the strain on the main power grid and improving the overall resilience of the energy system. In addition, microgrids can integrate renewable energy sources such as solar or wind power into the overall energy system. Renewable integration reduces carbon emissions and promotes a more sustainable energy system. Developing standards and best practices for microgrid design for urban communities’ unique needs is essential. This procedure includes the development of new financing mechanisms and business models that can make microgrid development more accessible and affordable.

2.2.1. Blockchain Technology, Artificial Intelligence, and Machine Learning in Microgrids

One exciting development in the field of microgrids is the integration of blockchain technology. Blockchain is a decentralized digital ledger that provides a secure and transparent means of recording transactions. In the context of microgrids, blockchain technology can create a decentralized energy marketplace that allows for peer-to-peer energy trading between microgrid participants. Using blockchain technology, microgrid participants can sell excess energy to one another in real time, creating a more efficient and flexible energy market. In addition, blockchain can provide a more secure and transparent means of tracking energy transactions, reducing the risk of fraud and improving the overall efficiency of the energy market [13].

Another potential benefit of blockchain technology in the context of microgrids is the ability to provide incentives for using renewable energy. Microgrid participants can use blockchain-based tokens or tokens backed by renewable energy certificates to use renewable energy sources such as solar and wind power. These tokens can help promote the transition to a more sustainable and decentralized energy system while providing economic benefits for microgrid participants [14].

Despite the potential benefits of blockchain technology for microgrids, many challenges are present with its implementation. For example, blockchain technology’s scalability and energy efficiency can be challenging, particularly in microgrids with limited computing resources. In addition, the regulatory framework for blockchain-based energy markets is still evolving, creating uncertainty for microgrid developers and participants [15]. Ongoing research and development efforts focus on improving blockchain technology’s scalability and energy efficiency and developing more robust regulatory frameworks for blockchain-based energy markets [16]. By overcoming these challenges, it may be possible to harness the power of blockchain technology to create more efficient, transparent, and sustainable energy markets for microgrids.

Another critical area of microgrid development research is using artificial intelligence (AI) and machine learning (ML) techniques to optimize the operation of microgrid systems. AI and ML can analyze large amounts of energy consumption and production data and identify patterns and trends that can help optimize microgrid systems’ operation. Developing new technologies and protocols to support the use of AI and ML in microgrid development is crucial to enable effective data collection and analysis [17]. This development may involve using advanced sensors and data analytics tools and developing new algorithms to process and analyze large amounts of data in real time. In addition, it is essential to ensure that the use of AI and ML in microgrid development is transparent and accountable [18]. This process may involve the development of new standards and best practices for using AI and ML in microgrid development.

2.2.2. Microgrids and EV Integration

One of the potential benefits of microgrids is their ability to support the integration of electric vehicles (EVs) into the energy system. As the number of EVs on the road continues to grow, there is a growing need for reliable and efficient charging infrastructure to support the increased demand for electricity. Microgrids can provide a localized and flexible power source for EV charging stations, reducing the strain on the main power grid and improving the overall efficiency of the charging process [19]. In addition, microgrids can help to manage the variable nature of EV charging demand, which can be challenging to predict and manage using traditional grid infrastructure. Developing standardized protocols and technologies for EV charging in microgrid systems is necessary. This process involves developing advanced control systems to manage and coordinate EV charging across multiple charging stations and integrating energy storage systems to help manage peak demand periods.

2.3. Global Sustainability Issues and Microgrid Development

Global sustainability issues refer to the complex and interrelated challenges that threaten the long-term well-being of the planet, its ecosystems, and its inhabitants. Climate change, driven by the accumulation of greenhouse gases in the atmosphere, is one of the most pressing global sustainability issues. It leads to extreme weather events, sea-level rise, ocean acidification, and significant disruptions to ecosystems and agriculture [20]. The consequences of climate change disproportionately affect vulnerable populations and can exacerbate existing socio-economic inequalities. The overconsumption of natural resources, such as fossil fuels, minerals, water, and arable land, poses a significant threat to global sustainability. Unsustainable resource extraction and usage can lead to resource scarcity, environmental degradation, and socio-economic tensions. Transitioning to renewable resources and promoting resource efficiency is essential for long-term sustainability [21]. Environmental degradation encompasses various forms of ecosystem damage, including deforestation, loss of biodiversity, air and water pollution, soil degradation, and the depletion of fish stocks. These issues threaten the planet’s ability to support life and can lead to declining ecosystem services, such as water filtration, carbon sequestration, and pollination [22].

As decentralized energy systems, microgrids can play a significant role in addressing various global sustainability issues. Microgrids enable the integration of renewable energy sources such as solar-, wind-, and hydropower into the energy mix. They facilitate the management of distributed energy resources and provide a flexible platform to balance the intermittent nature of renewables [23]. By incorporating energy storage systems, microgrids can store excess renewable energy for later use, reducing reliance on fossil fuels and promoting a low-carbon future. Microgrids improve energy efficiency and conservation by optimizing electricity generation, distribution, and consumption. They utilize advanced energy management systems, demand response programs, and smart grid technologies to monitor and control energy usage in real time [24]. These features lead to reduced transmission and distribution losses, increased system efficiency, and decreased peak demand, all of which contribute to better resource management and conservation. Microgrids empower local communities by enabling them to generate, distribute, and consume their energy. They offer an opportunity for remote and rural areas, particularly those lacking access to the main grid, to achieve energy independence and security [25]. Microgrids can reduce energy poverty by providing affordable and reliable electricity to underserved populations, fostering socio-economic development, and improving quality of life.

2.4. Critical Aspects in Microgrid Development

The critical aspects of microgrid development are presented in Figure 4. One crucial factor to consider in microgrid development is the need for robust monitoring and control systems. Microgrids can be complex systems with a range of distributed energy resources (DERs) that require proper management and coordination to ensure the system’s reliable and efficient operation. This process requires advanced monitoring and control systems that can gather real-time data on energy supply and demand, identify potential issues or anomalies, and adjust the operation of the DERs as needed [26]. Researchers are exploring the use of advanced sensors and data analytics tools to improve the performance of microgrids. These tools can provide real-time data on the performance of the DERs and the overall microgrid system, allowing operators to make informed decisions about optimizing energy supply and demand. In addition, machine learning algorithms can identify patterns and trends in the data, allowing for more accurate forecasting and improved operational efficiency [27].

Another essential aspect of microgrid development is the need for effective interconnection with the main power grid. While microgrids operate independently, there are times when it is necessary to connect to the main grid, such as during periods of high demand or when the DERs cannot meet the energy needs of the local community. It is important to have well-defined interconnection standards and protocols that allow for the seamless integration of microgrids into the main power grid. In addition to these technical considerations, there is also a need to consider the broader policy and regulatory framework for microgrid development [28]. These policies include developing a clear regulatory framework for microgrids and allocating funding and incentives to support microgrid development. By addressing these technical, policy, and regulatory considerations, it may be possible to realize the full potential of microgrids and create a more sustainable and resilient energy system. With their ability to improve energy access and security, reduce carbon emissions, and promote community ownership and collaboration, microgrids offer a promising technology that can transform the energy landscape for years.

3. Challenges of Microgrid Implementation

The challenges of microgrid implementation are presented in Figure 5.

3.1. Cybersecurity Issues

One of the potential challenges for microgrid development is the issue of cybersecurity. As microgrids become more common, they are increasingly vulnerable to cyber-attacks [29]. There is a growing need for cybersecurity solutions designed explicitly for microgrids [30]. These solutions may include advanced encryption techniques, intrusion detection and prevention systems, sophisticated authentication, and access control mechanisms. In addition, microgrid developers must take a proactive approach to cybersecurity, incorporating security considerations into the design and implementation of microgrid systems.

3.2. Energy Storage Issues

Another challenge for microgrid development is the issue of energy storage. While battery storage is becoming more cost-effective and reliable, it still represents a significant upfront cost for many microgrid projects [31]. In addition, using batteries can create environmental concerns. To address these challenges, researchers are exploring new energy storage technologies such as flow batteries and thermal energy storage [32]. These technologies offer the potential for improved energy density, longevity, and reduced environmental impact. In addition, researchers are exploring new business models and financing mechanisms that can make energy storage more accessible and affordable for microgrid developers.

3.3. Social Equity Concerns

As the use of microgrids becomes more widespread, there is a growing need for collaboration and information-sharing between stakeholders. The stakeholders are utilities, regulators, researchers, and local communities. These stakeholders can help develop common standards and best practices for microgrid development [33]. Another important consideration for the implementation of microgrids is the issue of social equity. Access to reliable and affordable energy is critical in many communities. Microgrids can solve this problem by providing a more localized and community-based approach to energy access. However, there is a risk that microgrids may exacerbate existing social inequalities if they are not presented equitably and inclusively. For example, suppose only specific community segments can afford the upfront costs of microgrid development. In that case, this could lead to a situation where the benefits of the technology are not uniform. It is crucial to involve local communities in developing and implementing microgrids and to prioritize equity and inclusion in the design and operation of these systems [34]. This method contains community ownership models, and is developing financing mechanisms accessible to low-income households. Implementing targeted outreach and education campaigns ensures that all community members know the benefits of microgrids and how to access them.

3.4. Financial Concerns

One additional challenge for microgrid development is the financing issue. Microgrid development often requires a significant upfront investment. There are limited financing options for developers, particularly in developing countries. In addition, microgrid developers may face challenges in attracting investment due to the perceived risks associated with the technology and the lack of a well-defined business case [35]. Researchers and policymakers are exploring new business models and financing mechanisms to address these financing challenges. For example, some microgrid projects explore pay-as-you-go models, where users pay for energy services per use. This method can reduce the upfront costs of microgrid development and make it more accessible to low-income households. In addition, governments and international organizations are exploring the use of grants, subsidies, and other financial incentives to support microgrid development. These incentives can provide the necessary funding to get microgrid projects off the ground and make them financially viable over the long term. Another potential financing mechanism for microgrid development is using carbon credits [36]. Microgrids that use renewable energy sources such as solar or wind power can generate carbon credits sold on carbon markets. This selling can provide a source of revenue for microgrid developers and create an economic incentive to use renewable energy sources [37,38].

3.5. Environmental Concerns

Another critical consideration for microgrid development is the need to address environmental concerns. While microgrids have the potential to reduce carbon emissions and promote a more sustainable energy system, there is a risk that they may also have negative environmental impacts, such as the degradation of local ecosystems or the depletion of natural resources [39]. Developing standards and best practices for microgrid design and operation that prioritize sustainability and environmental responsibility is essential to address environmental concerns. These measures may involve the use of renewable energy sources, the implementation of energy efficiency measures, and the development of new technologies and materials that are environmentally responsible.

4. Technical Aspects of MGs Implementation

Microgrids are critical in maintaining energy supply and stability during major blackouts, offering numerous benefits that enhance the power system’s resiliency. When a major blackout occurs, microgrids can automatically disconnect from the main grid and operate in islanded mode [40]. This isolation allows them to continue providing electricity to their local loads, ensuring that critical facilities, such as hospitals, data centers, and emergency response centers, remain operational. Some of the technical aspects of microgrid implementation are the following.

4.1. Harmonics and Power Quality

Harmonics are high-frequency voltage and current distortions that can occur in an electrical system. They result from non-linear loads, such as electronic devices and power electronic converters, which can introduce harmonic currents and voltages into the system. These harmonic disturbances can cause several problems, including power loss, increased heating in equipment, and decreased power factor [41]. Harmonics can be particularly challenging in microgrids because of distributed energy resources (DERs) such as solar PV systems, wind turbines, and battery storage systems. These DERs often include power electronic converters that can introduce harmonic distortion into the system. Microgrids often have a high penetration of non-linear loads, such as lighting and heating systems, which can also contribute to harmonic distortion [42].

Figure 6 shows three main harmonics mitigation strategies in microgrids: harmonic filters, advanced control algorithms, and droop control strategies. One approach is to use harmonic filters, devices designed to remove harmonic currents from the system. These filters are present at the point of common coupling (PCC) between the microgrid and the larger grid or individual DERs and loads within the microgrid [43]. Another approach is to use active power filter (APF) systems, which can actively manage harmonic distortion by injecting harmonic currents into the system. APF systems have harmonic filters for additional harmonic mitigation [44]. Another method is to use advanced control algorithms to manage the operation of DERs and loads within the microgrid. These algorithms can control the microgrid’s power flow and voltage levels to minimize harmonic distortion [45].

Microgrids also use power electronic interfaces as inverters, which can also introduce harmonics in the grid. Advanced control strategies, such as direct power control (DPC) and droop control, use the inverters to regulate their active and reactive power based on the grid conditions [46]. Power quality is a critical aspect of microgrids, as it directly impacts the performance and reliability of the system. Due to the distributed nature of microgrids and the integration of different energy sources, power quality issues can arise, significantly impacting the system [47]. One of the main power quality issues facing microgrids is voltage sag and swell. These are temporary reductions or increases in voltage levels caused by changes in the load or the power generated by the microgrid. Voltage sag and swell can cause various problems, including equipment damage, decreased system efficiency, and power outages [48,49,50].

4.2. Microgrid Stability

Stability in a microgrid is the ability of the system to return to regular operation after a disturbance. A microgrid has two types of stability: steady-state stability and dynamic stability. Steady-state stability is the capability of the microgrid to maintain a constant voltage and frequency within specified limits, even under normal and abnormal conditions [51]. Dynamic stability, on the other hand, is the ability of the system to return to steady-state conditions after a disturbance, such as a change in load or generation.

Figure 7 shows three main harmonics mitigation strategies in microgrids: energy storage systems, advanced protection systems, and improved system monitoring. One approach is to use energy storage systems, such as batteries, to store excess energy generated by the microgrid. These systems can provide backup power during power outages and help to smooth out voltage and frequency fluctuations. Energy storage systems can also provide ancillary services, such as frequency regulation, improving overall stability.

Another method is to use advanced protection systems; these systems detect and isolate disturbances in the grid, such as faults, and clear them quickly, thus preventing the disruptions from spreading and causing more damage to the grid.

4.3. Microgrid Energy Storage

Energy storage systems are an essential component of microgrids, as they play a critical role in ensuring the stability and reliability of the system. Energy storage systems store excess energy generated by the microgrid, which provides backup power during power outages [52]. A microgrid can have several energy storage devices, each with unique advantages and disadvantages. One of the most common types of energy storage devices is batteries. Batteries can store energy in various forms, including lead–acid, lithium–ion, and flow batteries. They are inexpensive, have a long lifespan, and can easily integrate into microgrids. However, batteries have a relatively low energy density, require a significant physical footprint, and are heavy [53].

Another type of energy storage device in microgrids is flywheels. Flywheels are mechanical devices that store energy in the form of kinetic energy. They are inexpensive, have a long lifespan, and can easily integrate into microgrids. However, flywheels have a relatively low energy density and are somewhat bulky [54]. A third type of energy storage device in microgrids is compressed air energy storage (CAES). CAES systems store energy in compressed air, generating electricity when needed. CAES systems are relatively inexpensive, have a long lifespan, and can easily integrate into microgrids [55]. However, CAES systems have a relatively low energy density and are bulky. Hydrogen fuel cells are the fourth type of energy storage device in microgrids. Hydrogen fuel cells convert the chemical energy of hydrogen into electricity [56]. They are relatively expensive, have a long lifespan, and are easy to integrate into microgrids. However, hydrogen fuel cells have a relatively low energy density and are bulky.

4.4. Microgrid Control Strategies

Effective microgrid control ensures robust and economical operation and coupling of renewable energy sources into the grid. There are several critical components of microgrid control, shown in Figure 8 and explained below [57]:

State estimation is performed using sensor data and other information to determine the current state of the microgrid, including the status of different components and the amount of power being generated and consumed.

Power management includes controlling the flow of power within the microgrid to ensure that it is balanced and that the different components operate within safe limits.

Energy storage management involves managing the charge and discharge of energy storage systems, including batteries, to ensure efficient utilization.

Load management includes managing the demand for electricity within the microgrid, such as by shifting loads to times when renewable energy sources produce more power.

Islanding detection is the ability of the microgrid to detect when it is disconnected from the larger grid and to switch to islanded operation.

Grid integration involves coordinating the operation of the microgrid with the larger grid, such as by allowing excess power to be exported to the grid or importing power when needed.

Three main approaches to microgrid control, shown in Figure 9, are centralized, decentralized, and hybrid control. Centralized control involves having a single controller that manages all the components of the microgrid. Decentralized control involves having multiple controllers containing a subset of the features. Hybrid control consists of a combination of centralized and decentralized control [58].

Centralized control is the traditional microgrid control approach. However, it has some limitations, such as the need for a high-bandwidth communication network and the potential for a single point of failure. The decentralized control is more robust, but coordinating multiple controllers’ actions can be more challenging [59]. Hybrid control can be a good compromise, as it allows for the benefits of both centralized and decentralized control. One of the critical challenges of microgrid control is to ensure that the microgrid operates stably and efficiently, even in the presence of uncertainty and disturbances. This operation uses advanced control algorithms, such as model predictive control (MPC) and robust control [60].

MPC is a control algorithm that uses a microgrid model to predict its future behavior, and then uses this information to determine the optimal control actions. MPC can handle a wide range of uncertainties and disturbances and can be used to optimize various performance metrics, such as power balance and energy efficiency. Robust control is another approach to ensure microgrids’ stability and efficiency in the presence of uncertainty and disturbances. Robust control algorithms are insensitive to slight variations in system parameters and are able to cope with unexpected disruptions [60]. Another critical aspect of microgrid control is the integration of renewable energy sources, such as solar and wind power, into the microgrid. Renewable energy sources are characterized by their high variability and uncertainty, making it difficult to predict their power output. This issue is resolved using advanced techniques, such as statistical forecasting and machine learning [61].

4.5. Microgrid Protection Strategies

Protection is a critical aspect of microgrids, as it ensures the safe and reliable operation of the system. Due to the distributed nature of microgrids and the integration of different energy sources, protection issues can arise, significantly impacting the system [62]. One of the principal protection issues facing microgrids is the occurrence of faults, such as short circuits, which can cause damage to equipment and disrupt the system’s operation. Figure 10 shows three main microgrid protection strategies: circuit breakers, power slow controllers, and regular system monitoring. Protection devices, such as circuit breakers, detect apparent faults quickly to prevent the defects from spreading and causing more damage to the grid [63].

Another protection device is the power flow controller (PFC), which helps to maintain the balance between the power generated and consumed by the microgrid. A PFC controls the power flow between different energy sources, energy storage systems, and loads [63]. Additionally, the microgrid’s inverters may use advanced protection strategies. These devices control the power flow between the microgrid and the primary grid. Protection strategies protect the inverters from overvoltage, overcurrent, and over/under frequency conditions [64]. Furthermore, regular monitoring and testing of the system are essential to identify and address potential protection issues. This strategy can include using power quality analyzers to measure voltage and frequency levels and identify the sources of faults within the system [65].

Table 1. Contribution and Limitations of various strategies.

Ref	Contributions	Limitations
[41]	This paper defines various stability parameters in microgrids and analyzes the various stability improvement strategies	A case study of microgrid stability analysis is missing
[42]	This paper explains various energy management strategies for developing a resilient microgrid	It lacks the review of machine learning techniques in microgrid energy management
[43]	This paper explains different energy management strategies with flexible energy sources	This paper does not present a review of super capacitors in microgrid energy management
[44]	This paper is a review of microgrids’ robust optimization with load uncertainty	It does not include the utilization of model predictive control strategies
[45]	This paper explains a number of energy management strategies at small-scale microgrids	It does not present the utilization of demand side management strategies
[46]	This paper is a review of microgrid architecture, control, and reliability	This paper lacks the implementation of microgrids at a nano scale
[47]	This paper is a review of microgrid cluster and operation	It lacks the information of grid level energy exchange
[48]	This paper performs reliability, economic, and environmental analysis of microgrid systems	It does not suggest a method to make a resilient microgrid system
[49]	In this work, various data-mining-based fault detection and classification strategies are studied	Information about the harmonic mitigation strategy is missing
[50]	In this paper, the implementation framework of a microgrid is studied	The strategies to mitigate the practical hurdles are missing

summarizes the contributions and limitations of various papers.

5. Microgrids in Pakistan: A Case Study

Microgrids are a promising solution to address the challenges of power generation and distribution in Pakistan. They can provide a reliable and sustainable source of electricity, particularly in rural and remote areas where grid infrastructure is inadequate or non-existent. Implementing microgrids encourages the utilization of renewable energy resources and lowers Pakistan’s reliance on fossil fuels.

One of the main advantages of microgrids in Pakistan is their ability to improve energy access and reliability. Microgrids can provide a reliable power source to remote and rural communities not connected to the primary power grid. These communities often suffer from frequent blackouts and brownouts due to the poor condition of the primary power grid. Microgrids can provide a stable source of power that is not dependent on the primary grid [66]. Another advantage of microgrids in Pakistan is their ability to promote the use of renewable energy. Various renewable energy sources such as solar, wind, and hydroelectric power can power microgrids. Microgrids can also incorporate energy storage systems, which can help to smooth out the unpredictable nature of renewable energy sources.

Microgrids also have the potential to promote economic development and create jobs in Pakistan. The development and operation of microgrids can create jobs in the systems’ construction, installation, and maintenance. Microgrids can also provide a stable power source to small businesses and industries, promoting economic development and creating jobs in the local community [67]. Furthermore, microgrids can also improve energy efficiency and reduce energy costs. Microgrids can optimize the use of energy resources and reduce waste, leading to lower energy costs. Microgrids can also incorporate demand response mechanisms, which can help reduce peak demand and lower energy costs [68].

Microgrids can improve energy security in Pakistan. The country heavily depends on imported oil and natural gas to meet its energy needs. Microgrids can reduce dependence on fossil fuels and increase domestic energy resources, improving energy security in the country [69]. Microgrids can significantly improve energy access and reliability in Pakistan, where only about 70% of households have access to electricity [70].

5.1. Pakistan’s Energy Mix

Pakistan’s energy mix is diverse, with various conventional and renewable energy sources to meet the country’s energy needs. Pakistan’s primary energy sources are oil, natural gas, coal, hydroelectricity, and nuclear power. Figure 11 shows the energy mix of Pakistan. Pakistan’s primary energy source is oil, accounting for about 40% of the total energy mix. Due to its small local oil reserves, the nation severely depends on imports to meet its oil demands. Pakistan uses most of its oil for power production and transportation [71]. Natural gas is Pakistan’s second-largest energy source, accounting for about 30% of the total energy mix. Pakistan’s natural gas sector is primarily state-controlled and has faced challenges such as low investment and declining production in recent years [72].

Coal is another significant energy source in Pakistan, accounting for about 15% of the total energy mix. Pakistan has large coal reserves, mainly in the Thar desert, which have been under development in recent years. Hydroelectricity is also an essential energy source in Pakistan, accounting for about 8% of the total energy mix. The country has significant potential for hydroelectric power, with large rivers such as the Indus and the Jhelum providing potential sites for hydroelectric power plants. However, poor management, lack of maintenance, and poor water management have affected hydroelectric power generation [73]. Nuclear power is a small but growing energy source in Pakistan, accounting for about 2% of the total energy mix. Pakistan has two nuclear power plants in operation, with plans to add several more [74]. The country has also developed a domestic nuclear fuel cycle and can produce low-enriched uranium for use in nuclear power plants. Renewable energy generation accounts for 5% of the energy mix. The graph in Figure 12 is based on the data collected from the IEA website; it shows the total energy supply in the country from 1990 to 2020 [75]. The graph in Figure 13, made from the IGCEP report approved by NEPRA, shows the peak demand forecast up to 2030 [76]. The pie chart in Figure 14, made from the IGCEP report approved by NEPRA, shows the sector-wise sale of electricity in Pakistan [64]. Figure 15 is the load curve of 23 June 2021 in Pakistan, analyzing the energy mix for each hour [77].

Despite having a diverse energy mix, Pakistan still faces several challenges in meeting its energy needs. One of the main challenges is the lack of investment in the energy sector. The country is experiencing a chronic energy dilemma due to insufficient power generation and transmission infrastructure investment. Furthermore, the government faces issues such as power theft, poor management, and lack of maintenance, resulting in poor operational efficiencies in the energy sector [78]. Another challenge faced by Pakistan is the high cost of energy. The country has a high energy subsidy bill, which has led to a high level of circular debt in the energy sector. This high energy cost has also resulted in high energy poverty, with many households unable to afford electricity.

Pakistan has significant renewable energy potential, particularly solar and wind power. The country’s geographic location, abundant resources, and growing energy demand make it an attractive market for renewable energy development. Solar energy is Pakistan’s most promising renewable energy source, with significant potential for solar power generation. Pakistan receives an average of 5–7 kWh/m²/day of solar radiation, among the highest in the world. The country has a total solar energy potential of over 105 GW, with a significant portion of this potential located in the remote and underdeveloped regions of the country. Higher sun irradiance makes solar energy an attractive option for providing energy access to remote and rural communities [79].

The government of Pakistan has been promoting the development of solar power projects through policies such as net metering and feed-in tariffs. Net metering allows consumers to generate electricity using solar panels and sell any surplus back to the grid. Feed-in tariffs are a policy mechanism that guarantees a fixed price for the electricity generated by renewable energy projects. These policies have helped attract private investment in the solar power sector and have led to the development of several large-scale solar power projects in the country [80]. In Pakistan, wind energy is also a potential renewable energy source. The country has a total wind energy potential of over 50 GW, with most of this potential located in the country’s coastal areas [81]. Through programs such as feed-in tariffs and tax breaks, the government has been pushing the development of wind-generating installations. The potential for wind power generation is anticipated to increase because of these measures, leading to many large-scale wind power projects nationwide. In addition to solar and wind energy, Pakistan has the potential for other forms of renewable energy, such as hydropower and biogas [82]. The country has significant potential for hydropower generation, with large rivers such as the Indus and the Jhelum providing potential sites for hydroelectric power plants. Biogas, which is an organic waste, has the potential to provide a source of clean energy for rural households and small-scale industries [83].

5.2. Energy Sector of Pakistan

Pakistan’s power system is a complex mix of power generation, transmission and distribution networks, and regulatory frameworks. The power system provides electricity to over 220 million people [84]. However, the country has faced a chronic energy deficit, which has led to widespread power outages, particularly in rural areas. Figure 16 shows the organizational structure of the power sector of Pakistan. National Transmission and Despatch Company (NTDC) manages Pakistan’s transmission and distribution networks. The NTDC moves electricity from power facilities to distribution companies, which then distribute the electricity to end consumers [85]. The transmission and distribution networks in Pakistan are inadequate and need improvement. The government has been investing in expanding and upgrading the transmission and distribution networks to improve the reliability and efficiency of the power system. One of the prominent roles of the NTDC in implementing microgrids is providing transmission and distribution services. The NTDC is responsible for connecting microgrids to the primary power grid, which allows them to sell surplus power back to the grid and provides a reliable energy source during grid outages. The NTDC also provides metering services to microgrids, which is crucial for billing and revenue collection [86].

Another critical role of the NTDC in implementing microgrids is providing technical assistance and capacity building. The NTDC has a team of experts in transmission and distribution who can provide technical assistance to microgrid developers and operators. This assistance includes providing training on grid connection procedures and standards and guidance on the design and operation of microgrids. The NTDC also plays a vital role in regulating and monitoring microgrids in Pakistan. The National Electric Power Regulatory Authority (NEPRA) Microgrid Regulations, issued in 2016, grant the NTDC the authority to control and monitor microgrids in the country. This regulating power includes enforcing technical standards, ensuring compliance with grid connection procedures, and monitoring the performance of microgrids. In addition, the NTDC also plays a role in developing microgrids in Pakistan through its partnerships with private sector companies. The NTDC has signed Memorandums of Understanding (MOUs) with several private sector companies to build microgrids in the country. These partnerships allow the NTDC to leverage the expertise and resources of the private sector to improve energy access and reliability in underserved communities. The regulatory framework for the power sector in Pakistan is the responsibility of the National Electric Power Regulatory Authority (NEPRA). NEPRA is responsible for regulating the generation, transmission, and distribution of electricity, as well as the protection of the rights of consumers [87]. The regulatory framework in Pakistan is generally considered weak, and there have been calls for strengthening the regulatory framework to improve the efficiency and effectiveness of the power system.

The Alternative Energy Development Board (AEDB) is a government organization in Pakistan established in 2007 to promote and develop renewable energy. The organization is responsible for creating a supportive environment for investment in renewable energy projects, providing technical assistance to developers, and issuing licenses and permits for renewable energy projects. Additionally, AEDB offers various incentives for investors to encourage renewable energy development in Pakistan. One of the central policies of AEDB is to increase the use of renewable energy sources in the country. Pakistan heavily depends on fossil fuels, contributing to high greenhouse gas emissions and import bills. AEDB is working to reduce this dependence by promoting clean energy sources such as solar, wind, and biogas [88].

One of the critical initiatives of AEDB is the development of large-scale solar power projects. The organization is working to increase the installed capacity of solar power in the country by developing solar power parks and implementing net metering policies. AEDB is also working to improve the use of solar energy in rural areas by providing subsidies and technical assistance to farmers and rural communities. In addition to solar power, AEDB is also working to develop wind energy in Pakistan. The organization is working to increase the installed capacity of wind power in the country by developing wind power parks and implementing net metering policies. AEDB is also working to improve the use of wind energy in rural areas by providing subsidies and technical assistance to farmers and rural communities [89]. Another key initiative of AEDB is the development of biogas projects. Biogas is a clean and renewable energy source produced from the decomposition of organic matter. AEDB is working to increase the use of biogas in Pakistan by developing large-scale biogas plants and implementing policies that promote biogas in rural areas. AEDB is also working to create a supportive environment for investment in renewable energy projects. The organization provides various incentives to investors to encourage renewable energy development in Pakistan. These incentives include tax exemptions, low-interest loans, and subsidies. Additionally, AEDB offers technical assistance to developers to help them navigate the regulatory and administrative processes involved in developing renewable energy projects [90,91].

5.3. Net Metering

A system known as net metering enables people and businesses to produce their electricity using renewable energy sources, such as solar or wind power, and then send any excess energy back to the grid for credits on their utility bill. This system is becoming increasingly popular in Pakistan to promote clean energy and reduce dependence on fossil fuels [92]. The National Electric Power Regulatory Authority (NEPRA) regulates the net metering system in Pakistan. Under NEPRA’s rules, customers who want to participate in the net metering program must first obtain approval from their local distribution company (LDC). The LDC then installs a special meter to measure the electricity the customer uses from the grid and the electricity they send back to the grid [93].

Once the net metering system is in place, customers receive credits on their utility bill for any excess electricity they send back to the grid. These credits can offset the cost of electricity that the customer uses from the grid later. For example, suppose customers generate more electricity than they use during the day (when the sun is shining or the wind is blowing). In that case, they can send that excess energy back to the grid and receive credits they can use at night when they need electricity from the grid [94]. Net metering has many advantages, one of which is that it encourages using renewable energy. Allowing individuals and businesses to generate electricity encourages them to invest in solar panels, wind turbines, and other renewable energy technologies. This technology helps reduce Pakistan’s dependence on fossil fuels, significantly contributing to climate change and air pollution [95].

Another benefit of net metering is that it can help to stabilize the electricity grid. When many people and businesses generate electricity, it reduces the demand for electricity from traditional power plants. This strategy can help reduce the need for expensive and polluting Peaker plants, typically only used during high demand [95]. However, some challenges are associated with the net metering system in Pakistan. One of the main challenges is that the system is not yet widely available throughout the country. Currently, net metering is only available in a few select areas. Many customers may be unable to participate in the program due to a lack of access to the necessary infrastructure [96]. Another challenge is that the system can be complex and require significant equipment investment and installation. For example, customers who want to participate in the net metering program may need to purchase expensive solar panels or wind turbines and may also need to pay to install a particular meter [97].

Despite these obstacles, net metering can significantly contribute to Pakistan’s promotion of renewable energy. Allowing individuals and businesses to generate their electricity and receive credits for any excess energy they send back to the grid provides a financial incentive for people to invest in renewable energy technologies. This strategy, in turn, can help to reduce dependence on fossil fuels, stabilize the electricity grid, and promote sustainable development.

5.4. Economical Impacts of Microgrid Projects in Pakistan

The increasing energy demand in Pakistan and the challenges of supplying reliable and affordable electricity to remote and underserved areas have led to an interest in implementing microgrids. Microgrids can enhance energy efficiency by optimizing energy generation and consumption, minimizing transmission and distribution losses, and utilizing advanced demand-side management strategies [98]. By incorporating renewable energy sources, microgrids can reduce the need for imported fossil fuels, resulting in lower energy costs and reduced exposure to volatile global energy prices. Microgrids can be critical in promoting rural electrification in Pakistan, where a significant portion of the population lacks access to reliable electricity. Microgrids’ design, construction, operation, and maintenance can create employment opportunities in various fields, such as engineering, project management, and technical services. One of the examples is the Gomal Zam Dam Solar Microgrid project in South Waziristan, which provides electricity to approximately 30,000 residents [99]. The 1.9 MW solar PV system has reduced the need for diesel-powered generators, lowering fuel costs and emissions. This project demonstrates the potential for microgrids to improve energy security and provide clean electricity in remote areas [100]. Another one is the Thar Desert Wind–Solar Hybrid microgrid project, which combines wind and solar energy to provide electricity to remote communities in the Thar Desert [101]. This project reduces dependency on expensive diesel fuel and supports the local economy by providing job opportunities in renewable energy installation and maintenance. Another is the Punjab Biomass Microgrid project, which utilizes agricultural waste to generate electricity in rural areas [102]. By converting biomass waste into energy, this project addresses waste disposal challenges and provides a sustainable and reliable energy source for local communities.

5.5. Environmental Aspects of Microgrid Projects in Pakistan

Pakistan’s energy sector is currently dominated by fossil fuel-based power generation, leading to significant environmental concerns such as greenhouse gas emissions, air pollution, and resource depletion. Microgrids offer an alternative, sustainable solution to address these challenges by integrating renewable energy sources and improving overall energy efficiency. The proportion of renewable energy within a microgrid directly impacts its potential to reduce GHG emissions [103]. Higher penetration of renewable energy sources, such as solar PV, wind, and biomass, reduces emissions. Integrating demand-side management (DSM) strategies, such as demand response, energy efficiency, and load shifting, can help optimize energy consumption and reduce the need for power generation from fossil fuels, thereby reducing GHG emissions. Renewable energy sources, such as solar and wind power, produce negligible air pollutants, resulting in cleaner air and reduced health risks associated with poor air quality. In urban areas, where air pollution is particularly severe, microgrids can significantly alleviate this environmental burden [104]. Microgrids can contribute to preserving and enhancing ecosystem services by minimizing land use change, habitat loss, and other environmental impacts associated with large-scale power plants and transmission infrastructure. By generating electricity close to the point of consumption, microgrids can reduce the need for large-scale infrastructure projects that can fragment habitats and disrupt ecosystems [105]. In addition, microgrids can support the development of sustainable agriculture and forestry practices by providing clean, reliable energy for irrigation, processing, and other activities.

5.6. Limitations in Pakistan

5.6.1. Cost

One major limitation of microgrids is their cost. Building and maintaining a microgrid can require substantial upfront expenditure, and ongoing maintenance and repair costs can also be high. The high price can make it difficult for many communities, particularly those in developing countries, to afford the necessary infrastructure [106]. Microgrid projects require a significant initial investment, and many local investors are unwilling to invest in such projects. The government of Pakistan has implemented several policies and programs to encourage private investment in the power sector, such as establishing a Power Sector Restructuring Program (PRF) and creating a Power Policy Framework (PPF) [107]. The high cost of components is also a significant impediment to Pakistan’s microgrid industry’s expansion. The cost of solar panels, batteries, and other parts needed to build and operate a microgrid can be prohibitively high, particularly in rural and remote areas [108,109]. Microgrids also rely heavily on renewable energy sources such as solar and wind power. Although these energy sources are becoming increasingly cost-effective, they can still be more expensive than traditional fossil fuels. Additionally, the availability of renewable energy sources can be affected by weather conditions, making it challenging to ensure a steady power supply [110].

5.6.2. Scalability

Another limitation of microgrids is their scalability. Microgrids meet the energy needs of a specific community or region. They may be unable to quickly expand to meet a growing population’s needs [111]. Expansion issues can make it difficult for microgrids to keep pace with population growth and changing energy demands [112].

5.6.3. Sophisticated Electronic Devices

Microgrids depend on advanced electronic devices to control and monitor electricity distribution, vulnerability to cyber-attacks, and physical damage [113,114]. Furthermore, microgrids rely on the quality and reliability of the equipment, such as inverters, generators, and energy storage systems. The failure of any of these components can result in a disruption of the power supply. As technology and policy evolve, microgrids will become increasingly viable and cost-effective for meeting energy needs.

5.6.4. Lack of Technical Skills

One of the significant challenges is the lack of technical expertise and capacity in the country. Many local companies lack the knowledge and resources to develop and operate microgrid projects. Another challenge is the shortage of trained workers in the microgrid industry. The lack of engineers and technicians with the necessary skills and experience to work in the microgrid sector has made it difficult for the country to develop microgrid projects. Lack of expertise has led to delays and inefficiencies in implementing microgrid projects, as well as increased costs [115]. To address this problem, the government of Pakistan has established several training and capacity-building programs, such as the National Power Training Institute (NPTI), which aims to train local technicians and engineers in the operation and maintenance of power generation, transmission, and distribution infrastructure [116].

5.6.5. Regulatory Challenges

Additionally, microgrids also face regulatory challenges in Pakistan. Many policies and regulations governing the generation and distribution of electricity in Pakistan do not accommodate microgrids. These policies can make it difficult for microgrid developers to navigate the legal and regulatory landscape, and can also make it difficult for microgrids to connect to the larger grid. One of the main challenges is the absence of a clear and stable policy structure. The National Electric Power Regulatory Authority (NEPRA) Microgrid Regulations were issued in 2016, providing a framework for developing and operating microgrids in the country. However, the lack of a clear and stable policy framework has made it difficult for investors to invest in microgrid projects. The situation is made worse by the absence of regulatory supervision and enforcement, which has caused investors to lose faith in the system.

5.6.6. Government Policies

The government of Pakistan has recognized the potential of microgrids and has implemented several policies to promote their development. One key policy is the National Electric Power Regulatory Authority (NEPRA) Microgrid Regulations, issued in 2016. These regulations provide a framework for developing and operating microgrids in the country. They cover issues such as licensing, tariffs, and technical standards. Another important policy is the National Energy Efficiency and Conservation Strategy (NEECS), launched in 2015 [117]. The strategy includes several measures to improve energy efficiency and promote renewable energy sources, such as solar and wind power. Microgrids are an essential component of the NEECS, as they can help increase the penetration of renewable energy in the country.

The government of Pakistan has also launched several initiatives to support the development of microgrids in the country. One such initiative is the “Access to Clean Energy” program, which aims to provide access to clean and affordable energy to off-grid communities [118]. The program includes the installation of microgrids in remote and rural areas, as well as the provision of technical assistance and capacity building. In addition, the government has also announced plans to establish a Microgrid Development Fund (MDF) to provide financial support for developing microgrids in the country [119]. The fund will provide grants and loans to microgrid developers and cover the costs of technical assistance and capacity building.

The government of Pakistan has also been actively promoting using microgrids to solve the energy crisis. The Alternative Energy Development Board (AEDB) has set a target of installing 2500 MW of renewable energy by 2025, with a significant portion of this coming from microgrids. Furthermore, the National Electric Power Regulatory Authority (NEPRA) has also issued regulations to facilitate the development of microgrids [120,121]. The Rural Electrification Corporation (REC) has implemented several microgrid projects in rural areas, providing electricity to remote communities without previous access to the grid. The Aga Khan Rural Support Program (AKRSP) has also implemented microgrid projects in the northern areas of Pakistan, providing clean energy to remote communities in the Gilgit-Baltistan and Chitral regions [122]. In addition, the government of Pakistan has launched several initiatives to promote renewable energy development, including the National Renewable Energy Policy (NRE) and the National Electric Power Regulatory Authority (NEPRA) Renewable Energy Policy. These policies try to enhance the proportion of renewable energy in the nation’s power generation mix and provide a framework for developing microgrids.

5.6.7. Microgrids’ Future Scope in Pakistan

In recent years, Pakistan has faced an energy crisis due to increasing demand, insufficient supply, and a lack of investment in new power generation projects. Microgrids can help to address these challenges by providing reliable and sustainable power to remote and off-grid communities. One of the main advantages of microgrids in Pakistan is their ability to provide power to remote and off-grid communities. Many rural communities in Pakistan lack access to the national grid and depend on expensive and polluting diesel generators for their electricity needs. Microgrids, powered by renewable energy sources such as solar and wind power, can provide a cleaner and more affordable alternative to these generators. In addition, microgrids can also help to improve the resilience of the grid during power outages. Pakistan’s power grid is prone to frequent outages, often caused by technical issues, theft, and sabotage. Microgrids can provide a reliable power source during these outages, helping keep essential services such as hospitals and water treatment plants operational. The cost of microgrids is decreasing in Pakistan as well. The price of solar panels and other components has reduced significantly in recent years, making microgrids more affordable.

Furthermore, the government has also introduced various incentives and subsidies for renewable energy projects, which can help lower the microgrid projects’ costs. Moreover, microgrids have the potential to provide employment opportunities to locals. Microgrids’ installation, operation, and maintenance can create jobs for local people, significantly boosting the local economy.

6. Discussion

In this research article, we have explored the potential of microgrid development as a solution to address global sustainability issues while considering the specific context of Pakistan. Our analysis has highlighted the numerous advantages of microgrids, including enhanced energy resilience, increased renewable energy integration, improved energy efficiency, and the empowerment of local communities. However, we have also acknowledged the challenges associated with microgrid implementation, such as technical difficulties, economic constraints, regulatory barriers, and social acceptance. We have gained valuable insights into the strategies and technologies needed to overcome these challenges by examining various research areas and technical aspects of microgrid development. In the case of Pakistan, microgrid development presents a unique opportunity to tackle energy poverty, reduce greenhouse gas emissions, and promote sustainable economic growth. By learning from international best practices and adapting them to the local context, Pakistan can leverage the benefits of microgrids to address its pressing sustainability issues and contribute to global efforts towards a more sustainable future.

7. Conclusions

In conclusion, microgrids represent a promising technology with the potential to transform the energy system and provide numerous benefits. By addressing the many technical, policy, and regulatory challenges associated with microgrid development, it may be possible to realize the full potential of microgrids and create a more sustainable, equitable, and resilient energy system. With their ability to promote cybersecurity, social equity, environmental responsibility, interoperability, regulatory clarity, resilience, financial sustainability, and the integration of renewable energy sources, microgrids represent an important area of focus for researchers, policymakers, and energy industry professionals. Microgrids have the potential to play a significant role in addressing Pakistan’s energy crisis by providing reliable and sustainable power to remote and off-grid communities. The government of Pakistan is also actively promoting the use of microgrids as a solution to the energy crisis. However, several challenges, such as a lack of technical expertise and capacity, regulatory challenges, and financing, must be addressed for microgrids to reach their full potential in Pakistan. As these challenges are addressed, microgrids can become an increasingly viable and cost-effective option for meeting energy needs in the country.