Which best defines a 'microgrid' in the context of power systems?

A microgrid is best defined as a localized grid that can operate independently from the traditional grid. This definition highlights the microgrid's capability to generate and distribute electricity at a smaller scale, often using renewable energy sources like solar or wind power, and to manage energy locally. The significance of this autonomy allows a microgrid to maintain operation during disturbances or outages in the larger grid, making it a resilient solution for power distribution.

Microgrids can also connect to the larger grid, enabling energy transactions and support during peak demands, but their ability to function independently is what distinguishes them. This feature is particularly valuable for critical facilities such as hospitals or military bases where continuous power is vital. The integration of energy management systems within microgrids facilitates improved energy efficiency and sustainability, contributing to modern energy strategies focused on decentralization and resilience.