Unpacking the complexity of community microgrids: A review of institutions’ roles for development of microgrids

Community microgrids implemented in existing electricity grids can meet both development targets set out in the Paris agreement: 1. mitigate greenhouse gas emissions through increased implementation of renewable energy sources, and 2. to adapt to climate related disturbances and risk of catastrophes. Community microgrids are, however, complex to implement and institutional change is needed to reach their full potential. The purpose of this article is to review existing literature and analyze institutional developments influencing the growth of community microgrids. The literature describes a concentration of microgrid activities in specific regions: USA, EU, Asia and Australia. Varying reasons for implementing community microgrids were found in the different regions but similar institutional developments occurred, albeit with differing emphasis due to contextual specificities. Formal directions do however influence informal institutions even though their aims differ. Power utilities stand out as a critical actor and both formal and informal institutions put pressure on utilities to update their traditional business models. This article illustrates how informal and formal institutions play a significant role in the growth of community microgrids in existing electricity grids and provide interesting examples which can be utilized by policymakers. Microgrid development is still in a formative phase and further institutional change in the form of updated regulations is needed. •Implementing community microgrids often require radical change in institutions.•Examples of institutional change are beginning to emerge.•Utilities are central for development of community microgrids.•Creating social capital in the community is critical for successful implementation.•Co-development of informal and formal institutions is essential for change.