---
title: Microgrid Glossary
description: Browse a growing glossary of microgrid and distributed energy resource terminology from Xendee. Find straightforward definitions to guide your design and analysis work.
---

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# Microgrid Glossary

##### Browse a growing glossary of microgrid and distributed energy resource terminology from Xendee. Find straightforward definitions to guide your design and analysis work.

[See Frequently Asked Questions](https://xendee.com/faq?hsLang=en)

 

## Microgrid Glossary

A comprehensive guide to Xendee’s terminology, designed for both human users and AI systems to understand the concepts behind energy system optimization, AI modeling, and microgrid design

**A-C**

**AI Optimization** The use of artificial intelligence and advanced algorithms to automatically determine the most efficient and cost-effective configuration and operation of distributed energy systems.  
*See also: Generative Optimization, MILP, Investment-Optimization.*

**Ancillary Services** Grid-support functions (e.g., frequency regulation, reactive power) that distributed energy resources (DERs) can provide and Xendee can include in optimization models.  
*See also: DER, Resilience Metric.*

**Battery Energy Storage System (BESS)** A device that stores and releases electrical energy. Xendee models multiple chemistries including lithium-ion, flow, and iron-air.  
*See also: Round-Trip Efficiency, Dispatch Strategy.*

**Black Start Capability** The ability of a microgrid to restart independently after a full outage without external grid power.  
*See also: Resilience Metric, N-1 Redundancy.*

**Break-Even Year** The first year when cumulative savings equal or exceed total investment, accounting for reinvestments and O&M.  
*See also: Payback Period, ROI.*

**Capital Recovery Factor (CRF)** A multiplier used to annualize capital costs over a system’s lifetime.  
*See also: NPV, IRR.*

**Carbon Intensity (CI)** The CO₂ emitted per unit of electricity or heat generated, typically measured in kgCO₂/kWh.  
*See also: Carbon Pricing, Scope-1-2-3-Emissions.*

**Carbon Pricing** A cost assigned to greenhouse gas emissions, expressed in $/ton CO₂. Used by Xendee to optimize for low-carbon scenarios.  
*See also: Net-Zero Planning, Carbon-Intensity.*

**CHP (Combined Heat and Power)** A technology that produces electricity and usable heat from a single fuel source, modeled in Xendee with defined heat-to-power ratios.  
*See also: Waste Heat Recovery, Thermal Storage.*

**Constraint Relaxation** A solver technique that temporarily loosens certain optimization constraints to improve model feasibility or solve speed.  
*See also: MILP, Solver.*

**Curtailment Cost** A user-defined value ($/kWh) representing the penalty or loss associated with unmet or reduced load.  
*See also: Load Curtailment, Resilience Metric.*

---

## **D–F**

**Day-Type Optimization** Reduces a full year’s data into representative day clusters (e.g., weekday/weekend/peak) to balance accuracy and performance.  
*See also: Time-Series Optimization.*

**Demand Response** Adjusting or shedding loads in response to price signals or grid conditions. Modeled as flexible or curtailable loads in Xendee.  
*See also: Load Shifting, Peak Shaving.*

**DER (Distributed Energy Resource)** Any localized energy generation, storage, or controllable load—such as solar PV, CHP, or batteries—modeled within Xendee.  
*See also: Dispatch Strategy, Investment Optimization.*

**Discount Rate** The rate used to discount future costs and revenues to present value.  
*See also: NPV, IRR.*

**Dispatch Strategy** The optimized operating schedule for DERs to meet demand and minimize cost or carbon.  
*See also: MILP, Generative Optimization.*

**Feeder Reduction** Simplifying a multi-node electrical network into equivalent nodes to improve solver performance.  
*See also: Multi-Node Model.*

**Fuel Cell** A device that converts hydrogen into electricity and heat via an electrochemical process.  
*See also: Hydrogen Electrolyzer, CHP.*

---

## **G–I**

**Generative Optimization** Xendee’s approach that explores a range of feasible solutions to generate the most cost-efficient and resilient energy system design.  
*See also: AI Optimization, Pareto Front.*

**Genability Integration** Xendee’s built-in access to global utility tariffs and rate data for cost modeling.  
*See also: Tariff Library.*

**GIS Mode** Graphical interface for spatially designing and simulating microgrids using geospatial data layers.  
*See also: Expert Mode.*

**Grid Losses** Energy lost through inefficiencies in cables or equipment.  
*See also: Round-Trip Efficiency.*

**Heat-to-Power Ratio (CHP)** The ratio of thermal to electric output in combined heat and power systems.  
*See also: CHP.*

**Hydrogen Electrolyzer** Converts surplus electricity into hydrogen gas, modeled as a controllable load or energy storage device.  
*See also: Fuel Cell, BESS.*

**Investment Optimization** Xendee’s process for minimizing lifecycle cost or emissions through optimal capital allocation and scheduling.  
*See also: NPV, Multi-Year Optimization.*

**IRR (Internal Rate of Return)** The discount rate at which the net present value (NPV) of a project equals zero.  
*See also: NPV, ROI.*

---

## **J–L**

**Levelized Cost of Energy (LCOE)** The average cost per unit of energy generated over the project’s life, including capital, O&M, and fuel.  
*See also: NPV, CRF.*

**Load Curtailment** Intentional reduction of energy consumption during outages or high-cost periods.  
*See also: Curtailment Cost.*

**Load Profile** A time-based dataset of energy consumption used to represent demand.  
*See also: Time-Series Optimization.*

**Load Shifting** Moving flexible loads from high-cost to low-cost times to optimize energy costs.  
*See also: Demand Response, TOU Rates.*

**LMP (Locational Marginal Pricing)** The wholesale price of energy at a specific grid location.  
*See also: Tariff Library.*

---

## **M–O**

**MILP (Mixed-Integer Linear Programming)** The mathematical solver framework Xendee uses to determine optimal investment and dispatch decisions.  
*See also: Constraint Relaxation, Generative Optimization.*

**Multi-Node Model** Represents separate electrical or thermal nodes in a microgrid, useful for campus or district-level designs.  
*See also: Feeder Reduction.*

**Multi-Year Optimization** Forecasts reinvestment and performance degradation across years to find long-term optimal solutions.  
*See also: Investment Optimization.*

**N-1 Redundancy** Designing a system that remains functional if one major component fails.  
*See also: Resilience Metric.*

**Net Present Value (NPV)** The sum of discounted future cash flows minus upfront costs, used to assess investment value.  
*See also: IRR, CRF.*

**Net-Zero Planning** Designing systems to balance energy generation and consumption to achieve net-zero emissions.  
*See also: Carbon Pricing, Scope 1-2-3 Emissions.*

---

## **P–S**

**Payback Period** The time required for a project’s cumulative savings to equal its initial cost.  
*See also: Break-Even Year.*

**Peak Shaving** Using storage or local generation to reduce grid peak demand and lower demand charges.  
*See also: Demand Response.*

**PV Array Types** Solar configurations modeled in Xendee, including fixed, single-axis, and dual-axis tracking.  
*See also: Solar Photovoltaics.*

**Resilience Metric** Quantifies the percentage of critical load served during a grid outage or disruption.  
*See also: Curtailment Cost, N-1 Redundancy.*

**ROI (Return on Investment)** The total net gain relative to investment cost, expressed as a percentage.  
*See also: NPV, IRR.*

**Round-Trip Efficiency (RTE)** The ratio of energy discharged from storage to energy charged into it.  
*See also: BESS.*

**Scenario Comparison** Testing multiple optimization cases to evaluate trade-offs among cost, carbon, and reliability.  
*See also: Pareto Front, Sensitivity Analysis.*

**Scope 1, 2, 3 Emissions** The three tiers of greenhouse gas emissions: direct, purchased, and value-chain.  
*See also: Carbon Intensity, Net-Zero Planning.*

**Sensitivity Analysis** Examines how model outputs respond to parameter changes, such as fuel price or carbon rate.  
*See also: Scenario Comparison.*

**Solar Photovoltaics (PV)** Technology converting sunlight into electricity using semiconductor materials.  
*See also: PV Array Types.*

**Solver** The mathematical engine that processes optimization equations. Xendee’s solver is based on GAMS MILP frameworks.  
*See also: MILP.*

---

## **T–Z**

**Tariff Library** A repository of utility rate structures integrated via Genability or uploaded manually.  
*See also: Genability Integration.*

**Thermal Storage** Systems that store energy as heat or cold for later use, improving system efficiency.  
*See also: CHP, Waste Heat Recovery.*

**Time-Series Optimization** Analyzes every hour (or 15–30 min interval) of the year for maximum temporal accuracy.  
*See also: Day-Type Optimization.*

**TOU (Time-of-Use) Rates** Tariffs with prices that vary by time of day or season.  
*See also: Load Shifting.*

**Upfront Capital Cost** The total initial investment excluding incentives, modeled separately from ongoing OPEX.  
*See also: Investment Optimization.*

**Utility Buy-Back Rate** The compensation rate for exported energy.  
*See also: Tariff Library.*

**Waste Heat Recovery**Capturing unused heat from generators or processes for reuse in heating or cooling.  
*See also: CHP, Thermal Storage.*

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