The first major paradigm shift in electricity generation, delivery, and control is emerging in the developed world, notably Europe, North America, and Japan. This shift will move electricity supply away from the highly centralised universal service quality model with which we are familiar today towards a more dispersed system with heterogeneous qualities of service. One element of dispersed control is the clustering of sources and sinks into semiautonomous μgrids (microgrids). Research, development, demonstration, and deployment (RD3) of μgrids are advancing rapidly on at least three continents, and significant demonstrations are currently in progress. This paradigm shift will result in more electricity generation close to end-uses, often involving combined heat and power application for building heating and cooling, increased local integration of renewables, and the possible provision of heterogeneous qualities of electrical service to match the requirements of various end-uses. In Europe, μgrid RD3 is entering its third major round under the 7th European Commission Framework Programme; in the U.S., one specific μgrid concept is undergoing rigorous laboratory testing, and in Japan, where the most activity exists, four major publicly sponsored and two privately sponsored demonstrations are in progress. This evolution poses new challenges to the way buildings are designed, built, and operated. Traditional building energy supply systems will become much more complex in at least three ways: 1. one cannot simply assume gas arrives at the gas meter, electricity at its meter, and the two systems are virtually independent of one another; rather, energy conversion, heat recovery and use, and renewable energy harvesting may all be taking place simultaneously within the building energy system; 2. the structure of energy flows in the building must accommodate multiple energy processes in a manner that permits high overall efficiency; and 3. multiple qualities of electricity may be supplied to various building functions.