January 30, 2012
Microgrids, or integrated systems in which distributed energy resources (DERs) operate as a single, autonomous grid either in parallel to or isolated from the existing utility power grid, offer customers and distribution utilities a host of new ways to bolster reliability and manage variable, bidirectional resources. In addition, their smaller scale results in far fewer line losses, a lower demand on transmission infrastructure, and the ability to rely on more localized sources of power generation. All of these benefits are stimulating increased demand for microgrids on a worldwide basis, in a range of application scenarios including campus environments, military operations, remote/off-grid settings, community/utility systems, and commercial and industrial markets. According to a new report from Pike Research, microgrid capacity worldwide will experience a compound annual growth rate (CAGR) of more than 22% over the next five years, reaching 4.7 gigawatts by 2017. That represents $17.3 billion in annual worldwide revenue by the same year, the cleantech market intelligence firm forecasts.
“Several new players have recently entered the microgrid market, signaling that a new race is on to take advantage of the significant opportunity that microgrids represent on a worldwide basis,” says senior analyst Peter Asmus, “most notably ABB, the Swiss industrial giant that is a leading player in transmission and distribution infrastructure, and Boeing, the veteran defense contractor that is engaging with Siemens in a strategic alliance to serve the U.S. military, as well as San Diego Gas & Electric – one of the leading utilities in this space – and Green Energy Corporation, which is addressing the interoperability of various controls and communications platforms being deployed for microgrids.”
Microgrids still face significant barriers to wide scale adoption. As of 2012, not a single national government has developed an integrated or comprehensive policy creating a viable, vibrant market for customer-driven microgrids. With the exception of Denmark, few other countries are even examining the complex policy issues involved when aggregating DERs not owned by utility companies on a broad scale. While North America is still clearly the leader in terms of planned capacity, the developing world remains the most promising long-term market. In particular, the remote/off-grid segment has emerged as the clear leader in terms of revenue and is arguably the most mature in terms of commercial status.
Pike Research’s report, “Microgrids”, analyzes the global market opportunity for microgrids across five key application segments: campus, military, remote, community, and commercial & industrial. The report provides a comprehensive assessment of the demand drivers, business models, policy factors, and technology issues associated with the rapidly-developing market for microgrids. Key industry players are profiled in depth and worldwide revenue and capacity forecasts, segmented by application and region, extend through 2017. An Executive Summary of the report is available for free download on the firm’s website.
Richard Martin
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