Microgrid Enabling Technologies

Distributed Generation, Advanced Energy Storage, Smart Islanding Inverters, Automated Demand Response, Electric Vehicle Charging, and Microgrid Software Controls: Global Market Analysis and Forecasts

Microgrids are beginning to move more into the mainstream of the power generation and distribution industry, with greenfield projects that include necessary (and quite substantial) investments in distributed generation (DG). Going forward, new microgrids will increasingly rely not only upon new DG installations, but also on other microgrid enabling technologies, including smart islanding inverters, advanced energy storage, internal forms of automated demand response (ADR), and other technologies. Pike Research views the microgrid as a building block of the ultimate smart grid designed to serve the needs of energy producers, consumers, and distribution utilities. As such, these enabling technologies will be critical to the success of smart grid projects in both mature markets and developing economies.

With the exception of ADR, all of the enabling technology components profiled in this report show continued growth, with the various forms of distributed generation (combined heat and power, fuel cells, solar photovoltaic (PV), and distributed wind) showing the largest capacity growth and revenue. Pike Research’s analysis also concludes that microgrids are among the best near-term markets for advanced energy storage, and will help increase demand for smart bi-directional inverters that can perform the islanding function. By far the largest investments in microgrid enabling technologies are in different forms of DG, including CHP, fuel cells, solar PV, and different forms of distributed wind. Combined, these four technologies will total more than 3,978 megawatts (MW) of new generation capacity valued at more than $12.7 billion in vendor revenues in 2018.

This Pike Research report provides a detailed analysis of the technologies necessary to create a microgrid. It also quantifies sales of the most vital technologies that will enable the microgrid market to grow, whether those systems are grid-tied or remote, and whether they utilize alternating current (AC) or direct current (DC). The report also includes SWOT analyses of the major enabling technologies for microgrids, along with profiles of the key players in the emerging microgrid sector. Market forecasts for the major enabling technologies, segmented by world region, are provided through 2018.

Key Questions Addressed:
  • Which smart grid technologies will benefit most from microgrid deployments?
  • Which technology will emerge as the leading generation technology of choice for microgrids?
  • Why are islanding inverters mandatory for virtually all microgrid applications?
  • What does the behind-the-meter market for advanced energy storage look like?
  • What role will automated demand response play in the evolution of microgrids, and why will sales decline in North America and Europe over the 6 year forecast period?
  • What will be the implications of investments in controls software for successful microgrid deployments in the future?
  • Which companies will be key players in the emerging microgrid sector?
  • What are the time horizons for commercialization of key microgrid-enabling technologies?
Who needs this report?
  • Utilities and grid operators
  • Microgrid technology suppliers
  • Energy storage vendors
  • Smart inverter vendors
  • Industrial automation companies
  • Controls software vendors
  • Government agencies and public utility commissions
  • Investor community

Table of Contents

1. Executive Summary

1.1   Microgrid Enabling Technologies Guidelines

2. Market Issues

2.1   What Is a Microgrid? Definitions and Key Applications

2.1.1     Customer-owned Grid-tied Microgrids

2.1.2     Utility Grid-tied Microgrids

2.1.3     Utility and Non-utility Remote Microgrids

2.1.4     Mobile Military Microgrids

2.1.5     Virtual Power Plants

2.2   Inventory of Microgrid Enabling Technologies

2.2.1     Distributed Generation

2.2.2     Islanding and Bi-directional Smart Inverters

2.2.3     Advanced Energy Storage Devices

2.2.4     Smarter Switches

2.2.5     Smart Meters

2.2.6     Enterprise Demand Controls and Automated Demand Response

2.2.7     Electric Vehicle Charging Technologies

2.2.8     Competing Microgrid Control Approaches

2.2.9     Unique DC Microgrid Exceptions and Enablers

2.2.10   Other Potential Microgrid Enabling Devices

2.3   Current Microgrid Market Technology Drivers

2.3.1     Distributed Renewables Integration

2.3.2     The Growing Role of Smart Meters within Microgrids

2.3.3     Smart Inverters Emerge as Vital Grid Gateways

2.3.4     The Emergence of Commercial Automated Demand Response-Virtual Power Plants

2.3.5     No Consensus on the Best Microgrid Controller Approach

2.4   Implementation Challenges: Key Component Standards

2.4.1     UL 1741 Safety Standards for Grid Devices

2.4.2     IEEE Standards for Distributed Generation

2.4.3     IEEE Standards for Energy Storage

2.4.4     IEC Standards for Transmission and Distribution Systems and Interoperability

2.4.5     DC Microgrid Standards

2.4.6     Electric Vehicle Charging Standards

2.4.7     Global Security Standards Overview

2.4.8     Evolving Global and National Security Standards

3. Technology Issues

3.1   Microgrids: New Energy Delivery Business Models

3.2   The New Grid-tied Microgrid Paradigm

3.2.1     Overview of Grid-tied Microgrids

3.2.2     Basic Principles of Grid-tied Microgrids

3.2.3     Commercial Time Horizon for Grid-tied Microgrids

3.3   Remote Microgrids

3.3.1     History of Remote Microgrids

3.3.2     Basic Principles of Remote Microgrids

3.3.3     Commercial Time Horizon for Remote Microgrids

3.4   Microgrid Enabling Technology Component Cost Breakdown

3.4.1     Distributed Generation Technology Overview

3.5   Fossil Distributed Generation

3.5.1     History of Fossil Distributed Generation

3.5.2     Basic Principles of Fossil Distributed Generation

3.5.3     Types of Fossil Distributed Generation

3.5.3.1     Combined Heat and Power

3.5.3.2     Fuel Cells

3.5.3.3     Diesel Generators

3.5.3.4     Other Fossil Distributed Energy Generation Technologies

3.5.4     Commercial Time Horizon for Fossil Distributed Generation

3.6   Renewable Distributed Generation

3.6.1     History of Renewable Distributed Generation

3.6.2     Basic Principles of Renewable Distributed Generation

3.6.2.1     Distributed Solar Photovoltaics

3.6.2.2     Distributed Wind Turbines

3.6.3     Commercial Time Horizon for Renewable Distributed Generation

3.7   Smart Islanding Inverters

3.7.1     Overview of Small Islanding Inverters

3.7.2     Basic Principles of Small Islanding Inverters

3.7.3     Types of Small Islanding Inverters

3.7.4     Commercial Time Horizon for Small Islanding Inverters

3.8   Advanced Energy Storage Technologies

3.8.1     History of Advanced Energy Storage Technologies

3.8.2     Basic Principles of Advanced Energy Storage Technologies

3.8.3     Advanced Energy Storage Types

3.8.3.1     Lead-acid Batteries

3.8.3.2     Sodium Sulfur Batteries

3.8.3.3     Flow Batteries

3.8.3.4     Lithium Ion Batteries

3.8.4     Commercial Time Horizon for Advanced Energy Storage Technologies

3.9   Smart Switches

3.9.1     Overview of Smart Switches

3.9.2     Basic Principles of Smart Switches

3.9.3     Types of Smart Switches

3.9.4     Commercial Time Horizon for Smart Switches

3.10 Automated Demand Response

3.10.1   Overview of Automated Demand Response

3.10.2   Basic Principles of Automated Demand Response

3.10.3   Commercial Time Horizon for Automated Demand Response

3.11 Plug-in Electric Vehicle Charging Solutions

3.11.1   History of Plug-in Electric Vehicle Charging Solutions

3.11.2   Basic Principles of Plug-in Electric Vehicle Charging Solutions

3.11.3   Types of Plug-in Electric Vehicle Charging Solutions

3.11.4   Commercial Time Horizon for Plug-in Electric Vehicle Charging Solutions

3.12 Microgrid Control Systems

3.12.1   History of Microgrid Control Systems

3.12.2   Basic Principles of Microgrid Control Systems

3.12.2.1   ABB

3.12.2.2   Siemens-Boeing Alliance

3.12.2.3   Lockheed Martin

3.12.2.4   Blue Pillar

3.12.2.5   Younicos

3.12.3   Commercialization Time Horizon for Microgrid Control Systems

4. Key Industry Players

4.1   Overview of Company Profile Selections

4.2   Legacy Industrial Automation Giants

4.2.1     General Electric

4.2.2     ABB

4.2.3     Siemens Corporation

4.2.4     Eaton Corporation

4.2.5     Toshiba

4.3   Defense Contractor Specialists

4.3.1     Boeing

4.3.2     Lockheed Martin

4.3.3     Arista Power

4.4   Pure Controls Vendors

4.4.1     Power Analytics

4.4.2     Blue Pillar

4.4.3     Green Energy Corporation

4.4.4     Spirae, Inc.

4.4.5     Sustainable Power Systems, LLC

4.5   Smart Inverter Innovators

4.5.1     Tecogen Inc.

4.5.2     Younicos

4.5.3     Petra Solar

4.6   ADR Microgrid Pioneers

4.6.1     Pulse Energy

4.7   Microgrid Electric Vehicle Charging Companies

4.7.1     Better Place

5. Market Forecasts

5.1   Microgrid Enabling Technologies Market Overview: Setting the Stage

5.2   Combined Heat and Power for Microgrids

5.2.1     North America: Combined Heat and Power for Microgrids

5.2.2     Europe: Combined Heat and Power for Microgrids

5.2.3     Asia Pacific: Combined Heat and Power for Microgrids

5.2.4     Rest of World: Combined Heat and Power for Microgrids

5.3   Fuel Cells for Microgrids

5.3.1     North America: Fuel Cells for Microgrids

5.3.2     Europe: Fuel Cells for Microgrids

5.3.3     Asia Pacific: Fuel Cells for Microgrids

5.3.4     Rest of World: Fuel Cells for Microgrids

5.4   Solar PV for Microgrids

5.4.1     North America: Solar PV for Microgrids

5.4.2     Europe: Solar PV for Microgrids

5.4.3     Asia Pacific: Solar PV for Microgrids

5.4.4     Rest of World: Solar PV for Microgrids

5.5   Distributed Wind for Microgrids

5.5.1     North America: Distributed Wind for Microgrids

5.5.2     Europe: Distributed Wind for Microgrids

5.5.3     Asia Pacific: Distributed Wind for Microgrids

5.5.4     Rest of World: Distributed Wind for Microgrids

5.6   Smart Islanding Inverters for Microgrids

5.6.1     North America: Smart Islanding Inverters for Microgrids

5.6.2     Europe: Smart Islanding Inverters for Microgrids

5.6.3     Asia Pacific: Smart Islanding Inverters for Microgrids

5.6.4     Rest of World: Smart Islanding Inverters for Microgrids

5.7   Advanced Energy Storage for Microgrids

5.7.1     North America: Advanced Energy Storage for Microgrids

5.7.2     Europe: Advanced Energy Storage for Microgrids

5.7.3     Asia Pacific: Advanced Energy Storage for Microgrids

5.7.4     Rest of World: Advanced Energy Storage for Microgrids

5.8   Automated Demand Response for Microgrids

5.8.1     North America: Automated Demand Response for Microgrids

5.8.2     Europe: Automated Demand Response for Microgrids

5.8.3     Asia Pacific: Automated Demand Response for Microgrids

5.8.4     Rest of World: Automated Demand Response for Microgrids

5.9   Electric Vehicle Charging Systems for Microgrids

5.9.1     North America: Electric Vehicle Charging Systems for Microgrids

5.9.2     Europe: Electric Vehicle Charging Systems for Microgrids

5.9.3     Asia Pacific: Electric Vehicle Charging Systems for Microgrids

5.9.4     Rest of World: Electric Vehicle Charging Systems for Microgrids

5.10 Software Spending for Microgrids

5.10.1   North America: Software Spending for Microgrids

5.10.2   Europe: Software Spending for Microgrids

5.10.3   Asia Pacific: Software Spending for Microgrids

5.10.4   Rest of World: Software Spending for Microgrids

6. Company Directory
7. Acronym and Abbreviation List
8. Table of Contents
9. Table of Charts and Figures
10. Scope of Study, Sources and Methodology, Notes

List of Charts and Figures

  • Total DOD Direct Annual Expenditures by Market Application: 2013-2025
  • Total Microgrid Distributed Generation Vendor Revenue by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Software Controls Spending by Region, Average Scenario, World Markets: 2012-2018
  • Smart Grid Renewables Integration Revenue by Technology Grouping, World Markets: 2012
  • Microgrid Combined Heat and Power Vendor Revenue by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Solar Photovoltaic Vendor Revenue by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Wind Vendor Revenue by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Islanding Inverter Vendor Revenue by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Advanced Energy Storage Vendor  Revenue by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Automated Demand Response Capacity by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Electric Vehicle Charging Device Vendor Revenue by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Combined Heat and Power Capacity by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Fuel Cell Capacity by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Fuel Cell Vendor Revenue by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Solar PV Capacity by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Wind Capacity by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Islanding Inverter Capacity by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Advanced Energy Storage Capacity by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Automated Demand Response Savings Value by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Electric Vehicle Charging Device Capacity by Region, Average Scenario, World Markets: 2012-2018
  • The DR Market Today: 1% to 2% of Summer Peak Days/Hours
  • Total Microgrid Capacity by Region, Average Scenario, World Markets: 2012-2018
  • Total Microgrid Distributed Generation Capacity by Region, Average Scenario, World Markets: 2012-2018
  • Scope, Size, and Ownership of Microgrids
  • Microgrid Application Triangle: Reliability, Fuel Savings, and Reduced Emissions
  • Microgrid Technology Matrix (Today’s Mandatory Components)
  • Microgrid Technology Matrix Future (Idealized Scenarios)
  • Battery Storage Applications for Microgrids
  • Switching Functionality for Microgrid Disconnects
  • V2G Linkages with Smart Grid Applications (including Microgrids)
  • Grid Problems Related to Solar Photovoltaics (including Anti-islanding Requirements)
  • Diagram of Vehicle and Grid Interaction in New V2G Paradigm
  • DC Devices within the Typical Home
  • Yesterday’s Centralized Power versus Tomorrow’s Clean, Localized Power
  • Regional Differences per Application Willingness to Pay for Microgrids
  • Microgrid Topology featuring Multiple Controllers
  • Capacity Application versus Actual Distributed Generation Power Generation Profiles
  • Microgrids as a Portion of U.S. Combined Heat and Power Market
  • Solar PV and Diesel Generation Cost Crossover Point: 2001-2011
  • Declining Cost Curve for Solar Photovoltaics
  • Distributed Energy Resources and Power Electronics Interface (including Inverter)
  • Inverse Pyramid of Demand Response Services for Renewables Integration
  • CERTS Droop Frequency Control Program
  • Centralized/Distributed Hybrid Controls for U.S. Department of Defense Applications
  • Battery Storage Market in Japan Linked to Growing Renewables Penetration
  • Automated Demand Response for Microgrid Topology for Hartley Bay, British Columbia

List of Tables

  • SWOT Analysis for Grid-Tied Microgrids
  • SWOT Analysis for Remote Microgrids
  • SWOT Analysis for Combined Heat and Power
  • SWOT Analysis for Fuel Cells
  • SWOT Analysis for Diesel Generators
  • SWOT Analysis for Solar Photovoltaics
  • SWOT Analysis for Distributed Wind
  • SWOT Analysis for Smart Islanding Inverters
  • Value of Ancillary Services in Select U.S. Deregulated Markets
  • SWOT Analysis for Advanced Energy Storage
  • SWOT Analysis for ADR
  • SWOT Analysis for Plug-in Electric Vehicles Charging Systems for Microgrids
  • SWOT Analysis for Microgrid Controls
  • Microgrid Combined Heat and Power Capacity by Region, Average Scenario, World  Markets: 2012-2018
  • Microgrid Combined Heat and Power Vendor Revenue by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Fuel Cell Capacity by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Fuel Cell Vendor Revenue by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Solar Photovoltaic Capacity by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Solar Photovoltaic Vendor Revenue by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Wind Capacity by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Wind Power Vendor Revenue, Average Scenario, World Markets: 2012-2018
  • Microgrid Islanding Inverter Capacity by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Islanding Inverter Vendor Revenue by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Energy Storage Capacity by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Energy Storage Vendor Revenue by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Automated Demand Response Capacity by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Automated Demand Response Savings Value by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Electric Vehicle Energy Storage Capacity by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Electric Vehicle Energy Storage Vendor Revenue by Region, Average Scenario, World Markets: 2012-2018
  • Total Microgrid Capacity by Region, Average Scenario, World Markets: 2012-2018
  • Microgrid Software Controls Spending by Region, Average Scenario, World Markets: 2012-2018
  • Total Microgrid Distributed Generation Capacity by Region, Average Scenario, World Markets: 2012-2018
  • Total Microgrid Distributed Generation Vendor Revenue by Region, Average Scenario, World Markets: 2012-2018

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