Microgrids

Commercial/Industrial, Community/Utility, Campus/Institutional, Military, Remote, Grid-Tied Utility Distribution, and Direct Current Microgrids: Global Market
Analysis and Forecasts

The microgrid market is heating up quickly, with deployments occurring around the world in a variety of application segments. The industry is moving into the next phase of project development, focusing on how to develop projects on fully commercial terms. As the microgrid market is evolving, innovative solutions are coming to the fore. For example, two new subsegments – grid-tied utility distribution microgrids (UDMs) and direct current (DC) microgrids – are attracting increased market attention. The key to future growth now rests with greater creativity in both the public policy and business model arenas.

While North America leads the microgrid market today, a condition expected to continue through 2020, the Asia Pacific region will likely emerge as the global leader for microgrid deployments by 2030 or 2035 due to the huge need for power for growing populations not served by traditional grid infrastructure. Europe is, relatively speaking, a laggard on microgrids because its preferred aggregation and optimization platform is the virtual power plant. The region’s grid reliability is far superior to that in North America, limiting the appeal of islanding capability. Navigant Research forecasts that global annual microgrid capacity will increase from 685 megawatts in 2013 to more than 4 gigawatts by 2020 under a base scenario.

This Navigant Research report analyzes the global market for microgrids in five key segments (commercial/industrial, community/utility, campus/institutional, military, and remote) and two new subsegments (grid-tied UDMs and DC microgrids). The study provides an analysis of the market issues, including business cases, opportunities, and implementation challenges, associated with microgrids. Global market forecasts for capacity and revenue, broken out by scenario, segment, region, country, and U.S. state, extend through 2020. The report also examines the main technologies related to microgrids, identifies nine different business models applicable to microgrid development, and profiles key market players.

Key Questions Addressed:
  • What are the policy drivers underpinning the recent rapid growth in the microgrid market?
  • What new technologies are allowing for commercial microgrid deployments?
  • Which business model is expected to drive microgrids into the mainstream?
  • How do the technology and market dynamics of grid-tied and remote microgrids differ?
  • Why are remote microgrids more lucrative for vendors than grid-tied microgrids?
  • Why are grid-tied microgrids picking up support among utilities and transmission grid operators?
  • Which microgrid segments show the largest capacity growth over the next 7 years?
  • Which regions of the world, other than the United States, are hot spots for microgrid activity in the near future?
Who needs this report?
  • Microgrid hardware and software vendors
  • Smart grid vendors
  • Renewable energy equipment and service providers
  • Utilities
  • Military agencies
  • Government agencies and regulators
  • Non-governmental organizations
  • Investor community

Table of Contents

1. Executive Summary

1.1  Global Survey of Today’s Microgrid Market

1.2  Report Scope

1.3  Market Forecasts

2. Market Issues

2.1  Microgrids: Why the Hype?

2.2  What Is a Microgrid?

2.2.1   Definition

2.2.2   Microgrid Segments

2.2.3   Microgrid versus Smart Grid

2.2.4   Microgrid versus Virtual Power Plant

2.3  Moving from Pilot Projects to Commercial Business Models

2.4  Business Case for Grid-Tied Microgrids

2.5  Business Case for Remote Microgrids

2.6  Current Market Opportunities

2.6.1   Shortcomings of the Status Quo Power Grid

2.6.2   Premium Power for a Digital Economy

2.6.3   Global Climate Change and Natural Disasters

2.6.4   Higher Penetrations of Distributed Renewables

2.6.5   Emerging Organized Markets for Grid Ancillary Services

2.6.6   Universal Energy Access for the Bottom of the Pyramid

2.6.7   Physical and Cyber Security for Military Operations

2.7  Implementation Issues

2.7.1   Historic Anti-Islanding Bias of Incumbent Utilities

2.7.2   Need for New Utility Business Models

2.7.3   Maps of Opportunity (but Lack of Coordinated Policy Incentives)

   2.7.3.1  Feed-in Tariffs

   2.7.3.2  Renewable Portfolio Standards

   2.7.3.3  Net Metering

   2.7.3.4  Third-Party Power Purchase Agreements

   2.7.3.5  Energy Storage Subsidies

   2.7.3.6  Utility Revenue Decoupling

2.7.4   Microgrid Governance

   2.7.4.1  Case Study: Connecticut

2.7.5   Plug-and-Play Offerings Limited

2.7.6   What Is the Best Microgrid Business Model?

   2.7.6.1  Facility Owner Financing and Maintenance

   2.7.6.2  Utility Rate Base

   2.7.6.3  Pure Component Sales

   2.7.6.4  Networking Control Service Agreements

   2.7.6.5  Government Energy Service Contracts

   2.7.6.6  Power Purchase Agreements

   2.7.6.7  Non-Synchronous Direct Current

   2.7.6.8  Operations and Maintenance Contracts

   2.7.6.9  Pay as You Go

3. Technology Issues

3.1  Microgrids Aggregate and Optimize DER

3.2  Microgrid Components and Enabling Technologies

3.2.1   Fossil Distributed Generation

3.2.2   Inverter-Based Distributed Generation

3.2.3   Multiple Loads

3.2.4   Advanced Energy Storage

3.2.5   Point of Common Coupling

3.2.6   Microgrid System Control

   3.2.6.1  Competing Controls Approaches

   3.2.6.2  Inverter-Based Controls

   3.2.6.3  Open and Distributed Platforms

3.3  Microgrid Application Technology Rules of Thumb

3.3.1   Grid-Tied Microgrids

   3.3.1.1  Case Study: PowerStream Utility Distribution Microgrid

3.3.2   Remote Microgrids

3.3.3     High Penetration Renewable Energy Microgrids

   3.3.3.1  Case Study: Graciosa Island

3.3.4   Economic Optimization Microgrids

3.3.5   Cyber and Physical Security Microgrids

3.3.6   AC versus DC Grid Architectures

3.4  The Evolution of Microgrid Standards

3.4.1   Safety, Islanding, and Energy Storage Standards

   3.4.1.1  UL Standards

   3.4.1.2  IEEE Standards

   3.4.1.3  Distribution Grid Integration Standards

4. Key Industry Players

4.1  Overview

4.2  Leading Electric Utilities

4.2.1   Consolidated Edison

4.2.2   DONG Energy

4.2.3   San Diego Gas & Electric

4.2.4   Other Utility Players

4.3  Grid Infrastructure Vendors

4.3.1   Alstom Grid

4.3.2   Schneider Electric

4.3.3   Siemens AG

4.3.4   Other Grid Infrastructure Vendors

4.4  Microgrid Integrators/Developers

4.4.1   Chevron Energy Solutions

4.4.2   Leidos (formerly SAIC)

4.4.3   Optimal Power Solutions

4.4.4   S&C Electric Company

4.5  Green Building Systems Integrators

4.5.1   Honeywell

4.5.2   Johnson Controls, Inc.

4.6  Components and Business Model Innovators

4.6.1   Bloom Energy

4.6.2   Sunverge Energy

4.7  Three Leading Software Providers

4.7.1   Blue Pillar

4.7.2   Power Analytics

4.7.3   Viridity Energy

4.8  Leading “Nuts and Bolts” Hardware Providers

4.9  Defense Industry Specialists

4.9.1   Earl Energy

5. Market Forecasts

5.1  Microgrid Market: Exponential Growth

5.2  Three-Scenario Forecasts

5.2.1   Capacity Methodology

5.2.2   Vendor Revenue Methodology

5.3  Microgrid Market Overview: 2013

5.3.1   North America: Clear Global Leader

   5.3.1.1  Top Five U.S. States

5.4  Top 10 Non-U.S. Countries

5.5  Regional Dynamics

5.5.1   Europe

5.5.2   Asia Pacific

5.5.3   Latin America

5.5.4   Middle East & Africa

5.6  New Subsegment Highlights

5.6.1   Grid-Tied Utility Distribution Microgrids

5.6.2   DC Microgrids

5.7  Conclusions and Recommendations

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

  • Annual Total Microgrid Capacity by Region, Base Scenario, World Markets: 2013-2020
  • Annual Total Microgrid Capacity by Segment, World Markets: 4Q 2013
  • Annual Microgrid CHP Vendor Revenue by Region, Base Scenario, World Markets: 2012-2018
  • Annual Microgrid Solar PV Vendor Revenue by Region, Base Scenario, World Markets: 2012-2018
  • Annual Grid-Tied Microgrid Capacity by Top Five Non-U.S. Countries, Base Scenario, World Markets: 2013-2020
  • Annual Remote Microgrid Capacity by Top Five Non-U.S. Countries, Base Scenario, World Markets: 2013-2020
  • Annual Total Microgrid Vendor Revenue by Top 10 Non-U.S. Countries, Base Scenario, World Markets: 2013-2020
  • Annual Total Microgrid Vendor Revenue by Region, Base Scenario, World Markets: 2013-2020
  • Annual Grid-Tied Utility Distribution Microgrid Capacity by Region, Base Scenario, World Markets: 2013-2020
  • Annual Grid-Tied Utility Distribution Microgrid Vendor Revenue by Region, Base Scenario, World Markets: 2013-2020
  • Annual DC Microgrid Capacity by Region, Base Scenario, World Markets: 2013-2020
  • Annual DC Microgrid Vendor Revenue by Region, Base Scenario, World Markets: 2013-2020
  • Centralized vs. Distributed Business Models for Power
  • Customer-Grid Evolution of Relationships via Microgrids
  • Microgrid Economic Capabilities Matrix per Internal Technology and External Markets
  • Grid Reliability Index, North America: 1992-2011
  • Today’s Bidirectional and Increasingly Complex Power System
  • Shares of Population without Access to Modern Energy
  • FITs Driving Renewable Growth in Europe
  • RPS States in the United States with Solar or Distributed Generation Set-Asides
  • U.S. States with Net Metering
  • Ranking of U.S. States per Net Metering and Utility Interconnection Policies
  • Third-Party Solar PPA States
  • Electricity Utility Rate Decoupling, U.S. States
  • Natural Gas Utility Rate Decoupling, U.S. States
  • Approved Sites (in Yellow) for Connecticut Microgrids Funded by DEEP
  • Annual Total Microgrid Capacity by Scenario, World Markets: 2013-2020
  • Annual Total Microgrid Vendor Revenue by Scenario, World Markets: 2013-2020
  • Annual Total Microgrid Capacity by Segment, Base Scenario, North America: 2013-2020
  • Annual Microgrid Capacity by Top Five States, Base Scenario, United States: 2013-2020
  • Annual Microgrid Vendor Revenue by Top Five States, Base Scenario, United States: 2013-2020
  • Energy Solution Bundle Blended PPA Model
  • Microgrid Topology and Components
  • Battery Storage Applications for Microgrids
  • Matrix of Microgrid Grid Integration & Technical Complexity
  • Microgrid Application Triangle: Reliability, Fuel Savings, and Reduced Emissions
  • PowerStream Citiview Project Diagram
  • Portugal’s Graciosa Island Microgrid
  • Private Shipyard 11 MW CHP Microgrid Savings over 15 Years
  • Theoretical 500 MW Microgrid Scenario for Con Edison
  • Borrego Springs Remote Geographical Topology
  • Siemens DBOOM Microgrid Offering
  • Microgrid as Full Infrastructure Delivery Service Platform
  • Fisher-Pry S-Curve for Microgrids

List of Tables

  • Microgrids vs. Virtual Power Plants
  • SWOT Analysis for Grid-Tied Microgrids
  • SWOT Analysis for Remote Microgrids
  • Five Other Leading Utilities Active in Microgrid Markets
  • Five Other Leading Grid Infrastructure Vendors
  • Five Leading Nuts & Bolts Hardware & Middleware Providers
  • Annual Total Microgrid Capacity by Region, Conservative Scenario, World Markets: 2013-2020
  • Annual Total Microgrid Capacity by Region and Segment, Conservative Scenario, World Markets: 2013-2020
  • Annual Total Microgrid Vendor Revenue by Region, Conservative Scenario, World Markets: 2013-2020
  • Annual Total Microgrid Vendor Revenue by Region and Segment, Conservative Scenario, World Markets: 2013-2020
  • Annual Total Microgrid Capacity by Region, Base Scenario, World Markets: 2013-2020
  • Annual Total Microgrid Capacity by Region and Segment, Base Scenario, World Markets: 2013-2020
  • Annual Total Microgrid Vendor Revenue by Region, Base Scenario, World Markets: 2013-2020
  • Annual Total Microgrid Vendor Revenue by Region and Segment, Base Scenario, World Markets: 2013-2020
  • Annual Total Microgrid Capacity by Region, Aggressive Scenario, World Markets: 2013-2020
  • Annual Total Microgrid Capacity by Region and Segment, Aggressive Scenario, World Markets: 2013-2020
  • Annual Total Microgrid Vendor Revenue by Region, Aggressive Scenario, World Markets: 2013-2020
  • Annual Total Microgrid Vendor Revenue by Region and Segment, Aggressive Scenario, World Markets: 2013-2020
  • Annual Grid-Tied Utility Distribution Microgrid Capacity by Region, Conservative Scenario, World Markets: 2013-2020
  • Annual Grid-Tied Utility Distribution Microgrid Capacity by Region, Base Scenario, World Markets: 2013-2020
  • Annual Grid-Tied Utility Distribution Microgrid Capacity by Region, Aggressive Scenario, World Markets: 2013-2020
  • Annual Grid-Tied Utility Distribution Microgrid Vendor Revenue by Region, Conservative Scenario, World Markets: 2013-2020
  • Annual Grid-Tied Utility Distribution Microgrid Vendor Revenue by Region, Base Scenario, World Markets: 2013-2020
  • Annual Grid-Tied Utility Distribution Microgrid Vendor Revenue by Region, Aggressive Scenario, World Markets: 2013-2020
  • Annual DC Microgrid Capacity by Region, Conservative Scenario, World Markets: 2013-2020
  • Annual DC Microgrid Capacity by Region, Base Scenario, World Markets: 2013-2020
  • Annual DC Microgrid Capacity by Region, Aggressive Scenario, World Markets: 2013-2020
  • Annual DC Microgrid Vendor Revenue by Region, Conservative Scenario, World Markets: 2013-2020
  • Annual DC Microgrid Vendor Revenue by Region, Base Scenario, World Markets: 2013-2020
  • Annual DC Microgrid Vendor Revenue by Region, Aggressive Scenario, World Markets: 2013-2020
  • Annual Grid-Tied Microgrid Capacity by Top 10 Non-U.S. Countries, Base Scenario, World Markets: 2013-2020
  • Annual Remote Microgrid Capacity by Top 10 Non-U.S. Countries, Base Scenario, World Markets: 2013-2020
  • Annual Total Microgrid Capacity by Top 10 Non-U.S. Countries, Base Scenario, World Markets: 2013-2020
  • Annual Grid-Tied Microgrid Vendor Revenue by Top 10 Non-U.S. Countries, Base Scenario, World Markets: 2013-2020
  • Annual Remote Microgrid Vendor Revenue by Top 10 Non-U.S. Countries, Base Scenario, World Markets: 2013-2020
  • Annual Total Microgrid Vendor Revenue by Top 10 Non-U.S. Countries, Base Scenario, World Markets: 2013-2020
  • Cumulative Total Microgrid Capacity by Top 10 Non-U.S. Countries, Base Scenario, World Markets: 2013-2020
  • Annual Microgrid Capacity by Top Five States, Base Scenario, United States: 2013-2020

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