Utility Distribution Microgrids

Utility Technology Disruption Report

Utilities across the United States are deploying utility distribution microgrids (UDMs) in order to explore new market opportunities in the emerging distributed energy resources (DER) landscape. Previously opposed to the concept of intentional islanding, utilities are now exploring microgrids thanks to recent technology advances such as smart inverters, smart switches, and new DER control platforms. Rather than being focused on providing economic value and resiliency benefits to behind-the-meter customers, UDMs can enable utilities to manage DER portfolios to bolster reliability at the distribution level of power service.

In 2015, 29 MW of new UDM capacity was deployed across the United States, representing an estimated $161 million in implementation revenue. By 2024, those numbers are expected to increase to 241 MW annually, with corresponding annual revenue of $917 million. Microgrids operated/owned by utilities can serve the distribution grid first (and be a platform for new services). UDMs can also be seen as vehicles to help utilities address DER deployment trends to their advantage. Yet, UDM adoption is dependent upon regulatory reforms, natural disasters, and customer adoption rates of DER such as solar PV and energy storage. As such, UDMs will only be deployed for a very small portion of the broad addressable market over next decade.

This slide-based Navigant Research Utility Technology Disruption Report examines the UDM market in the United States, with a focus on technology and policy trends, customer adoption, utility deployments, and the vendor landscape. Cost curve projections and adoption forecasts are provided through 2024. Featuring Navigant Research’s Utility Technology Disruption Matrix and Execution Grid, the report also examines implications for traditional utility business models, provides utility case studies, and offers strategic recommendations for industry stakeholders to position for long-term success.

Key Questions Addressed:
  • What is the current deployment status of utility distribution microgrids (UDMs) in the United States?
  • What are the typical costs of different types of UDMs?
  • Who are the leading vendors in the UDM space?
  • Which vendors have already forged partnerships with utilities?
  • How can utilities put UDMs into their rate base?
  • How can utilities secure a part of the microgrid revenue streams in the United States?
  • What actions can utilities take now to capture market opportunities in the UDM space? 
Who needs this report?
  • Investor-owned utilities
  • Publicly owned utilities
  • Unregulated utility subsidiaries
  • Microgrid developers and integrators
  • Microgrid product manufacturers
  • U.S. state regulatory agencies
  • Investor community

Table of Contents

Executive Summary

Technology

Overview

Maturity

Geography

Customers

Adoption

Cost vs. Demand

Vendors

Vendor Ecosystem

Utility Partnerships

Disruption

Opportunities & Threats

Strategy

Utility Execution Grid

Business Models

Response

Utility Evolution

Scope of Study

List of Charts and Figures

  • UDM Deployments, United States: 2010-2015
  • Top U.S. States by Total UDM Projects: 2Q 2016
  • Microgrid Adoption
  • U.S. Addressable Microgrid Market: 2010-2024
  • Average $ Millions per Megawatt: Three Microgrid Segments
  • Annual UDM Capacity and Revenue, United States: 2015-2024
  • UDM Vendor Landscape
  • Utility and Vendor Partnership
  • Navigant Research Utility Technology Disruption Matrix
  • Navigant Research Utility Execution Grid: UDMs
  • UDM Business Model Attributes
  • Utility Use Cases
  • Microgrid Commercial Ecosystem: Where Do Utilities Fit?
  • Utility Microgrid Response Matrix
  • The Proactive Approach

List of Tables

  • Borrego Springs Microgrid: Utility Rate Base
  • Stafford Hill Solar Farm: Generation Ownership
  • Oncor Technology Demonstration and Education Center (TDEC): Shared Ownership

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