Navigant Research has long argued that North America—and especially the United States—is the global hotspot for microgrids. I’ve argued that if one includes remote microgrids into consideration, it could be said that Alaska is the microgrid capital of the world. However, recent trends point to explosive growth in microgrids of all sizes, shapes, and applications (including both grid-tied and remote) in the Asia Pacific region. And it appears Alaska has some stiff competition in Australia.
Most of the innovation in the Asia Pacific region has been focused on private sector business models. But what about carving out a new role for utilities owned by the government? Certainly, microgrids challenge and may disrupt typical utility business models within the context of systems that intentionally island in order to derive economic benefits within a distribution grid. But what about utilities that operate and manage off-grid, remote systems?
Horizon Power a Standout Model
This is a space in the microgrid market where few have ventured, with the single notable exception of Horizon Power in Western Australia. Horizon Power services the biggest area with the least amount of customers in the world—a service area of approximately 2.3 million square kilometers, or an average of one customer for every 53.5 square kilometers of terrain. Its microgrids are exposed to intense heat and cyclonic conditions in the north and severe storms in the south.
Australia has long been a leader in wind-diesel hybrid microgrids provided by vendors such as Powercorp (now ABB) and Optimal Power Solutions, the latter a company which ranked third in last year’s Navigant Research Leaderboard Report on microgrid developers/integrators offering their own controls platform.
Horizon Power is more focused on providing operational efficiencies and value creation for the much maligned government-owned utilities. Its creativity may well spill over into other Asia Pacific markets that also focus on how to bring an enterprise management acumen to remote systems. Such remote systems traditionally have suffered from poor operations and management systems, contributing to the eroding financial status of utilities.
Asia Pacific Innovation
Australia is, like Alaska, a unique setting in which to test drive new and innovative business models, as well as robust technologies that must withstand extreme weather and logistical challenges. Innovators in nearby New Zealand (such as Infratec, an entity that is a spin-off from a publicly owned electricity distribution company) are showing that not all good ideas come from the private sector. Infratec recently entered into a strategic alliance with Perth-based company EMC to bring a wider range of product offerings to New Zealand and the Pacific. Already, Infratec and EMC jointly deployed the country’s first grid-connected, commercial-scale battery energy storage system in South Canterbury.
As the most recent Microgrid Deployment Tracker shows, the Asia Pacific region is rapidly catching up to North America in terms of total identified microgrid capacity. One could argue today that Australia is today’s global leader in terms of exploring synergies possible with enterprise optimization of remote microgrids, a topic that has yet to be tackled in any comprehensive way anywhere else in the world. A decade from now, I wouldn’t be surprised to see Australia and New Zealand among the top countries in the world when it comes to microgrid innovation.