Microgrids offer a compelling alternative to traditional energy generation and distribution, using smart grid technologies to enable integrated control of distributed power generation and energy storage assets either in parallel to or “islanded” from the utility power grid. According to a new report from Pike Research, there are more than 140 modern microgrid projects totaling over 1.1 GW of capacity worldwide (and 1.8 GW if legacy petrochemical and university campus systems are included in the tally). The cleantech market intelligence firm forecasts that global revenue from microgrid systems will experience a 64% compound annual growth rate (CAGR) over the next several years, increasing from just $144.2 million in 2011 to $1.7 billion by 2016, under a base case forecast scenario. Under a more aggressive forecast scenario that assumes the alignment of regulatory structures, industry priorities, and public policy supports, microgrid revenues could surpass $3 billion during the same period.
“Microgrids will be deployed in all shapes and sizes,” said senior analyst Peter Asmus. “Microgrid deployments utilize a wide variety of renewable and fossil fuel-based power sources, new storage options, leading software innovations, and groundbreaking controls to aggregate distributed energy to provide greater value to end-use customers and host distribution utilities. These modular aggregation platforms can be applied to a full range of application segments, including commercial and industrial sites, university campuses, remote off-grid communities, and military microgrids.”
Asmus added that, despite the significant promise and industry excitement over the concept, few fully commercialized state-of-the-art microgrids with significant generation capacity are actually up and running in North America, the world’s leading market for microgrids. Industry leaders and other advocates are wrestling to find the appropriate business models and regulatory structures for decentralizing the power distribution infrastructure in a quest to integrate renewable energy while adding greater reliability, security, and self-healing capabilities to electricity distribution, especially in times of emergencies and larger grid outages. The answers to these open questions, said Asmus, will have a profound influence on the long-term evolution of the electric power industry.
Pike Research’s report, Microgrids, provides an in-depth analysis of the emerging global market for microgrids and the technologies that will enable greater flexibility and diversity in the generation, storage, and distribution of electricity. The study includes a detailed examination of business models, policy and regulatory drivers, technology issues, and key industry players that are focused on realizing the microgrid vision. Global market forecasts are provided through 2016 for microgrid capacity and revenues, segmented by world regions, key countries, and application segments.