Developing commercially viable business models for microgrids is the current state of the market, according to Navigant Research’s latest research report, which conveys how the microgrid has evolved in the four years since the firm offered its first comprehensive analysis of the microgrid market.
Back then, microgrids were mainly migrating online to serve as pilot projects or R&D experiments.
The report identifies nine microgrid business models now under deployment – and notes that future growth requires a large level of innovation.
Pushing into the North American market has been a major initiative based on the fact that this is where more than half of all microgrid vendor revenue is currently generated. “The increasing frequency of severe weather is prompting utilities in the United States and around the world to reconsider their historic opposition to customer-owned microgrids that can disconnect from the larger grid and island, allowing critical mission functions to stay up and running,” Navigant reports.
North America should hold its leadership position for at least the next seven-year forecast
period. According to the base scenario, annual capacity is expected to increase from the current norm of 685 MW to more than 4 GW by 2020, a compound annual growth rate (CAGR) of 29.3%.
Navigant’s report identifies the top five U.S. markets and profiles 18 companies. And, in a first for microgrid research, Navigant identifies the top 10 markets outside the United States.
In addition, while the report analyzes the market based on the same five segments that the industry has widely adopted, it also slices the market into subsegments, focusing on two specific ones: grid-tied utility distribution microgrids (UDMs) and direct current (DC) microgrids – both of which, owing to their innovation, have been generating increasing awareness from the market.
– Commercial/industrial (C/I) microgrids: This segment is quickly maturing, especially in North America.
– Community/utility microgrids: Europe leads this segment, with Denmark’s high penetration of distributed wind requiring aggregation networks that represent over 80% of all microgrid activity there.
– Campus/institutional microgrids: The typical focus of these microgrids is to aggregate existing onsite generation with multiple loads that are co-located in a campus setting.
– Military microgrids: The focus of these microgrids is security, both cyber and physical.
– Remote microgrids: These microgrids never connect to a larger grid and, therefore, operate in island mode on a 24/7 basis.
Of the two new subsegments, UDMs face the largest regulatory barriers, but could lead to the largest-scale deployments over the long term, while DC encompass both grid-tied and remote systems and is a technology rather than an application approach to microgrid segmentation.
To access the report, click here