Global Microgrid Market Set To Reach $23 Billion By 2021, Predicts GlobalData
The global microgrid market is set to reach around $23 billion in 2021, an impressive growth from its current level of around $12 billion, due to the inherent resilience, reliability, and environmental credentials of microgrids, according to a new report published by GlobalData.
The research and consulting firm this week published its latest report, Microgrids, Update 2017 – Global Market Size, Competitive Landscape, and Key Country Analysis to 2021, analyzing the current state of the global microgrid market and looking at the current trends and future potential of the market. GlobalData predicts that the significant growth, a near-doubling of the sector’s market value, is due to significant market drivers including “the resilience, reliability, and environmental credentials of microgrids.” Specifically, GlobalData predicts that over the next five years, the global microgrid sector will “progress from the test-bed and demonstration phase to commercializing projects.”
The report echoes the findings of a similar report published last month by Navigant Research, which claimed that the global market for commercial and industrial microgrids was likely to increase from its current level of 448.3 megawatts (MW) through an impressive growth period to reach 5,389.1 MW annually by 2026. This particular sector is looking at microgrids for more financially well-off customers, helping to fund what Navigant call “the Energy Cloud” — a “shift to localised, resilient power systems incorporating diverse distributed energy resources.”
As such, we’re not specifically talking about microgrids which facilitate reliable electricity generation for poorer and regional communities and solving energy poverty — though microgrids will nevertheless be a primary player in that endeavour. Specifically, microgrids could help avoid power-related outages in the United States and other developed countries, mitigating significant costs. Already, according to GlobalData, utilities are actively being seen to move in the deployment of microgrids across North America.
“The deployment of microgrids facilitates dynamic energy management and the ability to protect critical loads,” explained Subha Krishnan, Power Analyst for GlobalData. “Microgrids combined with distributed generation are acting as a game-changer in the electricity distribution system, as network downtimes, natural disasters, and possible external attacks are increasing the need for grid-connected facilities to become more independent. Indeed, the negative impact of extended power outages on the economy is expected to be eased with the adoption of microgrids.”
There are challenges, however, which must be overcome for microgrid adoption and deployment to increase at the rate predicted. Technical, economic, and regulatory challenges, combined with a current lack of end-user acceptance and current high costs, will need to be overcome. Unsurprisingly, therefore, the United States — with its healthy economy and rich utilities — accounted for 39% of the global microgrids market.
“In order to make a conversion from traditional grid to a modern grid, transformation of business models and adoption of innovative technology are necessary,” continued Krishnan. “The market trends reflect that the technological advancement has been ahead of policies and regulations required for the uptake of microgrids.
“It is important that there is a balance between policymakers, regulators, entrepreneurs, and industry participants to facilitate the smooth transition of the existing electricity system into a modern grid. Indeed, the future growth of the industry will rely upon the quick development of public policies and regulations that will nurture project development, and efforts to standardize microgrids to integrate with the power delivery system.”
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