INSIGHTS
- While the size of the global microgrid market was $15.3 billion in 2016, the global microgrid demand stood at 1.48 GW in the same year.
- Due to reasons ranging from more demand for microgrids to significant investments in the same industry, North America and Asia are the regions expected to have the most near-term opportunities.
OVERVIEW
The size of the microgrid market in 2016 was $15.3 billion in 2016 as the global demand hit 1.48 GW in the same year. This market is expected to grow steadily at a
rate of 12% from 2017 to 2022, while for the global demand, it is 16.3%. North America and Asia-Pacific have been identified as the regions expected to have the most near-term opportunity. The reasons for this has been provided in this report. Lastly, trends around the global microgrid market include affordable energy storage, continuous decline of wind and solar costs, better integration of controls and controllers with the grid, blockchain technology, and expanding remote/island microgrid market.
rate of 12% from 2017 to 2022, while for the global demand, it is 16.3%. North America and Asia-Pacific have been identified as the regions expected to have the most near-term opportunity. The reasons for this has been provided in this report. Lastly, trends around the global microgrid market include affordable energy storage, continuous decline of wind and solar costs, better integration of controls and controllers with the grid, blockchain technology, and expanding remote/island microgrid market.
GLOBAL MARKET OPPORTUNITY FOR MICROGRIDS
Due to the demand for better power systems, and the need to conserve energy during transmission and distribution (as against the traditional power systems), the global microgrid market has seen a steady growth. The global microgrid demand was 1.48 GW in 2016 and is expected to increase to 6.54 GW by the end of 2025, at a rate of 16.3% from 2017 to 2025. According to Business Wire, the market size of the global microgrid was $15.3 billion in 2016. In light of the steady growth the market is experiencing, the market size is projected to be in excess of $30 billion by 2022, at a rate of 12% from 2017 to 2022.
It is projected that the market share of the global revenue for North America will continue to rise, reaching 71.4% by the end of 2025. It is reported that "the increasing number of new solar PV microgrids for utility in Northeast and West regions of the United States" constitutes the major driving force towards this growth. Also, due to recent extreme weather conditions that have led to power outages, the microgrid market in the region has seen a significant expansion.
According to MarketsandMarkets the microgrid market in Asia-Pacific is expected to see a high growth rate from 2016 to 2022. This due to the following reasons:
- Increasing demand for electrification in the rural areas.
- The rapid growth seen in the Indian mining vertical market.
- Significant investments made by some companies of high reputation (ABB, Siemens, GE, and Schneider Electric) in the region.
BRIEF OVERVIEW OF THE MICROGRID MARKET IN EUROPE
By having just 9% share of the total microgrid power capacity in 4Q 2017, Europe has been reported to be lagging behind North America (34%) and Asia-Pacific (40%). Others include the Middle East and Africa (14%), Latin America (3%), and Antarctica (0%). The reasons highlighted were based on the tightly regulated EU markets that have impeded the development of microgrids in the region. Most microgrids in the region are installed on "islands in the Mediterranean, the Canary Islands off the coast of Spain, or projects such as Bornholm or the Faroe Islands of Denmark." However, Finland has been highlighted as having the potentials to lead the line in the European microgrid market.
MARKET TRENDS AROUND MICROGRIDS GLOBALLY
1. Affordable Energy Storage.
The continuous dip in the cost of storage is "shifting the energy landscape significantly." This is as a result of the rise of affordable batteries that are able to deliver better performances.
2. Continuous decline of wind and solar costs.
Despite the underestimating predictions on the growth and capacity of the use of photovoltaics (PV), the use of solar energy continues to beat these predictions and expectations. And despite the steady high "soft costs" in the US, the cost of solar and wind equipment is falling/declining.
3. Better integration of controls and controllers with the grid.
With the emergence of software, electronics, and microelectronics, developers are rapidly deploying products ("smart meters, smart inverters, smart generator sets with built-in microgrid controllers, Distributed Energy Resource Management Systems (DERMS), Battery Management Systems (BMS) and other tools") that enhances grids while providing more support for additional solar and wind resources.
4. Blockchain Technology
Microgrid companies are beginning to leverage the encryption and distributed data sets technology of blockchain to enhance and improve "security and reliability of complex transactions" — widely called a "digital ledger." For example, the Brooklyn Microgrid uses this tech to enhance "peer-to-peer trading between owners of residential solar energy systems."
5. Expanding remote/island microgrid market.
Due to the reduction in "price of solar PV and wind power sources, cost of power generation, and other environmental benefits," the remote/island segment of the microgrid market is expected to increase between 2016 and 2022.
CONCLUSION
The size of the microgrid market in 2016 has been provided. This value stood at $15.3 billion in 2016 as the global demand for the same market hit 1.48 GW in the same year. North America and Asia-Pacific have been identified as the regions expected to have the most near-term opportunity. The reasons for this has also been provided in this report. Trends around the global microgrid market were also included. They include affordable energy storage, continuous decline of wind and solar costs, better integration of controls and controllers with the grid, blockchain technology, and expanding remote/island microgrid market.