Microgrid Market

The microgrid market is expected to grow from USD 19.22 billion in 2017 to USD 39.10 billion by 2023, at a CAGR of 11.97% during the forecast period. The base year considered for the study is 2017, and the forecast period is 2018–2023. A microgrid is a small-scale power grid that can operate independently or in conjunction with the area’s main electrical grid. It is a group of interconnected loads and distributed energy resources within clearly defined electrical boundaries. It acts as a single controllable entity with respect to the grid. A microgrid can be connected to or disconnected from the grid to enable it to operate in both grid-connected and remote/island modes. Microgrids cater to various verticals, such as educational institutes, industrial, military, healthcare, government & utilities, and others (electric vehicles, data centers, and telecom infrastructure).

Market Dynamics

Driver

• Increasing demand fo reliable and secure power supply worldwide
• Widespread industrialization and population growth fueling demand for endrgy storage systems
• Government initiatives to reduce carbon footprint
• Converrgence of IoT in enhancing microgrid market connectivity
• Advantage of cheap and clean energy storage

Restraints

• High installation and maintenance cost of microgrid
• Lack of knowledge about procedures to secure license right for connecting multisite microgrids
• Land acquistion and registration procedures creating complication for solar PV plant installations in rural areas

Opportunities

• Rising electrification projects in rural areas of APAC and Africa
• Growing demand for microgrid in healthcare, military, and government sectors worldwide
• Increasing government investments in projects

Challenges

• Dynamic government policies, regulation, and standards worldwide
• Interoperability and compatibility issue due to large numbers of components / devices
• Operation, technological, and security risks associated with microgrid

Increasing demand for reliable and secure power supply worldwide

Reliable and secure power supply is a critical parameter in any industry to work efficiently. Uninterrupted energy supply is a critical parameter in any country, which is vulnerable to the acts of terrorism, natural disasters, and other risks. Electricity generated by large, remote power plants in the centralized power grid is transmitted across regions and countries. However, system shortcomings, primarily related to transmission inefficiency, have become increasingly evident, as conventional grids are largely dependent on fossil fuels that lead to pollution and global warming and are largely vulnerable to calamities. This usually results in network malfunction or blackouts. For instance, Hurricane Sandy in the US and Typhoon Haiyan in the Philippines are some examples that have resulted in mass blackouts in major areas, such as New York and islands of Leyte. The aftereffects of these calamities resulted in the lack of access to electricity for several days in these regions, leading to the growing demand for self-power-generating resources or microgrid.

The following are the major objectives of the study:

• To describe, and forecast the global microgrid market, in terms of value, by type, offering, and vertical
• To forecast the size of market segments with respect to 4 major regions: Americas, Europe, APAC, and RoW
• To strategically analyze the micromarkets with respect to individual growth trends, prospects, and contributions to the overall microgrid market
• To provide detailed information regarding the major factors (drivers, restraints, opportunities, and challenges) influencing the microgrid market growth
• To analyze competitive developments such as new product developments, collaborations, partnerships, and research and development in the microgrid market
• To define and describe each stage of value chain and analyze the microgrid market based on industry trends
• To map competitive intelligence based on company profiles, key player strategies, and key developments in microgrid 
• To strategically profile key players and comprehensively analyze their market position in terms of ranking and core competencies, and detail the competitive landscape for microgrid market players

During this research study, major players operating in the microgrid market in various regions have been identified, and their offerings, regional presence, and distribution channels have been analyzed through in-depth discussions. Top-down and bottom-up approaches have been used to determine the overall microgrid market size. Sizes of the other individual markets have been estimated using the percentage splits obtained through secondary sources such as Hoovers, Bloomberg BusinessWeek, and Factiva, along with primary respondents. The entire procedure includes the study of the annual and financial reports of the top market players and extensive interviews with industry experts such as CEOs, VPs, directors, and marketing executives for key insights (both qualitative and quantitative) pertaining to the market. The figure below shows the breakdown of the primaries on the basis of the company type, designation, and region considered during the microgrid research study.

To know about the assumptions considered for the study, download the pdf brochure

The microgrid ecosystem includes original equipment manufacturers (OEMs) such as ABB (Switzerland), General Electric (US), Eaton (Ireland), Schneider Electric (France), Honeywell (US), S&C Electric (US), and Exelon Corporation (US). Key software providers in the market include Homer Energy (US) and Power Analytics (US). Key integrators and service providers include ABB (Switzerland), General Electric (US), Siemens (Germany), Schneider Electric (France), Honeywell (US), S&C Electric (US), Power Analytics (US), and Exelon Corporation (US).

Scope of the Report:

Major Market Developments

• In March 2018, GE launched the GE Reservoir - a comprehensive energy storage platform. It delivers a suite of customized storage solutions to help customers address new challenges and seek new opportunities in a rapidly transforming power grid.
• In January 2018, Eaton launched a series of reclosers to help utilities support a smarter, more reliable grid. Eaton’s Cooper Power series NOVA NX-T reclosers provide accuracy and distribution system reliability critical to smart grid applications. The new solution is designed to enhance performance and reliability while simplifying equipment configuration, installations, operation and control.
• February 2018, GE and ORES (Belgium) collaborated to deliver an integrated software solution for the operation of its distribution network. To overcome operational challenges, ORES developed a strategy to secure the future of its distribution infrastructure, including improving network reliability and implementing smart metering, all while improving customer focus and as such, selected GE as their solution vendor of choice.

Target Audience

• Microgrid providers
• IT service providers
• Cloud service providers
• Original equipment manufacturers (OEMs)
• System integrators and third-party vendors
• Software solution providers
• Government bodies
• Technology investors
• Enterprise data center professionals
• Research institutes and organizations
• Market research and consulting firms

Scope of This Report

The microgrid market has been covered in detail in this report. To provide a holistic picture, the current market demand and forecasts have also been included in the report. The microgrid market has been segmented as follows:

Microgrid Market, by Type

• Grid Connected
• Remote/Island/Off-Grid

Microgrid Market, by Offering

• Hardware
• Software
• Services

Microgrid Market, by Consumption Pattern

• Urban/Metropolitan
• Semi-urban
• Rural/Island

Microgrid Market, by Vertical

• Educational Institutes
• Industrial
• Military
• Healthcare
• Government & Utilities
  • Urban Electrification
  • Rural Electrification
• Others (Electric Vehicles, Data Centers, and Telecom Infrastructure (Cellphone Towers))

Microgrid Market, by Region

• Americas
• Europe
• APAC
• RoW

Available Customizations

Based on the given market data, MarketsandMarkets offers customizations in the reports as per the client’s specific requirements. The available customization options are as follows:

Grid Type Analysis:

• Detailed analysis of grid-connected and remote/island microgrid

Country-wise Information:

• Detailed analysis of the microgrid market for each country

Company Information:

• Detailed analysis and profiling of additional market players (up to 5)

According to MarketsandMarkets’ forecast, the microgrid market, in terms of value, is expected to grow from USD 22.22 billion in 2018 to USD 39.10 billion by 2023, at a CAGR of 11.97% between 2018 and 2023. Major drivers for the microgrid market are increasing demand for reliable and secure power supply worldwide; widespread industrialization and population growth fueling demand for energy storage systems; government initiatives to reduce carbon footprint; the convergence of IoT in enhancing connectivity, and the advantages of cheap and clean energy storage.

This report covers the microgrid market based on type, offering, vertical, and region. The microgrid market for remote/island microgrid is expected to grow at a higher CAGR between 2018 and 2023. The key reasons for this microgrid market growth are heavy decline in the prices of solar PV and wind power sources, drop in the cost of power generation compared with centralized power grids, and other environmental benefits, such as less heat generation and smog. Commercially, remote microgrids are considered to be an appropriate energy solution for remote and rural locations. The investment scenario in the remote sector is improving as industry giants such as ABB (Switzerland) and General Electric (US) are eyeing this segment.

The microgrid market is segmented on the basis of type whether is it connected to grid is off-grid. A grid-connected operates in connection with a larger utility grid whereas it is said to be in a remote/island/off-grid mode when a limited distributed energy system is disconnected from the main grid. The remote/island/off-grid segment holds the higher share and is expected to grow at a higher rate due to heavy decline in the prices of solar PV and wind power sources.

The microgrid market for software is expected to grow at the highest CAGR between 2018 and 2023. This growth can be attributed to the high adoption of software across university campuses, industrial and commercial sites, municipalities, and utilities. Software-as-a-service platform allows microgrid operators to dynamically manage and control distributed energy resources with integrated weather and load forecasting. With software management services, microgrids owners have a single point of accountability and a reduced risk of project delays and failures. This results in a safer, reliable, and cost-efficient system.

Americas is leading the market in terms of microgrid market share. The microgrid market in APAC is expected to grow at the highest CAGR between 2018 and 2023. The highest growth of the microgrid market in APAC can be attributed to the rising number of rural electrification projects in India, along with increasing investments made by both national and international companies, such as ABB, Siemens, SunEdison, and Omnigrid. All these factors are pushing the demand for microgrid in APAC.

Increasing deployment of microgrid across applications like educational institutes, military, government and utilities, and healthcare drive the growth of microgrid market

Educational Institutes

Educational institutes include research organizations, R&D institutes, laboratories, and schools and colleges. Nowadays, large institutional campuses have a number of buildings in a limited geographical area. The quality of power supply may differ depending on the type of institute. A moderate degree of power supply reliability suits most college buildings, while research institutes require a power supply of better quality. Educational institutes mostly operate in remote/island mode owing to their constant dependency on power supply quality. Colleges and universities represent the largest sector for the global grid-connected market. Such microgrids have an advantage of common ownership and hence offer the best near-term development opportunity. Several schools have started investing in microgrid for their labs as they need to protect labs against power outages and fluctuations.

Industrial

The industrial vertical covers mining, steel, chemicals, and oil & gas, among other industries. Mining and other industrial facilities, which are increasingly being established in remote locations, do not have continuous access to the main electricity grid and are therefore dependent on fuel. This higher dependency on fuel has led to the increasing cost of energy generation in remote areas. The additional pressure to adopt a sustainable development model makes self-production of electricity the only viable option.

Military

The military vertical is one of the important application areas for microgrids. The defense sector has always been the major enabler of the technology, which allows buildings or bases to stay running on their own power when the grid goes down. Microgrids are the focus of military projects with partners ranging from big players such as General Electric (US), Lockheed Martin (US), Boeing (US), and Honeywell (US) to small specialty technology firms such as Spirae (US) and Power Analytics (US). The US Department of Defense has assigned a contract to Viridity Energy (Philadelphia) to develop a better demand response management system. In another important development, Blue Pillar (US) installed its power sensors and deployed its software platform for energy management for an Air Force base in the US.

Healthcare

Healthcare facilities, specifically intensive care units (ICUs), require constant backup power to maintain critical life support systems, making them potential users of microgrid. A healthcare facility or medical center requires reliable electricity, heating, and cooling for running high-tech equipment and keeping patients healthy and comfortable. The microgrids system provides significant economic and environmental benefits to the most advanced healthcare facilities, ensuring the medical center’s sustainability and reducing its carbon footprint. Hospitals are an essential facility leveraging the advantages of microgrid. Microgrids have the ability to optimize energy consumption for any type of facility, and this brings particular value to public facilities such as hospitals, which use mass quantities of power to maintain daily operations without risking an outage.

Government & Utilities

Utility microgrids are usually owned by private or government bodies. Aggressive decline in the prices of renewable resources is one of the major reasons for the growth of microgrids. Remote/island microgrids are expected to witness high demand in the utilities vertical in the upcoming years. Several developments have been made in this vertical; for instance, in February 2015, Exelon Corp (US) partnered with Anbaric Transmission (US) to build microgrids in New York, US. Anbaric has experience in competitive markets such as New York and New Jersey in particular, where it has helped develop independent transmission.

Critical questions the report answers

• Where will all these developments take the industry in the mid to long term?
• What are the upcoming industry applications for Microgrids?

Factors restraining the microgrid market growth include high installation and maintenance cost of microgrids; lack of knowledge about procedures to secure license rights for connecting multisite microgrids; and land acquisition and registration procedures creating complications for solar PV plant installations in rural areas.

Major vendors in the microgrid market are ABB (Switzerland), General Electric (US), Eaton (Ireland), Siemens (Germany), Schneider Electric (France), Honeywell (US), Homer Energy (US), S&C Electric (US), Power Analytics (US), and Exelon Corporation (US). These players have adopted strategies such as new product developments, collaborations, agreements, and acquisitions to cater to the needs of customers.

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