A new Frost and Sullivan report finds that microgrids are set to “transform” the distributed energy resources and energy storage systems market.The report suggests that the bankability of microgrids “is on the rise,” citing significant price declines in both distributed renewable power and battery technologies.
This coupled with increased technological advancements in control and energy management systems, have created a vision of highly reliable, efficient, flexible, renewable and 'islandable' grid networks embedded with advanced smart grid technologies, says Frost and Sullivan. [Western Australia to develop renewable microgrid]
Ross Bruton, environment senior industry analyst, Frost and Sullivan, said: “Tying together decentralised power production through the use of microgrid control systems, energy storage, and smart technologies allows the efficient management of growing decentralised power production volatility without substantial investments into transmission upgrades and extensions.
“These systems will ensure electricity supply reliability, while trading electricity to the central grid to be used for ancillary services in grid balancing. The decline in the prices of photovoltaics and storage, and the use of microgrids for remote electrification purposes, will allow for more rapid, cost-effective and renewable electrification of developing countries.”
North America largest market share
The report states that North America accounts for almost 50% of the global microgrid market. The Asia-Pacific market, presenting key growth opportunities, is the second-largest market due to electrification in India and China, island grids in Indonesia, and industrial microgrids in Australia. [New York offers up $10m for microgrids and DER]
The European Union however, with the most secure electricity grids and highest penetration of smart grid technology, shows a limited need for islandable microgrid systems and is instead expected to represent a leading market for virtual power plant solutions, says the report.
Bruton adds: “With governments setting regulations and standards for efficient interconnection and operation, players across diverse sectors are swiftly entering the market with proprietary solutions for installation and management of distributed energy resources and storage to support associated loads.
“Consolidation of these solutions into more standardised microgrid projects will represent one of the key vehicles to carry the market to broad-based commercialisation.”