Global Microgrid Market - 2023-2030

Market Overview

Microgrid Market size was worth US$ XX million in 2022 and is estimated to show significant growth by reaching up to US$ XX million by 2030, growing at a CAGR of 13.0% within the forecast period (2023-2030).

A microgrid is a self-contained energy unit that serves a specific geographic area, such as a college campus, a hospital complex, a commercial center or a residential neighborhood. It is self-sufficient and does not require the assistance of a centralized grid. When connected to the main grid, a smart microgrid can work as an electrical island; even when it is not connected to the main grid, it can function as an electrical island. It contributes to reducing harmful emissions through the efficient use of renewable resources, increased efficiency and long-term energy cost predictability. The industry will be bolstered by the rising need for a stable and reliable power supply and rising electrification rates, particularly in developing nations.

The business scenario is expected to be fueled by the increasing penetration of distributed energy resources (DERs) due to rapid commercial and industrial expansion. Factors driving the microgrid market's growth include an increased need for reliable electricity, a growing focus on decarbonization by various end-users and governments, expanding adoption of microgrids for rural electrification and an increase in cyberattacks on energy systems.

Microgrid development is also being fueled by government initiatives in several nations to support the development of microgrids.

Market Dynamics

The rising demand for uninterrupted power supply is driving the market share for microgrid

Climate change is fueling more floods, wildfires, droughts and extreme storms across the globe. As a result, aging power grids are being forced beyond their limits, sometimes with deadly impacts leading to delay power supply. In 2020, a series of uncommon winter storms hit the power out in Texas for days, leading to shortages of power and over 100 deaths.

Microgrids are essential for communities and organizations like universities and hospitals to keep their essential services online by developing electricity during an outage. The localized energy grids can be powered by traditional or alternative energy sources, such as solar energy stored in batteries and operate independently from the bulk power grid.

Furthermore, Electricity is transmitted across multiple areas and countries from massive, remote power plants connected to centralized power systems and using fossil fuels. However, the power plants' limitations in inefficient power transmission have grown more apparent. Traditional systems rely heavily on fossil fuels to generate energy, resulting in pollution and global warming. Natural disasters can threaten these grids, resulting in network outages or blackouts.

For instance, Hurricane Sandy in U.S. and Typhoon Haiyan in the Philippines caused widespread blackouts in major cities such as New York and the islands of Leyte. After the disasters, these communities were without power for several days, resulting in a growing need for self-power-generating plants or microgrids. Companies are also investing the microgrid product due to the rising demand for electricity in disaster-prone areas. For instance, Shizen Energy Inc. introduced microgrid facilities that combine solar power generation systems, storage batteries and an Energy Management System in KURKKU FILEDS in Kisarazu-shi, Chiba Prefecture, with the aim of disaster prevention (the "Project"). On February 22, 2021, the handover was accomplished and the operation began on the same day.

Huge installation costs create a huge challenging atmosphere for the growth of microgrid

Microgrids have greater initial expenses for construction and maintenance than traditional power grids, ranging from 25% to 30% more. They cover everything from the deployment of communication systems to installing smart meters and the ongoing maintenance of the microgrid infrastructure. Smart meter installation prices are 50% higher than electric meter installation expenses. Microgrid distributed energy resources (DERs) are more expensive than those in classic centralized power plants.

Building a new microgrid or converting an existing system to a hybrid microgrid can cost anywhere from tens of thousands to hundreds of millions of dollars. The most expensive aspect of a microgrid is the generation assets, such as solar PV arrays, batteries and combined heat and power systems. Investments in grid automation and microgrid control systems that can intelligently monitor and manage all components managing how the microgrid consumes and generates energy would also demand significant capital.

Microgrids are more expensive than regular grids since they can store, convert and recycle energy and provide superior reliability and power quality. A microgrid might cost between US$ 2 and US$ 4 million per megawatt. However, the figure necessitates a lot of footnotes. The cost is determined by the location and purpose of the microgrid and the type of generation it employs. Nanogrids can cost tens of thousands of dollars, but a complicated urban microgrid planned for Cleveland is expected to cost US$ 100 million.

Furthermore, according to a 2018 study by the National Renewable Energy Laboratory, microgrids for commercial and industrial customers cost around US$ 4 million per megawatt-hour in U.S., followed by campus/institution microgrids at US$ 3.3 million per megawatt-hour, utility microgrids at US$ 2.5 million per megawatt-hour and community microgrids at US$ 2.1 million per megawatt-hour.

COVID-19 Impact Analysis

The coronavirus (COVID-19) pandemic has been a public health concern since December 2019. COVID-19 was declared a pandemic by WHO in March 2020, affecting 213 countries and territories globally. Several countries, including China, India, France, Spain, Denmark, Italy, Austria, New Zealand, Poland, UK and the Czech Republic, have placed harsh economic restrictions. More than a third of the world's population is quarantined during this pandemic. The outbreak has strained various businesses, including hospitals, data centers, communication and the food supply chain.

Out of various industries, microgrid has also seen ups and down's across the globe. For instance, during the COVID-19 crisis, microgrids provided major change and helped U.S. electricity system. Since most individuals are obliged to work from home, utilities connected with community microgrids have provided resilience to shifting power demand. Blue Lake Rancheria in California is an example of significant microgrid performance for saving lives. Three years ago, a microgrid powered by solar, battery energy storage and a diesel backup generator was erected to support a hotel and casino. Furthermore, during the pandemic, the hotel that was powered by the microgrid was turned into a base for delivering meals to the elderly.

Furthermore, the outbreak of the COVID-19 pandemic lead to a rise in patients for an unknown period and microgrids can be critical, life-saving tools for healthcare facilities. Bloom Energy, a California-based power firm, quickly built microgrids at two field hospitals in Vallejo and Sacramento within a week. In order to accommodate the overflow of COVID-19 patients at the main hospital in Vallejo, a 400kW pop-up field microgrid was built in parking lots and convention centers.

Segment Analysis

The global microgrid market is segmented by type, component, end-user and region.

The increasing use of the grid connects businesses, homes and other buildings to central power sources, allowing to use of heating/cooling systems, appliances and electronics to escalate the market growth for the segment

The global microgrid market, based on type, is segmented into ground-mounted solar installations, grid-connected, remote/island and hybrid. The grid-connected dominates in the market of the mentioned types. The microgrids connect to the utility grid via a switching mechanism at the point of common coupling. Still, they can disconnect into island mode and reconnect to the main grid as needed. In grid-connected scenarios, a microgrid integrated with the utility provider can offer grid services (e.g., real and reactive power support, frequency and voltage regulation, demand response, etc.) to address potential utility capacity, reliability and voltage issues grid.

The grid connects businesses, homes and other buildings to central power sources, allowing heating/cooling systems, appliances and electronics. But the interconnectedness implies that everyone is affected when part of the grid is on maintenance. It is where a microgrid can help. A microgrid works while connected to the grid and it can break and operate on its own using energy generation in times of crisis like power outages or other reasons. A microgrid is powered by batteries, distributed generators and renewable resources like solar panels.

A microgrid links to the grid, which keeps voltage constant with the main grid unless there is a problem with the grid or another reason to disengage. Microgrids enable the integration of rising installations of distributed energy resources, resulting in a flexible and efficient electric grid. Furthermore, using local energy sources to serve local loads reduces energy losses during transmission and distribution, improving the electric delivery system's efficiency.

Geographical Analysis

U.S. government has announced various incentives, such as tax credits and subsidies for adopting renewable energy and microgrids

North America is a high-income, developed and industrialized region with a concentration of a wide range of high-tech industries. The region has one of the largest energy demands in the world. The vast majority of the North American energy demand is met with fossil fuels, making it the highest carbon emissions in the world. With growing concerns over the adverse effects of climate change and the need to halt all forms of carbon emissions, various strategies are being undertaken at the national and local levels for an energy transition. Microgrids are expected to play a major role in the ongoing energy transition.

U.S. government has announced various incentives, such as tax credits and subsidies for adopting renewable energy and microgrids. In December 2020, U.S. government approved large-scale funding for microgrid projects in the pandemic relief aid bill. The Build Back Better (BBB) plan, U.S. president Joe Biden's main economic recovery initiative, has allocated US$ 100 billion to develop clean energy. It will provide a boost to microgrid projects in the country.

Electric vehicle manufacturers like Tesla and General Motors comprehensively develop microgrid networks to develop vehicle charging infrastructure. Tesla has constructed more than 120 microgrids globally using its proprietary battery pack technology. In 2022, U.S. Army announced that all military bases would be equipped with microgrids to achieve net-zero emissions by 2035. The army currently has 24 operational microgrids.

Competitive Landscape

The global microgrid market is highly competitive with local and global key players. The key players contributing to the market's growth are ABB Ltd, Eaton, General Electric, Siemens AG, Exelon Corporation, Honeywell Interational Inc, Power Analytics, Homer Energy, S&C Electric and Schneider Electric others.

The major companies are adopting several growth strategies, such as product launches, acquisitions and collaborations, contributing to the global growth of the microgrid market.

For instance, On September 2, 2021, Power Analytics Global's Paladin DesignBase and other power-related software products were bought by EasyPower LLC, a global leader in electrical power system analysis software and services. The following software items and the intellectual property and patents linked are included in the acquisition: Paladin Microgrid Power Management Systems, DCSDM, Paladin DesignBase, Paladin Power Digital Twin, Paladin Live and Paladin Microgrid Power Management Systems.

Eaton Corporation plc

Overview: Eaton Corporation plc is a power management company focused on enhancing the quality of life and protecting the environment. The energy-efficient products and services help customers effectively manage hydraulic, electrical and mechanical power more reliably, safely, efficiently and sustainably. The company's portfolio can broadly be segmented into two halves. The first part is housed under its industrial sector umbrella, which serves many end markets like general aviation, commercial vehicles and trucks. The second portion is the company's electrical sector portfolio, which serves utilities, data centers and the residential end market. The company serves its customers in over 170 countries globally.

Product Portfolio: Microgrid and distributed energy resources: Microgrid Energy Systems helps organizations facilitate electrical energy savings and independence from a utility. By integrating generation sources on a grid structure, users gain a scalable, reliable and efficient solution to unexpected power loss while enhancing cybersecurity. The company's Microgrid Energy System concept includes the following:

• System optimization software
• LV load control
• Automaton and product services
• Smart inverter suite
• Smart MV grid-tie connection
• Supporting electrics
• Utility automation products.

Key Development

• On October 06, 2021, Eaton and Enel X announced the expansion of clean energy infrastructure to strengthen energy resilience in Puerto Rico with a second microgrid.
• On December 02, 2020, Enel X and Eaton announced plans for microgrid development in Puerto Rico. The project will incorporate on-site solar generation and battery storage at the Arecibo plant, which manufactures circuit breakers used in buildings, homes and industrial applications

Why Purchase the Report?

• Visualize the global microgrid market segmentation by type, component, end-user and region, highlighting key commercial assets and players.
• Identify commercial opportunities in the microgrid market by analyzing trends and co-development deals.
• Excel data sheet with thousands of global microgrid market-level 4/5 segmentation points.
• PDF report with the most relevant analysis cogently put together after exhaustive qualitative interviews and in-depth market study.
• Product mapping in excel for the key product of all major market players

The global microgrid market report would provide approximately 61 market data tables, 56 figures and 210 pages.

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