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Microgrid Market size is estimated to grow by USD 25,623.76 million between 2022 and 2027 accelerating at a CAGR of 13.6% during the forecast period. The growth of the remote microgrid market depends on several factors, including the need for resilience, the rise in the adoption of microgrids in rural areas, and the recent developments in microgrids.
This microgrid market research report extensively covers market segmentation by application (remote, institutions and campus, military, and others), connectivity (grid-connected and off-grid connected), and geography (North America, APAC, Europe, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges.
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Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The need for resilience is notably driving the remote microgrid market growth. Aging infrastructure, climate change, rising energy costs, and mass electrification are some of the major problems in the power industry. These problems are common across the globe in any power industry and occur at different levels. Developed countries have well-developed power infrastructure that faces outages due to aging infrastructure, whereas developing countries such as Asia and Africa suffer from low electrification rates. Traditional grids follow a hierarchical power structure, where power is generated at a central location and are then sent through the transmission line to substations, distribution lines, and finally to the end-users. Any problem in one part of the system tends to have a domino effect on the rest of the system, thereby affecting the reliability of the grid. Therefore, the need to overcome the challenges faced by traditional grids has driven the need for microgrids.
A microgrid is a composition of multiple energy generation sources such as wind, solar, biomass, geothermal, and fossil fuels that are used to supply energy to a local community, university, or military base. These microgrids are connected to the main grid as a single point of load. The use of renewable sources along with energy storage systems makes microgrids self-sufficient and allows them to generate power as long as the sun is shining and the wind is blowing. The entire network can be managed by an energy management system. Microgrids can be grid-connected to supply power blended with their own source or can operate independently of the grid. They provide electricity backup and offer ancillary services to the main grid at times of power outages. Such factors are expected to drive the growth of the global remote microgrid market during the forecast period.
Microgrids for protection from cybersecurity attacks are a major trend in the market. Cybersecurity is one of the emerging threats facing the world, and the transition from a traditional grid to a smart grid has made power grids more susceptible to cyberattacks. Smart grids depend on SCADA for monitoring and controlling the physical infrastructure. SCADA systems are highly vulnerable to cyber-attacks, which allow adversaries to compromise the functionality of the grid by introducing malware into the systems. This mismanagement can cause damage to the equipment, in turn leading to heavy losses.
Microgrids are increasingly using renewable energy sources such as solar and wind to reduce the use of fossil fuels. Microgrids require energy storage systems to make them function even when local resources are not available. In the event of any disturbance, such as a cyber-attack in the grid, a microgrid can isolate itself and function indefinitely if it has access to the sun and wind, thereby allowing it to generate and store electricity during the day so that it can be supplied when power generation is not possible. Another benefit of using microgrids is that they can supply local power to individual households and small villages. As microgrids have a limited reach, the range/impact of the damage caused is less, in turn making them less prone to attackers. Such factors are expected to drive the growth of the global remote microgrid market during the forecast period.
High implementation costs are a major challenge impeding the microgrid market growth. The generation of power from microgrids is a tedious and expensive process as it involves the use of new and advanced technologies. Microgrids involve a wide array of equipment related to power generation resources, distribution infrastructure, and control systems. These components can be classified into infrastructure, generation, and controls and need to be connected and monitored with advanced control and communications technologies.
A microgrid is built according to the needs of various dynamic load types and is capable of operating under varying grid conditions. However, most of the microgrids are usually built upon existing infrastructure and are custom fitted with the equipment to meet customer needs. Therefore, there is no fixed cost for microgrids.
Apart from this, the components of microgrids need to be integrated with several other technologies for them to have the required platform functionalities. This results in increased production costs of the equipment. In the US, for microgrids to interact with the local utility distribution grids, it is highly desirable that they meet mandatory standards such as IEEE 1547 standards. This is crucial to the control system of microgrids as they need to interface with local utility systems such as energy management systems (EMS), distribution management systems (DMS), and supervisory control and data acquisition (SCADA) systems to ensure that both the systems work reliably and efficiently. The high cost of microgrid components is expected to become a major barrier to the growth of the global remote microgrid market during the forecast period.
The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Microgrid Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the remote microgrid market,
Siemens AG - The company operates under multiple segments including digital industries, and mobility among others with a high focus on digital industries.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth by the remote segment will be significant during the forecast period. Remote microgrids have found applications mostly in villages where grid-connected power is not accessible or is available only for a limited period. India, Indonesia, and several countries in Africa and Southeast Asia are the prospective markets for remote microgrids.
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The remote segment shows a gradual increase in the market share of USD 7,664.38 million in 2017 and continued to grow until 2021. It is expected that the majority of the growing power demand from remote villages needs to be met by remote microgrid systems as there is a significant increase in demand for electricity compared with the expansion rate of conventional electricity grids. The growing demand for electrical power is the main reason for the increased deployment of remote microgrid systems. Remote microgrids are mostly deployed in areas where connected grid power is not possible or feasible. These remote microgrids need to be self-sustainable. To function efficiently, remote systems need to generate a specified amount of electricity by implementing microgrids. Generally, remote microgrids are not connected to grids and employ standalone power sources, such as diesel generators and solar and wind energy sources, to meet the entire power load requirements. Energy storage systems are also deployed to store the excess power generated from solar and wind resources, which allows the production of clean and low-cost electricity as long as there is sufficient solar irradiation and wind speed, thus ensuring a continuous and reliable power supply. Remote microgrids are capable of offering ancillary services, such as frequency and load regulation, which are beneficial for utilities by increasing the share of renewable energy sources in the grid. This is expected to drive the adoption of the remote microgrid market during the forecast period.
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North America is estimated to contribute 29% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
Increased initiatives from the US government for implementing energy-efficient power solutions are driving market growth in the region. The US government offers to fund technologies that help in improving the resiliency of power systems. Rapid advances in the energy sector have propelled the adoption of microgrids in the region. The region is expected to remain the leading revenue contributor to the market during the forecast period. Remote systems and the military are the two major sections contributing to the growth of microgrids in the region.
Microgrids are mostly powered by fossil fuels. However, the share of renewable energy resources is expected to grow significantly as large utilities must comply with state-specific mandates to diversify the use of renewables under the Renewable Portfolio Standards (RPS). In the US, 33 states have implemented their own mandates for RPS. Therefore, power utilities can meet these RPS mandates using microgrids that have renewable power generation capabilities.
In 2020, the outbreak of COVID-19 delayed the construction of new microgrid projects in North America. However, with the lifting of lockdowns due to the initiation of vaccination drives, solar power installations increased in North America, primarily across the power unitality sector. In 2021, solar energy contributed 40% to 45% of the total electricity capacity added to the grid in the US. Such factors will supplement the growth of the microgrid market in North America during the forecast period.
The microgrid market research report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Microgrid Market Scope |
|
Report Coverage |
Details |
Page number |
175 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 13.6% |
Market growth 2023-2027 |
USD 25,623.76 million |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
11.95 |
Regional analysis |
North America, APAC, Europe, South America, and Middle East and Africa |
Performing market contribution |
North America at 29% |
Key countries |
US, China, Australia, Russia, and Germany |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
ABB Ltd., Anbaric Development Partners LLC, Canopy Power, Eaton Corp. Plc, Emerson Electric Co, Exelon Corp, General Electric Co., General MicroGrids, Gram Power (India) Pvt. Ltd., Honeywell International Inc., Pareto Energy, Power Analytics Global Corp., Powerhive Inc., S and C Electric Co., Schneider Electric SE, Siemens AG, Spirae LLC, Tesla Inc., TotalEnergies SE, and UL LLC |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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