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The energy storage for microgrids market size is forecast to increase by USD 2.10 billion at a CAGR of 22.79% between 2023 and 2028. The market's growth is driven by several pivotal factors. Government support and initiatives for microgrid energy storage projects play a crucial role in attracting investments and driving adoption, thereby fueling market expansion. Technological advancements further enhance the efficiency, reliability, and scalability of these solutions, making them increasingly appealing to both consumers and businesses alike. Moreover, the influx of new companies into the market fosters healthy competition, encourages innovation, and contributes to the overall expansion of the sector. These combined efforts not only bolster the market's resilience but also pave the way for sustainable growth in microgrid energy storage installations. As a result, the market continues to evolve, supported by robust government backing, technological progress, and a vibrant landscape of new entrants and innovations.
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The market is experiencing significant growth driven by the increasing demand for turnkey energy solutions in various sectors including the power, transport, industry, buildings, and agriculture sectors. Companies like Samsung SDI and Norway-based Freyr are making strides in this market, leveraging innovations in onboard energy storage and stationary energy storage. With the rise of low-carbon economy initiatives and the adoption of electric vehicles (EVs), there's a growing need for grid reliability and demand management. Technologies such as photovoltaics and energy capacity solutions play a crucial role in meeting these demands, especially in commodity trading and transportation markets. As the market continues to evolve, collaborations and advancements in data centers and consumer electronics are expected to drive further growth in the sector. BNEF reports a significant surge in demand for these sources, particularly in the wind markets, as gigawatts of power are increasingly generated and consumed across various sectors including the power sector, transport sector, industry sector, buildings sector, and agriculture sector, reflecting a shift towards sustainability in both transportation and stationary market, with electric vehicle playing a pivotal role in reshaping the transportation market.
The increasing government support and microgrid energy storage installation projects are notably driving market growth. Recognition of the resilience of microgrids during natural disasters has led to the introduction of policies and government support that promote and encourage the development of microgrids. Government initiatives to use clean energy and minimize greenhouse gas (GHG) emissions and further investments in microgrid projects by various countries and companies will help the market grow rapidly during the forecast period.
Further, with the support of governments around the world, microgrids are rapidly being adopted, leading to a steady increase in microgrid capacity. Combining renewable energy sources to produce cleaner electricity can be seen in microgrid solutions. The adoption of these in microgrids has also inspired the installation of energy storage systems to increase the penetration and profitability of renewable energy generation, which helps microgrids operate using only carbon-free natural resources.
Advancements in technology are the key trend in the market. Continuous technological development has improved the quality of power generation, which has helped vendors launch new microgrids that are more efficient and have better integration capabilities. The US DOE has a designated research and development program focused on developing the next generation of microgrids. The research and development program aims to make microgrids an essential building block of the future electricity distribution system by 2035 to support sustainability, carbon reduction and affordability.
In the US, the Microgrid Strategy development process began with microgrid experts considering areas where the strategy should focus to achieve impressive results in key metrics such as reliability, sustainability, carbon emissions and affordability over the next 5-10 years. It is expected to lead to new technologies that allow microgrids to operate in parallel with the electrical distribution network and move seamlessly into an autonomous power system state with control devices, protection, and operational algorithms. The market will experience a radical change when microgrids are installed where the central grid cannot meet the electricity demand.
High implementation costs are the major challenge impeding market growth. Microgrids have higher deployment costs than traditional centralized power grids, often 25-30% higher than the latter. Microgrid infrastructure costs include everything from implementing a communications system to installing and maintaining smart meters. Installing smart meters costs 50% more than installing a regular electricity meter. Microgrid distributed energy resources (DER) are also more expensive than conventional centralized power plants.
Further, building a new microgrid or converting an existing system to a hybrid microgrid can cost tens of thousands of dollars or hundreds of millions of dollars. When it comes to production resources such as solar panels, batteries, and/or CHP systems, microgrids are the most expensive. In addition, significant capital is required for grid automation and microgrid control systems that can intelligently monitor and manage all components and control how the microgrid consumes and produces energy. Thus, these shortcomings hinder the growth of the microgrid market and, in turn, the growth of global microgrid energy storage.
The market forecasting 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 market growth and forecasting strategies.
Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Sumitomo Electric Industries Ltd. - The company offers energy storage for microgrids such as Redox Flow
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies 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 companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market share growth of the remote segment will be significant during the forecast period. Remote systems to operate efficiently, need a specified amount of electricity that can be generated through microgrids. The increased use of remote microgrids lowers the total cost of electricity generation as power is generated on-site. The transmission and distribution losses gradually decline, thus having a positive impact on fossil fuel consumption and ensuring prolonged equipment lifetime. Remote microgrids are majorly used in villages where grid-connected power is not accessible or is available only for a limited extent of time. The average size of the microgrid used in villages is 10 kW of capacity. India, Indonesia, and Bangladesh are viewed as the most prospective markets for remote microgrids in villages.
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The remote segment was valued at USD 183.60 million in 2018. The growing demand for electrical power is the main reason for the increased deployment of remote microgrid systems. We expect the majority of the growing demand for power from remote villages to be met by microgrid remote systems as the demand for electricity is growing significantly faster than the expansion rate of conventional electricity grids.
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APAC is estimated to contribute 33% 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. Another region offering significant growth opportunities to companies is North America. North America held the largest share of the global energy storage market for microgrids in 2022. Countries such as Canada, Mexico, and the US are the major contributors to the revenue of the market in North America. This is attributed to the shift in focus toward renewable energy generation and the need for a reliable grid system. Increased initiatives taken by the US government for the implementation of energy-efficient power solutions are driving market growth in the region.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.
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The market is witnessing significant growth, fueled by escalating demand for reliable power solutions across various sectors like industry, buildings, and transportation. With all exact KW technologies, such as pumped-storage hydropower, compressed-air energy, and redox flow batteries gaining traction, microgrids are becoming increasingly resilient and efficient. BloombergNEF forecasts a surge in global deployments of these energy storage technologies, driven by decreasing prices and supportive policy frameworks. In the transportation sector, the rise of electric vehicles (EVs) is creating new mobility storage demands, prompting manufacturing platforms to invest in electrified powertrains.
Furthermore, subsidies and purchase incentives further accelerate EV adoption. As microgrids evolve, they are poised to play a pivotal role in California grid resilience and in addressing data center energy needs with DC backup solutions, ensuring a sustainable energy future. In response to shifting consumer demands and stated policies favoring renewables, corporate strategy are increasingly focused on the global deployment of hydrogen technologies, particularly in the mobility segment, while also addressing concerns such as Li-ion flammability in the consumer electronics market and building thermal energy management in the warehouse logistics, all within the context of evolving commodity markets and the expanding electric car market.
Market Scope |
|
Report Coverage |
Details |
Page number |
188 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 22.79% |
Market Growth 2024-2028 |
USD 2.10 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
19.3 |
Regional analysis |
North America, APAC, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 33% |
Key countries |
US, China, Germany, France, and Japan |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
ABB Ltd., AEG Power Solutions BV, Aquion Energy, AT and T Inc., Beacon Power Systems, David MacBrayne Ltd., EnerSys, General Electric Co., GS Yuasa International Ltd., Hitachi Ltd., LG Corp., Mitsubishi Heavy Industries Ltd., Morimura Bros Inc., Panasonic Holdings Corp., S and C Electric Co., Samsung Electronics Co. Ltd., Shell plc, Sumitomo Electric Industries Ltd., Toshiba Corp., and TotalEnergies SE |
Market dynamics |
Parent market growth analysis, Market Forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the market forecast period. |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Battery Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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