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The energy storage market for microgrids is estimated to grow at a CAGR of 18.9% between 2022 and 2027. The size of the market is forecast to increase by USD 1,361.05 million. The growth of the market depends on several factors, including increasing government support and microgrid energy storage installation projects, advancements in technology, and the market attracting new vendors.
This report extensively covers market segmentation by application (remote, community and utility, institution and campus, and military), battery type (lithium-ion batteries and lead-acid batteries), and geography (North America, APAC, Europe, South America, and the Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The reports categorize the global energy storage market for microgrids as a part of the global renewable electricity market within the global independent power and renewable electricity market. The parent global renewable electricity market covers companies engaged in the generation and distribution of electricity using renewable sources. Our research report has extensively covered external factors influencing the parent market growth during the forecast period.
The increasing government support and microgrid energy storage installation projects are notably driving the market growth, although factors such as high implementation costs may impede the market growth. 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.
Key Energy Storage Market For Microgrids Driver
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 microgrid energy storage market grow rapidly during the forecast period.
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 renewable energy 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.
Significant Energy Storage Market For Microgrids Trend
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.
Major Energy Storage Market For Microgrids Challenge
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.
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.
Key Energy Storage Market For Microgrids Customer Landscape
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 Energy Storage Market for Microgrids 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 market.
Sumitomo Electric Industries Ltd. - The company offers energy storage for microgrids such as Redox Flow Battery as its key offering under the environment and energy segment. Under this segment, the company offers solutions for electric conductors, power transmission wires, magnet wires, air cushions for railroad vehicles, power system equipment such as control systems, charged beam equipment and processing, power supply work and engineering, and porous metals.
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 of the remote segment will be significant during the forecast period. Remote systems in order 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 156.52 million in 2017 and continued to grow until 2021. 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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North America is estimated to contribute 37% 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.
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 for 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.
In 2020, the outbreak of COVID-19 negatively affected the market in focus in North America. However, the resumption of operations across commercial and industrial end-user facilities will spur demand for microgrid energy storage to reduce the overall expenses on energy. In addition, a rise in demand for energy storage systems is expected to propel the adoption of microgrids in the commercial and industrial sectors, thereby propelling the growth of the market for in North America during the forecast period.
The 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. The market has been segmented by Application (Remote, Community and utility, Institution and campus, and Military), Battery Type (Lithium-ion batteries and Lead-acid batteries), and Geography (North America, APAC, Europe, South America, and Middle East and Africa).
Energy Storage Market For Microgrids Scope |
|
Report Coverage |
Details |
Page number |
182 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 18.9% |
Market growth 2023-2027 |
USD 1,361.05 million |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
18.5 |
Regional analysis |
North America, APAC, Europe, South America, and Middle East and Africa |
Performing market contribution |
North America at 37% |
Key countries |
US, China, Japan, Germany, and France |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
ABB Ltd., AEG Power Solutions BV, Aquion Energy, AT & T Inc., Beacon Power Systems, David MacBrayne Ltd., EnerSys, General Electric Co., GS Yuasa Corp., 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 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 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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