The global microgrids market registered a market value of $15bn in 2017 and is projected to reach $30bn in 2022. According to GlobalData, the global microgrids market is estimated to double in the forecast period, primarily due to increased activity in Americas and Asia-Pacific regions. In 2017, Americas represented the largest market for microgrids; registering a value of $9bn. The region is expected to continue leading the market, due to the early adoption of microgrid technology in the US and its continued application for grid support. Other markets within the region are driven by the need to provide electricity supply in hinterlands and remote areas, with low activity levels.
The company’s latest report Microgrids, Update 2018 – Global Market Size, Competitive Landscape and Key Country Analysis to 2022 reveals that the global microgrids market is projected to grow due to the need for grid resiliency, reliability and auxiliary support, climate change, relative low scale of economy, topographical challenges of central grid expansion, government initiatives, and the need for grid assets optimisation. The drivers vary based on the region and the level of development within the power sector. Well- established markets of the US and Japan are primarily focused on providing supplementary support to the existing grid; whereas developing nations such as Brazil, China, and India are driven by the need to improve electrification rates.
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The report states that the increasing population, pervasive utilisation of electricity in various sectors, and growing per capita spending are contributing to the growing demand for electricity globally. Although, measures to improve efficiency are being implemented, the rapid growth in the demand would necessitate new generation capacities. However, the large scale development of new grid infrastructure would be resource and capital intensive; not to mention time consuming as well, due to complex regulatory framework. The declining cost of distributed technologies along with high retail prices of electricity are enabling end consumers to influence the distribution network operations, creating a complex power system. The traditional power grid is undergoing a transition of disintegrating into several individual network systems, capable of providing for the local area demand. In the future, utilities or grid operators would move towards connecting the individual power system silos, to provide for a more reliable and interactive grid network.
Microgrids, global, market value ($bn), 2012, 2017, 2022
| Source: GlobalData, 2018 |
GlobalData’s report also finds that in the forecast period, Americas region will continue to lead the global market. The regional market is largely underpinned by the trends in the US. Legacy deployment of microgrids in the US and continued efforts towards improving resiliency and electrification rates by other countries are primary contributors to the region’s market growth. The market is projected to reach $18bn in 2022. The Asia-Pacific is expected to grow quickest with a CAGR of 18% during the forecast period. The demand for microgrids within the region stems from the need to alleviate basic conditions and support the strong demand for electricity. China and India are two significant Asian markets by value, although other countries such as Japan, Australia, Indonesia, and other Island nations are promoting microgrids.
The US represents the largest market for microgrids with a market value of $4.6bn in 2017. The US market is primarily focused on grid resiliency and reliability of power supply. A large portion of the microgrid projects have been deployed by the military. In the future, other consumer segments are expected to embrace microgrids, which would drive the market significantly. Rapidly developing markets such as China and India are projected to reach $2.7bn and $1.3bn respectively by 2022. The drive to provide universal access to electricity, progressive development in industry sector, weak T&D infrastructure which would require expensive capacity development, topographical challenges, and the initiative to capitalise on the availability of renewable energy are some of the proponents of microgrid deployment in the countries.
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