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Capacity of Planned or Operating Microgrids Now Totals More Than 2.5 Gigawatts Worldwide

May 10, 2012
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Essentially, microgrids represent an emerging smart grid platform that incorporates a variety of hardware and software product offerings. According to a new update report from Pike Research, North America is the world's most promising market for grid-tied projects, with over 50 new projects coming to light since 4Q 2011 (primarily in the United States). These projects boosted overall planned capacity in North America to 1,550 MW in 2Q 2012, up 51% from 1,026 MW as reported last by Pike in 4Q 2011.

The firm also finds that the remote microgrid segment is the best long-term bet. As evidence of this, the region boasting the largest growth during the last quarter (356%) as did the catch-all category "Rest of World," which are, generally speaking, less developed countries without robust grid infrastructure, and therefore in need of the aggregation and optimization capabilities of microgrids. Planned capacity rose from 76 MW to 391 MW in the Rest of World category, an increase of 416%. Many of these projects are in the very early planning stages. Pike also learned of several other organizations working with the United Nations to use microgrids as a platform to help alleviate "energy poverty" throughout the developing world, but they were not yet ready to share any project details.



In terms of application segments, the largest jump in identified projects was in the institutional/campus segment, the global market leader on microgrids. 18 new microgrids were identified in this segment, or an additional 140 MW of new planned capacity. However, when it comes to percentage growth in total capacity additions, it was the commercial/industrial (C/I) segment that displayed the largest increase. This segment rose from 71 MW in 4Q 2011 to 322 MW in 2Q 2012, a 356% increase. Note, though, that this dramatic increase was largely due to a single 200 MW project in the United States that may not be fully developed until 2018. Nevertheless, several other microgrids of equal and even larger scale (and rumored to be in the early stages of planning in the Asia Pacific region) were not included in this tally, highlighting how the C/I segment appears poised for major growth over the next 6 years.

The military segment is often touted as leading the way for this smart grid application. Ironically enough, it now represents the smallest amount of total capacity among all segments. While 14 new military microgrids were identified, few of these new entries included data on the capacity size of these systems. It is safe to say that the 228 MW of identified military microgrid capacity in 2Q 2012 greatly undervalues the size of the market, since many of these projects are clouded in secrecy. Moreover, many of these projects start out extremely small and then will grow dramatically over time. In fact, the military segment remains the most consistent, with virtually every military base in the United States planning on ultimately deploying some form of a microgrid.

The most growth in terms of total new planned capacity, however, was in the remote systems segment, with 12 new microgrid entries (some representing multiple projects), or 309 MW of new planned capacity. With those additions, the remote systems segment grew from 356 MW in 4Q 2011 to 665 MW in 2Q 2012, an increase of 87%.

The community/utility microgrid segment now equals the remote microgrid segment with in terms of total planned capacity (665 MW), but shows the lowest quarter-to-quarter capacity growth (19%). All told, 87 new microgrids were identified that are either planned, proposed or in current operation, and which that totaled over 2,575 MW in planned or operating capacity in 2Q 2012. This compares to 1,695 MW of planned and operating capacity identified in 4Q 2011, a 54% capacity increase.

In the past, it was safe to say that the majority of microgrid projects were pilot projects and/or research-related experiments. This perception is slowly fading away. The year 2011 signaled a shift, as some of the first large-scale commercial microgrid projects reached significant milestones. With the adoption of the IEEE islanding standards P1547.4 in July 2011, the shift from pilot validation projects to fully commercial projects accelerated, as evidenced by the large jump in planned, proposed and operating grid-tied microgrids in North America.

Globally, the rising costs of diesel fuel - and corresponding drop in solar photovoltaic (PV) prices - have signaled the promise of a flurry of new commercial activity regarding remote microgrids throughout the developing world. Depending upon one's definition of what is and what is not a microgrid, remote systems could lead the global microgrid market in terms of revenue by 2018.


Source: Microgrid Deployment Tracker 2Q12 by Pike Research. Excerpts reprinted with permission. The Tracker is a database updated biennially and covers five microgrid market application segments and four principal world regions.


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