Product Code: 46268
The global microgrid market was valued at USD 8.29 billion in 2019 and is anticipated to reach USD 25.45 billion by 2026, at a CAGR of 21.5% during 2021-2026. The outbreak of COVID-19 has a significant impact on the global micrgrid market. The COVID-19 pandemic has delayed the commissioning of planned or under construction projects due to an economic slowdown globally coupled with a disrupted supply chain. In the first half of 2020, the United States recorded the lowest number of microgrid installations in four years (2015-2019), and a similar trend was registered in India. Therefore, the market is expected to be restrained until 2021, after which it is likely to grow for the remainder of the forecast period. Factors such as increasing deployment of renewable energy sources in microgrids are acting as the drivers for the market. However, the high upfront costs and long payback periods of renewable energy sources pose a major barrier to the widespread deployment of microgrids.
- Owing to the increasing need for power for daily activities, the microgrid establishments in the remote off-grid communities are expected to dominate the market.
- The microgrid-as-a-service model is evolving, considering a wide variety of third-party ownership schemes, including Power Purchase Agreements (PPA), pay-as-you-go, leases, and other types of financing agreements, which enables the usage of microgrids without any upfront investment. This is likely to provide huge opportunities for the market studied.
- North America is expected to be the largest market during the forecast period, with majority of the demand coming from countries like United States, Canada, etc.
Key Market Trends
Remote Off-Grid Communities Segment to Dominate the Market
- The off-grid communities' usage of microgrid systems is gaining importance because of the growing need to offset the power outage in remote areas, resulting from growth in power demand from the existing power infrastructure. Moreover, the remote Off-grid Communities segment is likely to proliferate during the forecast period due to increasing energy consumption by the remote location, island, hilly region, etc..
- Major countries are adopting microgrid technology to provide electricity in a remote location. In 2019, the Myanmar government approved the microgrid project developed by InfraCo Asia and Electricite de France (EDF) for Kha Laing village, Myanmar.
- In 2019, Maharashtra Energy Development Agency issued a tender for a 29.4 KW microgrid project for Maharashtra, India. The project's worth is likely to exceed INR 6,140,000 and likely to provide electricity to more than three villages.
- Also, with over 300 remote off-grid communities in Canada, microgrids' design and operation is a critical topic with significant social and economic implications. Therefore, in 2018, Canada approved 3-year plans in which a multidisciplinary team at Alberta has led microgrid projects with government and industrial support. The team is expected to address technical issues such as microgrid operation, stability, reliability, and the study of social and economic aspects that provide ample opportunity for the global microgrid market in the coming future.
- In 2019, Tata Power Delhi Distribution Ltd., inaugurated its second microgrid project at Behlolpur, Bihar (India). The project will provide a reliable and quality power supply to about 1,200 persons residing in 220 houses. Also, Tata power signed a contract with the Bihar government in 2019 for installing 16 microgrid projects in remote locations near the Nepal border by 2021.
- Thus, factors such as government initiative, upcoming projects, and private investment are likely to drive the global microgrid market during the forecast period.
North America to Dominate the Market
- North America is leading the microgrid market and is likely to continue dominating the market because of the number of upcoming projects. The Environmental Defense Fund announced a new initiative in Puerto Rico that aims to foster collaboration on low-carbon microgrid projects in rural communities. The government initiative is likely to attract investment from a private player in the market studied.
- Further, due to automation, the grid has become more dependent on computers and data-sharing, and more responsive to changes in the power demand. The high dependability on automation and complex nature makes the national grid vulnerable to cyber-attacks. Though the US power grid has not witnessed such attacks, after the cyber-attack in Ukraine in 2015 and 2016, the authorities are becoming more concerned about the vulnerability of the national grid system.
- Due to the requirement of large investments for reforming power grids, and concerns over the vulnerability of the national grid to cyber-attacks, the remote power systems, such as microgrids, are becoming a preferred choice, in terms of economic viability and reliability, which, in turn, is expected to drive growth of the market.
- In October 2020, Siemens USA announced that it had launched microgrid research and demonstration environment at its US corporate technology headquarters in Princeton, New Jersey. R&D work in Princeton is expected to investigate and validate technologies in a real environment, resulting in a clear blueprint for a more efficient and flexible microgrid system that can be replicated all over the world.
- On the other side, the Government of Canada is committed to building a clean energy future to strengthen the economy and support the natural resource sectors. Canada has a strong national grid network. Due to the availability of transmission network, very few communities in the country are dependent on the off-grid power systems.
- Moreover, Mexico is also moving towards microgrid technology. The country has been testing a few pilot projects of the microgrid. For instance, the DC modular microgrids have been focused on behind-the-meter applications. Thus, such projects are expected to create a huge opportunity for the studied market in the country.
- Hence, owing to the above mentioned scenario, North America is expected to dominate the microgrid market during the forecast period.
The microgrid market is moderately consolidated. Some of the major players includes Siemens AG, Hitachi Ltd., Honeywell International Inc., Schneider Electric SE, and General Electric Company.
Reasons to Purchase this report:
- The market estimate (ME) sheet in Excel format
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TABLE OF CONTENTS
- 1.1 Scope of the Study
- 1.2 Market Definition
- 1.3 Study Assumptions
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET OVERVIEW
- 4.1 Introduction
- 4.2 Market Size and Demand Forecast in USD billion, till 2026
- 4.3 Recent Trends and Developments
- 4.4 Government Targets, Policies and Regulations
- 4.5 Market Dynamics
- 4.5.1 Drivers
- 4.5.2 Restraints
- 4.6 Supply Chain Analysis
- 4.7 Porter's Five Forces Analysis
- 4.7.1 Bargaining Power of Suppliers
- 4.7.2 Bargaining Power of Consumers
- 4.7.3 Threat of New Entrants
- 4.7.4 Threat of Substitute Products and Services
- 4.7.5 Intensity of Competitive Rivalry
- 4.8 Assessment of COVID-19 Impact on the Industry
5 MARKET SEGMENTATION
- 5.1 Application
- 5.1.1 Institutional Sites
- 5.1.2 Commercial Facilities
- 5.1.3 Remote Off-grid Communities
- 5.1.4 Other Applications (Utility/Grid-Connected Communities, Military, etc)
- 5.2 Type
- 5.2.1 Customer Microgrid
- 5.2.2 Remote Power Systems
- 5.2.3 Other Types
- 5.3 Geography
- 5.3.1 North America
- 5.3.2 Europe
- 5.3.3 Asia-Pacific
- 5.3.4 South America
- 5.3.5 Middle-East and Africa
6 COMPETITIVE LANDSCAPE
- 6.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements
- 6.2 Strategies Adopted by Leading Players
- 6.3 Company Profiles
- 6.3.1 Hitachi Ltd.
- 6.3.2 Siemens AG
- 6.3.3 Honeywell International Inc.
- 6.3.4 Schneider Electric SE
- 6.3.5 Toshiba Corp.
- 6.3.6 General Electric Company
- 6.3.7 Eaton Corporation PLC
- 6.3.8 Standard Microgrid Inc.
- 6.3.9 ENGIE EPS S.A.
- 6.3.10 S&C Electric Co.
7 MARKET OPPORTUNITIES AND FUTURE TRENDS