Remote microgrids proliferating globally

September 30, 2013 | By Barbara Vergetis Lundin

Global remote microgrids are multiplying due to a number of factors, including high costs for existing energy services in many parts of the world and declining costs for solar photovoltaics and other renewable distributed energy generation technologies. In fact, Navigant Research reports that worldwide revenue from remote microgrids will grow from $3.1 billion in 2013 to more than $8.4 billion in 2020.

Navigant Research defines the fundamental concept of a microgrid as "an integrated energy system network consisting of distributed energy resources (DER) and multiple electrical loads and/or meters operating as a single, autonomous grid either in parallel to or 'islanded' from the existing utility power grid."

In the most common configuration, DER is tied together on its own distribution feeder, which is then linked to the larger utility grid at a single point of common coupling. In the case of remote microgrids, there is no interconnection to a larger grid. As a result, these remote networks are operating in island mode 24/7 out of necessity.

Remote microgrids, especially ones that operate on physical islands, are viewed by the market as low-hanging fruit.

"Since remote microgrids are the most lucrative of current microgrid opportunities, in terms of per-megawatt vendor revenues, we are witnessing an influx of firms, both large and small, trying to figure out the best business model to deploy," said Peter Asmus, principal research analyst with Navigant Research. "Not surprisingly, the largest number of remote microgrids is being deployed in the developing world, although activity is also increasing in Europe and North America."

While remote power systems number in the thousands, many are still powered by diesel generation. Others showcase smarter and cleaner combustion technologies capable of reducing diesel consumption by as much as one-third, even without any renewable generation, according to the report. When renewable distributed energy generation is added to the mix, these remote systems begin to look like the classic microgrids that have been the focus of funding from the U.S. Department of Energy and Department of Defense.

North America is the leading microgrid market today and will remain the leader through 2020, according to Navigant. Currently, North America makes up 63 percent of total global microgrid capacity (992 MW), with Asia Pacific coming in at a distant second place with 17 percent of global capacity (271 MW). Europe is in third place with 14 percent (217 MW), and the rest of the world -- including Latin America, the Middle East, and Africa -- has the remaining 6 percent pacity (101 MW).

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