Microgrids are set to experience the same kind of boom battery storage and solar capacity have seen as prices fall and the technologies become increasingly commercialized. Omar Saadeh, GTM senior analyst, spoke at the group's Grid Edge event earlier this week and predicted the size of the market would double within five years.
This trend signals a shift toward increasing commercial viability, Saadeh told the conference.
GTM expects microgrid capacity to reach 2,855 MW by 2020, up from 1,283 MW this year. The overall market value is expected to reach $3.5 billion.
The generation scheme of those microgrids are set to change as well. Fossil fuels led by diesel generators currently account for about 90% of microgrid capacity, while renewables come in at just 6%. But by 2020, GTM expects the share of renewables to more than quadruple as the cost of variable resource integration falls.
While microgrids were once more theory than reality, they are now seen as a way for communities, corporations, the military, hospitals and academic institutions to ensure reliability. Power outages cost the country up to $75 billion every year, according to one microgrid group, making small, sustainable grids a simple value proposition.
In New York, Central Hudson Gas & Electric last year outlined a proposal to build, own and operate microgrids for customers with a total or aggregated load of at least 500 kW. And on the other side of the country, earlier this year San Diego Gas & Electric used a solar-based microgrid to provide power to an entire community during planned maintenance, avoiding a significant outage.
We have this concept of microgrids being a great distributed energy resource integration platform, which they are, Saadeh told the GTM conference. But today, renewables only make up a small portion of cumulative microgrid capacity. But that is expected to change, he said: By 2020, we expect renewable generation to make up 26 percent of overall microgrid capacity.
Source: Utility Dive
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