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Microgrid market set to reach $23 billion by 2021 as it prepares to move from test-bed stage to commercialization, says GlobalData.
The global microgrid market is set to almost double from $12 billion in 2016 to around $23 billion in 2021, registering a compound annual growth rate of 14%, according to research and consulting firm GlobalData.
The company’s latest report states that major drivers of this market include the resilience, reliability, and environmental credentials of microgrids. Challenges include legislative and regulatory frameworks, lack of end-user acceptance, and the high costs associated with the technology. Between 2017 and 2021, the market is expected to progress from the test-bed and demonstration phase to commercializing projects.
Subha Krishnan, Power Analyst for GlobalData, explains: “The deployment of microgrids facilitates dynamic energy management and the ability to protect critical loads. Microgrids combined with distributed generation are acting as a game-changer in the electricity distribution system, as network downtimes, natural disasters, and possible external attacks are increasing the need for grid-connected facilities to become more independent. Indeed, the negative impact of extended power outages on the economy is expected to be eased with the adoption of microgrids.”
The annual cost of power-related outages is quite high in the US. The country has started deploying microgrids extensively in order to assure reliable power. Furthermore, several utilities are actively seen participating in the microgrid deployment in North America. However, barriers such as technical, economic, and regulatory challenges on deploying and integrating microgrids still exist. During the year 2016, the US accounted for around 39% of the global microgrids market.
Krishnan continues: “In order to make a conversion from traditional grid to a modern grid, transformation of business models and adoption of innovative technology are necessary. The market trends reflect that the technological advancement has been ahead of policies and regulations required for the uptake of microgrids.
“It is important that there is a balance between policymakers, regulators, entrepreneurs, and industry participants to facilitate the smooth transition of the existing electricity system into a modern grid. Indeed, the future growth of the industry will rely upon the quick development of public policies and regulations that will nurture project development, and efforts to standardize microgrids to integrate with the power delivery system.”