Status : Published Published On : Mar, 2022 Report Code : VRSME9104 Industry : Semiconductor & Electronics Available Format : Page : 300
2015
2022

Global Microgrid Market – Analysis and Forecast (2021-2027)

Industry Insight by Offering (Hardware, Software, and Services), by Type (AC Microgrids, DC Microgrids, and Hybrid), by Connectivity (Grid Connected and Off-Grid Connected), by Storage Device (Lithium-Ion, Lead Acid, Flow Batteries, and Flywheel), by Power (Combined Heat & Power (CHP), Solar Photovoltaic, Natural Gas, Fuel Cell, and Diesel), by End Use (Utilities, Commercial & Industrial, Institutes & Campuses, Military, Remote, Government, and Healthcare), and Geography (U.S., Canada, Germany, U.K., France, China, Japan, India, and Rest of the World)

Industry Overview

The global microgrid market is anticipated to grow from USD 23.6 billion in 2021 to USD 43.4 billion by 2027, registering a CAGR of 11.6% during the forecast period 2021-2027. Microgrids are smaller versions of power grids that transport electricity from source to consumers. They help to lower overall costs and provide grid backup in the event of an outage. Microgrids are more efficient than traditional electrical grids and can be integrated with a variety of renewable energy sources such as solar, wind, small hydro, geothermal, waste-to-energy, and combined heat and power (CHP) systems. Batteries, distributed generators, and solar panels can also be used to power them. Microgrids are also a reliable source of electricity because they operate continuously during power outages. Thus, the rising demand for reliable and secured power supply in industrial and commercial sectors globally along with initiatives by government to reduce carbon footprint will propel the growth of the global microgrid market.

Microgrid Market Highlights

The COVID-19 outbreak has impacted the businesses of several microgrid hardware manufacturing companies, distributors, and suppliers owing to delay in shipments, and delay in projects and installation of microgrids, reduced domestic demand, thereby impacting the growth of the global microgrid market.

Market Segmentation

Insight by Offering

Based on offering, the global microgrid market is segmented into hardware, software, and services. The hardware segment contributes to the largest share in the market owing to the rising number of microgrid projects globally, reduced cost of energy storage and renewable sources of energy along with initiatives by government to use clean energy and reduce greenhouse gas emissions.

Insight by Type

Based on type, the global microgrid market is classified into AC microgrids, DC microgrids, and hybrid. The AC microgrid is anticipated to have a high CAGR during 2021-2027 as it offer less transmission loss, reduced heat generation, and efficient high-end voltage levels across network. Furthermore, the increasing deployment of high-voltage AC power networks, as well as large solar and wind farms connected to AC transmission lines, will impact the business environment.

Insight by Connectivity

Based on connectivity, the global microgrid market is bifurcated into grid connected and off-grid connected. The grid connected witness the largest share in the market owing to the increased adoption of utility-base grid networks worldwide along with large-scale harnessing of renewable sources of energy which includes offshore winds. The advantages offered by grid connected include grid resiliency, enhanced power quality, and less impact on environment.

Insight by Storage Device

Based on storage device, the global microgrid market is segregated into Lithium-Ion, lead acid, flow batteries, and flywheel. Lithium-ion is anticipated to have a high CAGR during 2021-2027 owing to large scale sustainable technology deployment, extensive R&D activities, technological development and manufacturer inclination to develop towards battery powered systems will fuel the market growth.

Insight by Power

Based on power, the global microgrid market is segmented into combined heat & power (CHP), solar photovoltaic, natural gas, fuel cell, and diesel. The CHP dominate the market owing to increased adoption of sustainable source of power generation like hydro, solar and wind energy. The advantages offered by CHP include decreased emission levels, generate efficient and clean energy, and less cost.  Fuel cell is anticipated to grow at a faster pace owing to improved energy storage capabilities, zero-emission properties, and its ability to operate at high temperature will fuel the growth of the segment.

Insight by End Use

Based on end use, the global microgrid market is classified into utilities, commercial & industrial, institutes & campuses, military, remote, government, and healthcare. The commercial & industrial segment is anticipated to have a high CAGR during 2021-2027. The constant need for uninterrupted electrical supply to carry out seamless industrial operations to reduce downtime, boost worker productivity, and prevent equipment damages is responsible for the segment's growth. Increased government attempts to promote the use of renewable energy and reduce greenhouse gas (GHG) emissions are also propelling the commercial and industrial microgrid market forward.

Microgrid Market Report Coverage

Report Metric

Details

Historical Period

2015–2020

Base Year Considered

2021

Forecast Period

2021-2027

Market Size in 2021

$23.6 Billion

Revenue Forecast in 2027

$43.4 Billion

Growth Rate

11.6%

Segments Covered in the Report

By Offering, By Type, By Connectivity, By Storage Device, By Power, and By End Use

Report Scope

Market Trends, Drivers, and Restraints; Revenue Estimation and Forecast; Segmentation Analysis; Impact of COVID-19; Companies’ Strategic Developments; Market Share Analysis of Key Players; Company Profiling

Regions Covered in the Report

North America, Europe, Asia-Pacific, Middle East, and Rest of the World

 

Industry Dynamics

Industry Trends

The increased investment in solar energy projects increased adoption of Industry 4.0, and increased investment in equipment and machinery of the AEC (Architecture, Engineering, and Construction) are the trends prevalent in the global microgrid market.

Growth Drivers

Factors attributing to the growth of the global microgrid market include increased emphasis on the decarbonization of several end-users and government, mounting demand for uninterrupted power supply, increased instances of cyberattacks on energy infrastructure, government initiatives to promote the development of microgrids, and rising adoption of microgrids for rural electrification will accelerate the growth of the market.   Global energy consumption is anticipated to rise by roughly 56% by 2040, according to the US Energy Information Administration (EIA). Furthermore, as a result of industrialization and urbanization, energy consumption is increasing at a rapid rate, which is not being met entirely by major networks. These gaps are transforming into business possibilities for microgrid companies looking to expand their power supply services. Also, they generate power locally and decrease the dependency on long-distance transmission lines, resulting in reduced transmission losses. Furthermore, advancement in smart cities, rising demand for IoT, grid modernization, integration of distributed energy generation sources including renewables, integration of various smart grid technologies will further develop the growth of the global microgrid market.

Challenges

The massive capital cost and technical design issues may hamper the growth of the market because developers must maintain a symbiotic relationship between the main grid and the microgrid if the microgrid is connected to the grid. Microgrids are prone to instabilities in both oversupply and undersupply of electricity. An oversupply of electricity might cause a generator to trip, resulting in a microgrid losing power. Undersupply of electricity, on the other side, might cause equipment to malfunction. Also, the lack of a well-defined regulatory policy framework will retrain the growth of the market.

Opportunities

The opportunities offered to the players in the microgrid market include developing microgrid controllers, renewable energy storage systems, and smart microgrids for several end-use, and providing innovative microgrid hardware devices and software solutions along with giving emphasis on the integration of technology and data management. Furthermore, the microgrid market's main possibilities are innovation-oriented endeavors and funding feasibility studies in worldwide markets. Also, the increased demand for hard and reliable electrical equipment for military and aerospace industries will create promising opportunities for the growth of the global microgrid market.

Geographic Overview

North America contributes to the largest share in the global microgrid market owing to the rise in spending on R&D activities and early adopters of microgrid solutions in the region.

Asia-Pacific is anticipated to grow at a faster pace owing to the increased rate of electrification, particularly in rural or semi-urban areas, increased favorable norms and incentives offered by the government to enhance renewable energy blend, rising adoption of the stand-alone sources of energy, and ample availability of raw material.

Competitive Insight

The market for microgrids is moderated consolidated. The increased strategic partnerships, contractual agreements, and inorganic ventures will allow the industry players to have a competitive edge in the market.

ABB is a trusted partner in the evolving global energy ecosystem as and acts as a pioneer in energy management and optimization. ABB has become a pioneer in Microgrid technology by successfully powering research stations from Antarctica, Alaska, and Flores Island to distant mines and villages in Australia's deserts utilizing integrated energy sources. ABB's Microgrid Solutions group specialises in providing modular and scalable technology packages that provide power, improve power quality, and integrate renewable energy into fossil-fuel Microgrids. The PowerStore grid-stabilizing generator and the MGC600TM controller platform are the cornerstones of the Microgrid PlusTM System. Microgrid solutions from ABB are best suited for systems with peak demand between 300 kW and 50 MW.

Microgrid Energy Systems from Eaton assist businesses in achieving electrical energy savings, resiliency, and independence from a utility. Users obtain a dependable, scalable, and efficient solution to unexpected power outages while also improving cybersecurity by combining generation sources on a common grid structure. Eaton collaborates with customers to provide turnkey services for the full system's concept, design, pricing, implementation, and maintenance. System optimization software, automation, and product services, LV load control, smart inverter suite, supporting electrics, smart MV grid-tie connection, and utility automation products are all part of Eaton's Microgrid Energy System concept.

In October 2021, Eaton, a power management company, and Enel X, the Enel Group's advanced energy services business line, announced that they will collaborate on a second microgrid project in Puerto Rico. The projects will lower demand for regional energy infrastructure, allow Eaton to use more renewable energy in production, and improve Eaton's energy resilience.

Impact Solar, a Thai energy provider, has partnered with Hitachi ABB Power Grids to deliver an energy storage system for the country's largest private-owned microgrid, which will be operational in May 2021. The battery energy storage and control system from Hitachi ABB Power Grids will be used at the Saha Industrial Park microgrid in Sriracha, which is now under construction. The 214MW microgrid's power generation resources will include gas turbines, rooftop solar, and floating solar systems, as well as a battery storage system to fulfill demand when generation is low.

Some of the major players in the global microgrids market include ABB, Hitachi Energy Ltd., General Electric, Eaton, Siemens, Schneider Electric, Honeywell International Inc., HOMER Energy (Acquired by UL LLC), S&C Electric Company, and General Microgrids.

Microgrid Market Size and Market Analysis

Source: VynZ Reserach

Frequently Asked Questions

The global microgrid market is anticipated to grow from USD 23.6 billion in 2021 to USD 43.4 billion by 2027, registering a CAGR of 11.6% during the forecast period 2021-2027.
. The AC microgrid is anticipated to have a high CAGR during 2021-2027 as it offers less transmission loss, reduced heat generation, and efficient high-end voltage levels across network.
power source for major grids in order to meet end customers' rising electricity demands. The increased need for proper electrification in the emerging economies, rising dissemination of distributed energy resources (DER’s) owing to robust commercial and industrial development, sectors like military & research needs a secure network along with 24*7 power supply which can be offered by microgrids owing to its functioning under Island mode and independent of external power and transmissions, thus foster the industry landscape.
North America contributes to the largest share in the global microgrid market owing to the rise in spending on R&D activities and early adopters of microgrid solutions in the region.
Some of the major players in the global microgrid market include ABB, Hitachi Energy Ltd., General Electric, Eaton, Siemens, Schneider Electric, Honeywell International Inc., HOMER Energy (Acquired by UL LLC), S&C Electric Company, and General Microgrids.

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Research Methodology

  •  Desk Research / Pilot Interviews
  •  Build Market Size Model
  •  Research and Analysis
  •  Final Deliverabvle

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