The most recent Navigant Research puts the writing on the wall.
Microgrids are quickly moving into the mainstream and especially in North America accounting for 66% of 3,793 megawatts (MW) of microgrid capacity developed worldwide. Between 4Q 2012 and 2Q 2013, North America added 55 microgrid projects and an additional 417 MW. A total of 1,459 MW are currently online and more than 1,122 MW is proposed, planned, or being developed.
Thanks to increasing demand and improved technologies, the cards are in utilities’ favor to take advantage of this tipping point. Rather than resist microgrids, utilities are in prime position to fold them into their business strategy, and tap the microgrid momentum.
As utilities investigate the value of microgrids to the business, here are three facts you need to know about microgrids this year.
1. Large utilities are jumping in the microgrid ring
Economics will continue to drive microgrid policy, and some experts say deploying microgrids can save resources spent on re-stringing power lines every other year. In turn, utilities such as American Electric Power (AEP), Sacramento Municipal Utility District (SMUD), BC Hydro, and San Diego Gas & Electric (SDG&E) have all launched microgrid pilot projects.
“You can’t throw a stone at a smart grid conference these days and not hit a panel talking about microgrids,” Katherine Tweed with Greentech Media writes.
The Mid-Atlantic grid operator PJM Interconnection is collaborating with microgrid owners to investigate a winning integration of microgrids. “PJM is a particularly attractive market for potential microgrids. Last year, the system operator started using demand response in regulation markets, and this year, it will use DR in spinning markets. Because advanced microgrids need storage, there could be an opportunity to play in both of those markets.”
2. The U.S. army is on board
The military is an undisputed leader in microgrids, with the Pentagon spending $4 billion a year to power 300,000 buildings at 500 military installations all over the globe. Microgrids enhance electricity independence and security and reduce environmental impacts with the use of renewables. In May, the U.S. Army and Lockheed Martin commissioned the first U.S. Department of Defense (DoD) grid-linked microgrid that integrates renewable resources and energy storage at Fort Bliss, Texas. The Fort Bliss microgrid involves a 120 kilowatt solar array and 300 kilowatt energy storage system and is being heralded as a sign of the fast-approaching transition to wide-scale microgrid deployment.
"The Fort Bliss microgrid will provide the DoD and other government and commercial organizations with the data and confidence necessary to transition microgrid technologies into wider scale use," said Jim Gribschaw, director of energy programs at Lockheed Martin. "Microgrids are the key to an energy efficient and secure future for sites such as defense installations, hospitals, universities, commercial businesses and industrial sites."
3. Microgrids will be a $40 billion market
Microgrids are captivating demand from large and small facilities interested in self-reliant, more affordable energy. That’s why the microgrid market is expected to boom to $40 billion annually by 2020. Utilities can adopt virtual power plants (VPPs), or software systems to remotely and automatically send out and optimize generation, demand response, and storage in a unified digital system. Utilities can derive more value from conventional and renewable generators by deploying VPPs and microgrids to enhance efficiencies. When coupled with large-scale storage capacity, microgrids can decrease the need to ramp up massive amounts of baseload capacity idling until suddenly needed. A network microgrid can counteract an outage and meet rapid demand across a distributed line of grid assets.
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