Microgrid capacity to exceed 3.7 GW by 2020, a new study says

Dive Brief:

Microgrid capacity in the United States will reach 3.71 GW by 2020, an increase over GTM Research's predictions last year which called for 2.85 GW in a base-case scenario. The new estimates, however, exceed even last year's high-end predictions, Greentech Media reports.
There are currently 156 operational microgrids in the country, making up 1.54 GW of capacity. So far, 13 new projects have been commissioned this year, and 81 more are in development, the firm said in a research note.
While most projects still rely on fossil fuels, GTM said 45% of the capacity in development would be renewable.

Dive Insight:

Microgrids are still a relatively small part of the United States' power grid, but interest in them is growing and the systems are increasingly mirroring new technologies in the broader sector. For instance, Transparency Market Research predicted that what was a $9.8 billion market in 2013 will rise to $35.1 billion in 2020.

GTM Research has boosted its own 2020 predictions by 30% in its most recent research note.

"Renewables contribute to 14% of today’s cumulative operational capacity, more than double the 6% reported one year ago," GTM said in a note last month. And with almost half of projects in development focused on renewable power, those figures are set to rise.

While the overall installed capacity is dominated by small and medium-sized projects, a few large systems dominate the top end. The average capacity of installed microgrids is just under 10 MW, but the seven largest make up 600 MW of total capacity—almost 40% of the market.

In the Northeast, GTM said "enhanced reliability continues to be a major driver at the federal and state levels.

The industry is also being boosted by co-ownership agreements, and GTM said that both regulated and unregulated utilities are proposing microgrids. "Regulated utilities are developing public purpose projects, while deregulated utilities target C&I customers," the firm said.

Navigant Research in 2014 also predicted worldwide microgrid revenues would grow from $4.3 billion in 2013 to $19.9 billion in 2020. Utility distribution microgrids have grown seen significant growth in recent years; that sector is expected to reach $5.8 billion in 2023.