A new report forecasts that the value of the global microgrids market will hit $30bn in 2022.
The study by research and analytics company GlobalData reveals that while the Americas will continue to be the largest microgrid market, reaching $18bn in 2022, the Asia-Pacific will be the fastest growing region.
Power analyst Nirushan Rajasekaram said: “Globally, there is an increasing demand for electricity. In addition, the global power market is in a transition phase, supporting the expansion of distributed generation to circumvent volatile fossil fuel costs and supply market risks.
“The deployment of microgrids varies based on the needs of the country within a particular region. Within Americas, the US market is primarily focused on grid resiliency and reliability of power supply, whereas the Brazilian market is primarily focused on ensuring universal access to electricity, similar to developing countries in Asia and Africa.”
The report notes that for those well-developed power markets such as the US, Canada, and Japan which are prone to natural disasters, microgrids offer backup capabilities during periods of network downtime, reducing the impact on day to day activities.
“In addition, a microgrid allows end users to reduce their dependency on the grid in areas with high retail prices such as in California, South Australia and Japan.”
But the report notes that the development of microgrids “has been hindered by the lack of regulations and poor establishment of relevant business models. In certain underdeveloped markets, the cost and integration of energy storage is a big challenge and may not provide for a viable business case.”
Rajasekaram added: “Microgrids are seen as a viable technology to supplement the central grid. The shift in utilization of technologies within the power sector and growing influence of consumers at the distribution level would necessitate the use of smart infrastructure to support grid operations.
“Government mandates, technology advancement, changes in utility perception, and the eventual market acceptance are key factors that will determine the future of microgrid installations.”