Global Microgrid Market - Growth, Trends, and Forecast (2018 - 2023)
The global demand for energy is expected to increase by 30% between 2017 and 2040, with renewable sources of energy to contribute 40% of the increase in primary demand. To meet with the growing demand for energy, numerous new power projects are expected to be implemented across the globe, resulting in added concerns for grid stability. Countries across the globe are increasing the deployment of distributed power source, or microgrids, to reduce the overdependence on power grids and prevent power blackouts during natural calamities. Microgrids are similar to primary power grids, but smaller in size with low capacities. They are referred as distributed electric grids that can be operated and controlled depending on the requirements. Asia-Pacific has been experiencing increased demand for microgrids, majorly owing to factors, such as increased rural electrification programs in developing countries and development of commercial microgrids in advanced nations. Furthermore, government policies, such as Feed-in-Tariffs, are expected to further supplement the growth during the forecast period.
Supportive Government Policies Driving the Market
Owing to the vast benefits offered, governments across the globe have supported the deployment of microgrids in the form of fiscal and legislative incentives. In order to promote energy conservation, carbon emissions reduction, as well as structural reform of energy supply, many countries in the European Union, along with countries, like the United States, Japan, etc., have issued relevant policies and support plans to promote the development of microgrid projects. At the same time, China’s Thirteenth Five Year Plan for Electricity Development also incorporated microgrids as an essential way of energy restructuring. A similar investment is also expected to increase in other countries as well during the forecast period, in turn, supplementing the microgrid market.
Integration with Wholesale Power Market Driving Demand in Europe
The integration of microgrids with wholesale power market is a big boost for the development of microgrid network in Europe. The widespread network of microgrid can be integrated with the power network, and the owners of the microgrid can execute the trading activities. The region with power surplus can supply electricity to power deficit region by trading electricity in the power market, which is a big boost for the power sector, in turn, increasing the uptake of microgrid projects in the European region.
Japan to Witness High Demand in Asia-Pacific
As part of Japan’s policies to boost energy efficiency and power generation from renewable sources, the country’s sustained efforts toward smart grid deployment is expected to supplement the microgrid market in the Asia-Pacific region. To increase resiliency against natural disasters, Japanese cities are moving away from large-scale power toward microgrids. Higashi-Matsushima, a coastal city that was stricken by the 2011 earthquake and tsunami, is leading the switch. Supported by the country’s national resilience program, the city has constructed a large number of microgrids and has decentralized renewable power generation. Similar initiatives are also expected to increase in other cities of Japan, along with small microgrid connectivity, as Japan aims to move forward with the objective of preventing blackouts and minimizing damages during natural disasters.
Key Developments in the Market
Learn how to effectively navigate the market research process to help guide your organization on the journey to success.Download eBook