The Rise of the Microgrid
Microgrids are part of a growing trend toward “distributed energy,” power that’s produced independent of a traditional utility. Distributed energy is used by its producer, but is sometimes also sold to a utility and put back onto the general grid. In other words, electricity flows two ways, not one. Microgrids are well-suited to university campuses, corporate research parks, military bases and other insular environments that want to run on their own energy from start to finish. But more than that, microgrids are making their way to neighborhoods, office buildings, and beyond.
The increasing adoption of renewable power sources have made distributed power much more practical. It’s hard to imagine generating energy for standalone neighborhoods or communities using natural gas or coal. Fossil fuel-based electricity requires complex plants and refineries that cost billions of dollars and serve millions of buildings. Rooftop solar panels and clusters of wind turbines on the other hand can successfully generate enough energy to keep the lights on in just a handful, a few hundred or a few thousand homes. Renewables may not be able to meet the needs of entire cities today. But they can reliably serve people who live off the grid, or who want to declare independence from major utilities.
According to a research report from Markets and Markets ("Microgrid Market by Grid Type Global Forecast to 2022"), the microgrid market is estimated to reach USD 34.94 Billion by 2022, representing a CAGR of 10.9% between 2016 and 2022. Drivers include falling renewable prices, especially solar PV cells, low gas emissions, as well as a growing number of rural electrification projects in Africa and APAC.