Microgrid Market: Here’s how Nations can benefit from Microgrids
By Akhil Nair
Power consumption has spiked worldwide. According to the International Energy Agency‘s 2022 electricity market report, the global electricity demand increased by 6% in 2021, the largest annual increase in absolute terms (more than 1,500 TWh). This is one of the critical factors driving the global microgrid market growth at an 11.08% CAGR during 2022-2030.
Microgrids are autonomously-operating localized grids disconnected from the traditional grid. They can enhance grid resilience, mitigate grid disturbances, and function as a grid resource for swift system recovery and response. Moreover, they are controllable systems encompassing distributed energy storage systems, loads, and sources.
Here’s how Nations can benefit from Microgrids –
Supplementary Power Source
A traditional electricity grid connects businesses, homes, and other buildings to central power sources that enable the use of electronics, appliances, heating/cooling systems, etc. Accordingly, power outages or storms can shut down an area’s main electricity grid, thereby affecting many critical services, businesses, and homes. During such power outages, a microgrid can help since it can switch away from the main grid and continue to provide power during emergencies through a process called ‘islanding.’
A microgrid connects to the main grid at a point of common coupling that maintains the same voltage level as the main grid. A switch can separate the microgrid from the main grid either manually or automatically, thereby functioning as an ‘island.’ As a result, the geographic region served by microgrids becomes an island of power.
Furthermore, when a disaster strikes, gas stations, grocery stores, and shelters included within a microgrid’s service area can become places of refuge, facilitating the supply of clean water, food, and charging cell phones. For instance, the Seton Healthcare Family in Austin, Texas, powered its medical facility with combined heat & power (CHP) plant microgrid that would provide power alongside sustainably capturing waste from the combustion process to provide heat.
As a result, an increasing number of communities are installing microgrids to serve wastewater treatment plants, communication centers, fire departments, fire stations, hospitals, etc. Therefore, microgrids promote and enhance a nation’s well-being.
As per our estimates, grid connected is the fastest-growing microgrid type, set to project a CAGR of 11.39% by 2030.
Enhances Environment and Promotes Clean Energy
Several businesses and communities are establishing clean energy goals to reduce the environmental impact of power generation and conserve energy. Microgrids leverage stored, wind, and solar energy to supplement the dips in the current power supply. Also, if the regional grid is operating smoothly, a microgrid generating electricity from renewable sources can export that clean energy to the grid.
As per the International Energy Agency, the global CO2 emissions from industrial processes and energy combustion rebounded in 2021, reaching their highest annual level. Carbon emissions from electricity generation depend on the quantity of electricity, which is directly related to energy demands. As a result, minimizing the amount of carbon emissions would need a change in the generation or energy mix with regard to ‘cleaner’ sources.
Furthermore, microgrids can deploy a vast range of green power production technologies, including energy storage, combined heat & power (CHP) plants, fuel cells, wind, and solar. They integrate these renewables into the energy mix and balance the variable output of renewable energy with conventional generation assets.
Accordingly, they eliminate the downfall of wind and solar energies, which generate power only when the wind blows, or the sun shines. A microgrid can effectively tap into other resources when renewable energy is unavailable without human intervention. At the same time, advanced microgrids can be programmed to realize certain sustainability goals, like using the lowest carbon resources.
Boosts Economic Prospects
Power outages incur heavy expenses, especially for manufacturers, data centers, and research facilities that lost products or services. For instance, according to a Congressional Research Service study, the outage costs to the US economy range from $25 billion-$70 billion annually, depending on the number of storms.
In the case of business, enterprises are inclined to communities with microgrids. This is because outages are expensive to businesses. As a result, communities with reliable power can attract high quality employers like pharmaceutical manufacturers and data centers.
Besides, the operation and construction of microgrid create local jobs, and consequently, microgrids, as local energy, benefits the local economy. Therefore, microgrids enable economic values for nations.
Microgrids in Solar Energy: A Game-Changer?
Solar microgrids are integrated grids or networks that harness solar energy to supply, store, and generate clean electricity. Its array of photovoltaic cells creates power and sends it to the Power Conditioning Unit (PCU).
Solar microgrids are ideal for settlements on tiny islands and mountainous areas. This is because the distant villages cannot link to the current infrastructure offered by private or government firms. As a result, solar microgrids are considered a reliable and practical alternative for rural electrification globally.
For instance, according to Renewable Energy World®️, 32 solar microgrids, developed in response to the 2014 Ebola crisis, are set to provide first-time access to electricity to 80,000 people in West Africa. In addition, solar microgrids in India provide economic development and rural electrification to areas without electric grids and reliable power.
Moreover, the additional benefits of solar microgrids include increased efficiency, stable energy source, lower electrical utility costs, and reduced emissions. Thus, the growing use of microgrids in solar energy is expected to boost growth opportunities for the global microgrid market.
Which country has the most lucrative prospects in the microgrid market?
India has the most lucrative prospects in the microgrid market.
Which is the fastest-growing consumption pattern in the global microgrid market?
Rural/Island is the fastest-growing consumption pattern in the global microgrid market.