Wednesday, October 28, 2009


The development of microgrids is obvious and clearly beneficial to the consumer. As I have been also saying, it is now necessary because of the sharp expansion in demand coming about from the advent of the electric car in particular. Power distribution management must now be properly localized, or perhaps more properly actual management of the distribution must become much more localized.

The big grid power providers are simply not in the business of servicing the consumer. They are producers of power and they have been happy to ship it and forget about it. We put up with that when it did not matter much. Today it matters. Our houses are about to become energy producers and energy storage plants in their own right. Of course a microgrid is now called for.

It will certainly be a major new business niche for entrepreneurial activity over the next decade.

It will likely have to be regulated into existence, the same way that the telephone industry was regulated into localization and separation of markets. Large companies will never understand that their business model is outdated, even when the pie is growing. Remember AT&T and long distance? The industry is vastly larger and is providing massively more in service and AT&T is handling a section of the business, yet they never led. If it were up to them we would all still be paying them seven cents a minute for land line traffic to next door.

Obviously if we are about to displace several millions of barrels of oil per day, the grid build out is necessarily huge.

The report is costly and not for everyone but it helps us understand were the big money will be over the next few years.


Islanded Power Grids and Distributed Generation for Community, Commercial, and Institutional Applications

A variety of trends are converging to create promising market opportunities for microgrids, particularly in the United States. The fundamental architecture of today’s electrical grid, which is based on the idea of a top-down system predicated on unidirectional energy flows, is growing increasingly obsolete. This outmoded infrastructure poses risks to grid reliability and security, and could hinder the adoption of renewable power generation. Microgrids are being driven in part by the broader push to create a Smart Grid that will add intelligence and automation to the electricity infrastructure while facilitating the integration of renewable energy resources, electric vehicles, and greater customer control over energy consumption. In part, however, the microgrid is an alternative vision to a highly integrated “Super Grid” — microgrid proponents are advocating deployments where a community, corporation, or institutional entity can operate autonomously from the larger grid infrastructure.

Pike Research forecasts that over 3 GW of new microgrid capacity will come on line globally by 2015, representing a cumulative investment of $7.8 billion. North America will be the largest market for microgrids during that period, capturing 74% of total industry capacity. In North America, the largest category will be instutional microgrids, followed by commercial/industrial and community grids. In other regions, however, the story is different and we expect community microgrids to be the largest category in Europe and Asia Pacific.

This Pike Research report analyzes and forecasts five major segments of the emerging microgrid market: Community/Utility Microgrids, Commercial/Industrial, Institutional/Campus, Remote Off-Grid Systems, and Military Microgrids. It assesses key technologies that are integral to microgrid deployments including distributed energy generation (both renewables and fossil fuels), energy storage, and inverters. The report also includes in-depth analysis of key players in the nascent microgrid ecosystem, including identification of strengths, weaknesses, opportunities, and threats for key competitors as well as case studies for each category of deployment. Five-year forecasts provide quantification of the market opportunity in North America, Europe, and Asia Pacific.

Key questions addressed:

  • What is a “microgrid” and what are its key components and features?

  • Why are inverters the key advance enabling microgrids to develop today despite opposition from many electric utilities?

  • What are the key market drivers at the policy level – and why does the United States have the best near-term market opportunity?

  • Why are microgrids inevitable if investments in a smart grid are accompanied by a paradigm shift from central station to distributed generation supply sources?

  • Who are the big players – and new technology vendors – in the microgrid space, and what is their key role in developing this new energy market?

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