Microgrid is a small power grid that can operate separately or together with the central electric grid of the area. It consists of interconnected loads and energy distributions within defined electric limits. With regards to the grid, it acts as a single controllable entity.
What are the key factors driving the growth in the microgrid market?
Optin Energy
The global microgrid market was worth US$ 15 billion in 2018. The market is further projected to reach approximately US$ 30 billion by 2025.
The market is expected to see significant growth in the coming years due to the continued transition from conventional power stations to distributed energy. The increased demand for continuous power supply and improved power infrastructure has been driving the growth in the global microgrid market.
The chief force in keeping the market growth is the low transmission losses. Microgrids generate electricity locally and limit the dependence on long-distance transmission lines and thus cut transmission losses.
Various technological advancements have been made to improve the efficiency of battery inverters to ensure continuous power supply via microgrid. In addition, improved battery technology with higher inputs and outputs has been developed for a longer time — these features and technologies driving the microgrid market growth.
The demand for microgrids is growing as they allow customers and developers to achieve environmental goals through the use of renewable energy as a source of energy. This is in line with governments’ initiatives to develop solar energy and wind farms. In addition, the Clean Power Plan (CPP) rules have been introduced in countries like the US to reduce the emissions of CO2.
The global market is also facing some challenges, such as the high cost of maintenance and installation. The wide-ranging cost of microgrids tends to increase due to various parts such as distribution and generation system, loads, storage gadgets and regular couplers.