Microgrids are integrated energy systems consisting of distributed energy resources (DERs) and multiple electrical loads operating as a single, autonomous grid either in parallel to or islanded from the existing utility power grid. In many ways, a microgrid is really just a small-scale version of the traditional power grid that the vast majority of electricity consumers in the developed world rely on for power service today. Yet the smaller scale of microgrids results in far fewer line losses, a lower demand on transmission infrastructure, and the ability to rely on more localized sources of power generation.

All of these benefits are stimulating an increased demand for microgrids on a worldwide basis, in a variety of application areas including campus environments, military operations, remote/off-grid settings, community/utility systems, and commercial & industrial markets. In particular, the remote/off-grid segment has emerged as the clear leader in terms of revenue, and is arguably the most mature in terms of commercial status. North America is still clearly the leader in terms of planned capacity, but the developing world remains the most promising long-term market. Microgrids still face significant barriers to wide scale adoption, however. As of 2012, not a single national government has developed an integrated or comprehensive policy creating a viable, vibrant market for customer-driven microgrids. With the exception of Denmark, few other countries are even examining the complex policy issues involved when aggregating DERs not owned by utility companies on a broad scale.

This Pike Research report analyzes the global market opportunity for microgrids across five key application segments: campus, military, remote, community, and commercial & industrial. The report provides a comprehensive assessment of the demand drivers, business models, policy factors, and technology issues associated with the rapidly-developing market for microgrids. Key industry players are profiled in depth and worldwide revenue and capacity forecasts, segmented by application and region, extend through 2017.

Key Questions Addressed:

• What were the two most important steps forward for the overall microgrid market in 2011?
• Why does the North American campus environment segment lead in terms of worldwide capacity?
• Why are remote microgrids so far ahead of the rest of the other segments when it comes to revenue?
• Who are some of the new major players that have entered the microgrid market within the last year – and why?
• What are the greatest technical challenge facing microgrids today?
• Which segment has the most public policy support?

Who needs this report?

• Microgrid and smart grid technology vendors
• Renewable energy equipment and service providers
• Energy storage companies
• Large commercial/industrial power users
• Utilities
• Military agencies
• Government agencies
• Investor community

Table of Contents

1.      Executive Summary

1.1  Surveying the World’s Microgrid Market

1.2  Growth Drivers and Adoption Rates

2.      Market Issues

2.1  What is a Microgrid?

2.2  Microgrid Market Overview

2.3  Microgrid Enabling Technologies

2.3.1    Distributed Generation

2.3.2    Islanding & Bi-Directional Inverters

2.3.3    Smart Transfer Switches

2.3.4    Micro Storage Options

2.3.5    Microgrid “Control” Systems

2.3.6    Other Optimization and Integration Controls

2.3.7    Virtual Power Plants versus Microgrids

2.3.8    The Business Case for Microgrids

2.3.9    SWOTs for Campus, Military Stationary, and Remote Microgrids

2.1  Current Microgrid Opportunities

2.1.1    IMBY Instead of NIMBY

2.1.2    DOD’s Historic Track Record on Fostering Innovative Technologies

2.1.3    FITs, RPS, TOUs, Utility Revenue Decoupling, and Net Metering

2.1.4    Current Unstable Geopolitical Trends

2.1.5    Increasing Frequency of Natural Disasters

2.1.6    A Bottom of the Pyramid Value Proposition

2.2  Implementation Issues

2.2.1    Indifferent (or even Hostile) Host Distribution Utilities

2.2.2    Lack of Comprehensive Microgrid Policy Frameworks

2.2.3    Lack of Commercial Terms in Key Emerging Markets

2.2.4    AC versus DC Grid Architectures

2.2.5    IT Crossovers into Power Markets

2.2.6    UL 1741 Safety Standard

2.2.7    IEEE Islanding and Storage Standards

2.2.8    NIST Cyber Security Standards

2.2.9    Plug-and-Play Offerings Extremely Limited

2.2.10  Physical & Cyber Security

3.      Technology Issues

3.1  The Evolution of Power Grid Infrastructure

3.2  The New Microgrid Paradigm

3.2.1    Basic Principles

3.2.2    Remote Microgrid Exceptions

3.2.3    Pros and Cons

3.2.4    Commercial Time Horizon

3.2.5    Cost

3.3  Microgrid Component Cost Breakdown

3.4  Microgrid “Control” Systems

3.4.1    Basic Principles

3.4.2    Pros and Cons

3.4.3    Commercialization Time Horizon

3.4.4    Cost Ranges

3.5  Smart “Islanding” Inverters

3.5.1    Pros and Cons

3.5.2    Commercial Time Horizon

3.6  Advanced Energy Storage Technologies

3.6.1    Pros and Cons

3.6.2    Commercial Time Horizon

3.7  Virtual Power Plants

3.7.1    DR-VPP Parameters

3.7.2    Cost

3.7.3    The Pros and Cons of VPPs

4.      Key Industry Players

4.1  Overview of Key Industry Players

4.2  Leading Investor-Owned Utilities

4.2.1    American Electric Power

4.2.2    Consolidated Edison

4.2.3    San Diego Gas & Electric

4.3  Industrial Market Entrants

4.3.1    ABB

4.3.2    Boeing

4.4  Smaller Innovators with Track Records

4.4.1    Encorp

4.4.2    Power Analytics

4.4.3    Viridity Energy

4.5  Game Changing Data Management Start-Ups

4.5.1    Green Energy Corporation

4.5.2    Tiga Energy

4.6  Smart Transfer Switches

5.      Market Forecasts

5.1  Surveying the Global Microgrid Market

5.2  Growth Scenarios

5.2.1    Base Scenario

5.2.2    Average Scenario

5.2.3    Aggressive Scenario

5.3  Analysis by Segment Application

5.4  Analysis by Geography

5.4.1    Campus Environment/Institutional Segment

5.4.1.1    North America

5.4.1.2    Europe

5.4.1.3    Asia Pacific

5.4.1.4    Rest of the World

5.4.2    Campus Environment/Institutional Case Study:  Santa Rita Jail, Alameda County, California

5.4.3    Stationary Military Microgrid Segment

5.4.3.1    North America

5.4.3.2    Rest of the World

5.4.4    Military Stationary Base Case Study:  Fort Sill, Oklahoma

5.4.5    Remote Microgrid Segment

5.4.5.1    North America

5.4.5.2    Europe

5.4.5.3    Asia Pacific

5.4.5.4    Rest of the World

5.4.6    Remote Microgrid Case Study:  Bella Coola, British Columbia

5.4.7    Community/Utility Segment

5.4.7.1    North America

5.4.7.2    Europe

5.4.7.3    Asia Pacific

5.4.7.4    Rest of the World

5.4.8    Community/Utility Case Study:  Ashton Hayes Going Carbon Neutral Project, United Kingdom

5.4.9    Commercial/Industrial Segment

5.4.9.1    North America

5.4.9.2    Europe

5.4.9.3    Asia Pacific

5.4.9.4    Rest of the World

5.4.10  Commercial/Industrial (Multiple Owners) Case Study:  The Aomori Project

6.      Company Directory
7.      Acronym and Abbreviation List
8.      Table of Contents
9.      Table of Charts and Figures
10.      Scope of Study, Sources and Methodology, Notes

List of Charts and Figures

• Total Microgrid Capacity by Segment, Average Scenario, World Markets:  2011-2017
• Annual Microgrid Revenue by Region, Average Scenario, World Markets:  2011-2017
• Worldwide Announced Storage Capacity for Electricity Markets: 4Q 2011
• Microgrid Capacity by Market Segment, World Markets: 4Q 2011
• Microgrid Capacity by Region, World Markets: 4Q 2011
• Total Microgrid Capacity by Segment, Base Scenario, World Markets:  2011-2017
• Total Microgrid Capacity by Region, Base Scenario, World Markets:  2011-2017
• Annual Microgrid Revenue by Segment, Base Scenario, World Markets:  2011-2017
• Total Microgrid Revenue by Region, Base Scenario, World Markets:  2011-2017
• Total Microgrid Capacity by Region, Average Scenario, World Markets:  2011-2017
• Annual Microgrid Revenue by Region, Average Scenario, World Markets:  2011-2017
• Total Microgrid Capacity by Segment, Aggressive Scenario, World Markets:  2011-2017
• Total Microgrid Capacity by Region, Aggressive Scenario, World Markets:  2011-2017
• Annual Microgrid Revenue by Segment, Aggressive Scenario, World Markets:  2011-2017
• Annual Microgrid Revenue by Region, Aggressive Scenario, World Markets:  2011-2017
• Yesterday’s Centralized Power versus Tomorrow’s Clean, Localized Power
• Super Smart Grids versus Microgrids
• Microgrid Market Shares Based on Capacity Size: 2009
• Microgrid Market Shares per Generation Type: 2009
• Solar PV Market Displaying Exponential Growth: 2000-2010
• Hybrid Microgrid-VPP Networks for College Campuses
• Price Summary for Solar PV FITs, World Markets: 2011
• RPS States in the United States with Solar or Distributed Generation Set Asides
• States with IOU Residential Real-Time Pricing or TOU Rates
• U.S. States with Utility Revenue Decoupling
• Total Microgrid Capacity by Region and Segment, Average Scenario, World Markets:  2011-2017
• Net Metering States (with Eligibility Limits)
• Selected States Offering Net Metering Aggregation
• Increased Frequency of Natural Disasters
• Regional Remote Microgrid Opportunities: 1970-2030
• The History and Evolution of DC Distributed Power
• Moving from Disconnected to Dynamic Energy Management
• Conventional and Microgrid DER Paradigm Shift
• Distributed Power System Applications: MW versus MWh
• Current Microgrid Project/Test Center Landscape in the United States
• Microgrid Payback Periods and Market Penetration
• Cost Breakdown for Alaska Wind-Diesel Remote Microgrids
• CERTS “Droop Frequency Control” Diagram
• “Smart” Inverter Transforms Microgrid into VPP
• End-Use Customer Storage Applications
• Denmark’s “Cell Controller Project”
• Community Energy Storage Program at AEP
• Powercorp/ABB Powerstore Flywheel Technology
• University of California, San Diego Microgrid Topology
• FREEDM Microgrid Topology
• SMUD’s 310 kW Microgrid Topology
• Fisher-Pry S-Curve for Microgrids
• Santa Rita Jail Key Microgrid Components
• Energy Surety Microgrid Concepts
• Topology of Bella Coola Remote Microgrid
• Aerial View of the Ashton Hayes “Microgrid”
• Aomori Project Topology in Japan

List of Tables

• SWOT Analysis for Campus Environment Microgrids
• SWOT Analysis for Military Stationary Base Microgrids
• SWOT Analysis for Remote Microgrids
• AEP SWOT Analysis
• Con Edison SWOT Analysis
• SDG&E SWOT Analysis
• ABB SWOT Analysis
• Boeing SWOT Analysis
• Encorp SWOT Analysis
• Power Analytics SWOT Analysis
• Viridity Energy SWOT Analysis
• Green Energy Corporation SWOT Analysis
• Tiga Energy SWOT Analysis
• Thomas & Betts SWOT Analysis
• Campus Microgrid Capacity by Region and Segment, Base Scenario, World Markets:  2011-2017
• Military Stationary Base Microgrid Capacity by Branch, Base Scenario, United States: 2011-2017
• Remote Microgrid Capacity by Region, Base Scenario, World Markets: 2011-2017
• Annual Campus Microgrid Revenue by Region and Segment, Base Scenario, World Markets:  2012-2017
• Military Stationary Base Microgrid Annual Revenue by Branch, Baseline Scenario, United States: 2011-2017
• Total Remote Microgrid Revenue by Region, Base Scenario, World Markets: 2011-2017
• Campus Microgrid Capacity by Region and Segment, Average Scenario, World Markets:  2011-2017
• Military Stationary Base Microgrid Capacity by Branch, Average Scenario, United States: 2011-2017
• Remote Microgrid Capacity by Region, Average Scenario, World Markets: 2011-2017
• Annual Campus Microgrid Revenue by Region and Segment, Average Scenario, World Markets:  2012-2017
• Military Stationary Base Microgrid Annual Revenue by Branch, Average Scenario: 2011-2017
• Total Remote Microgrid Revenue by Region, Average Scenario, World Markets: 2011-2017
• Campus Microgrid Capacity by Region and Segment, Aggressive Scenario, World Markets:  2011-2017
• Military Stationary Base Microgrid Capacity by Branch, Aggressive Scenario, United States: 2011-2017
• Remote Microgrid Capacity by Region, Aggressive Scenario, World Markets: 2011-2017
• Annual Campus Microgrid Revenue by Region and Segment, Aggressive Scenario, World Markets:  2012-2017
• Military Stationary Base Microgrid Annual Revenue by Branch, Aggressive Scenario: 2011-2017
• Total Remote Microgrid Revenue by Region, Aggressive Scenario, World Markets: 2011-2017
• Total Microgrid Capacity by Region and Segment, Base Scenario, World Markets:  2011-2017
• Total Microgrid Capacity by Segment, Base Scenario, World Markets:  2011-2017
• Annual Microgrid Revenue by Region and Segment, Base Scenario, World Markets:  2011-2017
• Annual Microgrid Revenue by Segment, Base Scenario, World Markets:  2011-2017
• Total Microgrid Capacity by Segment, Average Scenario, World Markets:  2011-2017
• Annual Microgrid Revenue by Region and Segment, Average Scenario, World Markets:  2011-2017
• Annual Microgrid Revenue by Segment, Average Scenario, World Markets:  2011-2017
• Total Microgrid Capacity by Region and Segment, Aggressive Scenario, World Markets:  2011-2017
• Total Microgrid Capacity by Segment, Aggressive Scenario, World Markets:  2011-2017
• Annual Microgrid Revenue by Region and Segment, Aggressive Scenario, World Markets:  2011-2017
• Annual Microgrid Revenue by Segment, Aggressive Scenario, World Markets:  2011-2017