A new report from Navigant Research analyzes the global market opportunity for utility distribution microgrids (UDMs), including global market forecasts for capacity and implementation revenue through 2023.
In the last 2 years, market activity around microgrids owned and operated by utilities, or UDMs, has expanded rapidly. Although they still represent a small slice of the overall microgrid pie, utility deployments and investigation into this emerging market represent a significant investment opportunities for both the regulated and unregulated business units of utilities. According to a new report from Navigant Research, global UDM implementation revenue is expected to grow from $2.4 billion annually in 2014 to $5.8 billion in 2023, under a base scenario.
“Rather than viewing microgrids as a threat, due to intentional islanding and/or the effects of shrinking customer load on long-term revenue projections, a small but growing number of utilities view UDMs as the next logical extension of their efforts to deploy smart grid technology,” says Peter Asmus, principal research analyst with Navigant Research. “It is clear that a growing number of utilities are investigating their options in this space, weighing the pros and cons of different business models.”
The largest surge in growth has come in public power, grid-tied UDMs, according to the report. Less encumbered than other types of UDMs by regulatory obstacles and potential conflicts between customers and shareholders, public power UDMs span a wide array of projects, ranging from smaller municipal systems that encompass an entire utility system to large nationalized grid projects designed to integrate large-scale renewable generation in the Asia Pacific region.
The report, “Utility Distribution Microgrids,” analyzes the global market opportunity for UDMs in three key segments: investor-owned utility (IOU) grid-tied, public power grid-tied, and public power remote. The report provides an analysis of the significant market issues, including policy and technology drivers and implementation challenges, associated with UDMs. Global market forecasts for capacity and implementation revenue, broken out by segment, region, and scenario, extend through 2023. The report also examines the current composition of and key technologies related to UDMs, as well as the competitive landscape.