Yep, Utilities Do Like Microgrids, Especially Public Power Utilities

Dec. 20, 2014
Utilities do like microgrids, as we’ve said, and now Navigant Research has some data to back it up.

Credit: UGE

Utilities do like microgrids, as we’ve said. And now Navigant Research has some data to back it up.

A new report by Navigant finds that a small, but growing number of utilities see microgrids as a logical extension of their smart grid investments.

This runs contrary to popular thinking that utilities fear microgrids as competition. A survey by Utility Dive last summer also unearthed a keen interest among utilities in microgrids.

“It is clear that a growing number of utilities are investing their options in this space, weighing the pros and cons of different business models,” said Peter Asmus, a principal research analyst at Navigant.

Navigant calls these utility investments, utility distribution microgrids or UDMs. (Ah, just what we need, another energy acronym!)

Although UDMs still represent a small market, it is growing as utilities in North America, Europe and Asia Pacific increasingly investigate what microgrids offer. Navigant forecasts that the market for utility distribution microgrids will grow from $2.4 billion in 2014 to $5.8 billion in 2023 under a base case scenario.

Are you working on a utility distribution microgrid? Tell us about it on our LinkedIn Group, Microgrid News.

Like customer-owned microgrids, utility microgrids are getting a big push from government programs in the U.S. aimed at lessening power outages from storms.

Still unresolved is how to best compensate microgrids — utility-owned or private. They provide resiliency, security and sustainability benefits that energy regulators have yet to adequately quantify — if at all.

Over the last two years utility microgrid activity has increased rapidly. And public power utilities lead the charge, according to Navigant.  Public power utilities are less encumbered by regulation or shareholder/customer conflict, so can more easily develop unconventional resources, like microgrids.

Public power UDMs can be found within a wide range of systems, from small municipal utilities to nationalized grid projects, according to the report.

The public power utilities analyzed by Navigant include: BC Hydro, DONG Energy, Electricite Reseau Distribution France, PowerStream, Sacramento Municipal Utility District and TDX Power. The investor-owned utilities include: Arizona Public Service, Central Hudson Gas & Electric, Consolidated Edison, Duke Energy. E.ON, Green Mountain Power, NRG Energy and San Diego Gas & Electric.

A summary of the report, “Utility Distribution Microgrids: Investor-Owned and Public Power Utility Grid-Tied and Remote Microgrids: Global Market Analysis and Forecasts,” is available on Navigant Research’s website.

About the Author

Elisa Wood | Editor-in-Chief

Elisa Wood is an award-winning writer and editor who specializes in the energy industry. She is chief editor and co-founder of Microgrid Knowledge and serves as co-host of the publication’s popular conference series. She also co-founded, where she continues to lead a team of energy writers who produce content for energy companies and advocacy organizations.

She has been writing about energy for more than two decades and is published widely. Her work can be found in prominent energy business journals as well as mainstream publications. She has been quoted by NPR, the Wall Street Journal and other notable media outlets.

“For an especially readable voice in the industry, the most consistent interpreter across these years has been the energy journalist Elisa Wood, whose Microgrid Knowledge (and conference) has aggregated more stories better than any other feed of its time,” wrote Malcolm McCullough, in the book, Downtime on the Microgrid, published by MIT Press in 2020.

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