US growth lags globally when it comes to technologies used in electricity delivery and management with one exception — the microgrid market — says a new report by the advocacy group Advanced Energy Economy.
“In the US market, microgrids are a shining light,” says AEE’s 2019 market report, which looks at global energy revenue trends from 2011-2018 for seven areas of the advanced energy market, including electricity generation, transportation, fuel production, fuel delivery, building efficiency, industry, and electricity delivery and management.
The US captured 35% of the global microgrid market in 2018, accounting for just under $2.5 billion.
AEE attributes strength in US microgrid market to the high level of power outages on the nation’s grid. The report cites data from the Council of European Energy Regulators that US power outages averaged 244 minutes per customer in 2012, compared with 95 minutes per customer in France, 81 minutes per customer in the United Kingdom, and 16 minutes per customer in Germany.
“Large customers such as hospitals, university campuses, and military bases are increasingly deploying microgrid technologies so that they can island themselves from the grid and become energy self-sufficient in the event of a power outage,” says the report, which was prepared for AEE by Navigant Research.
Many reasons for microgrid market growth
The microgrid market has made “leaps and bounds over the past two years,” the report says, particularly when it comes to control platforms, modular or plug-and-play offerings, and creative business models.
“The increase in extreme weather events, threat of wildfires, and localized phenomena such as earthquakes and volcanic eruptions all build the business case for greater energy resilience,” the report says. “Microgrids can serve as platforms for other services as well, including thermal energy, water, and basic telecommunications infrastructure.”
Navigant Research expects total microgrid capacity to grow from 3.2 GW in 2019 to 15.8 GW by 2027.
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The microgrid market did decline slightly from 2017 to 2018, which the report attributes to various factors, among them growing interest in alternative aggregation models, such as virtual power plants, in places like Australia.
When it comes to other technology for electricity delivery and management, the US lags in part because it competes with nations that have more aggressive carbon reduction strategies, according to the report.
Advanced energy beats biotech twice over
The report also found rapid growth in advanced transportation, with revenue from plug-in electric vehicles reaching $18 billion, up 75%. Since 2011 the compound annual growth for the vehicles has been an “explosive” 59%. Electric vehicle charging infrastructure also was up — 23%, to $280 million
Energy efficiency for buildings grew 10% in 2018 to $83.8 billion; wind power 23%, to $14 billion; and solar PV 8%, to $24.2 billion, according to the report.
Energy storage continued to grow but slower. Revenue was $701 million, up 18% but far less than the 39% growth of 2017.
Total revenue for advanced energy worldwide was a record $1.6 trillion in 2018, making the industry equal to global tourism, bigger than pharmaceuticals, and twice the size of airlines worldwide. The US advanced energy market hit $238 billion after growing 11% in 2018 – nearly four times as fast as US GDP. Advanced energy is now nearly equal in revenue to aerospace manufacturing, and twice the revenue of the biotech industry, according to AEE.
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