4 Key Factors Driving Microgrid Growth

May 11, 2023
New generation technologies, modeling, standardization and energy as a service will drive microgrid growth, according to Haitham Radwan of Cummins.

Microgrid adoption in North America will surpass 1.8 gigawatts of annual installed capacity by 2027, according to Haitham Radwan, business development and marketing director at Cummins. Radwan recently spoke to Elisa Wood, editor-in-chief of Microgrid Knowledge, as a lead up to Microgrid 2023: Lights On!

During their conversation, Radwan and Wood discussed how technological changes, specifically around generation, are impacting and motivating microgrid adoption.

New energy storage solutions, hydrogen, solar and wind are all driving the market, as are enhancements to traditional technologies such as those that improve emissions for diesel and natural gas energy sources, Radwan said.

Energy modeling tools reduce complexity

These new and improved generation technologies create more options for the end users looking to use microgrids. Today, microgrid owners can select from a long list of assets when deciding what to include in their microgrid.

Now, Radwan said, the bigger question owners face is how to select the most optimized solutions based on specific site requirements, load profile, fuel availability and a variety of other factors.

That’s where energy modeling comes in.

“Energy modeling tools play a big role in reducing the complexity of the design and selecting the most optimal energy sources for your specific use case,” Radwan said. So, while there may be a long portfolio of generation sources to select from, there are also tools that help you select the right resources.

Energy-as-a-service is also driving microgrid adoption

The growth of the microgrid market is also being driven by the development of new business models like energy-as-a-service (EaaS), according to Radwan.

With EaaS, a developer takes on the complexity and cost involved in designing, installing, commissioning and operating the microgrid, rather than the site owner, who likely has little experience in running an energy system. Instead, the customer simply pays the developer for the energy generated at its site. This frees both to focus on doing what they do best.

According to Radwan, EaaS is a “win-win for all participating parties” and this business model has grown by 25% over the past three years alone.

Increased adoption will lead to standardization

As the number of microgrids deployed rises so, too, will the need for use case-specific standardization, according to Radwan. He sees a future where there is a standard microgrid solution for telecom applications, one for data center applications and so on.

“This standardization will help to even further reduce costs,” enabling scalability for microgrid solutions, Radwan said. He also believes that standardization will reduce the implementation and installation complexity because the modular designs will be plug-and-play.

A win-win for end users and utilities

All of these new microgrid solutions coming online will be a win-win for the end user as well as for utilities, Radwan said.

“Everything around us is being electrified,” Radwan said, adding, “with this increasing demand we have to ensure that we have a sufficient amount of supply.”

A microgrid’s ability to island and use diverse energy resources gives both utilities and the customer more flexibility and resilience in the face of ever increasing electricity demand.

And that is why Radwan believes microgrids will play an important part in the equation to ensure resiliency and the availability of electricity.

Learn more about microgrids at Microgrid 2023: Lights On!, which will be held May 16-17 in Anaheim, California.

About the Author

Kathy Hitchens | Special Projects Editor

I work as a writer and special projects editor for Microgrid Knowledge. I have over 30 years of writing experience, working with a variety of companies in the renewable energy, electric vehicle and utility sector, as well as those in the entertainment, education, and financial industries. I have a BFA in Media Arts from the University of Arizona and a MBA from the University of Denver.

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