Utility distribution microgrids will grow into a $917 million market by 2024 in the US, according to a new report by Navigant Research.
Utility distribution microgrids, or UDMs, differ from conventional microgrids in that they are built to bolster a utility distribution system, rather than directly serve a microgrid customer, such as hospital, university, business park, community or other non-utility host.
“Microgrids historically have been developed by private and public sector consumers not getting what they wanted in terms of reliability or renewables from their host distribution utilities,” says Peter Asmus, principal research analyst with Navigant Research. “The concept of a UDM turns this value proposition on its head as utilities seek new business models to better manage both customer-owned and utility-owned DER [distributed energy resources].”
Utilities are warming up to the idea of installing microgrids thanks to recent technology advances such as smart inverters, smart switches, and new distributed energy control platforms, according to Navigant.
Utility distribution microgrids are helping utilities manage their growing distributed energy resource portfolios, according to the research firm. Advanced microgrid controls orchestrate when and how the resources are used to guarantee reliability and best economics.
The report pegs utility distribution microgrid capacity at 29 MW in 2015, representing $161 million in annual revenue. Navigant forecasts the market will grow to 241 MW in 2024, representing $917 million.
Growth in utility distribution microgrids will be influenced by regulatory reforms, natural disasters, and how quickly both customers and utilities adopt distributed energy resources, according to the report. Because of this, Navigant expects utility distribution microgrids to only be deployed for a small portion of the broad addressable market over the next decade.
Navigant has made an executive summary of the report available for free download on the Navigant Research website.
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