Remote regions of the world such as the circumpolar Arctic, once viewed as disadvantaged due to a lack of conventional grid infrastructure, have proven to be fertile ground for microgrid innovation. This innovation flows from both the challenges associated with providing reliable electricity without the benefit of traditional transmission and distribution systems and from the economic pressures associated with the high cost of delivered energy in markets with many areas of relatively low per capita income.
The Arctic is home to many paradoxes. It is a region of harsh climate and extreme cold, but it is also a global hotspot for microgrids. It is the region with the most visible effects of climate change, but it is also home to some of the highest rates of renewable energy uptake on Earth. This white paper argues that the global microgrid market can learn important lessons from the circumpolar Arctic’s history of energy innovation, especially from Alaska. The state’s vast geography, low population density, and high energy demand make it an interesting case study that can provide insights into this market.
This white paper provides updated market data on the scale, capacity, and resources deployed in microgrids throughout the circumpolar Arctic. It compares these microgrid characteristics to global market trends, emphasizing remote microgrids—the largest market opportunity for microgrids. It concludes with a series of lessons learned and recommendations to guide future microgrid development globally. This paper’s findings are especially relevant to developing nations exploring alternatives to traditional utility models focused on centralized grid infrastructure.