mgdt 4q11 executive summary

7/28/2019 MGDT 4Q11 Executive Summary

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Peter AsmusSenior Analyst

Brittany GibsonResearch Associate

EXECUTIVE SUMMARY:Microgrid Deployment Tracker 4Q11

Commercial, Community, Institutional, Military, andRemote Microgrids: Active Projects by World Region

NOTE: This document is a free excerpt of a larger report.If you are interested in purchasing the full report, please contactPike Research at [email protected].

Published 4Q 2011


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Microgrid Deployment Tracker 4Q11

2011 Pike Research LLC.All Rights Reserved. This publication may be used only as expressly permitted by license from Pike Research LLC and may not otherwise be accessed or used, without theexpress written permission of Pike Research LLC.

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Section 1

EXECUTIVE SUMMARY1.1 Introduction

Pike Research has developed this Microgrid Deployment Tracker 4Q11 as a databaseupon which to build forecasts of future capacity, investment flows, and private sectorrevenue for the global microgrid market. Given the lack of maturity in this market, the dataare highly diverse (and often incomplete). Nevertheless, the goal of this database is toprovide the best up-to-date summary of microgrid projects globally. It is a working datasetthat will be periodically updated as new projects are announced and actually come online.In addition, information on power generation sources, companies, and institutions involvedwill be updated as details come to light through Pike Researchs ongoing research into thishighly dynamic market.

This database is the second edition of the Microgrid Deployment Tracker, updated as of

December 2011. Deeper dives into the three most active microgrid segments institutional/campus environment, military, and remote systems have uncovered newprojects and new market players. The result is a view of a much more robust microgridmarket than was the case in 2009, when Pike Research first began to develop the worldsonly database and commercial analysis of this corner of the smart grid movement.

1.2 Microgrid DeploymentTracker UpdatesThis update to the Pike Research Microgrid Deployment Tracker reveals fresh data thatturns some previous assumptions about the global microgrid market on its head. WhileNorth America is still the worlds most promising market for grid-tied projects, the regionalso ranks highly in the remote microgrid segment, thanks to Alaska. This remotemicrogrid segment is far more advanced and diverse than previously reported. PikeResearch has identified three primary subsegments within the remote microgrid market

village power systems, weak grid island systems, and remote industrial mine systems,(along with a mobile military microgrid subsegment). Each of the three major remotemicrogrid subsegments represents a billion-dollar plus market by 2017. The inclusion ofpreviously undiscovered capacity within the remote microgrid segment dramaticallyincreases the projected size of the worlds microgrid market especially in terms ofrevenue and potential investment.

Unlike the grid-tied microgrids profiled by Pike Research, remote microgrids boast higherrevenue per capacity. Why? These systems include revenue from generation sources. Incontrast, revenue forecasts for grid-tied systems have up to this point in time beenlimited to networking, controls, storage, and other hardware and software necessary to linkup legacy assets into smart grid networks. As microgrids mature into a commercialenterprise, the grid-tied sector will more closely mimic the revenue investment ratios

exemplified by remote microgrids. The demand for integrating renewable distributedenergy generation (RDEG) resources into power systems isolated from reliable gridsrepresents the most compelling value proposition for microgrids, especially with militaryoperations. Moreover, the need for power to fulfill the most basic humanitarian needs isdriving remote microgrids into the mainstream as a preferred bottom-of-the-pyramid (BOP)economic development platform.


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In the past, it was safe to say that the majority of projects in the Microgrid DeploymentTrackerdatabase were pilot projects and/or research-related experiments. This perceptionis slowly fading away. The year 2011 signaled a shift, as some of the first large-scalecommercial microgrid projects reached significant milestones. With the adoption of theIEEE P1547.4 islanding standards in July 2011, the shift from pilot validation projects to

fully commercial projects will only accelerate. Since 2009, a handful of large commerciallyviable projects have come to light, especially in California as platforms for aggregation ofdistributed renewable resources and in New York with combined heat and power(CHP) units as anchor technologies.

Globally, the rising costs of diesel fuel and corresponding drop in solar photovoltaic (PV)prices have signaled the promise of a flurry of new commercial activity regarding remotemicrogrids throughout the developing world. Depending upon ones definition, remotemicrogrids could clearly dominate the global microgrid market in terms of revenues by2017.

It must be noted that not all of the projects profiled in this database meet thePike Research and/or U.S. Department of Energy (DOE) definitions of a microgrid thoughthe vast majority do. Projects that do not meet the Pike Research/DOE definitions wereincluded due to their noteworthy features and/or key contributions to the development oftechnologies critical to the success of the overall microgrid market.

Many of these projects do not have official designations. Therefore, those subscribersresearching specific projects are urged to utilize the various different search criteria (e.g.by segment or region). Pike Research does not maintain that this database is complete,but it does represent a good faith effort to track all notable microgrids. The following typesof projects have been identified through direct interviews, secondary research, and leadsprovided by key contacts within the smart grid and renewable energy industries:

Commercial/Industrial

Community/Utility

Institutional/Campus Environment

Military

Remote Systems

Along with these different segments, the database can also be searched by region ofthe world:

Asia Pacific

Europe

North America

Rest of World (including Latin America)


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1.3 Future of the Microgrid DeploymentTrackerAs market activity increases, Pike Research intends to further segment both applicationsubsegments and geographical segments. Of particular interest is collecting data forprojects in Latin America, the Middle East, and Africa.

Pike Research encourages direct suggestions and research requests from subscribers.We also welcome microgrid project leads and any insights, updates, additions, and/orcorrections to this database. At present, this Microgrid Deployment Trackerrepresents themost comprehensive and up-to-date database of microgrids in the world. However, thedepth of coverage is best in North America, the worlds leading microgrid market, andweakest in the developing world. Interest in remote/off-grid microgrids is accelerating inthe developing world, and this remote subsegment already represents the largest sheernumber of microgrids (but the smallest average capacity).

1.4 SummaryThe lack of government and industry data on microgrids creates a need for this sort ofdatabase. It is the hope of Pike Research that the Microgrid Deployment Trackerdatabase

provides a good glimpse into an emerging market whose modularity and diversity oftechnologies renders it a constantly moving target. Whether considered as part of thesmart grid or an alternative to other aggregation structures such as virtual power plants,the commercial appeal of microgrids will increase over time. Therefore, the list of projects,companies, and generation and storage options will continue to grow, further increasingthe need for these types of aggregation platforms. These trends, in turn, boost the needfor this tracking product offered by Pike Research, especially for those firms looking toexpand project portfolios and find strategic partners.

If you have questions, additions, or corrections to this database, please contactPeter Asmus, Pike Research Senior Analyst, at [email protected].


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Section 4

SOURCES AND METHODOLOGYPike Researchs industry analysts utilize a variety of research sources in preparing Research Reportssuch as this Microgrid Deployment Tracker. The key component of Pike Researchs analysis is primaryresearch gained from phone and in-person interviews with industry leaders including executives,engineers, and marketing professionals. Analysts are diligent in ensuring that they speakwith representatives from every part of the value chain, including but not limited to technologycompanies, utilities and other service providers, industry associations, government agencies, and theinvestment community.

Additional analysis includes secondary research conducted by Pike Researchs analysts and the firmsstaff of research assistants. This Microgrid Deployment Tracker is the product of over one yearsresearch into the emerging market for microgrids. The sources of data are far too many to mention, butreflect ongoing research activity at Pike Research tapping both original research through interviews andsecondary research to then fill in gaps.

Pike Research is an independent market research firm whose goal is to present an objective, unbiasedview of market opportunities within its coverage areas. The firm is not beholden to any special interestsand is thus able to offer clear, actionable advice to help clients succeed in the industry, unfettered bytechnology hype, political agendas, or emotional factors that are inherent in cleantech markets.

This Microgrid Deployment Tracker will serve as a basis for future forecasts of specific microgridsegments, including those reports published in 2011 on institutional/campus environments, the militarysector, and remote microgrids being deployed primarily in the developing world.

NOTESCAGR refers to compound average annual growth rate, using the formula:

CAGR = (End Year Value Start Year Value)(1/steps)

1.

CAGRs presented in the tables are for the entire timeframe in the title. Where data for fewer years aregiven, the CAGR is for the range presented. Where relevant, CAGRs for shorter timeframes may begiven as well.

Figures are based on the best estimates available at the time of calculation. Annual revenues,shipments, and sales are based on end-of-year figures unless otherwise noted. All values are expressedin year 2011 U.S. dollars unless otherwise noted. Percentages may not add up to 100 due to rounding.


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Published 4Q 2011

2011 Pike Research LLC1320 Pearl Street, Suite 300

Boulder, CO 80302 USATel: +1 303.997.7609

http://www.pikeresearch.com

This publication is provided by Pike Research LLC (Pike). This publication may be used only asexpressly permitted by license from Pike and may not otherwise be reproduced, recorded, photocopied,distributed, displayed, modified, extracted, accessed or used without the express written permission ofPike. Notwithstanding the foregoing, Pike makes no claim to any Government data and other dataobtained from public sources found in this publication (whether or not the owners of such data are notedin this publication). If you do not have a license from Pike covering this publication, please refrain fromaccessing or using this publication. Please contact Pike to obtain a license to this publication.

mgdt 4q11 executive summary

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