Distributed Energy Resources, Microgrids, Utilities  -  June 16, 2016

Utility distribution microgrid capacity to hit 241 MW in 2024, new report finds

As U.S. utilities work to improve services to customers amid growing interest in clean energy and distributed energy resources, more attention is being paid to the feasibility and value of microgrids. 

According to a new report from Navigant Research, interest and adoption of the systems is expected to continue to accelerate: Deployed U.S. utility distribution microgrid, or UDM, capacity is expected to increase to 241 MW in 2024 from 29 MW in 2015, representing annual revenue of $917 million.

The report examines the U.S. UDM market with a focus on technology and policy trends, customer adoption, utility deployments and the vendor landscape, through 2024. UDMs, Navigant says, are helping utilities across the country explore new market opportunities in the distributed energy resources, or DERs, landscape. Rather than being focused on providing economic value and resiliency benefits to behind-the-meter customers, UDMs can enable utilities to manage DER portfolios to bolster reliability at the distribution level of power service. 

"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,” Peter Asmus, principal research analyst with Navigant said in a June 14 news release about the report. "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.”

While microgrids operated and owned by utilities can serve the distribution grid first and work as a platform for new services, UDM adoption is dependent upon regulatory reforms, natural disasters, and both customer and utility adoption rates of DER, according to the report. Because of this, UDMs are expected to only be deployed for a small portion of the broad addressable market over next decade.

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