Commercial, Microgrids  -  November 30, 2017

GTM: Commercial uses dominate microgrid market

Commercial applications have dominated the basic microgrid market in 2016 according to a new report from GTM Research. 

Overall, reliability and resilience became buzz words following three successive hurricanes in the Gulf of Mexico and Southeastern United States this year, according to the Nov. 30 report, "U.S. Microgrids 2017: Market Drivers, Analysis and Forecast."  Concurrently, the U.S. DOE's grid reliability study named reliability and resilience as priorities in the face of extreme weather.

Following the hurricanes, stories emerged of microgrids enabling buildings to keep their power on. Many of these were basic microgrids, noted Colleen Metelitsa, Grid Edge Analyst and lead author of a new report from GTM Research.

Basic microgrids – differentiated from advanced microgrid systems because they have only one distributed energy resource technology, usually a gas or diesel generator – make up the majority of the microgrid market in Florida and Texas.

Like an advanced microgrid, basic microgrid generators and controls must be able to provide both power and energy services when in grid-connected or island mode and be able to island for at least 24 hours.

GTM says the commercial segment of the market represents 58% of the installed and planned capacity this year, or 154 MW, compared with 21% of capacity, or 57 MW, in 2015 and 29% of capacity, or 132 MW, in 2016. This trend buffered overall commissioned capacity for the year because the military and university microgrid market nearly vanished following a banner 2016, according to the report.

Basic microgrids have been a foundational aspect of the microgrid market going back to the mid-2000s.

"Basic commercial microgrids will remain an important component of the market, but they will face increasing competition from more advanced solutions that provide fuel diversity and more energy and demand management controls," Metelitsa said in a news release announcing the report. GTM said commercial microgrids are positioned for growth as business models are refined and declining costs improve project economics, according to the report.