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Microgrids, Mini-grids, and Nanogrids: An Emerging Energy Access Solution Ecosystem
By Peter Asmus, principal research analyst, Navigant Research
and Adam Wilson, research analyst, Navigant Research
Microgrids, which are popping up like mushrooms globally, continue to be one of the biggest disruptors to the traditional electrical grid. The Microgrid Deployment Tracker 2Q17, in its 12th edition, reinforces this point. It covers seven microgrid market segments and six principal geographies. As of this update, some 1,842 projects (some of which represent country or company portfolios of projects) are listed in the Tracker, with a total capacity of 19,279.4 MW. There are 135 countries represented across all seven continents.
Navigant Research has been tracking the microgrid market since 2009, publishing its first Microgrid Deployment Tracker in 2011. While a dynamic process—due to the lack of reporting requirements for microgrids of any kind and the lingering ambiguity of what is and is not a microgrid—this is the only tally of global deployments microgrids published by any research or government organization. The data collected during this process provides insights into the most common application segments, regional differences, preferred resource mixes, and emerging company partnerships.
Given the confusion of definitions of what is a microgrid—as well as a mini-grid (and even a nanogrid)—a brief rundown on definitions is provided so readers can understand what types of projects are included in the data set—and what is not included.
Here is the federal US Department of Energy (DOE) microgrid definition:
A microgrid is a group of interconnected loads and distributed energy resources within clearly defined electrical boundaries that acts as a single controllable entity with respect to the grid. A microgrid can connect and disconnect from the grid to enable it to operate in both grid-connected or island mode.
Note that this definition implies that such a system is connected to a traditional utility grid. The definition of a mini-grid is the opposite, though there is hardly consensus on the term, even though it is often referred to in regulations in developing economies.
Here is one definition of a mini-grid put forward by The World Bank:
Isolated, small-scale distribution networks typically operating below 11 kilovolts (kV) that provide power to a localized group of customers and produce electricity from small generators, potentially coupled with energy storage system.
To further muddy the waters, Navigant Research can come up with a definition of a nanogrid, a term originated by Lawrence Berkeley National Laboratory.
A small electrical domain connected to the grid of no greater than 100 kW and limited to a single building structure or primary load or a network of off-grid loads not exceeding 5 kW, both categories representing devices (such as DG, batteries, EVs [electric vehicles], and smart loads) capable of islanding and/or energy self-sufficiency through some level of intelligent DER management or controls.
Note that the tally of nanogrids is not included in this Microgrid Deployment Tracker. Since such systems made up the majority of energy access projects funded by institutions such as The World Bank in developing economies in Africa and Asia Pacific in the past, these regions will appear to be under-represented in the data.
As for remote systems (i.e., mini-grids), Navigant Research screens projects to be included in the database according to the following criteria:
- Inclusion of a renewable power generation resource
- Some network controls that allow for optimization of generation and loads
- Inclusion of combined heat and power (CHP)
- In many cases, some form of energy storage
Due to sheer numbers, Navigant Research does not include off-grid pure diesel systems in its data collection for remote microgrids. This is because of practical reasons—these systems alone number in the thousands and obtaining accurate data on such systems is not realistic. Furthermore, once renewables or CHP are added to the resource mix, the control features and need for optimization align with the most innovative vendors seeking opportunity in this space.
With this terminology and some important caveats out of the way, what insights can be drawn from the latest update of the report?
Microgrids by Segment
In terms of overall breakout by market segment, there is a notable shift in market share in this update of the Tracker due in large part to the addition of the sizable commercial and industrial (C&I) portfolio. C&I market share increased from 6% to 16% from the 4Q 2016 Tracker thanks to an additional 2,140.4 MW of capacity. (This increase corresponds with the recent Navigant Research report, C&I Microgrids, that projects this segment will be the fastest growing microgrid market segment over the next decade.) Remote projects added 212.7 MW for a total of 8,708.1 MW and still hold the largest share at 45%.
(Source: Navigant Research)
Microgrids by Region
Looking at the total microgrid capacity in the Tracker, Asia Pacific moved ahead of North America after the region added 1,703.6 MW of total capacity from 4Q 2016, compared to 493.8 MW for North America. North America added 16 more projects compared to Asia Pacific, but several of the Asia Pacific additions were large projects, including a couple as large as 300 MW. Europe remains in a distant third place among the six regions with 1,911.3 MW of total capacity, representing a total increase of only 68.3 MW from 4Q 2016. The Middle East & Africa pushed ahead of Latin America in total microgrid capacity with 801.8 MW compared to 776.9 MW for Latin America. The Middle East & Africa had a strong update with 334.9 MW of new capacity between project updates and newly added projects. While the strong showings in Asia Pacific and Middle East & Africa are not all from newly installed projects, it does show that these regions that commonly lack robust electrical grid infrastructures are hotspots for microgrid development.
(Source: Navigant Research)
Conclusion: The Challenge of Data Collection
Many vendors claim to have large project portfolios, but due to client sensitivity and a desire to remain opaque in business development efforts, did not reveal project details for publication in this report. For example, PowerSecure—recently purchased by Southern Company—claims to have a portfolio equaling 1,500 MW in North America. With the new utility ownership, the company promises to be more forthcoming with project data, but was unable to respond in time for this update. Numerous microgrid developers and integrators have nondisclosure agreements in place. Nevertheless, the microgrid market is inching its way into the mainstream.
But even with data limitations, this data set offers key insights into the evolution of microgrids. The report also ranks countries, US states, and companies in terms of total microgrid capacity and project number. Navigant Research welcomes data from the larger microgrid community worldwide. If interested, please contact Adam Wilson: firstname.lastname@example.org.
Peter Asmus is a principal research analyst contributing to Navigant Research’s Energy Technologies program, with a focus on emerging energy distribution networks models such as nanogrids, microgrids, and virtual power plants. His expertise also includes wind energy, marine hydrokinetic technologies, and renewables generally. Asmus has over 25 years of experience in energy and environmental markets, as an analyst, writer, book author, and consultant.
Asmus is the author of four books covering key energy market issues: Reaping the Wind, Introduction to Energy in California, Reinventing Electric Utilities, and In Search of Environmental Excellence. He is a frequent speaker at industry conferences and is quoted regularly in major publications, including The New York Times, The Washington Post, The Christian Science Monitor, and Reuters. Prior to joining Navigant Research, Asmus was president of Pathfinder Communications, and was previously editor of the Clean Power Journal, assistant editor of California Policy Choices, and has written for a number of energy trade publications, including Windpower Monthly and Electric Utility Week. He holds a BA in journalism from the University of Wisconsin.
Adam Wilson is a research analyst with Navigant Research, contributing to the Energy Technologies program, with experience in software engineering, meteorology, and renewable energy data analysis and research.
Prior to joining Navigant Research, Wilson held an internship at the National Renewable Energy Laboratory, where he helped develop an offshore wind database and levelized cost of energy trajectories for wind technologies. He has also worked as a software engineer and meteorologist at Northrop Grumman. Wilson’s studies have focused on wind energy technology and design in addition to solar engineering design. He holds an MS in mechanical engineering from the University of Colorado Denver and a BS in meteorology-climatology from the University of Nebraska-Lincoln.