The emergence of storage as a cost effective addition to a rooftop PV system is set to revolutionize the building distributed generation market, enabling the use of that energy to be optimized. [All Aboard The (Residential) Energy Storage Train!]
Although the term hasn’t yet entered the popular lexicon such home and commercial building owners are in effect deploying a form of nanogrid – the term that has emerged as a subdivision of ‘microgrid’ and is generally understood to refer to a building or individual load level system.
By extension the combination of solar PV and storage at building level will be a major driver of the nanogrid market. In a recent report ‘Solar PV plus Energy Storage Nanogrids’, Navigant Research estimates market growth of PV/storage nanogrids globally from around 500MW in the current year to approximately 14,000MW in 2024. Currently the main market is Europe, but this is expected to be overtaken by Asia Pacific in 2016 growing to almost 6,000MW in 2024, while Europe is projected to grow to 4,300MW. The third largest market, North America, is projected to reach 4,000MW in 2024.
What is a nanogrid?
A nanogrid is technically a modular building block for energy services and thus interconnected can form the basis for microgrids.
Given the preference for direct current (DC) solutions such systems are also commonly referred to as DC microgrids.
In the absence of a consensus definition for a nanogrid, Navigant Research has set criteria which have been vetted with vendors in the space at 100kW for grid-tied systems and 5kW for remote systems not interconnected with a utility grid. However, except for analytical purposes these figures have limited practical value.
For many nanogrid owners, especially of the solar PV/storage type, whether they would want to interconnect to function as a microgrid is open to question, except to participate in the energy market in order to extract financial value from their system investment. To this end aggregators are now appearing in this space, such as Limejump in the UK. [Engerati-Shifting Control In The Energy Landscape] To support such activity in Europe, a standard, the Universal Smart Energy Framework, has been developed. [Engerati-Framework For Smart Energy Futures]
Where there is arguably greater synergy of microgrids and nanogrids is in remote areas which require off-grid electrification where nanogrids could expand into microgrids (or mini-grids as the preferred terminology for such remote systems). In another recent study ‘Market Data: Remote Microgrids and Nanogrids’, Navigant Research estimates the combined remote microgrid and nanogrid market at approximately 1,000MW currently and growing to almost 4,000MW in 2024. The market is led by the Asia Pacific region with 405MW and the Middle East & Africa with 328MW, and together these two regions continue to dominate over the decade growing to approximately 1,400MW and 1,200MW respectively.
According to Navigant Research in many ways, nanogrids appear to be an even more radical rewiring and rethinking of the world’s energy future than microgrids. Nanogrids mimic the innovation that is rising up from the bottom of the pyramid and capturing the imagination of growing numbers of technology vendors and investment capital, as well as ambitious global energy access commitments.
Nanogrid market potential
Certainly there is considerable market potential for nanogrids. In 2024 the total solar PV plus storage nanogrid revenue is projected to reach approximately US$23 billion up from US$1 billion in the current year, while the remote market revenue is projected at US$27 billion up from about US$11 billion.
In the case of solar PV/storage nanogrids growing utility opposition globally to traditional solar PV support mechanisms such as net metering and feed-in tariffs (FITs) helps to build the business case for these. In the case of the remote nanogrid market this is driven largely by energy access initiatives.