The absence of grid connectivity in isolated and rural areas — especially in developing countries — is forcing end users to retrofit or replace the diesel generator set with cost-effective and efficient hybrid power systems. [Engerati- Clean energy hybrid mini-grids in remote areas: an efficient cost effective solution.]
Creating a reliable power supply
Africa, for instance, has realised the importance of adopting hybrid power solutions in order to attain a reliable power supply. This is according to Guillermo Elum, Sales and Marketing Director, Himoinsa, who spoke to Engerati at the Africa Energy Forum. While it is important to harness valuable and rich renewable energy sources for power, it is important that power sectors create the right mix of generation and integrate systems efficiently and effectively, explains Elum. He says, “Storage solutions are still rather difficult to deploy and therefore, it is important to combine technology and create a hybrid solution.” [Engerati-Hybrid Solutions and Skills Transfer is Critical for Africa’s Power Sector.]
Hybrid power system manufacturers across the globe can leverage this trend while also targeting potential growth segments such as resorts, remote tourist locations and off-grid residential communities to succeed in the market. [Engerati- Hybrid systems: what to look out for in 2014.]
New analysis from Frost & Sullivan, Global Hybrid Power Systems Market, finds that the market earned revenues of US$358.4 million in 2013 and estimates this to reach US$552.2 million in 2018 at a compound annual growth rate of nine percent. Latin America and Africa are expected to experience the fastest growth.
"Industrial penetration into off-grid remote areas is boosting power requirements, driving the installation of hybrid power systems," says Frost & Sullivan Energy & Environmental Research Analyst Ashay Abbhi. "Telecom sector penetration is particularly strong and will therefore contribute most to global market revenues." [Engerati-Middle East Telecommunication Tower Operators Turn to Microgrids for Reliable Power.]
Hybrid power system needs proper legislation
However, there is a lack of clarity surrounding subsidies and other incentives provided for hybrid power systems. This is creating uncertainty amongst end users and discouraging some from adopting the solution.
Proper legislation governing the installation of hybrid power systems too is reducing market potential. For instance, solar and wind power subsidies are extended to hybrid power systems but do not have legislative literature with specific technical requirements to support it.
"Capital costs will fall further once clear legislations regarding subsidies provided for hybrid power systems are defined by governments," noted Abbhi. "The standardization of modular hybrid power systems will also lower capital costs substantially and power the use of these solutions globally."
In addition, the relatively higher capital costs of hybrid power systems compared to diesel generator sets, and the increased costs incurred while transporting these solutions to far-flung areas can deter uptake.
Nevertheless, cost may become less of a concern among customers with the gradual reduction in the prices of solar modules and wind turbines, which are the dominant renewable energy sources for hybrid power generation. The cost of installation and equipment required for the use of hybrid power systems is decreasing as well.