New analysis from Frost & Sullivan projects that the Asia Pacific microgrid market will grow at a compound annual growth rate of 32.8% through 2020 – very much in line with the 32.1% projected in a recent study by Navigant Research to 2023. [Engerati-Investment in Microgrids In Asia-Pacific To Near US$31 Billion By 2023]
Frost & Sullivan estimates the 2013 microgrid market revenue at US$84.2 million in countries including Japan, South Korea, Indonesia, Malaysia, The Philippines and Australia. The 2020 market revenue is projected to be US$814.3 million.
Solving power blackouts and rural electrification
Frost & Sullivan notes that microgrids will solve the power blackout issues due to grid failures during natural disasters. The 2011 earthquake and the subsequent power crisis in Japan was an eye-opener for the utilities in the country, to establish a strong and a resilient power infrastructure. The Japanese government is actively promoting the installation of energy storage systems and renewable energy plants in the private sector. [Engerati- Off-Grid Trend is Growing in Japan]
Off-grid rural electrification projects in the Southeast Asia region will give a significant push to the market revenue. Besides, to promote adoption of microgrids in the private and commercial sector, feed-in tariff policies, renewable energy incentives, energy storage subsidies and microgrid funds will aid market growth.
Microgrid market models
Microgrid test beds are analyzing the most feasible business model, state Frost & Sullivan. Private model, community model, utility model and Energy Service Company (ESCO) models are being followed in the region.
A stable financing pattern is non-existent for private parties planning to invest in microgrids. For utility invested projects, external support is extended by Asian Development Bank, World Bank, German Federal Ministry for Economic Corporation and Development (BMZ), and the Netherlands Ministry for Development Cooperation (DGIS).
More commercial microgrids with smart communication protocols will emerge, that can interact with microgrids in the locality to share stored energy among themselves. The challenge in its path is to develop a proper metering and electricity pricing system. Smart grid technologies are so evolved that to build in this level of intelligence into the system is not difficult.
The majority of the microgrid is based on solar PV and diesel generator sets. The share of mini-hydro and biomass driven microgrids is expected to increase between 2014 and 2020.
The major end users of microgrids in the region will be residential communities, remote mines, commercial buildings, factories, military bases, and university and other institutions.
Asia Pacific microgrid vendors
Frost & Sullivan notes that in 2013, the major microgrid solution providers in the region were Fuji Electric, Mitsubishi Electric, ABB Ltd, Siemens A.G., Alstom Ltd, General Electric Co Ltd, Meidensha Corporation, and WEnergy Corporation.