The growth in this market is attributed to high demand in the rural electrification sector, in the telecoms sector and in public safety, among other sectors requiring high availability, says Skumanich, speaking at the recent Microgrids West conference held in Santa Rosa, CA.
Microgrids have a ready economic case built, thanks to the high instance of grid support services that can be provided to local utilities. Capital cost avoidance is also a key benefit that microgrids provide to utilities. Continued experience in the market with value stacking for microgrids will help accelerate the adoption rate.
As the cost of batteries continues to decline, more previously uneconomic microgrid projects will become financially feasible. The value of the microgrids to local communities can range from emergency response to improved access to low cost electricity for customers in low population density areas.
Retrofitting non-renewable energy backup systems, like diesel, will also be a driver for microgrids, especially in areas like islands, campuses and military bases where the transportation cost of fuel is high, serving as a multiplier factor in the cost of electricity. Skumanich estimates that 99 percent of the energy for telecom towers comes from diesel, making the market segment a key target for microgrid energy development.
Limits to growth include the perceived one-off design nature of microgrids, along with relatively high capital costs per MW of capacity installed. Streamlined legislation and permitting standards on a state level will be a major boost to microgrids, as it has been to community solar in general.