North America Microgrid

North America Microgrid

The North America Microgrid Market is growing at a steady rate of 20.3% in the forecast period due to the growing energy demand for clean energy in the region. A rise in the market for renewable energy owing to the rising concern of greenhouse gas emissions and government policies to increase the share of renewables in mixed energy, coupled with reducing the cost, contribute to the growing demand for microgrids. As per the IEA, amid the global pandemic, 278 gigawatts of renewable energy were added in 2020, and there was a 45% increase from the year before, the biggest increase in over 20 years. Furthermore, communities and businesses established clean energy goals to conserve energy and reduce the impact of power generation on the environment. Microgrids use various green power production technologies and equipment, such as microturbines, combustion turbines, hybrid systems, and wind systems. These technologies are integrated with microgrids to reduce the carbon footprint of electricity generation on the environment. Governments of several countries, such as the US, Canada, and the rest of North America, are taking initiatives to reduce the carbon footprints on the environment. For instance, in 2016, the Government of California (US) formulated legislation, SB 32 Bill, to reduce carbon footprints on the environment resulting from power generation. The country is expected to reduce its carbon pollution to at least 40% below the carbon pollution levels in 1990 by 2030. Thus, the rising awareness about clean energy has led to the increased adoption of microgrids in the region.

• Based on component, the North America microgrid market is segmented into Software & services, and Hardware. Amongst components, the hardware segment dominated the market and is expected to behave this way in the forecast period. The demand for hardware such as protection relays, microgrid controllers, and controllers of solar inverters, battery inverters, diesel gensets, and other DERs is emerging on account of the mandates by the government for renewable energy in the power generation mix. The need to change the old, aging electricity infrastructure requires new software and services. Also, the demand for managed services is witnessing a sharp rise across North America.
• Based on the type, the market is segmented into AC, DC, and Hybrid. The DC segment has the highest market share and is expected to maintain its position in the forecast period. DC Microgrids are being deployed globally as distributed energy, solar PV, energy storage, consumer electronics, and LED lights are inherently DC resources. As these devices comprise a large share of generation and demand, it is only natural to string them together on DC Microgrids. There are enormous opportunities for efficiency and system cost gains, as shown by research institutions, industrial facilities, and even DC homes. DC Microgrids DC Home Solar solutions are the primary means of rural electrification for the billion people who do not yet have grid electricity. For instance, in June 2023, Kirtland Air Force Base (KAFB) is taking another step on its energy resilience journey by announcing a new direct current (DC) microgrid project. The US Air Force Research Laboratory (AFRL) recently awarded a USD 4.8 million contract to Concurrent Technologies Corporation (CTC) to develop and implement DC microgrid technologies on the base.
• Based on connectivity, the North America microgrid market is segmented into grid-connected and off-grid. Amongst connectivity, the grid-connected segment has the highest market in 2023 and is expected to dominate in the forecast period. Off-grid microgrid systems are gaining popularity as the need for power outages in remote areas grows. There is an increasing demand for power infrastructure in rural areas, due to which it is easiest to install off-grid microgrids to enhance the already built-up infrastructures in these regions. Moreover, with the need to decentralize energy distribution and technologies and reduce grid reliability, the demand for off-grid connection is on the rise.
• Based on power source, the North American microgrid market is segmented into Combined heat and power, diesel generators, natural gas, solar PV, fuel cells, and others. The natural gas segment generated revenue of USD 3,120.9 million in 2023 and is expected to grow at a CAGR of 21.2% during the forecast period to reach a market valuation of USD 16,425.69 million by 2032F. Government policies aim to encourage the integration of efficient and sustainable power generation to enhance the natural gas (NG) powered microgrid infrastructure. The transition towards renewable energy sources and reducing carbon emissions is driving the adoption of natural gas microgrids. Natural gas generators play a crucial role in three main applications within a microgrid: combined heat and power (CHP), energy or load management, and as a backup to a larger system that may include solar, wind, storage, or other intermittent power sources. For example, natural gas production in the United States has doubled from 2005 to 2022, re-establishing the U.S. as a global leader in natural gas production. In 2022, U.S. production grew by 3.6% to a new all-time high of 94.7 billion cubic feet per day (BCF/d). This new record eclipsed the previous record set in 2021. The U.S. retained a 24.2% share of global production, followed by Russia (15.3% share) and Iran (6.4% share). Furthermore, as per a study by Microgrid Knowledge, natural gas-fired microgrids can provide a continuous power supply with lower emissions and competitive prices.
• Based on storage, the North America microgrid market is segmented into Lithium-ion, Lead Acid, Flow Battery, Flywheels, and Others. Amongst storage devices, the lithium-ion segment of the North American microgrid market was valued at USD 6,428.98 million in 2023 and is likely to reach USD 31,257.27 million by 2027 and is growing at a CAGR of 20.1% from 2024-2032. Batteries are crucial in enhancing microgrid systems' performance, efficiency, and reliability. The utilization of lithium-ion (Li-ion) batteries in remote microgrids has been hindered by their high cost. These batteries necessitate specific packaging and overcharge protection circuits, costing a cost exceeding US$600/kWh. Nevertheless, the declining prices of lithium-ion batteries in recent years have made their integration feasible and are driving the expansion of the microgrid market. For instance, in 2023, according to Bloomberg NEF, in 2013, the price of a lithium-ion battery pack was USD 780/kWh, which has decreased to USD 139/kWh in 2023. These storage devices can minimize fuel consumption. Until recently, lead-acid storage devices were considered the most economical and popular. Recently, lithium-ion storage devices have gained popularity.
• Based on application, the North America microgrid market is segmented into Healthcare, Educational Institutes, Military, Utility, Industrial/ Commercial, Remote, and Others. Amongst applications, the remote segment has dominated the market in 2023 and is expected to dominate in the forecast period owing to the focus on energy resilience and reliability in isolated areas. The rising adoption of renewable energy sources like solar and wind power in remote regions fuels the growth of the remote segment. Furthermore, favorable government policies and initiatives promote the deployment of microgrids in remote and off-grid areas to enhance energy security and resilience.
• The United States market for microgrids is experiencing significant growth, driven by a powerful combination such as the growing demand for clean energy in the country by various industries such as manufacturing, construction, and predominantly automotive, which includes the adoption of electric vehicles in the country. The United States ranks as the third most prominent nation in electric vehicle adoption. Renowned electric vehicle manufacturers like Tesla, GM, and Ford have played a significant role in this achievement. These companies have unveiled numerous upcoming models in the country, effectively meeting the growing demand for clean energy by incorporating microgrids. Additionally, the federal government of the United States recently introduced a program named "The Grid Resilience and Innovation Partnerships (GRIP)" under the guidance of US Secretary of Energy Jennifer Granholm and White House Infrastructure Implementation Coordinator Mitch Landrieu. This fund of USD 10.5 billion program to “strengthen grid resilience and reliability” across the US includes funding for microgrids and other projects that will integrate battery storage technologies.
• Some of the major players operating in the market include ABB, General Electric, Siemens AG, Eaton Corporation Inc., Schneider Electric SE, Honeywell International Inc., Caterpillar, Toshiba Corporation, Hitachi Energy Ltd, and General Microgrids.