The market for microgrids at universities, corporate headquarters, hospitals, and military bases will grow by 164 percent by 2017, according to new report by Pike Research.
Microgrids allow campus-scale facilities to better manage distributed energy sources and achieve greater control in meeting energy demands. Pike Research says the campus microgrid market could reach $777 million by 2017 rising in capacity from 620 MW to 1.6 GW.
While universities and educational institutions currently lead the microgrid market in terms of actual online operating capacity, interest in microgrids is growing for all organizations that maintain campuses, says Peter Asmus, senior analyst and report author with Pike Research.
"Microgrids offer a compelling opportunity for facilities managers in single-owner campuses to take more direct control of their electricity supply," said Asmus. "Energy and facilities managers for educational institutions, corporate campuses, medical campuses, and other campuses are increasingly turning to distributed energy generation, both from renewable and fossil fuel sources."
Accounting for nearly 95% market share, the U.S leads globally in microgrids because of several factors including an uneven power distribution where new technologies can offer greater value to both end-use customers and utilities.
Asmus says utilities have historically been opposed to microgrids due to their wish maintain control over grid operations and potential safety concerns. But recently the IEEE published a standard to ensure "safe-islanding" for a microgrid to continue operation and protect distribution line workers in the event of disruption in the larger grid.
Furthermore, some utilities perceive microgrids as a threat in promoting energy independence from the larger utility grid which could potentially disrupt their power resources and ability to manage loads.
But a handful of utilities have recently embraced microgrids for pilot projects including American Electric Power (AEP), Sacramento Municipal Utility District (SMUD), BC Hydro, and San Diego Gas & Electric (SDG&E).
SDG&E is working with UC San Diego as the university deployed a 42 MW microgrid, considered one of the most complex incorporating solar PV, fuel cells, advanced storage, and legacy natural gas-fired turbines. The microgrid operates as demand response resource for SDG&E, shrinking UCSD’s need for grid electricity by 40% during peak periods of demand.
Notably, the U.S. military has been active in microgrid development -- with a partnership with GE at the Twentynine Palms facility, the world's largest Marine Corps base, and across U.S. Army installations -- in oder to reach mandates for reducing energy consumption as well as securing a reliable power source for mission-critical functions.