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On the ground industry intelligence: the microgrid model

Updated: Nov 23, 2021

Daniel Schwab, CEO of Israeli-based Brightmerge, breaks down the role of microgrids in the future of power systems.

Microgrids are self-sufficient energy systems that are designed to control loads and electric generation /distribution onsite. The ability of the microgrids to connect and disconnect from the main central power grid as well as integrate with renewable energy sources like solar is unmatched.

Market Forecast

The projected growth of microgrids from 2020-2025 is 23% CAGR. Studies estimate the microgrid market to be $47.6B in 2025 – up from the $10B in 2019 (Global Market Insights). Historic success in certain case studies like university systems, particularly the 140MW, 20 million square foot system at the University of Texas with a 99.99% reliability. 

Global Value of Microgrids

Microgrids contain the ability to disconnect from the main power grid and operate independently, opening the door for an interconnected global energy system that is innately self-sustaining. The integration of sustainable renewable energy technologies such as wind and solar will further their value and break away at the stress and expense of being dependent on central power grids. 

Why invest in microgrids?

  • Resiliency – Microgrids prove their worth and ability to maintain reliable electricity access even when the central power grid goes down. Community microgrids can keep critical loads online indefinitely during power outages of any length.

  • Real-time price action – Location-based energy pricing uses the efficiency of microgrids to create a comparison of energy prices for consumers, making it easier to manage and monitor. 

  • Reduced O&M – With monitoring software and enhanced integration of the IoT technologies, there can be less work and expense associated with O&M. 

Global Opportunity

1.1 billion people lack access to electricity

95% live in sub-Saharan Africa and parts of southern Asia, creating an increased demand for off-grid electricity that can be sourced in underdeveloped rural areas. Building microgrids in underdeveloped rural areas is the key to creating universal access to electricity and fulfilling global infrastructure.

Global central power grid losses have averaged $200 billion per year over the last decade

Even in developed regions like North America and Europe, microgrids are being adopted to improve power efficiency. Microgrids fix the dependability issues of local energy access and minimize losses from grid failures.

A 2017 IRENA report shows that around 50-60% of global electricity in 2030 will be supplied by off-grid solutions (MIA).

Renewable energy continues to be integrated into the microgrid model. Solar photovoltaic models are cost-effective and relatively easily manageable assets, that when coupled with a storage system, prove to be a viable candidate for microgrids. Microgrids support clean, affordable, and resilient energy generation. 

“Microgrids have the potential to be the industry standard for grid design in the power sector.” Daniel Schwab, CEO Brightmerge

Daniel breaks down the three generations of microgrid control design sophistication and we cover three companies operating in the latest generation. 

Gen 1 is mainly CHP or diesel generator or solar PV with one battery with one main captive consumer.

Gen 2 is currently multiple consumers, multiple producers; however, the control plan is based on estimated average consumption/production patterns adjusted for example by the time of use tariff.

Gen 3 allows for many edge device consumers to many edge device producers communication that enables the system to adjust in real-time based on changes in environment and behavior of systems using an economic dispatch signal. 

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