An alternative and compelling option to traditional energy generation and distribution is being offered by Microgrids, utilizing smart grid technologies to enable integrated control of distributed power generation and energy storage assets either in parallel to or “islanded” from the utility power grid. Based on a new report from Pike Research, it is estimated that there are more than 140 modern microgrid projects totaling over 1.1 gigawatts (GW) of capacity worldwide and if legacy petrochemical and university campus systems are included, it will amount to 1.8 GW).

The global revenue from microgrid systems is predicted by the cleantech market intelligence firm to experience a 64 percent compound annual growth rate (CAGR) over the next several years, an increase from $144.2 million in 2011 to $1.7 billion by 2016, under a base case forecast scenario. Under a more aggressive forecast scenario that assumes the alignment of regulatory structures, industry priorities, and public policy supports, microgrid revenues could surpass $3 billion during the same period.

In a press release, Senior Analyst, Peter Asmus, said, “Microgrids will be deployed in all shapes and sizes. Microgrid deployments utilize a wide variety of renewable and fossil fuel-based power sources, new storage options, leading software innovations, and groundbreaking controls to aggregate distributed energy to provide greater value to end-use customers and host distribution utilities. These modular aggregation platforms can be applied to a full range of application segments, including commercial and industrial sites, university campuses, remote off-grid communities, and military microgrids.”

Pike Research’s (News - Alert) report entitled “Microgrids” provides a detailed analysis of the emerging global market for microgrids and the technologies that will provide greater flexibility and diversity in the generation, storage, and distribution of electricity. The study also includes a detailed examination of policy and regulatory drivers, technology issues, business models, key industry players that are focused on realizing the microgrid vision.

Asmus went on to say that despite the significant promise and industry excitement over the concept, few fully commercialized state-of-the-art microgrids with significant generation capacity are actually up and running in North America, the world’s leading market for microgrids.

Industry leaders and other advocates are wrestling to find the appropriate business models and regulatory structures for decentralizing the power distribution infrastructure in a quest to integrate renewable energy while adding greater reliability, security, and self-healing capabilities to electricity distribution, especially in times of emergencies and larger grid outages.