- Utility distribution microgrids (UDMs) have grown significantly in the past two years and revenue from their implementation is expected to grow from $2.4 billion annually in 2014 to $5.8 billion in 2023, according to a new report from Navigant Research reported by T&D World.
- UDMs are only a small slice of the overall microgrid market, Navigant says, but utilities are increasingly viewing them as an opportunity rather than a threat. UDM growth could be higher than the estimated $5.8 billion, as that number represents a base scenario.
- The consultancy said that government programs set up after severe weather events have "set the stage" for potential regulatory models that allow further microgrid growth.
Utilities have come a long way from viewing microgrids as a threat to their business model, Utility Dive reported in September. Then, New York utility Central Hudson Gas & Electric had just submitted ambitious plans to regulators to own and operate microgrids in the state.
Now, Navigant Research reports that similar actions around the world will make revenue from the utility microgrid market more than double by 2023, under a base scenario. Researchers say governmental incentive changes, like New York's REV, will drive utilities to invest more in microgrids to ensure reliability and integrate distributed energy resources.
The largest growth in utility microgrids has come in public power, grid-tied UDMs, according to the report. T&D World reports that these UDMs are less encumbered than other types by regulatory issues and conflicts between customers and shareholders.