EXECUTIVE SUMMARY: Microgrid Deployment Tracker 4Q11

Commercial, Community, Institutional, Military, and Remote Microgrids: Active Projects by World Region
NOTE: This document is a free excerpt of a larger report. If you are interested in purchasing the full report, please contact Pike Research at sales@pikeresearch.com. Published 4Q 2011

Peter Asmus Senior Analyst Brittany Gibson Research Associate

Microgrid Deployment Tracker 4Q11

Section 1
EXECUTIVE SUMMARY
1.1 Introduction
Pike Research has developed this Microgrid Deployment Tracker 4Q11 as a database upon which to build forecasts of future capacity, investment flows, and private sector revenue for the global microgrid market. Given the lack of maturity in this market, the data are highly diverse (and often incomplete). Nevertheless, the goal of this database is to provide the best up-to-date summary of microgrid projects globally. It is a working dataset that will be periodically updated as new projects are announced and actually come online. In addition, information on power generation sources, companies, and institutions involved will be updated as details come to light through Pike Researchs ongoing research into this highly dynamic market. This database is the second edition of the Microgrid Deployment Tracker, updated as of December 2011. Deeper dives into the three most active microgrid segments institutional/campus environment, military, and remote systems have uncovered new projects and new market players. The result is a view of a much more robust microgrid market than was the case in 2009, when Pike Research first began to develop the worlds only database and commercial analysis of this corner of the smart grid movement.

1.2

Microgrid Deployment Tracker Updates

This update to the Pike Research Microgrid Deployment Tracker reveals fresh data that turns some previous assumptions about the global microgrid market on its head. While North America is still the worlds most promising market for grid-tied projects, the region also ranks highly in the remote microgrid segment, thanks to Alaska. This remote microgrid segment is far more advanced and diverse than previously reported. Pike Research has identified three primary subsegments within the remote microgrid market village power systems, weak grid island systems, and remote industrial mine systems, (along with a mobile military microgrid subsegment). Each of the three major remote microgrid subsegments represents a billion-dollar plus market by 2017. The inclusion of previously undiscovered capacity within the remote microgrid segment dramatically increases the projected size of the worlds microgrid market especially in terms of revenue and potential investment. Unlike the grid-tied microgrids profiled by Pike Research, remote microgrids boast higher revenue per capacity. Why? These systems include revenue from generation sources. In contrast, revenue forecasts for grid-tied systems have up to this point in time been limited to networking, controls, storage, and other hardware and software necessary to link up legacy assets into smart grid networks. As microgrids mature into a commercial enterprise, the grid-tied sector will more closely mimic the revenue investment ratios exemplified by remote microgrids. The demand for integrating renewable distributed energy generation (RDEG) resources into power systems isolated from reliable grids represents the most compelling value proposition for microgrids, especially with military operations. Moreover, the need for power to fulfill the most basic humanitarian needs is driving remote microgrids into the mainstream as a preferred bottom-of-the-pyramid (BOP) economic development platform.

2011 Pike Research LLC. All Rights Reserved. This publication may be used only as expressly permitted by license from Pike Research LLC and may not otherwise be accessed or used, without the express written permission of Pike Research LLC.

Microgrid Deployment Tracker 4Q11

In the past, it was safe to say that the majority of projects in the Microgrid Deployment Tracker database were pilot projects and/or research-related experiments. This perception is slowly fading away. The year 2011 signaled a shift, as some of the first large-scale commercial microgrid projects reached significant milestones. With the adoption of the IEEE P1547.4 islanding standards in July 2011, the shift from pilot validation projects to fully commercial projects will only accelerate. Since 2009, a handful of large commercially viable projects have come to light, especially in California as platforms for aggregation of distributed renewable resources and in New York with combined heat and power (CHP) units as anchor technologies. Globally, the rising costs of diesel fuel and corresponding drop in solar photovoltaic (PV) prices have signaled the promise of a flurry of new commercial activity regarding remote microgrids throughout the developing world. Depending upon ones definition, remote microgrids could clearly dominate the global microgrid market in terms of revenues by 2017. It must be noted that not all of the projects profiled in this database meet the Pike Research and/or U.S. Department of Energy (DOE) definitions of a microgrid though the vast majority do. Projects that do not meet the Pike Research/DOE definitions were included due to their noteworthy features and/or key contributions to the development of technologies critical to the success of the overall microgrid market. Many of these projects do not have official designations. Therefore, those subscribers researching specific projects are urged to utilize the various different search criteria (e.g. by segment or region). Pike Research does not maintain that this database is complete, but it does represent a good faith effort to track all notable microgrids. The following types of projects have been identified through direct interviews, secondary research, and leads provided by key contacts within the smart grid and renewable energy industries: Commercial/Industrial Community/Utility Institutional/Campus Environment Military Remote Systems Along with these different segments, the database can also be searched by region of the world: Asia Pacific Europe North America Rest of World (including Latin America)

2011 Pike Research LLC. All Rights Reserved. This publication may be used only as expressly permitted by license from Pike Research LLC and may not otherwise be accessed or used, without the express written permission of Pike Research LLC.

Microgrid Deployment Tracker 4Q11

1.3 Future of the Microgrid Deployment Tracker
As market activity increases, Pike Research intends to further segment both application subsegments and geographical segments. Of particular interest is collecting data for projects in Latin America, the Middle East, and Africa. Pike Research encourages direct suggestions and research requests from subscribers. We also welcome microgrid project leads and any insights, updates, additions, and/or corrections to this database. At present, this Microgrid Deployment Tracker represents the most comprehensive and up-to-date database of microgrids in the world. However, the depth of coverage is best in North America, the worlds leading microgrid market, and weakest in the developing world. Interest in remote/off-grid microgrids is accelerating in the developing world, and this remote subsegment already represents the largest sheer number of microgrids (but the smallest average capacity).

1.4

Summary
The lack of government and industry data on microgrids creates a need for this sort of database. It is the hope of Pike Research that the Microgrid Deployment Tracker database provides a good glimpse into an emerging market whose modularity and diversity of technologies renders it a constantly moving target. Whether considered as part of the smart grid or an alternative to other aggregation structures such as virtual power plants, the commercial appeal of microgrids will increase over time. Therefore, the list of projects, companies, and generation and storage options will continue to grow, further increasing the need for these types of aggregation platforms. These trends, in turn, boost the need for this tracking product offered by Pike Research, especially for those firms looking to expand project portfolios and find strategic partners. If you have questions, additions, or corrections to this database, please contact Peter Asmus, Pike Research Senior Analyst, at peter.asmus@pikeresearch.com.

2011 Pike Research LLC. All Rights Reserved. This publication may be used only as expressly permitted by license from Pike Research LLC and may not otherwise be accessed or used, without the express written permission of Pike Research LLC.

Microgrid Deployment Tracker 4Q11

Section 4
SOURCES AND METHODOLOGY
Pike Researchs industry analysts utilize a variety of research sources in preparing Research Reports such as this Microgrid Deployment Tracker. The key component of Pike Researchs analysis is primary research gained from phone and in-person interviews with industry leaders including executives, engineers, and marketing professionals. Analysts are diligent in ensuring that they speak with representatives from every part of the value chain, including but not limited to technology companies, utilities and other service providers, industry associations, government agencies, and the investment community. Additional analysis includes secondary research conducted by Pike Researchs analysts and the firms staff of research assistants. This Microgrid Deployment Tracker is the product of over one years research into the emerging market for microgrids. The sources of data are far too many to mention, but reflect ongoing research activity at Pike Research tapping both original research through interviews and secondary research to then fill in gaps. Pike Research is an independent market research firm whose goal is to present an objective, unbiased view of market opportunities within its coverage areas. The firm is not beholden to any special interests and is thus able to offer clear, actionable advice to help clients succeed in the industry, unfettered by technology hype, political agendas, or emotional factors that are inherent in cleantech markets. This Microgrid Deployment Tracker will serve as a basis for future forecasts of specific microgrid segments, including those reports published in 2011 on institutional/campus environments, the military sector, and remote microgrids being deployed primarily in the developing world.

NOTES
CAGR refers to compound average annual growth rate, using the formula: CAGR = (End Year Value Start Year Value)(1/steps) 1. CAGRs presented in the tables are for the entire timeframe in the title. Where data for fewer years are given, the CAGR is for the range presented. Where relevant, CAGRs for shorter timeframes may be given as well. Figures are based on the best estimates available at the time of calculation. Annual revenues, shipments, and sales are based on end-of-year figures unless otherwise noted. All values are expressed in year 2011 U.S. dollars unless otherwise noted. Percentages may not add up to 100 due to rounding.

2011 Pike Research LLC. All Rights Reserved. This publication may be used only as expressly permitted by license from Pike Research LLC and may not otherwise be accessed or used, without the express written permission of Pike Research LLC.

Microgrid Deployment Tracker 4Q11

Published 4Q 2011 2011 Pike Research LLC 1320 Pearl Street, Suite 300 Boulder, CO 80302 USA Tel: +1 303.997.7609 http://www.pikeresearch.com

This publication is provided by Pike Research LLC (Pike). This publication may be used only as expressly permitted by license from Pike and may not otherwise be reproduced, recorded, photocopied, distributed, displayed, modified, extracted, accessed or used without the express written permission of Pike. Notwithstanding the foregoing, Pike makes no claim to any Government data and other data obtained from public sources found in this publication (whether or not the owners of such data are noted in this publication). If you do not have a license from Pike covering this publication, please refrain from accessing or using this publication. Please contact Pike to obtain a license to this publication.

2011 Pike Research LLC. All Rights Reserved. This publication may be used only as expressly permitted by license from Pike Research LLC and may not otherwise be accessed or used, without the express written permission of Pike Research LLC.