Microgrids offer reliable form of demand response

Boulder, Colo., June 18, 2012 — In their earliest forms, microgrids — in which distributed energy resources operate as a single, autonomous grid either in parallel to or isolated from the existing utility power grid — have been operating for decades. These first generation systems relied on manual controls and were typically fueled by dirty fossil fuel generation, i.e., diesel generators.

In contrast, the new microgrid paradigm relies more on renewable distributed energy generation, employing IT advances, sophisticated software and new islanding inverters to network these resources so that they harmonize as a system.

According to a recent report from Pike Research, this new technology platform offers customers and distribution utilities a host of new ways to bolster reliability and manage variable, bidirectional resources. It also allows for the reduction of demand during peaks with the most reliable form of demand response available on the market — the microgrid.

Microgrid capacity worldwide will reach 4.7 GW by 2017, representing $17.3 billion in annual worldwide revenue, the cleantech market intelligence firm forecasts.

For a variety of reasons, North America (and especially the U.S.) represents the best overall market for microgrids for most application segments — even the lucrative remote/off-grid segment, thanks to Alaska.

Key factors include pockets of poor power quality scattered throughout the U.S. and the structure of markets for distributed energy resources. The latter has stimulated creative aggregation possibilities behind the meter at the retail level of power service. Instead of being driven by grid operators, which is the case in Europe, the microgrid market in the U.S. is largely customer-driven.

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