Remote Microgrid Players Lead on Innovation Out of Pure Necessity

Remote microgrids—the most mature of all microgrid segments—typically do not connect to a traditional, larger grid, and therefore operate in island mode 24/7. Larger vendors, such as Schneider Electric, focus on both grid-tied and remote microgrids; however, there are many companies that see this remote segment as the best global market opportunity. 

According to Guidehouse Insights’ most recent Microgrid Deployment Tracker, these remote microgrids make up 42% of the total global market. Many argue that these systems were the original microgrids, and rightly so. In 2018, the global market for remote microgrids represented about $3 billion in implementation spending, according to Guidehouse Insights’ most recent forecast. That annual tally is expected to jump to more than $10.2 billion by 2027, with the leading global region being Asia Pacific. 

Remote Microgrids Integrate Diverse Renewable Resources

Unlike many of their grid-tied counterparts, remote microgrids have natural incentives to integrate renewable energy since these free fuel resources of lower ongoing operation costs. How is that so? Diesel fuel prices in these remote markets are incredibly high due to transportation costs. As a result, many remote microgrids are designed to reduce diesel fuel consumption by integrating the widest diversity of renewable resources of any other segment. 

Guidehouse Insights recently published its Leaderboard report ranking remote microgrid players. The list of companies included many familiar names including ABB, the one large technology company whose portfolio has been dominated by remote projects as well as large-scale mines in the past. ENGIE was the leader, primarily since recent acquisitions (including an Italian controls vendor) allowed it to capture revenue across the entire remote microgrid value chain (EDF, also of France, ranked in the Top 5 as well). A few of the smaller, but equally interesting competitors, include the following:

• Optimal Power Solutions of Australia has 20 years of success throughout the Asia Pacific region, with a portfolio consisting of over 1,000 microgrids in Australia, Indonesia, Malaysia, and India. It also has made recent forays into China and Japan.
  

• Caterpillar, a generator manufacturer, is using its massive global dealer network to develop microgrids and is now offering its own solar PV systems and partnering with energy storage companies to develop remote microgrids. 
  

• Husk Power focused on biomass in India but is now expanding into other renewables and geographies. It offers one of the lowest cost remote microgrids available. 
  

• PowerHive is plowing new ground in Africa by offering tools to identify viable sites, optimize and control resources, and meter products to address the all-important goal of accurate revenue collection for remote energy access microgrids.
  

• OutBack Power, one of the few companies to focus on remote residential opportunities in North America, has product sales in every major region of the world. Its smart inverter and control products are a long-standing mainstay in this space. 
  

Among the challengers, PowerGen Renewables has staked out significant thought leadership in market reforms promoting remote microgrids approach focused on privatization of electricity supply. Larsen & Toubro may have sold off its grid automation business to Schneider Electric, but it is rapidly scaling up its remote microgrid construction business in a country that represents one of the best markets in the world (India) due to the notorious poor reliability of its existing distribution networks. 

Barriers Remain

Though remote microgrids represent the largest market segment, it still faces significant barriers. Along with extreme logistical challenges are government subsidies for incumbent diesel generators, obscuring an otherwise clear microgrid value proposition for integration of renewable energy.