3Q 2019

Microgrid Innovation in the Circumpolar Arctic

Lessons for Developing World Markets

Remote regions of the world such as the circumpolar Arctic, once viewed as disadvantaged due to a lack of conventional grid infrastructure, have proven to be fertile ground for microgrid innovation. This innovation flows from both the challenges associated with providing reliable electricity without the benefit of traditional transmission and distribution systems and from the economic pressures associated with the high cost of delivered energy in markets with many areas of relatively low per capita income.

The circumpolar Arctic is made up of the eight nations with territories above the Arctic Circle, including the US (Alaska), Canada, Russia, Greenland, Iceland, Norway, Sweden, and Finland. Sweden, Norway, Finland, and parts of the Russian Arctic are grid connected to the larger European Union energy network or the Russian National Energy Grid, and do not rely on microgrids. Alaska, Greenland, the Canadian Arctic, and large portions of the Russian Arctic are not interconnected with a traditional power grid. Over 1,500 communities with a total population exceeding 1.5 million inhabitants across this region rely on locally generated power primarily from microgrids.

This white paper—codeveloped by the University of Alaska and Guidehouse Insights—provides updated market data on the scale, capacity, and resources deployed in microgrids throughout the circumpolar Arctic. It compares these microgrid characteristics to global market trends, emphasizing remote microgrids—the largest market opportunity for microgrids. It concludes with a series of lessons learned and recommendations to guide future microgrid development globally. This paper’s findings are especially relevant to developing nations exploring alternatives to traditional utility models focused on centralized grid infrastructure.
Pages 31
Tables | Charts | Figures 12
  • Defines microgrids (and regional grids) which lead much of the circumpolar Arctic delivery of electricity service to remote communities and industry.
  • Why does Alaska have more microgrids—and the largest amount of microgrid capacity—than any other US state?
  • How do microgrids in the circumpolar Arctic compare to global market in terms of distributed energy resources (DER) mix?
  • How does the DER mix in Alaska microgrids compare to other US states?
  • Why have both deregulated and regulated markets supported renewable energy adoption here based on economics?
  • How do Alaska, Russia, Canada, and Greenland stack up in terms of microgrid capacity?
  • Why do remote microgrids exhibit the widest array of DER technologies of any microgrid market segment?
  • What key lessons learned on thermal energy optimization achieved in Alaska can translate to other developing world markets? 
  • Microgrid developers
  • Microgrid component suppliers
  • Federal and state policymakers
  • Global energy access advocates
  • International funding agencies
  • Private financial institutions
  • Universities and research organizations
  • Investor community

1. Introduction

1.1   Setting the Stage: Microgrids in the Circumpolar Arctic

1.2   Where Is the Circumpolar Arctic?

1.2.1   Why Alaska Is a World Leader in Microgrids

1.2.2   Majority of Energy Services Delivered Through Microgrids

1.2.3   Microgrids Shifting Toward Renewable Energy to Reduce Costs

2. What Does the Circumpolar Microgrid Portfolio Look Like?

2.1   Factors Driving Renewable Energy Growth in the Circumpolar Arctic

2.1.1   Resilience May Be a Matter of Life and Death Due to Harsh Climatic Conditions

2.1.2   Deregulated and Regulated Markets Both Support Microgrid Development   Policies and Programs Supporting Distributed Energy Resources and Microgrid Development in Alaska

2.1.3   Regional Breakdown by Country   Canada   Russia   Greenland   Alaska, US

2.1.4   DER Resource Mix for the Arctic Region

3. The Circumpolar Arctic Microgrid Portfolio Compared to the Rest of the World

3.1   Global Microgrid Market Overview

3.1.1   Microgrid Market Segments

3.1.2   Remote Microgrid DER Characteristics

4. Lessons Learned from Arctic Region Microgrids

4.1   Important Lessons Learned from Circumpolar Arctic Microgrids

4.1.1   Robust and Simple Designs Work Best

4.1.2   Modest Inclusion of Energy Storage Helps Keeps Costs Contained

4.1.3   Thermal Energy Innovation is Vital to Project Success

4.1.4   Key Role for Wind Technology

4.1.5   Myth Busting the Idea that Solar Cannot Work in the Circumpolar Arctic

4.1.6   The All-of-the-Above Approach to Resource Development

4.1.7   Local Stakeholder Buy-In Key to Project Success

5. Table of Contents

6. Table of Charts and Figures

7. Scope of Study, Sources and Methodology
  • Top 10 US States for Microgrid Capacity: 2Q 2019
  • Microgrid DER Resource Mixture for the Top 10 US States: 2Q 2019
  • Microgrid Project Market Share, Circumpolar Arctic: 2Q 2019
  • Microgrid Capacity Market Share, Circumpolar Arctic: 2Q 2019
  • Circumpolar Arctic Microgrid DER Capacity Market Share: 2Q 2019
  • Total Microgrid Power Capacity Market Share by Region, World Markets: 2Q 2019
  • Total Microgrid Power Capacity Market Share by Segment, World Markets: 2Q 2019
  • Remote Microgrid DER Market Shares, World Markets: 2Q 2019
  • Circumpolar Arctic Remote Communities Microgrid Map
  • Alaska’s Railbelt Grid – Linked and Nested Microgrids
  • Residential Customers and Energy Capacity Sold by Utility Type, Alaska: 2013
  • Circumpolar Arctic Regional Grids