More Related Content Similar to [Smart Grid Market Research] Microgrids: The BRICS Opportunity - Zpryme Smart Grid Insights (20) More from Zpryme Research & Consulting, LLC (20) [Smart Grid Market Research] Microgrids: The BRICS Opportunity - Zpryme Smart Grid Insights1. SMART GRID INSIGHTS
JULY 2012
SMARTGRIDRESEARCH.ORG
INTELLIGENT RESEARCH FOR AN INTELLIGENT MARKETTM
PREMIUM
MICROGRIDS: THE BRICS
INTELLIGENCE BY ZPRYME | ZPRYME.COM
© 2012 ZPRYME RESEARCH & CONSULTING, LLC. ALL RIGHTS RESERVED. OPPORTUNITY
2. Table of Contents
Executive Summary ................................................................. 2
Benefits of Microgrids .............................................................. 4
Global Market Value Forecasts.............................................. 6
Key Players ............................................................................... 7
Challenges & Barriers to the Microgrid Market ..................... 9
Key Microgrid Solutions ......................................................... 10
BRICS: The Microgrid Opportunity ........................................ 12
BRICS Nations: Drivers........................................................... 12
Major End-Use Industries for Microgrids ............................. 14
Brazil ........................................................................................ 16
Brazil: Drivers .......................................................................... 16
Brazil: Microgrid Market Forecast ....................................... 16
Brazil: Projects ........................................................................ 17
Russia ...................................................................................... 19
Russia: Drivers ........................................................................ 19
Russia: Microgrid Market Forecast ..................................... 20
Russia: Projects ...................................................................... 20
India ........................................................................................ 21
India: Drivers .......................................................................... 21
India: Microgrid Market Forecast ....................................... 22
India: Projects ........................................................................ 22
China....................................................................................... 24 Special Thanks
China: Drivers ........................................................................ 24
China: Microgrid Market Forecast ..................................... 25
China: Projects ...................................................................... 25 Thierry Godart
South Africa ............................................................................ 27 Siemens, President of Smart Grid Division, U.S.
South Africa: Drivers ............................................................. 27 www.siemens.com
South Africa: Microgrid Market Forecast .......................... 28
Jeff Lund
South Africa: Projects ........................................................... 28
Echelon, VP of Business Development
BRICS: Microgrid Outlook ...................................................... 29
www.echelon.com
Q&A with Echelon .................................................................. 31
Q&A with Siemens ................................................................. 33
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3. Executive Summary Global Microgrids Market Value Forecast
CAGR = 13%
2012 to 2020 (in US billions)
Many parts of the world are without grid-connected (figure 1, source: Zpryme)
electrical power. As their population and standard of $15
$13.40
living increase, so will their demand for energy, and a $12.01
suitable system for providing that electricity to them. The $12 $10.82
current energy system is unable to offer connectivity to $9.57
many of these remote locations for economic or logistical $9 $8.33
reasons. One solution to providing energy to these remote $7.50
$6.90
locations is to install microgrids. Several large firms have $6.20
$6
expanded operations into the microgrid marketplace, $4.95
while niche firms have developed customized programs
specific to the market. $3
The global microgrids market is projected to reach $0
$4.95 billion in 2012. By 2020, the global microgrid 2012 2013 2014 2015 2016 2017 2018 2019 2020
market is projected to reach $13.40 billion. The
market is projected to grow at a compound annual
growth rate of 13% from 2012 to 2020. BRICS Microgrids Market Value Forecast
CAGR = 25%
2012 to 2020 (in US billions)
In 2012, the combined microgrids market value for (figure 2, source: Zpryme)
BRICS (Brazil, Russia, India, China, and South Africa) $5
$4.47
nations is projected to reach $0.73 billion in 2012. By
2020, the microgrids market among BRICS nations $4
$3.39
will reach $4.47 billion.
$3 $2.57
The BRICS nations, as a whole, are projected to
grow at a compound annual growth rate of 25% $1.96
$2
from 2012 to 2020. $1.49
$1.24
$1.04
In 2012, BRICS nations are projected to account for $1 $0.73 $0.87
15% of the global microgrid market. By 2020, they will
account for 33% of the global market. $0
2012 2013 2014 2015 2016 2017 2018 2019 2020
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4. $2,015 How well do you
know the BRICS
microgrid
$1,191 ecosystem?
BRICS Market Value Forecast by Country - 2012, 2020
(figure 3, source: Zpryme, in US millions)
2012
2020
$518
$433
$320 $312
$149
$115 $99
$50
China India Brazil Russia South Africa
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5. Microgrids incorporate renewable energy solutions, energy in India and South Africa that integrate distributed
storage, and energy management technology into an generation to compensate for disruptions in utility-supplied
integrated system that manages energy generation, power. Smart mini-grids are very useful for stand-alone
transmission, distribution, and usage on a small scale projects in villages and inaccessible areas. Microgrids not
compared to the current grid system, as it serves a smaller only foster the effective inter-connection and utilization of
base of local residents. However, this small local nature multiple renewable energy resources, but also help in
offers significant benefits, such as reliability, flexibility, and advancing access to energy to the last mile in the most
increased security. Key technology has been introduced optimum way by improving the efficiency of the overall
to allow widespread adoption of microgrids. system. The PRISMA project in the Amazon village of
Cachoeira do Aruã, Brazil is a run-of-the-river micro-hydro
BRICS (Brazil, Russia, India, China, and South Africa) nations facility that provides the community with power that is
are the fastest growing countries internationally and have distributed via a mini-grid. The project establishes
large percentages of their population without power. community ownership and management of local
These five nations can benefit from microgrid installation, infrastructure, such as power generating stations, while
thus allowing their rural citizens to experience reliable strengthening small local enterprises that then use the
power for the first time. infrastructure for productive uses which help them in
earning an income.
In BRICS nations (Brazil, Russia, India, China, and South
Africa), the demand for energy, particularly electricity, is Benefits of Microgrids
growing much more rapidly than the rate of expansion of
conventional electricity grids in the industrialized world. The current electrical generation system, where energy
Microgrids are a cost-effective solution to help meet this flows in one direction from the utility to consumers is
rising demand for more power, without increasing carbon becoming obsolete. Outdated transmission lines,
emissions. The microgrid market across BRICS nations is inefficient equipment and antiquated software will require
being driven by the growing energy demand; the need for a tremendous expense to update, as well as present
reliable power; increasing focus on renewable energy; security and reliability problems. Microgrids provide one
requirement for electrification in rural and inaccessible solution to a more efficient energy system and offer many
areas; and government incentives provided for achieving benefits.
energy efficiency and renewable power generation.
First, the smaller scale of microgrids offers several benefits
Several microgrid projects are coming up across the BRICS including increased efficiency because less energy is lost
countries to provide a more reliable power supply to during the transmission of energy. In a microgrid, energy
consumers. For example, recently, in early 2012, Echelon travels shorter distances from the energy source to the
Corporation, announced that it will set up two microgrids customer and serves fewer customers. Thus, overall
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6. demand on the transmission infrastructure decreases.
Further, the system becomes more reliable and is able to
respond more quickly to local demand.
In addition, distributed resources are locally controlled and
function as a single unit. Not only does this optimize
energy generation, but it also creates energy
independence and encourages the adoption of
renewable technology to meet clean energy
requirements.
Flexibility is also a key benefit of microgrids. Microgrids are
arranged in a modular fashion. New components can be
added with minimal problems and the system can be
easily updated and maintained. In addition, the
development of the microgrid is locally controlled, which
means local needs are considered when designing the
microgrid. Therefore, transformation of the grid is planned
to meet the needs of the local or regional area.
Lastly, microgrids utilizing distributed resources offer
improved security. The microgrid is able to island itself,
creating a separation from the main grid and decreasing
its vulnerability to outside attacks. This increases both the
cyber-security of the grid and its physical security. This is
especially important when valuable resources must be
maintained, such as in hospital or military installations. In
addition, islanding prevents the local area from being
affected due to widespread blackouts or other problems
occurring in the main electrical grid.
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7. Global Market Value Forecasts
Global and BRICS Market Value Forecast, 2012 – 2020
(table 1, source: Zpryme, in US billions)
Market Value 2012 2013 2014 2015 2016 2017 2018 2019 2020 CAGR
Global Market $4.95 $6.20 $6.90 $7.50 $8.33 $9.57 $10.82 $12.01 $13.40 13%
BRICS $0.73 $0.87 $1.04 $1.24 $1.49 $1.96 $2.57 $3.39 $4.47 25%
BRICS % of Global Market Europe 15% 14% 15% 17% 18% 20% 24% 28% 33%
BRICS Market Value Forecast by Country, 2012 – 2020
(table 2, source: Zpryme, in US millions)
Market Value 2012 2013 2014 2015 2016 2017 2018 2019 2020 CAGR
Country
Brazil $149 $166 $186 $209 $234 $285 $348 $424 $518 17%
Russia $99 $112 $126 $143 $161 $207 $264 $339 $433 20%
India $115 $150 $194 $253 $328 $453 $626 $863 $1,191 34%
China $320 $384 $461 $553 $664 $876 $1,156 $1,526 $2,015 26%
South Africa $50 $59 $71 $86 $103 $135 $179 $236 $312 26%
Total $732 $871 $1,039 $1,243 $1,490 $1,956 $2,573 $3,388 $4,468 25%
BRICS Market Value by %, 2012 BRICS Market Value by %, 2020
(figure 4, source: Zpryme) (figure 5, source: Zpryme)
China India Brazil Russia South Africa China India Brazil Russia South Africa
7% 7%
13% 10%
44% 45%
11%
20%
27%
16%
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8. Key Players microgrid market, through its Adaptive Protective System
architecture. ABB is also involved in utilizing microgrids to
In the microgrid market, two main types of key players are provide ancillary services for utilities. In addition, ABB has
strengthening their position. First, large Smart Grid firms are been very active in the Advanced Architecture Program
expanding their product lines to offer products specifically for the European Consortium. ABB is a member of the
designed for the microgrid market. Small niche firms have steering committee, which develops functions and
also entered the marketplace with products uniquely schemes for microgrids. ABB has experienced success in
suited for microgrids. In addition, these two types of firms installing a $16 million microgrid upgrade in Qatar, where it
have collaborated to provide solutions for specific was responsible for reengineering and reinforcing the
locations and projects. existing system to improve the availability and reliability of
electricity. In addition, ABB has developed strategic
BPL Global was founded in 1983 and has expanded its partnerships with wind and solar manufacturers, as well as
operations to include member firms in 7 countries, acquiring Powercorp, an Australian firm specializing in
including Africa, China, Brazil and the Middle East. The BPL renewable energy integration.
Africa branch offers Intelligent Power Smart Grid
Integrated Demand Response Software to design the most Siemens has expanded its position as an electrical
cost effective energy microgrid solution based on cost engineering and electronics leader to include global
and other grid conditions. BPL Africa is the only firm on the energy management for microgrids. Siemens views
continent to offer a turnkey solution to microgrid microgrids as a central component in the Smart Grid
deployment for the remote power market. The solution evolution. Siemens offers energy-efficiency technology for
provides the basic starting components and allows the a microgrid’s consumption, transmission and production
user to add modules as they need the additional capacity needs. Siemens has been involved in a series of
and can afford the upgrades. BPL Africa has experienced partnerships. Recently, Siemens partnered with Boeing to
success in developing microgrid solutions for mining develop microgrid solutions for the Department of Defense
operations that were totally unconnected from the grid to be use in military installations. In addition, Siemens
and had no electricity. In addition, its turnkey solution has partnered with BPL Global to combine demand response
been implemented in small villages, providing consistent solutions with distributed generation resources for homes
energy for the first time to the remote locations. BPL and businesses, creating a mini-grid. Siemens has also
Global has had several strategic partnerships that have worked with Viridity Energy and has several other
further developed its position in the field including its partnerships and projects underway to further develop its
acquisition of Serveron and a partnership with Siemens. microgrid position.
ABB has expanded its position as a transmission and
distribution Smart Grid leader to develop solutions for the
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9. Echelon has expanded its position as a leader in network Science Foundation, and Red Hat to provide software
platforming to provide solutions for the microgrid market. engineering for the utility, energy, and communications
Echelon’s microgrid software is able to outline the usage fields.
of power by source, delineating power from renewable
sources, from the grid, and from back-up power sources. Pareto Energy was founded in 2004 and began operations
This allows consumers to make choices about their energy focused on creating legislation to enable microgrid
consumption, in turn creating a more efficient system. development and deployment. Pareto’s Grid Link product
Echelon has announced two projects in India and South overcomes problems with interconnection between the
Africa. Echelon will supply each project with smart meters microgrid and the utility. It solves momentary instability
for each residence or business to provide feedback on and energy loss problems experienced when switching to
energy consumption, and provide their software to island mode due to grid difficulty. The main grid is thus
provide energy management capabilities. In addition, shielded from inconsistent distributed generation, and
applications from Echelon’s partners will provide allows for upgrades and improvements to distributed
additional functionality for supply/demand management generation resources. Pareto currently has over $70 million
and automatically switch to backup power if Echelon’s committed to microgrid projects. In addition, Pareto has
Networked Energy System senses any irregularity. The installed over 20 microgrids, including systems at Howard
projects will not only provide greater efficiency, but also University and for a pilot project in Stamford, Connecticut.
will also allow better pricing methods and serve as an
example of an entry-level microgrid market, where back- Lastly, Viridity Energy is a new firm that enables a microgrid
up generators support the electrical grid in times of need. to achieve a shorter payback period on investments.
Viridity’s software consolidates all of the microgrid’s assets
In addition to large Smart Grid firms expanding into the to allow for comprehensive decision-making. The VPower
microgrid market, several niche firms have also developed program allows a microgrid to not only balance supply
specialty products to serve microgrids. Green Energy and demand, but also maximize selling energy back to
Corporation has received numerous awards, including the grid. The program manages energy production,
being named one of the Top 50 Colorado Firms to Watch. storage, consumption, and distributed resources to avoid
Green Energy Corporation offers a Master Controller peak loads to not only minimize cost, but also maximize
program, allowing for monitoring of both energy storage profits. Viridity has worked with Siemens, Drexel University,
and distributed generation. Utilizing cutting edge cloud Penn State University, The University of Pennsylvania, PECO
computing on an open source format, the software Energy, San Diego Gas & Electric, University of San Diego,
combines new energy applications and legacy systems, Con Edison and other firms to maximize microgrid
allowing interoperation that is stable and secure. Green profitability.
Energy Corporation has partnered with such companies as
the National Rural Electric Cooperative, the National
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10. Challenges & Barriers to the Microgrid Market Compressed Air Energy Storage (CAES) is not implemented
as widespread as pumped hydro, but is very popular. It
Several factors have created barriers to successful requires either an underground storage space, such as a
microgrid deployment. First, the cost and integration of cavern, or an aboveground storage tank for storage.
energy storage has provided a barrier to microgrids. Excess energy is used to compress air and move it to the
Energy storage is absolutely essential to the successful storage space. When it is needed, the air is released and
integration of microgrids. Energy storage allows energy to passes through a turbine, thus producing energy. Energy
be captured when excess energy is produced during non- efficiency for CAES systems is typically close to 40% due to
peak times and utilized during peak or inconsistent cooling, air compression, and turbine generation losses.
periods. Storage systems improve reliability and quality; Because of these losses, additional features are usually
however energy storage options are not cost effective in added to capture the lost energy and produce additional
most cases. Because of the size and the scope energy from it. CAES systems are expensive to install, but
requirements of microgrids, it is difficult to choose the have a long life cycle, reducing its cost over time.
appropriate storage option for each installation. However,
recent developments have lowered the cost of some Battery Energy Storage systems have different
storage options and small-scale applications of energy compositions, come in different sizes and can be used for
storage can be significantly less expensive than previously different purposes. Batteries have been frequently used
available. for substation back-up systems and significant research is
aimed at improving efficiency and making them more
Pumped hydro facilities are the most common storage cost effective. One key advantage is the portability of
solution worldwide, with over 127,000 MW installed batteries, as well as the fact that they can be immediately
worldwide. Two reservoirs at two different heights are connected and utilized without significant additional
utilized. Excess energy is used to pump water to the upper installation costs. However, the lifetime of battery storage
reservoir to be stored until energy is needed. Then the is 2-10 years, after which they must be replaced and safely
water is released and gravity pulls it towards the lower discarded. They can also have high maintenance costs,
reservoir, and through a turbine, thus releasing the stored but can operate at 90% efficiency.
energy. For it to be successful, the environment must be
able to provide for pumped hydro storage (water must be Solar energy integration has also produced significant
present, etc.). The system is able to come online quickly barriers to microgrid operation. One challenge of solar
and typically stores 5-6 hours of energy at capacity. In energy is its distribution nature. Many times solar panels
addition, it operates at 70-75% capacity and is expensive are spread out and produce small amounts of highly
to install, however its long life cycle makes it more variable power. The energy is then collected at a central
affordable over the long term. source and then transmitted to energy customers. This
process raises technical problems, such as inconsistent
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11. voltage and frequency, grounding, protection and reducing the cost of wind turbines. Finally, not all regions
regulation, power quality, and variability caused by are well suited to wind energy production. Some areas
various weather conditions. Utilities and remote areas have inadequate wind flow for wind technology to be a
considering installing microgrids must be sure that their feasible option. Because of the expense, the feasibility of
systems are able to integrate the solar energy, even during producing wind energy needs to be studied before the
fluctuations without compromising the grid itself. Research technology is implemented.
has developed new technology to both protect the grid
from variability in production and integrate the distributed Key Microgrid Solutions
resources. In addition, the price of solar photovoltaic
panels has decreased significantly, allowing them to be a Several key technological developments have enabled
more cost efficient option for microgrid use. One final microgrid deployment. GridLink by Pareto Energy provides
consideration for installing solar panels for use in a protection to the main electrical grid from any issues of the
microgrid setting is suitability. A major challenge to microgrid, including variability experienced when
microgrids is to implement the right distributed generation islanding, problems when upgrading distributed resources,
mix. Not all areas are conducive to solar energy and local energy generation and loads. GridLink allows
production and installing the wrong mix can be very costly the utility to be considered as an equal input with all other
and result in not only excess unused materials, but resources. All inputs pass through inverters before
inefficient energy capacity as well. connecting to the microgrid. This insures consistent power
to the microgrid even during times of blackout on the
Wind integration has presented some similar barriers to main grid, while insuring no impact on the utility system
microgrid deployment. Like solar energy, wind energy itself. GridLink has been utilized at many large utilities, as
production is highly variable, producing intermittent well as Howard University with great success. GridLink has
power. Frequency and voltage are affected by weather proven its success in over 20 microgrid installations, and in
and wind conditions. The proper technology must be in overcoming interconnection problems between
place to allow a microgrid to utilize wind energy, without microgrids and the main utility system.
compromising the electrical system. The microgrid must
be able to balance the power the wind turbines generate, A second key technology in microgrid deployment is BPL
storing energy over its maximum capacity for later use, Global’s Power SG Integrated Distributed Energy
when wind production declines or load increases. Proper Resources Software (iDER). iDER is a turnkey microgrid
software programs are the key to effective energy solution that allows end-to-end energy management of all
management. New wind technology has been resources. The software allows the main components of a
developed that has both increased efficiency and microgrid to be set up quickly and for the customer to add
lowered the costs for wind technology. Increased components later, as necessary. BPL Global offers a
efficiency has improved reliability and safety, while ―unique combination of solutions for the continent in
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12. energy efficiency and management, solar energy issues. In addition, energy management strategies can be
generation, renewable energy storage, electrification of tested to determine the most efficient plan before the
off-grid areas with energy islands, electrical network plans are undertaken in the actual system. Power
optimization via MicroGrid, sustainable solutions to the Analytics’ Paladin program offers superb analytical data
economic realities‖, making it a key technological processing that predicts and prevents real time problems,
development. making it a key technology in the emerging microgrid
market place.
HOMER is a microgrid modeling software that analyzes
different distributed energy possibilities to provide the
design for the most efficient microgrid possible, based on
a number of different factors, including weather, energy
usage, and environmental factors. HOMER stands for
Hybridization Optimization Model for Electric Renewables
and identifies the most cost effective options for
renewable energy and hybrid renewable microgrids. It
has been downloaded by 68,000 people in 193 countries
and is used in numerous microgrid projects. It helps utilities
avoid costly mistakes during renewable energy
deployments. HOMER was originally developed for off-
grid village power systems, but has been enhanced to
consider new technology options and changes in the
microgrid marketplace.
Paladin Live program, by Power Analytics, analyzes data
from the microgrid to predict possible problems with the
system. It uses data from the installation of the microgrid
as baseline data to compare present microgrid
performance. It offers users real time data about system
efficiency, and is able to show capacity, reliability, and
availability of the microgrid. This information is able to
identify potential problems and address them before they
affect the system. In addition, different plans can be
tested before they are implemented. Upgrades can be
simulated before they are made to assess unforeseen
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13. BRICS: The Microgrid Opportunity BRICS Microgrids Market Value Forecast
CAGR = 25%
Developing countries compose 80% of the world’s 2012 to 2020 (in US millions)
population, but only comprise 30% of the world’s energy (figure 6, source: Zpryme)
$5,000
consumption. As the population increases, energy
demand will also increase. These developing countries $4,000
are improving their standard of living, thus requiring more
energy. However, many parts of the world are not $3,000
connected to a central grid, and rely on individual gas or
diesel generators, or biomass for their energy needs. $2,000
$1,000
The electrical grid is centralized and it is either cost
prohibitive to connect these locations or the population is
$0
too disbursed to allow for connectivity. Meeting the 2012 2013 2014 2015 2016 2017 2018 2019 2020
energy needs for this segment of the population around
the world presents a huge opportunity. The BRICS nations Brazil Russia India China South Africa
(Brazil, Russia, India, China, and South Africa) are the five
fastest growing segments of this market. The rural BRICS Nations: Drivers
communities that are not connected to any electrical
system seek an alternative to the traditional energy Demand for energy, specifically electricity, in BRICS
system. They seek access to affordable, reliable energy. nations is growing much more rapidly than the rate of
Renewable energy utilized in microgrids can meet the expansion of conventional electricity grids in the
needs of these communities in a sustainable manner. industrialized world. Demand for energy in these countries
Renewables offer a more reliable option than traditional is expected to grow in tandem with projected increases in
connectivity, as well as providing access to water for human population and rising living standards among the
irrigation purposes. Thus, microgrids in BRICS will improve chronically poor. Microgrids are ideally suited to help meet
the overall way of life for remote locations. this rising demand for more power, without increasing
carbon emissions. The growing demand for energy;
In 2012, the combined microgrids market value for BRICS increasing focus on renewable energy; government
nations is projected to reach $0.73 billion in 2012. By 2020, incentives provided for achieving energy efficiency and
the microgrids market among BRICS will reach $4.47 billion. renewable power generation; unreliable power quality
The BRICS market is projected to grow at a compound and power shortages; and poor rural electrification
annual growth rate of 25% from 2012 to 2020. systems are driving the microgrid market across Brazil,
Russia, India, China, and South Africa.
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14. providing many rural people access to both light and
Microgrids act as a cost-effective and viable option in the power for the first time in their lives.2
developing world which is coping with an unreliable
power supply. Several microgrid projects are coming up Another microgrid project is being undertaken for insular
across the BRICS nations to provide consumers with a more and remote localities in the Asia-Pacific Economic
dependable power supply system. For example, recently, Cooperation (APEC) economies. Led by the Russian
in early 2012, Echelon Corporation (an American Federation, the objective of the project is to maximize the
company which designs control networks to connect economic and environmental effect of deployment of the
machines and other electronic devices, for the purposes Smart Grid technology in insular and remote localities as
of sensing, monitoring and control), announced that it will these areas experience bigger challenges in securing
set up two microgrids in India and South Africa that reliable and efficient energy supply.3
integrate distributed generation to compensate for
disruptions in utility-supplied power. The model microgrid Together with local partners, the local utility, and the local
deployments are at Palm Meadows in Hyderabad, India, community, Winrock International, a global nonprofit
and Clearwater Mall in Johannesburg, South Africa. Palm organization, in 2005 began the installation of the first
Meadows is an 86-acre integrated gated community with PRISMA project in the Amazon village of Cachoeira do
335 homes and residential services. Clearwater Mall in Aruã, Brazil. A run-of-river micro-hydro facility the project
Johannesburg is a retail building with more than 240 provides the community with power that is distributed via
stores.1 a mini-grid – all governed under simplified contracts
between the community and the electric utility. One of
Microgrids also help in providing electricity in de-electrified the activities undertaken under this project is to promote
villages. Smart mini-grids are very useful for stand-alone ecotourism, raising global awareness of the environmental
projects in villages and inaccessible areas. Microgrids not challenges that this region faces each day.
only foster the effective inter-connection and utilization of
multiple renewable energy resources but also help in The PRISMA Cachoeira do Aruã project in Brazil establishes
advancing access to energy to the last mile in the most community ownership and management of local
optimum way by improving the efficiency of the overall infrastructure, such as power generating stations, while
system. In one of India’s poorest states, Uttar Pradesh, the strengthening small local enterprises that then use the
founders of Mera Gao Micro Grid Power build and infrastructure for productive uses which help them in
operate solar-powered microgrids to provide low-cost earning an income. In the case of electricity, the
lighting and mobile phone charging to village houses, community ―sells‖ the power to the local utility (which in
Brazil holds a monopoly on power distribution) and
2 Tree Hugger
1 Solar Feeds 3 EGNRET
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15. villagers manage the local mini-grid under a contract to Major End-Use Industries for Microgrids
the power company. The electric utility provides technical
support if required, so villagers are not completely on their The microgrid system has a great potential in large
own.4 commercial and industrial complexes, hospitals, shopping
malls/ complexes, apartments, residential complexes,
To supply electricity to those areas that have rare educational institutions, remote un-electrified as well as
population, inconvenient traffic and those that are unable electrified locations to ensure maximum flexibility, reliability
to be covered by the main power grid, Beijing Huadian and safety.6
Tianren Power Control Technology Co., Ltd. (The
company’s business focuses on energy saving, BRICS Microgrids Market Forecast by End-Use Industry
environmental protection, new energy and innovation All 5 Countries Combined
transformation of traditional industries.) started a wind- 2015 and 2020 (in US millions)
solar hybrid microgrid project in Jijiao Village, Chawu (figure 7, source: Zpryme)
Townership, Lazi County, Rikaze, Tibet. On December 4,
2011, the project was formally put into production.5 $1,340
Institutional
$435
Government incentives for energy efficiency and
renewable power generation also stimulate investment in Community/Industrial
$894
advanced energy infrastructure. Husk Power Systems, an $199
Indian firm, uses second-world-war-era diesel generators
$849 2020
fitted with biomass gasifiers that can use rice husks, which Off-grid
$149
are otherwise left to rot, as a feedstock. Wires are strung
2015
on cheap, easy-to-repair bamboo poles to provide power $626
Community/Utility
to around 600 families for each generator. By 2010, Husk $186
Power had established five mini-grids in Bihar, where rice is
a staple crop. Consumers pay door-to-door collectors Military
$536
$174
upfront for power, and Husk collects a 30 percent
government subsidy for construction costs. Its pilot plants $223
were profitable within six months, so its model is Other
$99
sustainable.
$0 $500 $1,000 $1,500
4 Winrock
5 KJT 6 The Economic Times
14 [PREMIUM] ZPRYME SMART GRID INSIGHTS Microgrids: The BRICS Opportunity | July 2012
Copyright © 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
16. Recently, in early 2012, China’s Xiamen University Systems, Saran Renewable Energy, Mera Gaon Micro Grid
partnered with leading multinational technology providers Power, and Naturetech Infra all operate microgrids on a
to build the country’s first direct current microgrid. commercial basis in India.
Significant changes brought by the new DC microgrid
include integrating renewable energy generation and Certain commercial and industrial environments have a
storage batteries with building electrical loads via mobile critical need for a constant power supply and cannot
and web-based energy management and control afford brownouts or blackouts – research labs, data
applications; changing the way Chinese campuses and centers, semiconductor manufacturing, and infrastructure
building complexes manage, control and consume deemed critical to national security. Furthermore, as the
energy; and for reducing building energy consumption, reliance on modern communication technology increases
which could run up to 20% of 2020 global coal (wireless, cloud computing, etc.), power systems are also
consumption if left unchecked.7 Use of micro grids at mine becoming vulnerable to cyber-attacks and hackers.
sites is also gaining popularity due to an expected
upswing in interest in shifting to more sustainable energy In some specific customer segments, such as the military
strategies for mine sites controlled by large multinationals. and research labs, there is significant value in a secure
Globally, nearly 75% of existing mines are remote network. Microgrid power can provide greater security for
operations, though very few deploy renewable energy ground army troops in remote areas. The technology
generation.8 would work very much like a portable power plant,
providing and storing enough energy to power smaller,
Microgrids have been specifically helpful to people mostly communications systems, in very remote locations
running small and medium enterprises, particularly in rural where re-supplying fuel is difficult or dangerous. Hotels,
areas of the BRICS nations. For example, to further extend one of the most intensive power users, can opt to develop
centralized grid electricity to remote rural areas and to microgrids that incorporate solar, wind, hydro, geothermal
address the increasing demand and supply gap in and other technologies to reduce the need for grid power
electrified rural areas, The Energy and Resources Institute and for uninterrupted power supply. Hospitals are
(TERI), in India, has initiated a strategy to set up solar particularly well suited for smart microgrids as they often
microgrids that can cater to a segment of households or have a multi-building campus lay-out and require reliable
small enterprises (shops) in a village. Upscaling and and constant power supply.
promoting this endeavor would serve two purposes: i) to
provide access to quality lighting in rural areas, and ii) to
enhance the income of both the entrepreneurs and end-
users.9 Organizations such as Desi Power, Husk Power
7 Engerati
8 The Smart Grid Observer
9 SEI International
15 [PREMIUM] ZPRYME SMART GRID INSIGHTS Microgrids: The BRICS Opportunity | July 2012
Copyright © 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
17. Brazil ranching. To stop deforestation, residents must have a stake
in remaining in their villages, generating income through
Brazil has a population of approximately 195 million people environmentally sustainable livelihoods. Therefore, providing
and is the fastest growing country on the planet. the area with electricity is significant. Off-grid solutions are
However, the Northern Amazonian Para region only has the only practical way to bring power to remote areas in
0.8% of citizens with access to power. Isolated grids exist in the Amazon.10
the Amazon that use diesel powered generators for
energy production; however energy production is limited Brazil: Microgrid Market Forecast
due to the cost of fuel. In addition, the overall grid is
unable to meet the country’s needs, as 91 large blackouts From 2012 to 2020, the Brazil market is projected to grow
were experienced in 2011. The largest blackout left 50 from $149 million to $518 million with a compound annual
million people in 8 states without power overnight. Brazil is growth rate of 17%.
particularly suited to PV arrays. In addition, many
locations are close to the Amazon River, making Brazil Microgrids Market Value Forecast
hydropower incorporation an attractive option. Several CAGR = 17%
projects have successfully tested microgrids in the Amazon 2012 to 2020 (in US millions)
(figure 8, source: Zpryme)
region. In Coelba, the Sao Paulo Research Foundation $600
installed 10,133 Photovoltaic systems for free to its $518
residents, who only had to pay for energy consumption $500
$424
after installation. Ilha de Ferradura installed PV for 6
fishermen’s homes successfully in demonstrating Brazil’s $400 $348
microgrid potential, in both large and small installations. $285
$300
$234
$209
Brazil: Drivers $186
$200 $166
$149
Due to vast sparsely populated areas, Brazil faces $100
particular difficulty in providing universal access to
electricity, as required by law. In Brazil, about 23 million $0
people do not have access to electricity. The highest 2012 2013 2014 2015 2016 2017 2018 2019 2020
concentrations are in the Amazon, which makes up 45% of
the area of the nation, but only 3% of the population. If
modern energy services cannot be provided in the Amazon
region, the local population will continue to abandon the
forest for nearby cities, leaving vast areas to predatory
10 SolarServer
16 [PREMIUM] ZPRYME SMART GRID INSIGHTS Microgrids: The BRICS Opportunity | July 2012
Copyright © 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
18. Brazil: Projects To pay for the program, Brazil established three funds: The
Energy Development Fund (Conta de Desenvolvimento
Light for All de Energia, CDE); the Global Reversion Reserve (Reserva
Global de Reversao, RGR), and the Fuel Consumption
In 2003, the Government of Brazil (GOB) launched the Fund (Conta de Consumo de Combustivel, CCC) into
program Luz Para Todos (LPT) or ―Light for All‖ to subsidize which tax revenues are designated. These funds provide
universal access to electricity by: the subsidies for both implementation and operation of
the program, and to offset the costs of individual electrical
Extending and establishing connections to the consumption in the most remote regions.
national electrical grid.
Overall, LPT was estimated to cost R$20 billion, of which
Establishing a small number of off-grid distributed R$14.3 was to be provided by the federal government. The
energy pilot systems, including photovoltaic solar rest was to be funded by state governments (R$2.3 billion)
and wind power systems; and hybrid systems of and by power companies (R$3.4 billion). By 2010, the
solar, wind and diesel. government had R$13.5 billion in contracts, funded by the
CDE and RGR. State governments had spent R$2.081
The program was implemented in 2004, extended in 2008, billion and power companies, R$3.164 billion.
and again in 2010. By May 2009, electrical services were
being provided to 10 million people through 2 million new The second phase of LPT, extended in March 2010 to end
connections to the national electrical grid. in 2014, foresees a total investment of R$5.5 billion, and the
government is likely to extend the RGR, set to expire in
A total of 883,000 km of new electric cable had been 2010 and which has R$7 billion available, to cover the next
strung over 4.6 million new poles to bring transmission lines phase.
and power switches to rural communities. Considered a
success by the government, the program was extended in Program costs per installed electrical connection rose over
2010 to 2011, to add 310,000 new households, and is time as more distant areas were connected to the grid.
expected to be extended until 2014 to add an additional The average cost per connection in 2004 was R$4,300. By
495,000 households. In total, the objective of this phase of 2010, connection costs had risen to between R$7,000 to
the program is to bring energy services to approximately R$9,000 per connection.11
810,000 new households in the remotest areas of the
country, including the greater Amazon rainforest in
Brazilian territory.
11www.actionaidusa.org/assets/pdfs/climate_change/Access_to_Energy_for_the_Poor_2011.p
df
17 [PREMIUM] ZPRYME SMART GRID INSIGHTS Microgrids: The BRICS Opportunity | July 2012
Copyright © 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
19. CEMIG’s Microgrid Project Other partners are expected to be incorporated to the
project depending on the choice of the location for the
CISB approved a microgrid project to distribute electric implementation of the infrastructure. They could be local
energy for CEMIG in an urban area of Belo Horizonte.12 This providers of infrastructure, telecommunications and gas.
project will be implemented in three phases. Also, other companies from the CEMIG group might join,
such as CEMIG TELECOM and GASMIG.14
The first phase involves FAPEMIG and CEMIG together with
the Federal University of Minas Geris (UFMG) and KTH Royal
Institute of Technology, who have proposed to study
decentralized energy production and distribution
architecture.13 The initiative is considered strategic and will
be funded directly by Cemig.
A second group of partners, formed by the companies
GAS ENERGY and CONCERT, will have the task of installing
a distributed generation plant. This plant will serve to study
the co-generation of energy from the binomial natural gas
and sunlight. The plant should be initially sized to satisfy the
study of co-generation and generation necessary for the
existence of a ―microgrid‖, but it should be designed in a
way that will allow modular expansion, in order to
correspond to the suggested business models that will also
be studied.
The third group is formed by the research institute LACTEC
and the companies HITACHI and CONCERT. They will be
responsible for the technical implementation of the
distributed generation grid and for all the issues related to
the engineering tasks.
12 www.kth.se/en/studies/why/focus-regions/brazil/additional-collaborations-with-brazil-
1.296141
13 www.kth.se/en/studies/why/focus-regions/brazil/additional-collaborations-with-brazil-
1.296141 14Microfoundations of Open Innovation (Sao Paulo, 2012)
18 [PREMIUM] ZPRYME SMART GRID INSIGHTS Microgrids: The BRICS Opportunity | July 2012
Copyright © 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
20. Russia shortfall in funding for the renovation of the electric power
sector assets for about 10-15 years in the early 90s, Russia is
In Russia, over 10 million people are not connected to the now seeing critical wear of the substation equipment fleet.
grid and are using diesel or gas powered generators to The guideline equipment life (25 years) has ended for
meet their energy needs. Fifty percent of these generators 54.7% of these assets and total excess life (35 years) has
are not working due to either fuel costs or delivery issues. been surpassed for 22.2% of equipment.
The areas least connected are Siberia, the Northern and
Far Eastern areas of Russia. Because of the size of Russia Considering the longer lifetime for HV power lines, on
and its diverse resources, renewable energies are average 40 years, the wear of power transmission line
particularly attractive and cost effective. In addition, equipment comprises the following – guideline life (40
Russia’s energy strategy until 2020 includes realizing years) has ended for 29.2%, total excess life (50 years) has
sustainable development. Several small-scale wind been surpassed for 8.9% of equipment.16 However, Russia
projects using wind-diesel hybridization have saved 40-80% possesses favorable conditions for the development of
of total energy cost with a 3-4 year payback period. renewable energy sources, largely due to its size and
Hydropower has been successfully utilized in areas located range of geographic features.
by rivers. Solar also offers potential, especially in Southern
areas. The very strong renewable energy potential, Russia has huge potential markets for off-grid electricity
combined with the huge number of isolated areas lacking systems based on renewable energy. The renewable
grid power create a tremendous microgrid opportunity in potential is especially applicable in some of the more
Russia. remote parts of Russia that are not connected to the grid.
In many isolated settlements, renewables can be the most
Russia: Drivers economic, and perhaps even the only way to provide
electricity and heat to consumers. Geothermal resources
It is estimated that approximately five million farms and ten in the Far East or North Caucasus, or hydro from the many
million people in Russia are not connected to the watersheds, or other renewables such as wind and solar
electricity grid. Furthermore, an estimated 45 percent of all energy could potentially serve remote populations.17
energy in Russia is lost in production, transport, transmission
or inefficient consumption—much of this due to artificially
low prices which reduce incentives to improve efficiency.
According to several estimates, Russia could save around
half of the energy it currently uses.15 Furthermore, due to a
16 PowerTec
15 MDPI 17 EBRD
19 [PREMIUM] ZPRYME SMART GRID INSIGHTS Microgrids: The BRICS Opportunity | July 2012
Copyright © 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
21. Russia: Microgrid Market Forecast build a self-contained diesel-solar power unit, the first of its
kind in Russia. The companies plan to build the pilot hybrid
From 2012 to 2020, the Russian market is projected to grow power station with a capacity of over 100 KW, 70% of
from $99 million to $433 million with a compound annual which is to come from solar generation, it said in a
growth rate of 20%. statement. The company did not provide a timeframe for
the work to be completed. Use of solar technology is
Russia Microgrids Market Value Forecast
limited in Russia, which mainly develops conventional
CAGR = 20% energy resources. But the companies believe that
2012 to 2020 (in US millions) development of diesel-solar power generation "is a
$500
(figure 9, source: Zpryme) technically and economically viable solution for Russian
$433 regions with high levels of solar radiation," said Michael
Lifshitz, CEO of Rosnano's subsidiary Rotek.
$400
$339
In particular, he mentioned southern regions of Russia,
$300 $264 southeastern Siberia, the east Siberian Republic of Sakha
$207 (Yakutia) and far eastern regions, where diesel generation
$200 $161 costs Rb30-40 kWh (around $1/kWh).18
$143
$126
$99 $112
$100 Russia: Solar Power Station
In 2010, Russia's high-tech companies Rusnano and
$0
2012 2013 2014 2015 2016 2017 2018 2019 2020
Renova announced plans to build the country's first
industrial solar power station near the Black Sea. The 12.3
megawatt station will be built in the spa resort of Kislovodsk
Russia: Projects
by the companies' joint venture Khevel. "This is a
breakthrough into a different dimension," Rusnano CEO
Russia has included microgrids in the Energy Smart
Anatoly Chubais told an innovation forum in Moscow. The
Communities Initiative Smart Grid pillar. The plan, which will
$97 million deal was sealed by Khevel CEO Yevgeny
be implemented in 2012, will pilot smart/micro grid projects
Zagorodny and Stavropol region Governor Valery
for insular and remote localities in APEC economies.
Gayevsky. Swiss-made thin-film solar panels will be used in
the construction. The station may start operating as soon
Renova and Rosnano Project
as 2012, Zagorodny said.19
Russia's Renova holding company and state-run
nanotechnology company Rosnano plan to develop and 18 www.renova.ru/en/press-center/publications/15/1964/
19 ww.solardaily.com/reports/Russia_To_Build_Its_First_Industrial_Solar_Power_Station_999.html
20 [PREMIUM] ZPRYME SMART GRID INSIGHTS Microgrids: The BRICS Opportunity | July 2012
Copyright © 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
22. India Moreover, approximately 30 percent of India’s generated
power is lost in transmission.
About 115 million households in rural areas lack grid
access while 250,000 villages connected to the grid have Distribution is the weakest link of India’s power supply
frequent connectivity issues. That is over 60% of the total chain as it faces substantial technical losses (because of
population. Rural electrification has been identified as a overloading of transformers and conductors, for instance)
priority by the Indian government. Where the grid cannot and commercial losses of electricity (because of low
be connected, the government has authorized distributed metering efficiency, poor billing and collection, large-
networks to be established. Solar energy offers tremendous scale theft of power). Furthermore, lack of transmission
market potential for India. Several projects have shown and distribution of power to less densely populated areas
the potential of the market. which are located far away from the power generating
stations is the major reason for not being able to achieve
The New Energy and Industrial Technology Development 100 percent electrification in the country.
Organization of Japan installed 6 MW PV solar arrays at
the Neemrana Industrial Park to demonstrate efficiency of In India, about 70% of the population lives in rural areas. In
control technology and benefits of clean energy. 2010, it was estimated that 48 percent of rural households
Greenpeace India has also released a report proposing were un-electrified nationally leaving approximately 400
clusters of microgrids be installed to support the electrical million people without electricity. Hence it is necessary to
grid. Bihur is used as an example of how an area with a use energy sources which can be decentralized to supply
substantial energy deficit can be an area of energy power to these households. Thus, India can leverage their
surplus through microgrid deployment. Thus the microgrid abundant renewable energy sources such as wind, solar,
market in India holds tremendous potential for future geothermal energy, and biomass to deploy microgrids to
development. meet their pressing energy needs.20
India: Drivers
Electricity consumption in India was about 543 KWh/capita
in 2009, among the lowest in the world. Although India has
considerably improved its generating capacity, it still has
difficulty in meeting demand and there are persistent
power shortages which constrain India’s economic
growth. With the development of the industrial and
commercial sectors as well as the wider use of electrical
equipment, electricity demand keeps increasing.
20 TERI
21 [PREMIUM] ZPRYME SMART GRID INSIGHTS Microgrids: The BRICS Opportunity | July 2012
Copyright © 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
23. India: Microgrid Market Forecast distributes power through a micro grid, approximately 0.75
to 1 km in length. An electronics company, DD Solar 23
From 2012 to 2020, India’s market is projected to grow from India Pvt. Ltd (which works under the banner of the Bergen
$115 million to $1,191 million with a compound annual Group) has provided the technical know-how for this
growth rate of 34%. project.
India Microgrids Market Value Forecast
There are 60 solar panels in the plant, each one producing
CAGR = 34% 145 watts of power. A battery bank consisting of 24 cells of
2012 to 2020 (in US millions) two volts each provides the power back up for 4 to 5
$1,400
(figure 10, source: Zpryme) cloudy or rainy days, when there is no sun.21
$1,191
$1,200 The project was conceived, managed and financed by
Scatec Solar at the cost of Rs 5 million (US$1=Rs 46.6).
$1,000
$863 Delhi-based NGO, Development Alternatives (DA), was
$800 engaged to identify the beneficiary villages.22
$626
$600 Azure Power to Asses Solar Powered Microgrids (Int'l)
$453
$400 $328
$253 India-based independent power producer Azure Power
$194
$200 $115 $150 has been awarded a grant from the U.S. Trade and
Development Agency (USTDA) to assess the development
$0
2012 2013 2014 2015 2016 2017 2018 2019 2020
and accelerate adoption of solar power in rural India. The
$476,670 grant will fund a feasibility study on two 500 kW
microgrid solar photovoltaic power generation pilot
India: Projects
projects in the states of Gujarat and Chhattisgarh. Having
spearheaded the national initiative of grid-connected
Northern India
solar power projects that are over 1 MW in capacity, Azure
Power will, with this study, open up the potential of
Norway-based company Scatec Solar decided to set up
electrifying rural India through solar powered microgrids.
an 8.7 kilowatt power plant in Rampura. Assisted by
Following the study, Azure aims to set up over 100
Development Alternatives, an NGO working locally, the
microgrid solar systems, with each system covering an
community in this village was mobilized to take charge of
average of 2-3 acres of rural land which would generate
perhaps India’s first community-managed solar power
plant. As a result, since January 26, 2009, this village has 21www.actionaidusa.org/assets/pdfs/climate_change/Access_to_Energy_for_the_Poor_2011.p
not been without power for a single day. The plant df
22 www.smeworld.org/story/features-108/solar-power-at-everyones-doorstep-234.php
22 [PREMIUM] ZPRYME SMART GRID INSIGHTS Microgrids: The BRICS Opportunity | July 2012
Copyright © 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
24. sufficient power to electrify approximately 800-1,000
villages with little or no connectivity to existing electrical The Skynet software interfaces with the NES system
grids. software and creates a bill for the customer that reflects
the customers' actual use of lower cost grid power and
The USTDA India mission aims to further development of more expensive locally generated power. Customers have
projects that have a positive economic, social and the option of reducing usage at times when the more
environmental impact while promoting exports of US to expensive energy is being supplied. The Palm Meadows
India. The grants provided by USTDA support the initiation micro grid is providing reliable service even during
of such projects and bring them close to realization. In this frequent utility grid outages and enabling the customer to
light, the benefits of solar power are obvious and make intelligent trade-offs between comfort and cost.25
imperative. USTDA helps companies create US jobs
through the export of US goods and services for priority
development projects in emerging economies. Azure
Power is claiming to be India's first independent solar
service provider offers clean and affordable solar energy
to its customers with minimum upfront cost and ongoing
operational expenses.23
Southern India
Echelon Corporation has successfully deployed micro grid
installations in an 86-acre integrated gated community
with 335 homes and residential services at Palm Meadows
in Hyderabad. Palm Meadows runs diesel generators and
seeks to incorporate solar power in the future to its micro
grid.24 Echelon's has equipped the residences with smart
meters that connect into data concentrators at
distribution transformers and feed near real-time
information into the company's Networked Energy Systems
(NES) software. Grene Robotics' Skynet management
application automatically turns on local generation if
utility-delivered power is inadequate.
23 epoverviews.com/articles/visitor.php?keyword=Micro-Grid www.pv-magazine.com/news/details/beitrag/a-growing-global-smart-grid-
25
24 www.echelon.com/company/news-room/2012/microgrids-india-south-africa.htm market_100006258/#axzz1xsuXXnV6
23 [PREMIUM] ZPRYME SMART GRID INSIGHTS Microgrids: The BRICS Opportunity | July 2012
Copyright © 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
25. China eight million.26 The massive size of the country in terms of
population means that still a large number of individuals,
In China, remote regions experience power supply issues equal to the total population of countries such as Sweden
where the grid cannot be extended due to the expense or Austria, do not have access to electricity.
of extending the electrical grid. Energy consumption was
18% in 2005 in rural areas, especially in central and western As of 2012, some five million Chinese people living in
areas. China is dedicated to renewable energy remote villages in mountainous or border areas are
expansion and has 8 completed pilot projects, with many currently without electricity, and the government has
more underway. One such project was completed in vowed to extend electricity services to such groups by the
Zuo’anmen at Beijing City, where 50 kWp PV, 30 kW end of 2015. According to the annual social responsibility
microturbines, 72 kWh energy storage was installed. Other report of the State Grid Corporation of China (SGCC), the
microgrids were installed in the Henan Province, in Tiajin country's largest power supplier, China's urban residents
City, Mongolia, Foshan City, and Foshan Island. These endured an average of 6.92 hours of blackouts, while rural
projects have had tremendous success and focused households experienced an average of 29.35 hours of
mainly on PV and wind energy, as well as storage. China blackouts in 2011. SGCC has pledged to shorten the
realizes that microgrids are an important part of the periods of electricity cut-offs to 5.71 hours for urban citizens
country’s Smart Grid and is also related to national and 23.7 hours for rural residents through grid upgrades
development strategies, further highlighting the microgrid and renovations.27
opportunity presented in China. In addition,
governmental support for microgrid development may Additionally, energy consumption efficiency is very low in
provide additional incentives to develop microgrids in China, i.e. the amount of energy consumed per unit of
remote regions, thus extending reliable energy to its economic output is considerably higher than the world
citizens. average.28 Microgrid systems thus offer tremendous
opportunities to develop the power system in China with
China: Drivers investments focused on increasing capacity, reliability,
efficiency, and integration of renewable energy.
Being the largest country in East Asia and the most
populous in the world, China’s rapidly growing economy State level projects have already been initiated in China
created a significant increase in energy consumption, as to encourage and support universities and institutions that
well as a rise in harmful emissions and power shortages conduct research on the use of microgrid systems.
over a very short period of 60 years. The number of people Furthermore, microgrid systems may represent the best
lacking access to electricity in China in 2009 was around solution to provide electricity to those rural areas,
26 China Europe International Business School
27 China.Org.cn
28 National University of Singapore
24 [PREMIUM] ZPRYME SMART GRID INSIGHTS Microgrids: The BRICS Opportunity | July 2012
Copyright © 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
26. especially in the Western regions, where the grid extension China: Projects
is not feasible and off-grid applications are required. This is
the sector where the new renewable energies such as Xiamen Direct-Current Microgrid
wind and solar are expected to play a key role by
becoming the most appropriate solution in order to The Haixi International New Energy Industry Expo and
achieve the Central government’s goal of a full rural Forum, Xiamen University, Nextek Power Systems, People
electrification before 2020. Power Company, Canadian Solar, Intel Corporation and
Lawrence Berkeley National Laboratory (LBNL) announced
China: Microgrid Market Forecast a ground-breaking alliance to construct and manage
direct-current microgrids at the School of Energy Research
From 2012 to 2020, China’s market is projected to grow in Xiamen University (SER-XMU). This microgrid will become
from $320 million to $2,015 million with a compound operational this year and will make Xiamen University
annual growth rate of 26%. China's first direct-current powered commercial building,
and will serve as a global showcase for distributed direct-
China Microgrids Market Value Forecast
current microgrid innovation and commercialization.
CAGR = 26%
2012 to 2020 (in US millions) The Xiamen University's direct-current microgrid could
$2,500
(figure 11, source: Zpryme) change the way Chinese campuses and building
complexes manage, control and consume energy by
$2,015 directly integrating renewable energy generation and
$2,000
storage batteries with building electrical loads through
$1,526 one-touch mobile and web-based energy management
$1,500 and control applications. This change is significant
$1,156
because of Chinese building energy consumption.
$1,000 $876
$664 Nextek Power Systems will introduce the first Direct
$553
$461 Coupling(R) microgrid in mainland China that will manage
$500 $320 $384
and support diverse energy loads, such as direct-current
lighting, air conditioning, data centers, electrical vehicle
$0
2012 2013 2014 2015 2016 2017 2018 2019 2020
charging and building plug loads. People Power
Company will provide its award-winning, cloud-based
energy management, control and behavioral analytics
applications that will enable building managers to control
and manage buildings loads. LBNL will develop methods
25 [PREMIUM] ZPRYME SMART GRID INSIGHTS Microgrids: The BRICS Opportunity | July 2012
Copyright © 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org