Microgrid-as-a-Service Market to Make Inroads as Legacy Infrastructures Perform Poorly
The microgrid-as-a-service (also known as MaaS) model is marking prodigious growth, which is highly propelled by its economic benefits over traditional models. The underperformance of traditional grids with legacy infrastructures is a key success factor driving governments of numerous countries to undertake initiatives to encourage the deployment of the MaaS model, thereby propelling growth of the microgrid-as-a-service market. The U.S. Department of Energy has come forward with the Smart Grid Investment Grant (SGIG) program to accelerate the gait of the shift from traditional electric transmission systems to modernized systems, with grants from governments.
Profitable opportunities await for players of the microgrid-as-a-service market, as rural electrification projects ongoing in numerous countries of Asia Pacific and the Middle East & Africa are projected to upkeep the adoption rate. On top of that, the demand for electricity during exigencies, ascending from hospitals and the defense sector, is projected to drive the demand for microgrids. However, the inadequacy of skilled labor, on account of lack of proper training programs, is likely to affect the scalability of the MaaS market.
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Technology to Lead the Future Course of the MaaS Market
Numerous technological advancements have been being directed towards improving the performance of battery invertors for ensuring uninterrupted power supply through a microgrid. Manufacturers operating in the microgrid-as-a-service market are looking at the development of battery technology with higher power outputs to further penetrate their models deeper into end-user segments. Initiatives such as the Clean Power Plan (CPP) policy, intended towards shrinking carbon footprints, are paving the way for the development of renewable energy through bio power, wind, and solar energy.
With the advent of wireless and IoT technologies, the performance of microgrids can be optimized by real-time data streaming, processing, storage, and monitoring infrastructure, which eliminates any human intervention. Manufacturers also leverage the prowess of MaaS to reduce the reliance on long-distance distribution lines, thereby reducing transmission losses. The convergence of Blockchain technology and MaaS will further build trust in the transaction landscape. The integration of this technology with microgrids will assist market players in managing payments in a convenient and secure fashion.
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What’s Inhibiting the Growth of the Microgrid-as-a-Service Market
Since the time of its inception, the microgrid-as-a-service model has been deemed complex. The intricate planning and designing of microgrids coupled with the integration of sensors, controllers, resolvers, and encoders, together, further increases the complexity of the system. The deployment of such a complex system requires a skilled workforce; however, the insufficient number of professionals could impact the adoption rate in the long run. Besides this, the presence of stringent government regulations regarding microgrids and the escalating adoption rate of individually-owned microgrids are projected to deter the impressive pace of the microgrid-as-a-service market. The MaaS market has a low threat of new entrants, on account of two key aspects: high upfront CAPEX and OPEX requirement, and mandatory conformity to government standards
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Authors of the report have an optimistic perspective regarding the growth of the microgrid-as-a-service market. As per the research, there is involvement of a very few players, meaning, moderate competition in the landscape. Analysts recommend that, manufacturers can devise business strategies based on product innovation and the technological upgrade of microgrids. In addition, since the industry faces the 'shortage of workforce' dilemma, manufacturers can organize training sessions aimed at increasing the proficiency of their workers, which can also serve as an opportunity to build long-term customer relations.
An example of a customer-centric approach can be derived from METCO Engineering Inc. The company offers end-to-end services, and manages energy performance contracts. In May 2018, the company entered into a strategic agreement with Duro Felguera SA to collaborate on energy efficiency and resilience projects in the U.S.
In a nutshell, significant investments made towards innovating service-based solutions can build a smooth road to market consolidation for manufacturers.
- According to Transparency Market Research’s latest research report on the global microgrid-as-a-service (MaaS) market for the historical period of 2017–2018 and the forecast period of 2019–2027, the growing number of industries using microgrid-as-a-service is expected to boost the global microgrid-as-a-service market during the forecast period.
- In terms of revenue, the global microgrid-as-a-service market is estimated to reach a value of ~US$ 4.5 Bn by 2027, expanding at a CAGR of ~14% throughout the forecast period.
In the report on the global microgrid-as-a-service market, we have discussed individual strategies, followed by company profiles of the providers of microgrid-as-a-service. The ‘Competition Landscape’ section has been included in the report to provide readers with a dashboard view and company market share analysis of key players operating in the global microgrid-as-a-service market.
Global Microgrid-as-a-Service Market: Key Developments
Key providers of microgrid-as-a-service, such as ABB, are focusing on forming partnerships and increasing the usage of advanced technologies. Some other key developments in the global microgrid-as-a-service market are as follows:
In April 2016, Tech Mahindra Limited signed two strategic long-term agreements to strengthen offerings under its microgrid-as-a-service segment in Canada and India. The first MoU (Memorandum of Understanding) was signed with the Center of Urban Energy (CUE), a part of Ryerson University, Toronto, and the second one was signed with Himachal Pradesh State Electricity Board (HPSEB) and Advanced Energy Center (AEC). In November 2016, Green Energy Corp. announced its collaboration with Xtensible Solutions, LLC, which is a prominent player that provides the utility industry with high standard-based systems integration and information management solutions. As per this collaboration, both companies would be implementing the Open Field Message Bus (OpenFMB) standard. In April 2019, Rolls-Royce Power Systems announced that it would be signing a partnership contract with ABB for the supply of advanced automation and microgrid technology. As a part of this partnership, the two companies are planning to develop an energy-efficient microgrid solution for players in the commercial and industrial sectors.
Global Microgrid-as-a-Service Market: Competition Landscape
Detailed profiles of the providers of microgrid-as-a-service have been provided in the report to evaluate their financials, key product offerings, recent developments, and strategies. Key players operating in the global microgrid-as-a-service market are:
- Green Energy Corp.
- Schneider Electric
- General Electric
- Tech Mahindra
- Siemens AG.
Shortage of Skilled Labor and Lack of Proper Training Programs to Pose a Major Challenge
Microgrid-as-a-service has become a major trend in the field of power grid systems, due to advantages provided by MaaS such as improved scalability, dynamic monitoring, financial benefits, and energy efficiency. However, lack of proper training programs and awareness regarding benefits of microgrid-as-a-service is hampering the global MaaS market. Microgrid-as-a-service systems are technologically advanced, and their design and planning are highly complex in nature. Thus, in order to understand the technicalities of microgrid-as-a-service, proper training is required. Also, the power industry is witnessing shortage of skilled labor, which is affecting the demand for smart grid systems. All these factors are anticipated to hamper the global microgrid-as-a-service market during the forecast period.
Industry De-carbonization the Latest Trend in Global Microgrid-as-a-Service Market
Traditional power grid systems produce a high level of carbon dioxide, which is approximately 33% of the carbon produced. Industries and governments are focusing on reducing carbon production. As the industry is shifting toward digitization, microgrid controllers are gaining popularity. While microgrids require a large amount of electricity, digitization also creates new streamlined methods to manage energy. Microgrid-as-a-service allows the system to island seamlessly away from the central grid at the time of power outage, and back again when the central grid re-energizes, which results in improved operational efficiency. This technology is expected to play a key role in industry de-carbonization. More than 420 major corporations are committed toward the cutting down of greenhouse gas emissions (GHGs). These factors are expected to drive the global microgrid-as-service market during the forecast period.
Government Initiatives to Modernize Grid Systems: A Key Driver
Traditional grids are highly expensive, and they cannot provide energy security, clean energy integration, and economic benefits. Hence, end users are shifting toward microgrids. Initiatives taken by regional and international governments in the field of microgrids is a major factor expected to drive the global microgrid-as-a-service market from 2019 to 2027. Governments are continuously encouraging the deployment and development of microgrids. According to India Energy Storage Alliance (IESA), by 2016, India has installed over 2,000 AC microgrids of over 5 kW, and over 10,000 DC microgrids, with a majority of them sized at less than 1 kW. The Ministry of New and Renewable Energy (MNRE) of the Government of India calls for 500 MW of installations by energy service companies (ESCOs). The Central Government, state governments, and corporate companies would be raising the funding for these installations. The U.S. Department of Energy has taken an initiative called 'Smart Grid Investment Grant (SGIG)' program in order to speed up the modernization of the country’s electric transmission and distribution systems. Under the Energy Independence and Security Act (EISA), the U.S. Government has raised funding of US$ 4.5 Bn to jump-start the SGIG (Smart Grid Investment Grant) project. If industry expenditure is included, the Smart Grid Investment Grant program represents an investment of US$ 8 Bn, which would be utilized to empower the country’s electricity distribution system. The above-mentioned initiatives taken by governments are likely to augment the global microgrid-as-a-service market in the near future.
Microgrid-as-a-Service Market: Scope of the Report
A new study on the global microgrid-as-a-service market was published by Transparency Market Research (TMR). It presents detailed information of key market dynamics, including the market drivers, market trends, and challenges, as well as structure of the global microgrid-as-a-service market. TMR’s study offers valuable information on the global microgrid-as-a-service (MaaS) market, in order to illustrate how the market would expand during the forecast period, i.e. 2019 - 2027.
Key indicators of market growth, which include value chain analysis, supply chain analysis, and compounded annual growth rate (CAGR), are elucidated in TMR’s study in a comprehensive manner. This data can help readers interpret the quantitative growth aspects of the global microgrid-as-a-service market during the forecast period.
An extensive analysis of the business strategies adopted by leading market players is also featured in TMR’s study on the global microgrid-as-a-service market. This can help readers understand the key factors responsible for growth of the global microgrid-as-a-service market. In this study, readers can also find specific data on avenues for the qualitative and quantitative growth of the global microgrid-as-a-service market. This data would guide market players in making apt decisions in the near future.
Key Questions Answered in TMR’s Microgrid-as-a-Service Market Study
- What would be the Y-o-Y growth trend of the microgrid-as-a-service market between 2019 and 2027?
- What is the influence of the changing trends in technologies on the global microgrid-as-a-service market?
- Would North America continue to remain the most profitable regional market for providers of MaaS?
- Which factors would hinder the global microgrid-as-a-service market during the forecast period?
- Which are the leading companies operating in the global microgrid-as-a-service market?
Microgrid-as-a-Service Market: Research Methodology
A unique research methodology is utilized by TMR to conduct comprehensive research on the global MaaS market, and arrive at conclusions on the future growth prospects of the market. This research methodology is a combination of primary and secondary research, which helps analysts warrant the accuracy and reliability of the conclusions drawn.
Secondary research sources referred to by analysts during the production of the report on the global microgrid-as-a-service market include statistics from company annual reports, SEC filings, company websites, World Bank database, investor presentations, regulatory databases, government publications, and market white papers. Analysts have also interviewed senior managers, product portfolio managers, CEOs, VPs, and market intelligence managers, who have contributed to the production of TMR’s study on the global microgrid-as-a-service market, as a primary research source.
These primary and secondary sources provided exclusive information during interviews, which served as a validation from leading players operating in the global microgrid-as-a-service market. Access to an extensive internal repository as well as external proprietary databases allowed this report to address specific details and questions about the global microgrid-as-a-service market with accuracy. The study also uses a top-down approach to assess the numbers for each segment, and a bottom-up approach to counter-validate them. This has helped in making TMR’s estimates on the future prospects of the global microgrid-as-a-service market more reliable and accurate.
Segmentation of Global Microgrid-as-a-Service Market
TMR’s study of the global microgrid-as-a-service market includes information divided into four sections – by type, by service, by end user, and by region. Changing market trends and other crucial market dynamics associated with these four sections of the global microgrid-as-a-service market have been discussed in detail.
Grid Connected Microgrids
Monitoring & Optimization
System Maintenance & Operations
Government & Utilities
Middle East & Africa