The Microgrid Market Continues to See Growth in Digitization, Decentralization and Decarbonization

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The advancement of microgrids is part of a larger trend bringing more digitization, decentralization and decarbonization to the power industry. Technology is moving faster, and today’s customers may select power from cleaner sources, generate it on their rooftop, use it more easily with connected Wi-Fi options and save money while connecting these services.

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Living off the grid doesn’t necessarily mean rustic anymore as luxury homes come equipped with individual microgrids. Businesses may bring power production onsite to access economic, environmental and reliability benefits previously unknown to them.

COVID-19 speeds up digitization

Society and the world’s workforce continue to become more digitized. COVID-19 suddenly pushed working professionals out of their offices in 2020. Worldwide, millions became home-based workers. Zoom took off in popularity and growth. Home internet connections became priceless. There is no longer a difference between the value of home and office power. Wi-Fi connection everywhere has become a must. Digitization is essential to a degree consumers never realized previously.

Peter Herweck, executive vice president, industrial automation at Schneider Electric, spoke at the recent International Conference on Industrial Engineering and Operations Management (IEOM 2021).

“Today’s industrial innovation is driven by powerful software and data analytics that increase both productivity and sustainability. With net zero factories now possible due to increased computational power and connectivity, as well as advanced digital supply chains, ecology and progress are no longer at the opposing ends of the environmental spectrum,” he said.

Decentralization continues with distributed energy

The electric power industry is well on its way to decentralization through the rise of distributed energy services. Thanks to more digitization, it may be less expensive to install and operate on-site power generation and microgrids than it is to connect to and maintain access to a centralized energy grid. In both developed and developing regions, decentralized distributed power generation and energy production provide a range of benefits, such as improved access, resilience and efficiency.

According to Fortune Business Insights’ “2021 Distributed Energy Trends” report, the gradual shift to distributed energy resources from centralized energy promotes its growth. The decrease in the cost of energy storage and solar photovoltaics will continue to drive the market.

Various regulations and the rise in the number of cybersecurity issues related to the energy sector may hinder the market. However, the surge in microgrid and smart grid deployment should create lucrative growth opportunities for the decentralized energy market in the coming year.

Decarbonization

In early February, at the US Energy Association’s 17th Annual State of the Energy Industry Forum, Arshad Mansoor, president and CEO of the Electric Power Research Institute (EPRI), said that all sides must come together immediately to speed the pace of economy-wide decarbonization.

While the electric sector has become 33% cleaner over the past 15 years, Mansoor noted, the overall economy’s removal of CO2 emissions has progressed much more slowly during the same period.

That’s not an acceptable scenario, according to Mansoor. “If we have the same path of acceleration, it’s going to take 75 years. Clearly, we want to accelerate,” he said.

EPRI launched a multiyear project with the Gas Technology Institute (GTI) and other anchor companies to develop and demonstrate technologies to enable a low-carbon future. Called the Low-Carbon Resources Initiative (LCRI), EPRI and its anchor sponsors said that the initiative represents a crucial step toward achieving decarbonization goals over the next 30 years.

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Mansoor emphasized that before this decade is over, the energy industry must offer other sets of molecules as clean energy carriers as a vital part of a future where we have multiple options to get to net-zero emissions reliably and affordably. 

For example, a recent Microgrid Knowledge article noted that Hydrogen Forward is a group formed to advocate for a US national hydrogen strategy. The organization’s founding members are Air Liquide, Anglo American, Bloom Energy, CF Industries, Chart Industries, Cummins, Hyundai, Linde, McDermott, Shell and Toyota. 

“We must embrace hydrogen if we are to meet our ambitious decarbonization goals,” said KR Sridhar, CEO of Bloom Energy. “Hydrogen will enable the world to harness our abundant and affordable renewable energy and make it dependable and resilient to meet the needs of our digital world.”

Learn more about the trend toward digitization, decentralization and decarbonization. Join us at Microgrid 2021: The World Awakens to Microgrids. Registration is free for the virtual event, but limited, so we encourage you to act soon.

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