The European and U.S. power grids are both experiencing tremendous transformations in form and function. When it comes to microgrid adoption, however, the gap in progress is almost as wide as, well, the Atlantic Ocean.
Microgrid adoption in the U.S. has sailed past 10 GW of total installed capacity in recent years and is progressing at an accelerating pace. Major islandable microgrid projects are underway or recently completed in Maryland, Illinois, Michigan, Texas, California, Puerto Rico and Hawaii, among others.
Europe is certainly stepping up its integration of utility-scale renewable and distributed energy resources (DERs) in response to higher macro energy prices. However, the momentum of interconnected microgrids is not moving forward quite as fast as in the U.S., noted Gregorio Ogliaro, a managing director and transmission and distribution lead for consulting giant Accenture’s utilities business.
Research data from Guidehouse Insights (then Navigant) several years ago estimated that Europe contained less than 10% of the world’s microgrid power capacity, compared to some 33% in the U.S. and 40% in the Asia Pacific region. The focus on European Union-supported microgrids may be intensifying under climate and security pressures (such as the Russian invasion of Ukraine), but the pace is more like a country drive than Formula One.
“In terms of microgrids’ penetration in Europe, they are not widespread—in fact, they are fairly limited in number and are generally small in size,” Ogliaro replied in response to emailed questions from Microgrid Knowledge Managing Editor Rod Walton.
“Those that have been deployed thus far are mainly located on islands…at universities…or within buildings,” he added. “Apart from a few exceptions, most microgrids in Europe are pilot or research projects rather than fully produced solutions. One current barrier to the scaling up of DERs and microgrids is regulatory frameworks, as regulation influences investment in these technologies.”
Ogliaro named several promising microgrids in Europe, including projects on the Scottish Isle of Eigg, Valencia Polytechnic University in Spain and the Florian Hotel in the Netherlands. These types of microgrids are not unusual in comparison to the U.S., where islandable, on-site power projects are common on remote islands, within university campuses and increasingly within cities and industrial plants intent on ensuring electricity resiliency and redundancy.
The European and U.S. power grid approaches, as always, remain unique from each other in profound ways (remember the former’s distribution system delivers 230 volts and the latter 120V). Interconnection is certainly a thorny, frustrating issue for many DER and microgrid developers in the U.S., but even more so in Europe with the continental interconnection of multiple nations.
Many globally minded grid experts say that Europe is way ahead of the U.S. when it comes to smart grid technologies improving efficiencies and responsiveness on the bigger system. Ironically, though, intransigence at the utility and regulatory level could be making European microgrid adoption more sluggish.
“For utilities, a model involving DERs and microgrids is not possible in systems that apply deregulation of network activities, as in Europe, as it means there are restrictions for vertically integrating grid activities,” Accenture’s Ogliaro said. “Therefore, regulators tend to restrict utility control of microgrids beyond the pilot phase projects. Exceptionally, DER ownership has been granted in some states or countries, but only for resilience or for enhancing flexibility when relevant services cannot be provided by other market players.”
The European grid-connected microgrid market was estimated at about US$3.8 billion in value last year, according to forecaster and researcher Global Market Insights (GMI). This is barely more than one-fifth the size of the nearly $17 billion U.S. microgrid market estimated by GMI, but GMI also anticipates that Europe’s portion could grow annually at an impressive 15.9% annual rate through 2032 to more than $16 billion.
Indeed, Ogliaro noted, the recent movement in Europe toward local energy communities (LECs) could include a wave of microgrid adoptions in coming years. LECs are still early in the adoption phase in Europe but these clusters of grid-connected DERs located close to the load could also provide ancillary services to the main grid, which could make them more attractive to investors, he added.
“We believe that microgrids and LECs could become one of the tools to alleviate problems in distribution and transmission networks, including congestion management, voltage and frequency problems and flexibility in planning by allowing cost-efficient infrastructure replacement strategies,” Ogliaro said.
And, as if any story can move forward without mentioning this, artificial intelligence (AI) could facilitate a future boom in microgrid adoption everywhere. If AI is not everywhere already, it will be.
“At the planning stage, AI and machine learning (ML) can help with forecasting and predicting load and generation,” he said. “Improved predictions can help in accurate planning, dispatch and reinforcement decisions, which in turn supports the deployment and operation of microgrids, LECs and DERs.”
Generative AI, which can generate text, data and even marketing/communication campaigns, could help speed up interconnection processes, Ogliaro added. Of course, Gen AI, as Accenture and others call it, also will require dozens of GW in new power to feed energy consumption from training and computational operations.
“AI and ML are as good as the data they are fed with, so utilities that wish to employ such techniques need to capitalize on data and improve their databases, building a strong digital foundation,” Ogliaro said. “Data cleansing is required, as in filling data gaps, improved SCADA (supervisory control and data acquisition system architecture) capabilities and integrating IoT (internet of things) platforms for data hosting.”
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