Tesla and other energy storage players see a rising market for remote microgrid projects in what’s shaping up to be an “important year of ground-laying,” says a new report by Bloomberg New Energy Finance (BNEF).
The companies are installing battery-based microgrids to replace diesel energy on far-flung islands or to bring clean and steady electricity to the energy poor in places like Africa and India.
Market economics plays in their favor, as diesel energy prices rise in several regions, making clean energy a more attractive play, according to BNEF’s “2Q 2017 Frontier Power Market Outlook: Microgrids on the Horizon.”
Microgrid opportunity is particularly strong in emerging markets, the destination for 42 percent of the diesel gensets shipped internationally, says BNEF.
For Tesla, islands now account for 36 percent of the total battery capacity deployed to date for power generation, according to the report. The company has provided batteries for remote microgrids projects on Monolo island, Fiji; Ocracoke island, North Carolina; Kauai and Honolulu islands, Hawaii.
Batteries are often paired with solar in remote microgrid projects, and not surprisingly BNEF finds a rise in solar use in remote regions. Countries in Asia, Latin America and Africa are now the largest worldwide buyers of solar modules made in China, which is the world’s largest solar manufacturer.
Remote microgrid projects tend to be small in size, but the scale of the market is attractive. Not only are there thousands of islands off the grid, but 16 percent of the global population – 1.2 billion people – still lack access to electricity, according to the International Energy Agency.
The BNEF report notes that other factors also are driving the market for remote microgrid projects, among them:
- India’s allocation $740 million to achieve electrification of all villages by May 2018. There are 2,385 villages that still need to be electrified. In addition, $835 million has been allotted for rooftop solar and microgrids.
- Newly approved legislative guidelines in Nigeria for regulating microgrids (which they call mini-grids)
Courtesy of Bloomberg New Energy Finance
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