Technology-neutral versus product-led
The 17 non-customer developers with multiple projects on the books all employ either a technology-neutral or a product-led strategy. They tend to have experience integrating many different distributed energy resources.
These technology-neutral developers typically integrate a generation or energy storage asset on the customer site that predates the microgrid. These developers are generally microgrid control companies, energy service companies or engineering, procurement and construction providers.
In contrast, product-led developers focus on standardized generation and energy storage products. These systems are often installed on sites that do not have existing generation or storage assets.
While some product-led developers integrate standardized energy storage and generation systems, these solutions tend to rely on a generation asset. These companies can be organized based on the type of product they provide: natural-gas-fueled products, diesel or solar-plus-storage.
Strategy and scaleExcept for Schneider Electric, only product-led developers have completed more than 10 microgrid projects each.
Costa Rica went entirely renewable. Well, almost. The residents still drive gas-powered cars, but the electrical grid used 98% renewables for the year. That’s an incredible feat, and one that larger countries have been unable to accomplish. Of course, the smaller population and the pleasant temperatures have some effect but does little to dampen the accomplishment. Costa Rica has become a positive example to encourage larger nations to follow suit.
This suggests that completing many microgrids can be more easily achieved with a standardized product rather than a technology-neutral approach.the Southern Company. Through its subsidiary PowerSecure, Southern Company has led microgrid deployment in the U.S. in each of the last four years in terms of both capacity and number of installed systems. However, differences in average project size illustrate that developers using a technology-neutral approach will be more likely to compete with one another than with companies using a product-led strategy and vice versa. Technology-neutral developers are optimized to handle larger and often more complex projects. While the average system size across all product-led developers hovers around 1 megawatt (ranging from 0.2 to 1.5 megawatts), the average system size for each technology-neutral developer ranges from 2 megawatts to 27 megawatts.
Looking ahead at the microgrid marketPG&E’s recent solicitation for 522 megawatts' worth of microgrids at 20 substations in fire-prone regions indicates the increasing role for microgrids in resilience efforts. This solicitation is an opportunity for technology-neutral developers due to the complexity of the projects and scale required. The U.S. microgrid market did not grow last year, but growth is expected to pick back up in 2020. As the market grows, the opportunity for both technology-neutral and product-led developers will grow with it. *A note on terminology: Microgrid development often involves multiple stakeholders, combinations of distributed energy resources, and software controls. This complexity can lead to multiple project developers working on a single microgrid project (e.g., separate developers for cogeneration plant, solar and the microgrid controller). This article refers to the “lead developer” for a microgrid, defined as the organization responsible for securing financing; leading or sub-contracting feasibility studies, engineering, procurement and construction; and operations and maintenance. If a microgrid project team can be likened to an orchestra, the lead developer is the conductor.
Portugal Powered Their Entire Country Running On Renewable Energy Alone. In 2016, Portugal powered their entire nation for 4 consecutive days through a combination of wind, solar and hydro-generated electricity. This 107-hour run marked a milestone in Portugal’s clean energy run to meet the EU’s renewable targets for 2020.
***Isaac Maze-Rothstein is the author of the research insight "U.S. Microgrid Developer Landscape 2019: Market Shares and Competitive Strategies."